Document:

Exhibit 10.1 - Omnibus Amendment No. 1

Exhibit 10.1

EXECUTION VERSION

OMNIBUS AMENDMENT NO. 1
TO

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT AND
GUARANTIES

This OMNIBUS AMENDMENT NO. 1 to SIXTH AMENDED AND RESTATED CREDIT AGREEMENT and GUARANTIES (the “Amendment”), dated as of November 18, 2014, is entered into by and among Tesoro Corporation (the “Borrower”), the Subsidiaries of the Borrower signatory hereto (the “Subsidiary Guarantors”), the financial institutions listed on the signature pages hereof (the “Lenders”), and JPMorgan Chase Bank, National Association, as Administrative Agent (the “Agent”), under the below-defined Credit Agreement.  Each capitalized term used herein and not otherwise defined herein shall have the meaning given to it in the below-defined Credit Agreement.
WITNESSETH
WHEREAS, the Borrower, the Lenders, and the Agent are parties to a Sixth Amended and Restated Credit Agreement dated as of January 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); 
WHEREAS, certain Subsidiaries of the Borrower and the Agent are parties to an Amended and Restated Subsidiary Guaranty, dated as of March 16, 2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Domestic Guaranty”);
WHEREAS, Tesoro Canada Supply & Distribution Ltd. and the Agent are parties to a Subsidiary Guaranty (Canada), dated as of August 14, 2012 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Canada Guaranty”);
WHEREAS, Tesoro Panama Company, S.A. and the Agent are parties to a Subsidiary Guaranty (Panama), dated as of August 14, 2012 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Panama Guaranty” and, together with the Domestic Guaranty and the Canada Guaranty, each, a “Guaranty” and collectively, the “Guaranties”);
WHEREAS, the Borrower and the Subsidiary Guarantors wish to amend the Credit Agreement and the Guaranties in certain respects and the Lenders party hereto and the Agent are willing to amend the Credit Agreement and the Guaranties on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Subsidiary Guarantors, the Agent and the Lenders party hereto hereby agree as follows:
1.    Amendments to Credit Agreement.  Effective as of the date of satisfaction of the conditions precedent set forth in Section 3 below, the Credit Agreement is hereby amended as follows:

(a) The Credit Agreement (including the Commitment Schedule attached thereto) is hereby amended in its entirety pursuant to Annex A hereto.
(b) Schedule 1.1(b) to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex B.
(c) Schedule 5.8 to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex C.    
(d) Exhibit B to the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex D.
2.     Amendments to Guaranties.  Effective as of the date of satisfaction of the conditions precedent set forth in Section 3 below, each Guaranty is hereby amended as follows:
(a) Section 2 of each Guaranty is amended to amend and restate the first sentence thereof in its entirety as follows:
“Each of the Guarantors hereby unconditionally guarantees, jointly and severally with the other Guarantors, the full and punctual payment and performance when due (whether at stated maturity, upon acceleration or otherwise) of the Secured Obligations, including, without limitation, (i) the principal of and interest on each Advance made to the Borrower pursuant to the Credit Agreement, (ii) any Reimbursement Obligations of the Borrower or the performance by it of such Reimbursement Obligations, (iii) all other amounts payable by the Borrower under the Credit Agreement and the other Loan Documents, including, without limitation, all Rate Management Obligations, and (iv) the punctual and faithful performance, keeping, observance, and fulfillment by the Borrower of all of the agreements, conditions, covenants, and obligations of the Borrower contained in the Loan Documents (all of the foregoing being referred to collectively as the “Guaranteed Obligations”; (provided, however, that the definition of “Guaranteed Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor)).”
(b) Section 4 of each Guaranty is amended to amend and restate the third sentence thereof in its entirety as follows: 
“If at any time any payment of the principal of or interest on any Advance or Reimbursement Obligation or any other amount payable by the Borrower or any other party under the Credit Agreement, any agreement evidencing a Rate Management Transaction or any other Loan Document (including a payment effected through exercise of a right of setoff)  is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Holder of Secured Obligations in its discretion), each of the Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.”
(c) The following new Section 23, with respect to the Domestic Guaranty and the Canada Guaranty, and Section 22, with respect to the Panama Guaranty, is hereby added to each Guaranty immediately after Section 22 (or Section 21, as applicable) thereof (it being acknowledged that bracketed Section references shall apply to each Guaranty as applicable):
“[22][23].    Special Guaranty to Confer ECP Status. The Borrower, unconditionally and irrevocably, with respect to each Guarantor, hereby guarantees such Guarantor’s obligations under each

2

Specified Swap Obligation.  The obligations of the Borrower under this Section [22][23] shall remain in full force and effect until a discharge of such Guarantor’s Guaranteed Obligations in accordance with the terms hereof and the other Loan Documents.  The Borrower intends that this Section [22][23] constitute, and this Section [22][23] shall be deemed to constitute, a guarantee or other agreement for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.”
3.    Conditions of Effectiveness.  This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if:
(a) the Agent shall have received executed copies of this Amendment from the Borrower, the Subsidiary Guarantors and all of the Lenders required to execute and deliver this Amendment pursuant to the terms of the Credit Agreement; 
(b) the Agent shall have received those agreements, documents, instruments and other deliverables appearing in Annex E hereto; and
(c) the Borrower shall have paid all fees and expenses of the Agent (including (i) the fees payable to the Agent and the Lenders as set forth in that certain Fee Letter of even date herewith (the “Amendment Fee Letter”), and (ii) to the extent invoiced, attorneys’ fees and expenses) in connection with this Amendment.
4.    Representations and Warranties of the Borrower and Subsidiary Guarantors. The Borrower and each Subsidiary Guarantor each  hereby represents and warrants as follows:
(a) The Credit Agreement and each Guaranty to which the Borrower or such Subsidiary Guarantor is a party, as previously executed and amended and as amended hereby constitutes the legal, valid and binding obligation of the Borrower or such Subsidiary Guarantor, and is enforceable against the Borrower or such Subsidiary Guarantor in accordance with its terms, except as enforceability may be limited by (i) bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally; (ii) general equitable principles (whether considered in a proceeding in equity or at law); and (iii) requirements of reasonableness, good faith and fair dealing.
(b) (i) The representations and warranties contained in Article V of the Credit Agreement and Section 1 of each Guaranty are true and correct as of the date hereof, both immediately before and after giving effect to this Amendment, except (x) with respect to Sections 5.5 and 5.7 of the Credit Agreement, the representations and warranties set forth in such Sections shall have been true and correct on and as of the date of the most recent Form 10-K or Form 10-Q filing, as applicable, made by the Borrower with the U.S. Securities and Exchange Commission, and (y) with respect to any other representation and warranty set forth in Article V of the Credit Agreement or Section 1 of any Guaranty, to the extent such representation or warranty is stated to relate solely to an earlier date, such representation or warranty shall have been true and correct on and as of such earlier date and (ii) both immediately before and after giving effect to this Amendment, no event shall have occurred and then be continuing which constitutes a Default or an Unmatured Default.
(c) The modifications contemplated by this Amendment are permitted under the terms of indentures and other agreements referenced in Section 9.17 of the Credit Agreement that remain in effect as of the date hereof.
(d) Each of the Borrower and each Subsidiary Guarantor has the power and authority and legal right to execute and deliver this Amendment and to perform its obligations hereunder.  The

3

execution and delivery by each of the Borrower and each Subsidiary Guarantor of this Amendment and the performance of its obligations hereunder have been duly authorized by proper proceedings and the Amendment has been duly executed and delivered by the Borrower and each Subsidiary Guarantor. No order, consent, adjudication, approval, license, authorization, or validation of, or exemption by, any governmental or public body or authority, or any subdivision thereof, which has not been obtained by the Borrower or any of the Subsidiary Guarantors, is required to be obtained by the Borrower or any of the Subsidiary Guarantors in connection with the execution and delivery of the Amendment except where failure to obtain the same would not reasonably be expected to have a Material Adverse Effect.
5.    Effect on the Credit Agreement and Guaranties.
(a) Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit Agreement  or any Guaranty to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Credit Agreement or such Guaranty, as applicable, as amended and modified hereby.
(b) Except as specifically amended and modified above, the Credit Agreement, each Guaranty and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall neither, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders or the Agent, nor constitute a waiver of any provision of the Credit Agreement, any Guaranty or any other documents, instruments and agreements executed and/or delivered in connection therewith.
(d) For the avoidance of doubt, the parties hereto acknowledge and agree that this Amendment constitutes a Loan Document as defined under the Credit Agreement.
6.    Costs and Expenses.  The Borrower agrees to pay all reasonable costs, fees and out‐of‐pocket expenses (including attorneys’ fees and expenses charged to the Agent) incurred by the Agent and the Lenders in connection with the preparation, arrangement, execution and enforcement of this Amendment.
7.    Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8.    Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
9.    Counterparts.  This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile shall be effective as delivery of a manually executed counterpart of this Amendment.
10.    No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Amendment.  In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Amendment.

4

11.    Reaffirmation. Each of the undersigned Subsidiary Guarantors hereby acknowledges receipt of a copy of this Amendment, and each of the Borrower and each Subsidiary Guarantor affirms the terms and conditions of each Loan Document executed by it, including, without limitation, the Security Agreement and each Guaranty to which it is a party, and acknowledges and agrees that each such Loan Document executed by it in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.
12.    Departing Lenders.  Certain Lenders have agreed that they shall no longer constitute Lenders under the Credit Agreement as of the date hereof (each, a “Departing Lender”).  Each Lender that executes and delivers a signature page hereto that identifies it as a Departing Lender shall constitute a Departing Lender as of the date hereof.  No Departing Lender shall have a Revolving Loan Commitment on and after the date hereof.  Each Departing Lender shall cease to be a party to the Credit Agreement as of the date hereof, and no Departing Lender shall have any rights, duties or obligations thereunder.  All amounts owing to a Departing Lender, other than outstanding Loans and LC Obligations owed to or held by such Departing Lender, shall be paid by the Borrower to such Departing Lender as of the date hereof.  The consent of a Departing Lender is not required to give effect to the changes contemplated by this Amendment. Each Departing Lender hereby assigns its Loans and LC Obligations to the remaining Lenders as of the date hereof, and the Agent is hereby authorized to take such steps under the Credit Agreement as reasonably required to give effect to this Section 12, including, without limitation, reallocating outstanding Loans and LC Obligations among the Lenders (including the New Lender, as defined below) ratably based on their Revolving Loan Commitments. As of the date hereof, Deutsche Bank Trust Company Americas (“DBTCA”) shall be a Departing Lender, and, upon its execution of this Amendment, Deutsche Bank AG New York Branch (the “New Lender”) shall be deemed to be a Lender for all purposes of the Loan Documents, with such New Lender’s Revolving Loan Commitment to be as set forth on the Commitment Schedule attached to Annex A hereto (and for purposes of determining the New Lender’s fees under the Amendment Fee Letter, such New Lender’s Revolving Loan Commitment prior to the effective date hereof shall be deemed to be the same as the Revolving Loan Commitment of DBTCA prior to the effective date hereof). The Loan Parties agree with and consent to the foregoing.

The remainder of this page is intentionally blank.

5

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

TESORO CORPORATION,
as the Borrower

By:  /s/ BRAD S. LAKHIA                        
Name:  Brad S. Lakhia
Title:    Vice President and Treasurer

SUBSIDIARY GUARANTORS:

	
	
	TESORO WASATCH, LLC
TESORO COMPANIES, INC.
TESORO ALASKA COMPANY LLC (formerly known as Tesoro Alaska Company)
TESORO REFINING & MARKETING COMPANY LLC (formerly known as Tesoro Refining and Marketing Company)
TESORO WEST COAST COMPANY, LLC
TESORO SIERRA PROPERTIES, LLC
TESORO NORTHSTORE COMPANY
TESORO SOUTH COAST COMPANY, LLC
TESORO TRADING COMPANY
TESORO ENVIRONMENTAL RESOURCES COMPANY
TESORO AVIATION COMPANY
TESORO MARITIME COMPANY
TESORO FAR EAST MARITIME COMPANY
GOLD STAR MARITIME COMPANY
CARSON COGENERATION COMPANY
TREASURE FRANCHISE COMPANY LLC
TESORO INSURANCE HOLDING COMPANY
TRANS-FORELAND PIPELINE COMPANY LLC
TESORO RENEWABLES COMPANY LLC
UINTA EXPRESS PIPELINE COMPANY LLC
TESORO SOCAL COGEN COMPANY LLC
TESORO CANADA SUPPLY & DISTRIBUTION LTD. 
TESORO PANAMA COMPANY, S.A.  

By:   /s/ BRAD S. LAKHIA                      
Name:  Brad S. Lakhia
Title:    Vice President and Treasurer

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

TREASURE FRANCHISE COMPANY LLC

By:  /s/ ALAN R. WILKERSON                      
Name:  Alan R. Wilkerson
Title:    Senior Director, Retail Support and Manager

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, individually, as an LC Issuer, as the
Non-Ratable Lender and as Administrative Agent

By:  /s/ J. DEVIN MOCK                           
Name:  J. Devin Mock
Title:    Authorized Officer

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

WELLS FARGO BANK, N.A.,
as a Lender

By:  /s/ REZA SABANI                      
Name:  Reza Sabani
Title:    Duly Authorized Signer

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

THE ROYAL BANK OF SCOTLAND plc,
as a Lender

By:  /s/ JOHN PREECE                      
Name:  John Preece
Title:    Authorised Signatory

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

BANK OF AMERICA, N.A.,
as a Lender

By:  /s/ HANCE VANBEBER                      
Name:  Hance VanBeber
Title:    Sr. Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

BARCLAYS BANK PLC,
as a Lender

By:  /s/ MARGUERITE SUTTON                      
Name:  Marguerite Sutton
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

THE BANK OF TOKYO MITSUBISHI UFJ, LTD.,
as a Lender

By:  /s/ MARIA FERRADAS                      
Name:  Maria Ferradas
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CITIBANK, N.A.,
as a Lender

By:  /s/ BRENDAN MACKAY                      
Name:  Brendan Mackay
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CREDIT AGRICOLE CORPORATE & INVESTMENT
BANK, as a Lender

By:  /s/ DAVID GURGHIGIAN                      
Name:  David Gurghigian
Title:    Managing Director

By:  /s/ MICHAEL WILLIS                      
Name:  Michael Willis
Title:    Managing Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

MIZUHO BANK, LTD.,
as a Lender

By:  /s/ LEON MO                         
Name:  Leon Mo
Title:    Authorized Signatory

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

NATIXIS, NEW YORK BRANCH
as an LC Issuer and as a Lender

By:  /s/ LOUIS P. LAVILLE, III             
Name:  Louis P. Laville, III
Title:    Managing Director

By:  /s/  STUART MURRAY                   
Name:  Stuart Murray
Title:  Managing Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

BANCO BILBAO VIZCAYA ARGENTARIA S.A.,
NEW YORK BRANCH, as a Lender

By:  /s/ VERONICA INCERA                      
Name:  Veronica Incera
Title:    Managing Director

By:  /s/ MAURICIO BENITEZ                    
Name:  Mauricio Benitez
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

BNP PARIBAS,
as an LC Issuer and as a Lender

By:  /s/ A-C MATHIOT                      
Name:  A-C Mathiot
Title:    Managing Director

By:  /s/ MATTHEW L. ROSETTI                    
Name:  Matthew L. Rosetti
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

DEUTSCHE BANK AG NEW YORK BRANCH,
as a Lender

By:  /s/ KIRK L. TASHJIAN                      
Name:  Kirk L. Tashjian
Title:    Vice President

By:  /s/ MICHAEL WINTERS                    
Name:  Michael Winters
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

REGIONS BANK,
as a Lender

By:  /s/ GREGORY GARBUZ                      
Name:  Gregory Garbuz
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

SUNTRUST BANK,
as a Lender

By:  /s/ LYNN TRAPANESE                      
Name:  Lynn Trapanese
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

UBS AG, STAMFORD BRANCH,
as a Lender

By:  /s/ LANA GIFAS                            
Name:  Lana Gifas
Title:    Director

By:  /s/ JENNIFER ANDERSON          
Name:  Jennifer Anderson
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

THE BANK OF NOVA SCOTIA,
as a Lender

By:  /s/ JOHN FRAZELL                      
Name:  John Frazell
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CIBC INC.,
as a Lender

By:  /s/ WILLIAM M. REID                      
Name:  William M. Reid
Title:    Authorized Signatory

By:  /s/ TRUDY NELSON                    
Name:  Trudy Nelson
Title:    Authorized Signatory

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

FIFTH THIRD BANK,
as a Lender

By:  /s/ LARRY HAYES                      
Name:  Larry Hayes
Title:    Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

SUMITOMO MITSUI BANKING CORPORATION,
as a Lender

By:  /s/ JAMES D. WEINSTEIN                      
Name:  James D. Weinstein
Title:    Managing Director

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

RB INTERNATIONAL FINANCe (USA), LLC,
as a Lender

By:  /s/ JOHN A. VALISKA                          
Name:  John A. Valiska
Title:    First Vice President

By:  /s/ STEVEN VANSTEENBERGEN       
Name:  Steven VanSteenbergen
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

PNC BANK, NATIONAL ASSOCIATION,
as a Lender

By:  /s/ MICHAEL SCHOLTEN                          
Name:  Michael Scholten
Title:    Officer

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

ROYAL BANK OF CANADA,
as a Lender

By:  /s/ DON J. MCKINNERNEY                         
Name:  Don J. McKinnerney
Title:    Authorized Signatory

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CAPITAL ONE, NATIONAL ASSOCIATION,
as a Lender

By:  /s/ NANCY M. MAK                          
Name:  Nancy M. Mak
Title:    Senior Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

HSBC BANK USA, NATIONAL ASSOCIATION
as a Lender

By:  /s/ JOHN M. REGAN                          
Name:  John M. Regan
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

U.S. BANK NATIONAL ASSOCIATION,
as a Lender

By:  /s/ ROD SWENSON                          
Name:  Rod Swenson
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CITY NATIONAL BANK, a national banking
association, as a Lender

By:  /s/ MIA BOLIN                          
Name:  Mia Bolin
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

FROST BANK,
as a Lender

By:  /s/ SARAH CERNOSEK                          
Name:  Sarah Cernosek
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

COMERICA BANK,
as a Lender

By:  /s/ L. J. PERENYI                          
Name:  L. J. Perenyi
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH, as a Lender

By:  /s/ MIKHAIL FAYBUSOVICH                          
Name:  Mikhail Faybusovich
Title:    Authorized Signatory

By:  /s/ SAMUEL MILLER       
Name:  Samuel miller
Title:    Authorized Signatory

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

AMALGAMATED BANK,
as a Lender

By:  /s/ MICHAEL LAMANES         
Name:  Michael LaManes
Title:    First Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

AMEGY BANK NATIONAL ASSOCIATION,
as a Lender

By:  /s/ MARK A. SERICE                          
Name:  Mark A. Serice
Title:    Senior Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

BANK HAPOALIM B.M.,
as a Lender

By:  /s/ JAMES P. SURLESS                          
Name:  James P. Surless
Title:    Vice President

By:  /s/ CHARLES MCLAUGHLIN              
Name:  Charles McLaughlin
Title:    Senior Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

SIEMENS FINANCIAL SERVICES, INC.,
as a Lender

By:  /s/ JEFFREY B. TERVESE               
Name:  Jeffrey B. Tervese
Title:    Vice President

By:  /s/ JOHN FINORE                             
Name:  John Finore
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

MEGA INTERNATIONAL COMMERCIAL BANK
CO., LTD., as a Departing Lender

By:  /s/ ANGELA CHEN               
Name:  Angela Chen
Title:    VP & DGM

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

FIRST HAWAIIAN BANK,
as a Departing Lender

By:  /s/ CHRISTOPHER FROST               
Name:  Christopher Frost
Title:    Assistant Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

DEUTSCHE BANK TRUST COMPANY AMERICAS,
as a Departing Lender

By:  /s/ KIRK L. TASHJIAN                  
Name:  Kirk L. Tashjian
Title:    Vice President

By:  /s/ MICHAEL WINTERS                 
Name:  Michael Winters
Title:    Vice President

SIGNATURE PAGE TO AMENDMENT NO. 1 
TO SIXTH  AMENDED AND RESTATED CREDIT AGREEMENT

ANNEX A
TO
OMNIBUS AMENDMENT NO. 1

Amended Credit Agreement

Attached

EXECUTION COPY
CONFORMED TO REFLECT PROPOSED CHANGES FROM AMENDMENT NO. 1 TO BE DATED NOVEMBER 18, 2014

J.P.MORGAN

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF JANUARY 4, 2013

AMONG

TESORO CORPORATION,
AS BORROWER

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,
AS LENDERS

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT

THE ROYAL BANK OF SCOTLAND PLC AND WELLS FARGO BANK, N.A.,
AS CO-DOCUMENTATION AGENTS

AND

BANK OF AMERICA, N.A., BARCLAYS BANK PLC, THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CITIBANK, N.A., CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK, MIZUHO BANK, LIMITED AND NATIXIS, NEW YORK BRANCH,
AS SYNDICATION AGENTS

____________________________________________________________________________

J.P. MORGAN SECURITIES LLC, RBS SECURITIES INC
and WELLS FARGO CAPITAL FINANCE, LLC
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
_____________________________________________________________________________

TABLE OF CONTENTS
		
	ARTICLE I DEFINITIONS
	6

		
	1.1.
	Certain Defined Terms                                6

		
	1.2.
	Other Definitional Provisions                            37

		
	ARTICLE II THE CREDITS
	38

		
	2.1.
	Commitments; Loans.                                38

		
	2.2.
	Required Payments; Termination                        39

		
	2.3.
	Ratable Loans; Types of Advances                        40

		
	2.4.
	Commitment Fee; Aggregate Revolving Loan Commitment; Ticking Fee        41

		
	2.5.
	Minimum Amount of Each Advance                        41

		
	2.6.
	Optional Principal Payments                            42

		
	2.7.
	Method of Selecting Types and Interest Periods for New Advances        42

		
	2.8.
	Conversion and Continuation of Outstanding Advances; No Conversion or

Continuation of Eurodollar Advances After Default                42
		
	2.9.
	Changes in Interest Rate, etc                            43

		
	2.10.
	Rates Applicable After Default                            43

		
	2.11.
	Method of Payment; Settlement                            43

		
	2.12.
	Noteless Agreement; Evidence of Indebtedness                    46

		
	2.13.
	Telephonic Notices                                46

		
	2.14.
	Payments of Interest.                                46

		
	2.15.
	Notification of Advances, Interest Rates, Prepayments and Revolving Loan

Commitment Reductions; Availability of Loans                    48
		
	2.16.
	Lending Installations                                48

		
	2.17.
	Non-Receipt of Funds by the Agent                        48

		
	2.18.
	Replacement of Lender                                49

		
	2.19.
	Facility LCs                                    49

		
	2.20.
	Increase of Aggregate Revolving Loan Commitment                54

		
	2.21.
	Defaulting Lenders                                56

		
	2.22.
	Increase of Aggregate Revolving Loan Commitment in Connection with BP

Acquisition.                                    58
ARTICLE III YIELD PROTECTION; TAXES                            58
		
	3.1.
	Yield Protection                                    58

		
	3.2.
	Changes in Capital Adequacy Regulations                    59

		
	3.3.
	Availability of Types of Advances                        59

		
	3.4.
	Funding Indemnification                            59

		
	3.5.
	Taxes                                        59

		
	3.6.
	Lender Statements; Survival of Indemnity                    62

		
	3.7.
	Alternative Lending Installation                            62

		
	ARTICLE IV CONDITIONS PRECEDENT
	63

		
	4.1.
	Effectiveness of Revolving Loan Commitments                    63

		
	4.2.
	Each Credit Extension                                64

1

		
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	64

		
	5.1.
	Existence and Standing    64

		
	5.2.
	Authorization and Validity    65

		
	5.3.
	No Conflict; Government Consent    65

		
	5.4.
	Financial Statements    65

		
	5.5.
	Material Adverse Change    65

		
	5.6.
	Taxes    65

		
	5.7.
	Litigation and Contingent Obligations    66

		
	5.8.
	Subsidiaries    66

		
	5.9.
	ERISA    66

		
	5.10.
	Accuracy of Information    66

		
	5.11.
	Regulation U    66

		
	5.12.
	Material Agreements    66

		
	5.13.
	Compliance With Laws    66

		
	5.14.
	Ownership of Properties    67

		
	5.15.
	Plan Assets; Prohibited Transactions    67

		
	5.16.
	Environmental Matters    67

		
	5.17.
	Investment Company Act    67

		
	5.18.
	Insurance    67

		
	5.19.
	No Default or Unmatured Default    67

		
	5.20.
	Anti-Corruption Laws and Sanctions, Etc..    68

		
	ARTICLE VI COVENANTS
	68

		
	6.1.
	Financial Reporting    68

		
	6.2.
	Use of Proceeds    71

		
	6.3.
	Notice of Default    71

		
	6.4.
	Conduct of Business    71

		
	6.5.
	Taxes    71

		
	6.6.
	Insurance    71

		
	6.7.
	Compliance with Laws    71

		
	6.8.
	Maintenance of Properties    72

		
	6.9.
	Inspection; Keeping of Books and Records    72

		
	6.10.
	Restricted Payments    72

		
	6.11.
	Merger    73

		
	6.12.
	Sale of Assets    73

		
	6.13.
	Investments and Acquisitions    74

		
	6.14.
	Indebtedness    76

		
	6.15.
	Liens    79

		
	6.16.
	Affiliates    81

		
	6.17.
	Financial Contracts    82

		
	6.18.
	Subsidiary Covenants    82

		
	6.19.
	Contingent Obligations    82

		
	6.20.
	MLP Agreements and Arrangements    82

		
	6.21.
	Fixed Charge Coverage Ratio    82

		
	6.22.
	Minimum Consolidated Tangible Net Worth    83

		
	6.23.
	Subsidiary Collateral Documents; Subsidiary Guarantors    83

		
	6.24.
	Insurance Proceeds    83

		
	6.25.
	Collection Accounts    83

		
	6.26.
	Repayment of Indebtedness    84

2

		
	6.27.
	Multiemployer Plans    84

		
	ARTICLE VII DEFAULTS
	84

		
	ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
	87

		
	8.1.
	Acceleration    87

		
	8.2.
	Amendments    87

		
	8.3.
	Preservation of Rights    89

		
	ARTICLE IX GENERAL PROVISIONS
	89

		
	9.1.
	Survival of Representations    89

		
	9.2.
	Governmental Regulation    89

		
	9.3.
	Headings    89

		
	9.4.
	Entire Agreement    89

		
	9.5.
	Several Obligations; Benefits of this Agreement    90

		
	9.6.
	Expenses; Indemnification    90

		
	9.7.
	Numbers of Documents    91

		
	9.8.
	Accounting    91

		
	9.9.
	Severability of Provisions    91

		
	9.10.
	Nonliability of Lenders    91

		
	9.11.
	Confidentiality    92

		
	9.12.
	Lenders Not Utilizing Plan Assets    92

		
	9.13.
	Nonreliance    92

		
	9.14.
	Disclosure    92

		
	9.15.
	Performance of Obligations    92

		
	9.16.
	Subordination of Intercompany Indebtedness    93

		
	9.17.
	Certifications Regarding Indentures    94

		
	9.18.
	Co-Agents    94

		
	9.19.
	Releases of Subsidiary Guarantors.    94

		
	ARTICLE X THE AGENT
	95

		
	10.1.
	Appointment; Nature of Relationship    95

		
	10.2.
	Powers    96

		
	10.3.
	General Immunity    96

		
	10.4.
	No Responsibility for Loans, Recitals, etc    96

		
	10.5.
	Action on Instructions of Lenders    96

		
	10.6.
	Employment of Agents and Counsel    96

		
	10.7.
	Reliance on Documents; Counsel    97

		
	10.8.
	Agent’s Reimbursement and Indemnification    97

		
	10.9.
	Notice of Default    97

		
	10.10.
	Rights as a Lender    97

		
	10.11.
	Lender Credit Decision    97

		
	10.12.
	Successor Agent    98

		
	10.13.
	Agent and Arrangers Fees    98

		
	10.14.
	Delegation to Affiliates    98

		
	10.15.
	Collateral Documents    98

		
	10.16.
	Exercise of Certain Remedies    99

3

		
	ARTICLE XI SETOFF; RATABLE PAYMENTS
	99

		
	11.1.
	Setoff    99

		
	11.2.
	Ratable Payments    100

		
	11.3.
	Application of Payments    100

		
	11.4.
	Failure to Make Payment    100

		
	ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
	101

		
	12.1.
	Successors and Assigns    101

		
	12.2.
	Participations    101

		
	12.3.
	Assignments    102

		
	12.4.
	Dissemination of Information    104

		
	12.5.
	Tax Certifications    104

		
	ARTICLE XIII NOTICES
	104

		
	13.1.
	Notices    104

		
	13.2.
	Change of Address    105

		
	ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS
	105

		
	ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
	105

		
	ARTICLE XVI PRIOR CREDIT AGREEMENT
	106

		
	ARTICLE XVII USA PATRIOT ACT
	106

4

SCHEDULES
Commitment Schedule 
Pricing Schedule
Departing Lender Schedule
	
			
	Schedule 1.1(a)
	-
	Eligible Carriers

	Schedule 1.1(b)
	-
	Drop Down Assets

	Schedule 2.19.1
	-
	Letters of Credit Issued Under Prior Credit Agreement

	Schedule 5.8
	-
	Subsidiaries

	Schedule 5.9
	 
	ERISA

	Schedule 6.13
	-
	Investments

	Schedule 6.14
	-
	Indebtedness

	Schedule 6.15
	-
	Liens

EXHIBITS
	
			
	Exhibit A
	-
	Intentionally Omitted

	Exhibit B
	-
	Form of Compliance Certificate

	Exhibit C
	-
	Form of Assignment and Assumption Agreement

	Exhibit D
	-
	Form of Loan/Credit Related Money Transfer Instruction

	Exhibit E
	-
	Form of Revolving Note (if requested)

	Exhibit F
	-
	Intentionally Omitted

	Exhibit G
	-
	Form of Officer’s Certificate

	Exhibit H
	-
	List of Closing Documents

	Exhibit I-1
	-
	Form of Interim Collateral Report

	Exhibit I-2
	-
	Form of Monthly Collateral Report

	Exhibit J-1
	-
	Form of Commitment Increase Certificate

	Exhibit J-2
	-
	Form of Additional Lender Certificate

	 
	 
	 

5

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
This Sixth Amended and Restated Credit Agreement, dated as of January 4, 2013, is entered into by and among Tesoro Corporation, a Delaware corporation, the Lenders, the LC Issuers, and JPMorgan Chase Bank, National Association, as Administrative Agent.
WHEREAS, the Borrower, certain of the Lenders, certain other parties and the Agent are currently party to the Prior Credit Agreement;
WHEREAS, the Borrower, the Lenders and the Agent have agreed (a) to enter into this Agreement in order to (i) amend and restate the Prior Credit Agreement in its entirety; (ii) re-evidence the “Obligations” under, and as defined in, the Prior Credit Agreement, which shall be repayable in accordance with the terms of this Agreement; and (iii) set forth the terms and conditions under which the Lenders will, from time to time, make loans and extend other financial accommodations to or for the benefit of the Borrower;
WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Prior Credit Agreement or be deemed to evidence or constitute full repayment of such obligations and liabilities, but that this Agreement shall amend and restate in its entirety the Prior Credit Agreement and re-evidence the obligations and liabilities of the Borrower outstanding thereunder, which shall be payable in accordance with the terms hereof; and
WHEREAS, it is also the intent of the Borrower to confirm that all obligations under the applicable “Loan Documents” (as referred to and defined in the Prior Credit Agreement) shall continue in full force and effect as modified or restated by the Loan Documents (as referred to and defined herein) and that, from and after the Closing Date, all references to the “Credit Agreement” contained in any such existing “Loan Documents” shall be deemed to refer to this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree that the Prior Credit Agreement is hereby amended and restated as follows:
ARTICLE I

DEFINITIONS

6.1Certain Defined Terms.  As used in this Agreement:

“Accounting Changes” is defined in Section 9.8.
“Account Debtor” means the account debtor or obligor with respect to any of the Receivables and/or the prospective purchaser with respect to any contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with the Borrower or any Subsidiary.
“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Closing Date, by which the Borrower or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number

6

of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage of voting power) of the outstanding ownership interests of a partnership or limited liability company of any Person.
“Act” is defined in Article XVII.
“Additional Lender” is defined in Section 2.20.2.
“Additional Lender Certificate” is defined in Section 2.20.2.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Agent.
“Advance” means a borrowing hereunder consisting of the aggregate amount of several Loans (i) made by some or all of the Lenders on the same Borrowing Date, or (ii) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period.  The term “Advance” shall, unless otherwise indicated, include Non-Ratable Loans and Collateral Protection Advances.
“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person.  A Person shall be deemed to control another Person if the controlling Person is the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of voting securities, by contract or otherwise.
“Agent” means JPMorgan in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, as Administrative Agent, and any successor Agent appointed pursuant to Article X.
“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the Outstanding Credit Exposure of all the Lenders.
“Aggregate Outstanding Revolving Loan Credit Exposure” means, at any time, the aggregate of the Outstanding Revolving Loan Credit Exposures of all the Lenders.
“Aggregate Revolving Loan Commitment” means the aggregate of the Revolving Loan Commitments of all the Lenders, as increased or reduced from time to time pursuant to the terms hereof.  The Aggregate Revolving Loan Commitment as of the effective date of the First Amendment is Three Billion and 00/100 Dollars ($3,000,000,000).
“Agreement” means this Sixth Amended and Restated Credit Agreement, as it may be amended, restated, supplemented or otherwise modified and as in effect from time to time.
“Agreement Accounting Principles” means U.S. GAAP, applied in a manner consistent with that used in preparing the financial statements of the Borrower referred to in Section 5.4; provided, however, that except as provided in Section 9.8, with respect to the calculation of the financial covenants set forth in Sections 6.21 and 6.22 (and the defined terms used in such Sections), “Agreement Accounting

7

Principles” means U.S. GAAP as in effect in the United States as of the Closing Date, applied in a manner consistent with that used in preparing the financial statements of the Borrower referred to in Section 5.4.  Notwithstanding anything to the contrary herein, any obligations of a Person under a lease (whether existing now or entered into in the future) that is not (or would not be) required to be classified and accounted for as a capital lease on the balance sheet of such Person under the Agreement Accounting Principles as in effect on the Closing Date shall not be treated as a capital lease solely as a result of (x) the adoption of changes in or (y) changes in the application of U.S. GAAP after the Closing Date.
“Alternate Base Rate” means, for any date, a rate per annum equal to the highest of (i) the Prime Rate for such day, (ii) the Federal Funds Effective Rate plus 1/2% per annum for such day, and (iii) the Eurodollar Rate (without giving effect to the Applicable Margin) for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided  that,  for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or  on  any  successor  or substitute page) at approximately 11:00 a.m. London  time  on  such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar Rate, respectively.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.
“Anti-Money Laundering Laws” is defined in Section 5.20.
 “Applicable Fee Rate” means, with respect to the Commitment Fee at any time, the percentage rate per annum which is applicable at such time as set forth in the Pricing Schedule.
“Applicable LC Sublimit” means (i) with respect to JPMorgan in its capacity as an LC Issuer under this Agreement, $1,000,000,000, (ii) with respect to BNP Paribas in its capacity as an LC Issuer under this Agreement, $500,000,000, (iii) with respect to Natixis, New York Branch in its capacity as an LC Issuer under this Agreement, $500,000,000, and (iv) with respect to any other Person that becomes an LC Issuer pursuant to the terms of this Agreement, such amount as agreed to in writing by the Borrower, the Agent and such Person at the time such Person becomes an LC Issuer pursuant to the terms of this Agreement, as each of the foregoing amounts may be amended from time to time with the written consent of the Borrower, the Agent and the LC Issuers. For the avoidance of doubt, it is acknowledged and agreed the sum of all LC Issuers’ Applicable LC Sublimits shall not at any time exceed the Aggregate Revolving Loan Commitment.
“Applicable Margin” means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type consisting of Revolving Loans as set forth in the Pricing Schedule.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means J.P. Morgan Securities LLC, RBS Securities Inc. and Wells Fargo Capital Finance, LLC, in their respective capacities as the co-lead arrangers and joint bookrunners for the credit facilities evidenced by this Agreement.
“Article” means an article of this Agreement unless another document is specifically referenced.

8

“Assignment Agreement” is defined in Section 12.3.1.
“Authorized Officer” means any of the chief executive officer, president, chief operating officer, chief financial officer, treasurer, vice president-finance or vice president-controller of the Borrower, acting singly.
“Available Aggregate Revolving Loan Commitment” means, at any time, the lesser of (i) the Aggregate Revolving Loan Commitment and (ii) the Borrowing Base then in effect, minus the Aggregate Outstanding Revolving Loan Credit Exposure at such time.
“Bank Products” means, with respect to any Lender, any of the following services provided to the Borrower or an Affiliate thereof by any Lender or the Agent: (i) Rate Management Transactions, (ii) commercial credit card services, (iii) cash management and other treasury management services (including, without limitation, controlled disbursements, automated clearinghouse transactions, return items, and interstate depository network services), and (iv) foreign exchange related services.
“Bankruptcy Event” means, with respect to any Person, such Person if it becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Borrower” means Tesoro Corporation, a Delaware corporation, and its permitted successors and assigns (including, without limitation, a debtor in possession on its behalf).
“Borrowing Base” means, as of any date of calculation, an amount equal to the lesser of (x) the Aggregate Revolving Loan Commitment, and (y) as set forth on the most current Interim Collateral Report or Monthly Collateral Report, as applicable, delivered to the Agent, the aggregate of (i) 100% of Perfected Cash Interests, plus (ii) eighty-five percent (85%) of the Gross Amount of Eligible Receivables, plus (iii) eighty percent (80%) of the Gross Amount of Eligible Petroleum Inventory, minus (iv) the Rental Reserve, minus (v) the Standard Reserve, and minus (vi) such reserves as the Agent may from time to time reasonably deem appropriate (including any Permitted Credit Enhancement Transaction Reserves); provided, however, that the Agent, upon the occurrence and during the continuance of a Default, may, in its reasonable discretion and without the Borrower’s consent, decrease the foregoing percentages, and, in the event such Default is cured, such decrease in the percentages shall be restored subject to the consent of the Required Lenders so long as no other Default has occurred and is continuing.
“Borrowing Date” means a date on which an Advance is made hereunder.
“Borrowing Notice” is defined in Section 2.7.
“BP Acquisition” means the contemplated acquisition by Tesoro Refining and Marketing Company of British Petroleum’s integrated Southern California refining and marketing business from BP West Coast Products, LLC, Atlantic Richfield Company, ARCO Midcon LLC, ARCO Terminal Services

9

Corporation, ARCO Material Supply Company, CH-Twenty, Inc., Products Cogeneration Company and Energy Global Investments (USA), Inc, as disclosed in the Form 8-K filed by the Borrower with the U.S. Securities and Exchange Commission on August 13, 2012.
“BP Acquisition Agreement” means the agreement or agreements evidencing the BP Acquisition as attached to the Form 8-K filed by the Borrower with the U.S. Securities and Exchange Commission on August 13, 2012.
“Business Activity Report” means (A) a Notice of Business Activities Report filed with the State of Minnesota, Department of Revenue or (B) any similar report required by any other State relating to the ability of the Borrower or any Subsidiary Guarantor to enforce its Receivables claims against Account Debtors located in any such state.
“Business Day” means (i) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago, Illinois and New York, New York for the conduct of substantially all of their commercial lending activities, interbank wire transfers can be made on the Fedwire system and dealings in Dollars are carried on in the London interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago, Illinois and New York, New York for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.
“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles.
“Cash Equivalent Investments” means (i) short-term obligations of, or fully guaranteed by, the United States of America, and the senior notes of government sponsored enterprises, (ii) commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s, (iii) demand deposit accounts maintained in the ordinary course of business, (iv) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000; provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest, (v) tax exempt, auction rate securities, and variable rate demand notes which are AAA rated, (vi) money market mutual funds where total investment does not exceed five percent of total assets, (vii) repurchase agreements that are collateralized by securities for direct investments, (viii) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (iv) of this definition, having a term of not more than thirty (30) days, with respect to securities issued or fully guaranteed or insured by the United States government; (ix) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; and (x) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (iv) of this definition.

10

“Catalyst Sale/Leaseback Transaction” means a sale-leaseback transaction (the agreements, documents, and instruments for which, as well as the rights and remedies thereunder, have been collaterally assigned by the Borrower or the applicable Subsidiary to the Agent on terms and conditions reasonably acceptable to the Agent) by the Borrower or any of the Subsidiaries of any catalyst containing one or more precious metals used by the Borrower or any of the Subsidiaries in the ordinary course of business. 
“Change in Control” means the occurrence of any of the following events:  (i) there shall be consummated (A) any consolidation or merger of the Borrower in which the Borrower is not the continuing or surviving corporation or pursuant to which shares of the Borrower’s common stock would be converted into cash, securities or other property, other than a merger of the Borrower where a majority of the Board of Directors of the surviving corporation are, and for a two year period after the merger continue to be, persons who were directors of the Borrower immediately prior to such merger or were elected as directors, or nominated for election as directors, by a vote of at least two-thirds of the directors then still in office who were directors of the Borrower immediately prior to such merger, or (B) any sale, lease, exchange or transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Borrower, unless, immediately following such sale, lease, exchange or transfer, such assets are owned, directly or indirectly, by the Borrower or one or more Subsidiaries of the Borrower; (ii) the shareholders of the Borrower shall approve any plan or proposal for the liquidation or dissolution of the Borrower; (iii) (A) any “person” as defined in the Securities Exchange Act of 1934 (the “Exchange Act”), other than the Borrower or a Subsidiary or any employee benefit plan sponsored by the Borrower or a Subsidiary, shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Borrower representing 50% or more of the combined voting power of the Borrower’s then outstanding securities ordinarily (and apart from rights accruing in special circumstances) having the right to vote in the election of directors, as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise, and (B) at any time during a period of two consecutive years thereafter, individuals who immediately prior to the beginning of such period constituted the Board of Directors of the Borrower shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination by the Board of Directors for election by the Borrower’s shareholders of each new director during such period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period; or (iv) a “Change of Control” or like event under any agreement, document or instrument evidencing Material Indebtedness.
“Change in Law” means (a) the adoption of any law, rule, regulation or treaty after the Closing Date, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance by any Lender or any LC Issuer (or, for purposes of Section 3.2, by any lending office of such Lender or by such Lender’s or such LC Issuer’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided however, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.
“Closing Date” means the date on which all of the conditions to the effectiveness hereof have been satisfied, which date is January 4, 2013.

11

“Co-Agent” means each of The Royal Bank of Scotland plc and Wells Fargo Bank, N.A., each in its capacity as co-documentation agent, together with their respective successors and assigns.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
“Collateral” means all property and interests in property now owned or hereafter acquired by the Borrower or any of its Subsidiary Guarantors in or upon which a security interest or lien is granted to the Agent, for the benefit of the Holders of Secured Obligations, or to the Agent, for the benefit of the Lenders, whether under the Security Agreement, under any of the other Collateral Documents or under any of the other Loan Documents.
“Collateral Documents” means all agreements, instruments and documents executed in connection with this Agreement that are intended to create or evidence Liens to secure the Secured Obligations, including, without limitation, the Security Agreement and all other security agreements, loan agreements, notes, guarantees, subordination agreements, pledges, warrants, mortgages, charges, debentures, hypothecations, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether heretofore, now, or hereafter executed by or on behalf of the Borrower or any of its Subsidiary Guarantors and delivered to the Agent or any of the Lenders, together with all agreements and documents referred to therein or contemplated thereby.
“Collateral Protection Advance” is defined in Section 2.1.2.
“Collateral Shortfall Amount” is defined in Section 8.1.
“Collection Account” is defined in Section 6.25.
“Commitment Fee” is defined in Section 2.4.1.
“Commitment Increase Certificate” is defined in Section 2.20.2.
“Commitment Schedule” means the Schedule identifying the Lenders’ respective Revolving Loan Commitments, as attached hereto and identified as such.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute. 
“Consolidated Capital Expenditures” means, for any period, with respect to the Borrower and its Subsidiaries, the aggregate of all expenditures by the Borrower and its Subsidiaries for the acquisition or leasing (pursuant to a Capitalized Lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs, and improvements during such period) which are capitalized under Agreement Accounting Principles on the Borrower’s or any Subsidiary’s balance sheet.
“Consolidated EBITDA” for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of, (i) Consolidated Interest Expense, (ii) income and franchise tax expense, (iii) depreciation, (iv) amortization and (v) any other non-cash charges (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, non-cash losses on sales of assets outside of the ordinary course of business), minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of, (i) interest income (except to the extent deducted in determining Consolidated Interest Expense) and (ii) any other non-cash income, all

12

reported for the Borrower and its Subsidiaries on a consolidated basis.  For the avoidance of doubt, no amounts in respect of Net Mark-to-Market Exposure shall be included in any computation of Consolidated EBITDA.  For the purposes of calculating Consolidated EBITDA for any period of twelve consecutive months (each, a “Reference Period”) pursuant to any determination of the financial covenant contained in Section 6.21, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $10,000,000; and “Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $10,000,000.
“Consolidated Interest Expense” means, with reference to any period, the accrued interest expense of the Borrower and its Subsidiaries reported on a consolidated basis for such period, including, without limitation, yield or any other financing costs resembling interest which are payable under any Receivables Purchase Facility.
“Consolidated Net Income” means, with reference to any period, the consolidated net earnings (or loss) of the Borrower and its Subsidiaries reported for such period.
“Consolidated Tangible Net Worth” means at any time, with respect to any Person, the consolidated total stockholders’ equity of such Person and its Subsidiaries reported on a consolidated basis in accordance with Agreement Accounting Principles and as reported in such Person’s most recent Form 10-K or Form 10-Q filing, as applicable, with the U.S. Securities and Exchange Commission, minus at all times all items that are reported in such Form 10-K or Form 10-Q filing, as applicable, as “acquired intangibles net” and “goodwill.”
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss; provided, however, that amounts held or allocated as reserves for obligations arising under or in connection with (i) any Plan or other pension fund related item, (ii) litigation, judgments and legal proceedings, and (iii) compliance with Environmental Laws, including, without limitation, the remediation of any environmental related issues with respect to its Property, shall not constitute “Contingent Obligations.”
“Continuing Director” means, with respect to any Person as of any date of determination, any member of the board of directors of such Person who (i) was a member of such board of directors on the Closing Date, or (ii) was nominated for election or elected to such board of directors with the approval of the required majority of the Continuing Directors who were members of such board at the time of such nomination or election; provided that any individual who is so elected or nominated in connection with a merger, consolidation, acquisition or similar transaction shall not be a Continuing Director unless such individual was a Continuing Director prior thereto.

13

“Controlled Affiliate” has the meaning assigned to such term in Section 5.20. 
“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
“Conversion/Continuation Notice” is defined in Section 2.8.
“Credit Extension” means the making of an Advance or the issuance of a Facility LC.
“Credit Extension Date” means the Borrowing Date for an Advance or the issuance date for a Facility LC.
“Credit Party” means the Agent, the LC Issuers, the Non-Ratable Lender or any other Lender.
“Current Petroleum Inventory Market Price” means, with respect to any Petroleum Inventory, the market price for such Petroleum Inventory as set forth in a published or reported price index maintained by a third-party that is not an Affiliate of the Borrower and that prepares such index in the ordinary course of its business.  Current Petroleum Inventory Market Price shall be determined using published or reported price indices created or distributed by Oil Price Information Service, commonly known as OPIS, and/or Platts Oilgram Price Report, commonly known as Platts.  In the event OPIS or Platts no longer provides the aforementioned price indices, or in the event the Borrower and the Agent determine that either OPIS or Platts no longer accurately provides pricing information for Petroleum Inventory, the Borrower and the Agent shall replace one or both of the OPIS and Platts price indices, as applicable, with other third-party price indices reasonably acceptable to each of the Borrower and the Agent. 
“Default” means an event described in Article VII.
“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Facility LCs, Non-Ratable Loans or Collateral Protection Advances or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Facility LCs, Non-Ratable Loans and Collateral Protection Advances under this Agreement; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance reasonably satisfactory to it and the Agent, or (d) has become the subject of a Bankruptcy Event.
“Departing Lender” means each lender under the Prior Credit Agreement that does not have a Revolving Loan Commitment hereunder and is identified on the Departing Lender Schedule hereto.

14

“Departing Lender Schedule” means the Schedule identifying each Departing Lender as of the Closing Date attached hereto and identified as such. 
“Dilution Factors” means, without duplication, with respect to any period covered by a field exam, the aggregate amount of all deductions, credit memos, returns, adjustments, allowances, bad debt write-offs and other non-cash credits which are recorded to reduce Receivables in a manner consistent with current and historical accounting practices of the Borrower. 

“Dilution Ratio” means, at any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors corresponding with the field exam most recently received by the Agent divided by (b) total gross sales corresponding with such field exam.

“Dilution Reserve” means, at any date, (i) the amount by which the Dilution Ratio exceeds six percent (6%) multiplied by (ii) the Eligible Receivables on such date.

“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollar”, “dollar” and “$” means the lawful currency of the United States of America.
“Drop Down Assets” means (i) all Property of the Borrower and its Subsidiaries identified on Schedule 1.1(b) and (ii) Property of the Borrower and its Subsidiaries identified by the Borrower from time to time as “Drop Down Assets”, which Property shall constitute storage and logistics assets; provided that no Collateral shall constitute a Drop Down Asset.
“Drop Down Subsidiaries” means (i) Kenai Pipeline Company, Tesoro Alaska Pipeline Company, (ii) each other Person, substantially all of the assets of which consist of one or more pipelines used in connection with the transportation of petroleum or storage of petroleum at terminals and which is identified by the Borrower to the Agent (which identification may be made upon the acquisition by such Person of such assets) and (iii) all Subsidiaries of the Borrower identified by the Borrower to the Agent from time to time as a “Drop Down Subsidiary”; provided, that the Drop Down Subsidiaries shall not own or control any Collateral nor shall any Subsidiary required to act as a Guarantor pursuant to Section 6.23 be designated as a Drop Down Subsidiary without the prior written consent of the Agent.
“Drop Down Transactions” means the contribution, sale, lease, conveyance, disposition or other transfer by the Borrower and/or its Subsidiaries of the Drop Down Assets and the Drop Down Subsidiaries to the MLP, the MLP GP or any of their respective Subsidiaries; provided that no assets that constitute Collateral shall be permitted to be contributed, sold, leased, conveyed, disposed or otherwise transferred pursuant to any such transaction.
“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC. 
“Eligible Carrier” means any of the terminals, warehouses, carriers and pipeline companies listed or described in Schedule 1.1(a) to this Agreement, as such Schedule 1.1(a) may be revised by the Borrower from time to time with the consent of the Agent, such consent not to be unreasonably withheld.
“Eligible Petroleum Inventory” means Petroleum Inventory of the Borrower and the Subsidiary Guarantors which is held for sale or lease or refining in the ordinary course of business or furnished under

15

any contract of service by the Borrower or such Subsidiary Guarantors in the ordinary course of business which is at all times and shall continue to meet standards of eligibility from time to time established in accordance with this Agreement.  Initially, standards of eligibility will be established by the Agent in a manner substantially consistent with the standards in effect immediately prior to the effectiveness of this Agreement and may be revised from time to time by the Agent in its reasonable credit judgment (which credit judgment shall be exercised in a manner that is not arbitrary or capricious).  In general, without limiting the foregoing, the following Petroleum Inventory constitutes Eligible Petroleum Inventory:
(a)    (i) Petroleum Inventory that is subject to a valid, properly documented, first priority perfected lien and security interest in favor of the Agent on behalf of the Holders of Secured Obligations; provided, such Petroleum Inventory may be subject to one or more Specified Liens; or (ii) Petroleum Inventory that has been delivered to an Eligible Carrier subject to a valid, first priority perfected lien and security interest in favor of the Agent on behalf of the Holders of Secured Obligations with UCC financing statements (or any other applicable form filings) perfecting or continuing the perfection of the security interest of the Agent on behalf of the Holders of Secured Obligations in such Petroleum Inventory having been duly filed where necessary and either (x) no document of title is issued with respect to such Petroleum Inventory by such Eligible Carrier, or (y) if a document of title is issued with respect to such Petroleum Inventory by such Eligible Carrier, the original of such document of title is delivered to the Agent or its designated bailee or agent; provided, such Petroleum Inventory may be subject to one or more Specified Liens;
(b)    Petroleum Inventory that is in good saleable or usable condition, is not deteriorating in quality and is not obsolete, and is of a quality which (in locations where sold by the Borrower) is marketable at prevailing market prices for such products and meets all applicable governmental regulations and standards at the place of intended sale;
(c)    Petroleum Inventory to which the Borrower or its Subsidiaries have title; provided, such Petroleum Inventory may be subject to one or more Specified Liens; or, in the case of Petroleum Inventory described in clause (ii) of paragraph (a) above, the Borrower has the absolute and unconditional right to obtain such Petroleum Inventory or Petroleum Inventory equivalent to such Petroleum Inventory from an Eligible Carrier, in each case, free and clear of any and all Liens whatsoever, other than those (1) in favor of the Agent on behalf of the Holders of Secured Obligations created pursuant to the Collateral Documents and (2) those in favor of an Eligible Carrier that arise under applicable law or contract and for which appropriate amounts have been allocated under the Rental Reserve; provided, such Petroleum Inventory may be subject to one or more Specified Liens;
(d)    Petroleum Inventory that is (1) located at a location owned by the Borrower or a Subsidiary Guarantor, (2) delivered to an Eligible Carrier under an arrangement described in clause (ii) of paragraph (a) above, or (3) located at a location leased by or under contract by the Borrower or a Subsidiary Guarantor so long as such location is either subject to a Third Party Agreement or such location is subject to the Rental Reserve;
(e)    Petroleum Inventory that is not commingled with Petroleum Inventory of any Person other than the Borrower and/or its Subsidiaries or has been delivered to an Eligible Carrier under an arrangement described in clause (ii) of paragraph (a) above, 
(f)    Petroleum Inventory that is in full conformity with the representations and warranties made by the Borrower or a Subsidiary Guarantor to the Agent with respect thereto whether contained in this Agreement or the Security Agreement, and

16

(g)    To the extent Petroleum Inventory is in transit on the high seas to or from a non-Affiliate, (1) it does not constitute a Receivable, (2) if purchased with a Letter of Credit, a copy of such Letter of Credit has been delivered to the Agent, (3) it is covered by insurance in form and substance reasonably acceptable to the Agent, and (4) all applicable documents of title have been delivered to the Agent (or a designee (including, if so designated by the Agent, the Borrower or a Subsidiary Guarantor) of the Agent); provided, however, that with respect to the high seas Petroleum Inventory described in this clause (g), the amount of such high seas Petroleum Inventory on any date of determination in excess of 33.333% of the aggregate amount of all Petroleum Inventory then owned by the Borrower and its Subsidiary Guarantors on such date of determination shall not constitute Eligible Petroleum Inventory.
Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, no Petroleum Inventory (i) located, stored or maintained at any retail service station or in a railroad car, or otherwise in transit upon a railway system, or (ii) owned by Tesoro Canada or Tesoro Panama, shall constitute Eligible Petroleum Inventory.
“Eligible Receivables” means Receivables created by the Borrower or any Subsidiary Guarantor, in each case in the ordinary course of its business arising out of the sale of goods or rendition of services by the Borrower or such Subsidiary Guarantor, which Receivables are and at all times shall continue to meet standards of eligibility from time to time reasonably established in accordance with this Agreement.  Initially, standards of eligibility will be established by the Agent in a manner substantially consistent with the standards in effect immediately prior to the effectiveness of this Agreement and may be revised from time to time by the Agent in its reasonable credit judgment (which credit judgment shall be exercised in a manner that is not arbitrary or capricious).  In general, without limiting the foregoing, the following Receivables are not Eligible Receivables:
(a)Receivables which remain unpaid sixty (60) days after the date on which payment was due or ninety (90) days after the date of the original applicable invoice;

(b)Receivables on any date of determination which are owing by an Account Debtor and its Affiliates (i) which are from an Account Debtor whose senior unsecured obligations without giving effect to third party credit enhancement are rated no less than BBB- by S&P (or the equivalent by a recognized credit rating agency reasonably acceptable to the Agent) to the extent that the aggregate amount of Receivables owing by said Account Debtor and its Affiliates to the Borrower or any Subsidiary Guarantor exceeds 25% or, upon the request of the Borrower and with the approval of the Agent, up to 35%, times the aggregate amount of all Eligible Receivables on such date; or (ii) if such Account Debtor does not have such minimum rating, to the extent that the aggregate amount of Receivables owing by such Account Debtor and its Affiliates to the Borrower or any Subsidiary Guarantor exceeds 25% times the aggregate amount of all Eligible Receivables on such date;

(c)all Receivables owing by a single Account Debtor (including Receivables which remain unpaid fewer than sixty (60) days after the date on which payment was due or ninety (90) days after the date of the original applicable invoice) if fifty percent (50%) of the aggregate balance owing by such Account Debtor, calculated without taking into account any credit balances of such Account Debtor, remains unpaid ninety (90) days after the date of the original applicable invoice or has otherwise become, or has been determined by the Agent to be ineligible in accordance with the provisions of this definition;

(d)Receivables with respect to which the Account Debtor is a director, officer, employee, Subsidiary or Affiliate of the Borrower or any Subsidiary thereof;

(e)(i) Receivables with respect to which the Account Debtor is the United States of America, any federal, state, local or other political subdivision thereof or any department, agency or

17

instrumentality of any of the foregoing, unless the Borrower or applicable Subsidiary Guarantor has complied with the provisions of the Federal Assignment of Claims Act or other applicable statutes, including executing and delivering to the Agent all statements of assignment and/or notification which are in form and substance acceptable to the Agent and which are deemed necessary by the Agent to effectuate the assignment of such Receivables to the Agent for the benefit of the Holders of Secured Obligations; and (ii) Receivables with respect to which the Account Debtor is a foreign government, any federal, state, local or other political subdivision thereof, or any department, agency, or instrumentality of any of the foregoing described in this clause (ii);

(f)Receivables not denominated in Dollars or not payable in the United States;

(g)Receivables with respect to which the Account Debtor is not a resident of the United States (which shall not be deemed to include any territories of the United States) or Canada unless (i) the Account Debtor has supplied the Borrower or applicable Subsidiary Guarantor with an irrevocable letter of credit (which letter of credit shall be delivered to the Agent and shall be in form and substance acceptable to the Agent), or (ii) the full payment of such Receivable shall have been insured by the Borrower or applicable Subsidiary Guarantor pursuant to an insurance policy in form and substance acceptable to the Agent issued by a financial institution satisfactory to the Agent, which policy names the Agent as the loss payee or beneficiary thereof; provided, however, that up to $100,000,000 of Receivables for which the Account Debtors therefor reside in the United Kingdom, Japan, Australia, Singapore or a country which is a member of the European Union shall constitute Eligible Receivables so long as all of the other eligibility requirements for such Receivables are satisfied;

(h)Receivables that are subject to any dispute, contra-account, defense, offset or counterclaim, volume rebate or advertising or other allowance; provided that if any portion of any such Receivables is not subject to any material dispute, contra-account, defense, offset, counterclaim, volume rebate or advertising or other allowance and the payment of such portion is not being withheld or delayed or otherwise affected in any manner due to the portion that is subject to such material dispute, contra-account, defense, offset, counterclaim, volume rebate or advertising or other allowance, then such portion which is not subject to any material dispute, contra-account, defense, offset, counterclaim, volume rebate or advertising or other allowance shall not be excluded from Eligible Receivables because of this clause (h); provided, further, that the portion of a contra-account that arises from a claim against the Borrower or a Subsidiary Guarantor that is supported by a letter of credit issued on behalf of the Borrower or a Subsidiary Guarantor in favor of a customer as payment for goods or services shall not be excluded from Eligible Receivables because of this clause (h);

(i)Receivables with respect to which the Account Debtor is the subject of a bankruptcy or similar insolvency proceeding or has made an assignment for the benefit of creditors or whose assets have been conveyed to a receiver, pledgee, trustee or assignee for the benefit of creditors unless there is a letter of credit supporting such Receivables (which letter of credit shall have been delivered to the Agent and shall be in form and substance acceptable to the Agent);

(j)Receivables with respect to which the Account Debtor’s obligation to pay the Receivable is conditional upon the Account Debtor’s approval or is otherwise subject to any repurchase obligation or return right, as with sales made on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval (except with respect to Receivables in connection with which Account Debtors are entitled to return Petroleum Inventory on the basis of the quality of such Petroleum Inventory) or consignment basis, or where such Receivables represent progress billings;

(k)Receivables with respect to which the Account Debtor is located in Minnesota (or any other jurisdiction which adopts a statute or other requirement with respect to which any Person that

18

obtains business from within such jurisdiction or is otherwise subject to such jurisdiction’s tax law requiring such Person to file a Business Activity Report or make any other required filings in a timely manner in order to enforce its claims in such jurisdiction’s courts or arising under such jurisdiction’s laws); provided, however, such Receivables shall nonetheless be eligible if the Borrower or applicable Subsidiary Guarantor has filed a Business Activity Report (or other applicable report) with the applicable state office, or is qualified to do business in such jurisdiction and, at the time the Receivable was created, was qualified to do business in such jurisdiction, or had on file with the applicable state office a current Business Activity Report (or other applicable report), or is exempt from such filing requirement;

(l)Receivables with respect to which the Account Debtor’s obligation does not constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms;

(m)Receivables with respect to which the Borrower or applicable Subsidiary Guarantor has not yet shipped the applicable goods or performed the applicable service;

(n)any Receivable which is not in conformity with the representations and warranties made by the Borrower or the applicable Subsidiary Guarantors to the Agent with respect thereto, whether contained in this Agreement or the Security Agreement;

(o)Receivables in connection with which the Borrower or applicable Subsidiary Guarantor (or any other party to such Receivable) is in default in the performance or observance of any of the terms thereof (other than payment of such Receivable) in any material respect;

(p)Receivables that are not bona fide existing obligations created by the sale and actual delivery of inventory, goods or other property or the furnishing of services of other good and sufficient consideration to customers of the Borrower or the applicable Subsidiary Guarantors in the ordinary course of business;

(q)Receivables subject to any Lien or the Petroleum Inventory, goods, property, services or other consideration of which any such Receivable constitutes proceeds is subject to any such Lien, in either case other than the Lien granted to the Agent in connection herewith for the benefit of the Holders of Secured Obligations; provided, that such Receivables may be subject to one or more Specified Liens;

(r)Receivables that have been classified by the Borrower or any Subsidiary Guarantor as doubtful or that have otherwise failed to meet established or customary credit standards of the Borrower or the Subsidiary Guarantors, to the extent of such write-down;

(s)Receivables evidenced by a promissory note or other similar instrument;

(t)Receivables that are expressly by their terms subordinate or junior in right or priority of payment to any other obligation or claim of the Account Debtor;

(u)Receivables that are consigned or otherwise assigned to any Person for collection or otherwise;

(v)Receivables generated by sales on a cash-on-delivery basis;

(w)any Receivable subject to a Permitted Credit Enhancement Transaction; and

(x)any Receivable owing to Tesoro Canada or Tesoro Panama.

19

“Environmental Laws” means any and all federal, state and local statutes, laws, common law, judicial decisions, regulations, ordinances, rules, judgments, orders decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (i) the protection of the environment, (ii) the effect of the environment on human health, (iii) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (iv) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean up or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rules or regulations promulgated thereunder.
“Eurodollar Advance” means an Advance which, except as otherwise provided in Section 2.10, bears interest at the applicable Eurodollar Rate.
“Eurodollar Base Rate” means, with respect to any Eurodollar Advance for any Interest Period, the London interbank offered rate administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Agent from time to time in its reasonable discretion (in each case the “LIBOR Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for deposits in Dollars with a maturity comparable to such Interest Period; provided that if the LIBOR Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement; provided, further, that if a LIBOR Screen Rate shall not be available at such time for such Interest Period (the “Impacted Interest Period”) with respect to Dollars then the Eurodollar Base Rate for such Interest Period shall be the Interpolated Rate; provided, that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. It is understood and agreed that all of the terms and conditions of this definition of “Eurodollar Base Rate” shall be subject to Section 3.3.  
“Eurodollar Loan” means a Loan which, except as otherwise provided in Section 2.10, bears interest at the applicable Eurodollar Rate.
“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (ii) the then Applicable Margin, changing as and when the Applicable Margin changes.
“Excess Availability” means, on any date of determination, the excess of the Borrowing Base over the Aggregate Outstanding Credit Exposure on such date.
“Excluded Proceeds” is defined in Section 6.24.
“Excluded Subsidiary” means (i) each of Interior Fuels Company, Tesoro Petroleum (Singapore) Pte. Ltd., RW Land Company (f/k/a Philosopher’s Stone Land Company), Redland Vision, LLC (f/k/a Philosopher’s Stone Land Partners, L.P.), RidgeWood Association, Ridgewood Insurance Company, MLP GP and each of its Subsidiaries, MLP and each of its Subsidiaries, the Drop Down Subsidiaries, (iii) such other Subsidiaries that the Borrower, with the Agent’s prior written consent, may identify to the Agent and the Lenders from time to time and (iv) each Subsidiary of an Excluded Subsidiary.

20

“Excluded Swap Obligation” means, with respect to any Loan Party, any Specified Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Specified Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an ECP at the time the guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Specified Swap Obligation. If a Specified Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Specified Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal. 
“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation, each LC Issuer, the Agent or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Subsidiary Guarantor under any Loan Document, (a) taxes imposed on its net income, and franchise taxes imposed on it, by (i) the United States, (ii) the jurisdiction under the laws of which such Lender, such LC Issuer, the Agent or such recipient is incorporated or organized or any political combination or subdivision or taxing authority thereof or (iii) the jurisdiction in which the Agent’s, such Lender’s, such LC Issuer’s or such recipient’s principal executive office or such Lender’s applicable Lending Installation is located, (b) any U.S. federal withholding taxes imposed under FATCA, (c) any branch profits tax imposed under the Code or any similar tax imposed by any other jurisdiction described in clause (a) above, (d) in the case of any Non-U.S. Lender, any withholding tax resulting from any requirements of law in effect at the time such Non-U.S. Lender becomes a party to this Agreement (or designates a new Lending Installation), except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Installation (or assignment), to receive additional amounts from Borrower with respect to such withholding tax pursuant to Section 3.5(i), and (e) any U.S. federal backup withholding tax.
“Executive Order” is defined in Section 5.21.
“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.
“Extended Facility LC” is defined in Section 2.19.13.
“Facility LC” is defined in Section 2.19.1.
“Facility LC Application” is defined in Section 2.19.3.
“Facility LC Collateral Account” is defined in Section 2.19.11.
“FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (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 and any agreement entered into pursuant to Section 1471(b)(1) of the Code
“Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to the weighted average (rounded upwards, if necessary, to the next 1/100th of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average (rounded upwards, if necessary, to the next 1/100th of

21

1%) of the quotations at approximately 10:00 a.m. (Chicago time) for such day for such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion; provided, that, if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for  purposes of this Agreement.
“First Amendment” means that certain Omnibus Amendment No. 1 to Sixth Amended and Restated Credit Agreement and Guaranties, dated as of  November 18, 2014, by and among the Borrower, the Subsidiary Guarantors, the Agent and the Lenders signatory thereto.
“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio for the period of four fiscal quarters most recently ended for which financial statements have been or were required to be delivered pursuant to Section 6.1.1 or 6.1.3, of (i) Consolidated EBITDA (excluding any MLP EBITDA but including, for the avoidance of doubt, proceeds resulting from any Disposition or contribution of assets from the Borrower or any Subsidiary to any Drop Down Subsidiary), minus expenses for cash federal income taxes paid, minus Net Consolidated Capital Expenditures (excluding any MLP Capital Expenditures), minus Restricted Payments, plus any cash dividend or cash distribution made by any Excluded Subsidiary in respect of its equity interests to the Borrower or any Subsidiary, plus cash federal income tax refunds received to (ii) Fixed Charges of the Borrower and its Subsidiaries.
“Fixed Charges” means, for any period of determination, the sum of (i) Consolidated Interest Expense on a cash basis, (ii) scheduled principal payments (other than those described in clause (iii)) on Indebtedness actually paid in cash, and (iii) amounts actually paid in cash on Indebtedness at maturity or by way of prepayment, defeasance, purchase, redemption, retirement or acquisition (in each case for the remaining outstanding amount of such Indebtedness), to the extent paid out of the proceeds of any Revolving Loan or the Borrower’s or any Subsidiary’s own funds (and not funds resulting from the refinancing or replacement of any such Indebtedness); provided, however, that payments of principal owing under or in connection with the Revolving Loans shall not be included in any determination of Fixed Charges.
“Floating Rate” means, for any day, a rate per annum equal to the sum of (i) the Alternate Base Rate for such day, changing when and as the Alternate Base Rate changes plus (ii) the then Applicable Margin, changing as and when the Applicable Margin changes.
“Floating Rate Advance” means an Advance which, except as otherwise provided in Section 2.10, bears interest at the Floating Rate.
“Floating Rate Loan” means a Revolving Loan which, except as otherwise provided in Section 2.10, bears interest at the Floating Rate.
“Foreign Assets Control Regulations” has the meaning assigned to such term in Section 5.21. 
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

22

“Gross Amount of Eligible Petroleum Inventory” means Eligible Petroleum Inventory valued at market value, less the value of reserves which have been recorded by the Borrower and the Subsidiary Guarantors with respect to obsolete, slow-moving or excess Petroleum Inventory.
“Gross Amount of Eligible Receivables” means the outstanding face amount of Eligible Receivables, determined in accordance with Agreement Accounting Principles, consistently applied, less the sum of (i) all financing charges, late fees and other fees that are unearned, (ii) the value of any accrual that has been recorded by the Borrower and the Subsidiary Guarantors with respect to downward price adjustments, and (iii) the Dilution Reserve.
“Guaranty” means, collectively, (i) the Amended and Restated Subsidiary Guaranty, dated as of March 16, 2011, made by certain Subsidiaries of the Borrower in favor of the Agent for the benefit of the Holders of Secured Obligations, (ii) the Subsidiary Guaranty, dated as of August 14, 2012, by Tesoro Canada in favor of the Agent for the benefit of the Holders of Secured Obligations and (iii) the Subsidiary Guaranty, dated as of August 14, 2012, by Tesoro Panama in favor of the Agent for the benefit of the Holders of Secured Obligations, in each case as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Hazardous Materials” means any waste, pollutant, contaminant, toxic substance, hazardous waste, hazardous substance or other similarly described chemical or substance regulated by or for which liability or standards of care are imposed under any Environmental Law, including, without limitation, petroleum, including crude oil or any fraction thereof, radioactive material, polychlorinated biphenyls and asbestos in any form or condition.
“Highest Lawful Rate” means, at any time, the maximum rate of interest the Holders of Secured Obligations may lawfully contract for, charge, or receive in respect of the Secured Obligations as allowed by any applicable law.  For purposes of determining the Highest Lawful Rate under applicable law of the State of Texas, the applicable rate ceiling shall be (a) the “weekly ceiling” described in and computed in accordance with the provisions of Section 303.003 of the Texas Finance Code, as amended, or (b) if the parties subsequently contract as allowed by any applicable law, the “quarterly ceiling” or the “annualized ceiling” computed pursuant to Section 303.008 of the Texas Finance Code, as amended; provided, however, that at any time the “weekly ceiling”, the “quarterly ceiling”, or the “annualized ceiling” shall be less than eighteen percent (18.0%) per annum or more than twenty-four percent (24.0%) per annum, the provisions of Section 303.009(a) and Section 300.009(b) of the Texas Finance Code, as amended, shall control for purposes of such determination, as applicable.
“Holders of Secured Obligations” means the holders of the Secured Obligations from time to time and shall refer to (i) each Lender in respect of its Loans, (ii) each LC Issuer in respect of Reimbursement Obligations, (iii) the Agent, the Lenders, and the LC Issuers in respect of all other present and future obligations and liabilities of the Borrower or any of its Subsidiary Guarantors of every type and description arising under or in connection with this Agreement or any other Loan Document, (iv) each Person benefiting from indemnities made by the Borrower or any Subsidiary Guarantor hereunder or under other Loan Documents in respect of the obligations and liabilities of the Borrower or such Subsidiary Guarantor to such Person, (v) each Lender (or affiliate thereof), in respect of all Bank Product Obligations provided by such Lender (or affiliate thereof) to the Borrower or its Affiliates, and (vi) their respective successors, transferees and assigns.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“Impacted Interest Period” has the meaning assigned to such term in the definition of “Eurodollar Base Rate”.

23

“Increase Effective Date” is defined in Section 2.22.
“Indebtedness” of a Person means, at any time, without duplication, such Person’s (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of Property or services (other than current accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, bonds, debentures, acceptances, or other instruments, (v) obligations to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (vi) Capitalized Lease Obligations, (vii) reimbursement obligations under Letters of Credit, bankers’ acceptances, surety bonds and similar instruments, (viii) Off-Balance Sheet Liabilities, (ix) obligations under Sale and Leaseback Transactions, (x) Net Mark-to-Market Exposure under Rate Management Transactions, (xi) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any capital stock of such Person, (xii) the liquidation value of any mandatorily redeemable preferred capital stock of such Person or its Subsidiaries held by any Person other than such Person and its wholly-owned Subsidiaries, (xiii) obligations of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer, but only to the extent to which there is recourse to such Person for the payment of such obligations, and (xiv) any other obligation for borrowed money which in accordance with Agreement Accounting Principles would be shown as a liability on the consolidated balance sheet of such Person and (xv) Contingent Obligations of such Person in respect of any of the foregoing.  Obligations of the Borrower and its Subsidiaries to pay dues to Marine Spill Response Corporation in an aggregate amount of up to $6,000,000 shall not be deemed to constitute Indebtedness. Obligations in an aggregate amount not in excess of $7,000,000 at any time owing in respect of the Borrower’s retention and use of Cook Inlet Spill Prevention and Response, Inc. (which provides the Borrower with spill-response capabilities) shall not constitute Indebtedness. For the avoidance of doubt, any supply arrangement under which the Borrower or any of its Subsidiaries purchases Petroleum Inventory for processing that (i) is not required to be classified as indebtedness on the balance sheet of the Borrower pursuant to U.S. GAAP, and (ii) does not create an obligation on the part of the Borrower or any Subsidiary to purchase Petroleum Inventory, shall not constitute “Indebtedness” hereunder.
“Indebtedness Prepayment Conditions” means, with respect to any prepayment, defeasance, purchase, redemption, retirement or acquisition of any Indebtedness, so long as immediately before and after making such prepayment of Indebtedness, on a pro forma basis (i) no Default or Unmatured Default exists, (ii) Excess Availability equals or exceeds 20% of the Borrowing Base then in effect and shall remain equal to or in excess of 20% for the remainder of the day on which such prepayment is made, and (iii) the Fixed Charge Coverage Ratio exceeds 1.10 to 1.00.
“Index Debt Rating” means a rating in respect of the senior, secured, long-term Indebtedness of the Borrower that is not guaranteed by any other Person or subject to any other credit enhancement.
“Interest Period” means, with respect to a Eurodollar Advance, a period of one, two, three or six (or, if agreed to by all Lenders, twelve) months , commencing on a Business Day selected by the Borrower pursuant to this Agreement.  Such Interest Period shall end on but exclude the day which corresponds numerically to such date one, two, three or six months thereafter (or, if agreed to by all Lenders, twelve), provided, however, that if there is no such numerically corresponding day in such next, second, third, sixth or twelfth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third, sixth or twelfth succeeding month.  If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.

24

“Interim Collateral Report” means a report, in form and substance substantially similar to Exhibit I-1 hereto and acceptable to the Agent.
“Interpolated Rate” means, at any time, the rate per annum (rounded to the same number of decimal places as the LIBOR Screen Rate) determined by the Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBOR Screen Rate for the longest period (for which the LIBOR Screen Rate is available for Dollars) that is shorter than the Impacted Interest Period and (b) the LIBOR Screen Rate for the shortest period (for which the LIBOR Screen Rate is available for Dollars) that exceeds the Impacted Interest Period, in each case, at such time. 
“Investment” of a Person means any loan, advance (other than commission, travel and similar advances to officers and employees made in the ordinary course of business), extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or other securities owned by such Person; any deposit accounts and certificates of deposit owned by such Person; and structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.
“Investment Account” means any account maintained with a financial institution (other than Collection Accounts) that is funded with amounts permitted to be transferred from the Collection Accounts pursuant to the last sentence of Section 6.25.
“JPMorgan” means JPMorgan Chase Bank, National Association, in its individual capacity, and its successors.
“LC Exposure” means, with respect to a Lender at any time, its Pro Rata Share of the total LC Obligations at such time.
“LC Fee” is defined in Section 2.19.4.
“LC Issuer” means (i) JPMorgan (or any subsidiary or affiliate of JPMorgan designated by JPMorgan), (ii) BNP Paribas (or any subsidiary or affiliate of BNP Paribas designated by it), (iii) Natixis, New York Branch (or any subsidiary or affiliate of Natixis, New York Branch designated by it), and (iv) any other Lender with a Revolving Loan Commitment hereunder (or any subsidiary or affiliate of such Lender designated by such Lender) which, at the Borrower’s request, agrees, in such Lender’s sole discretion, to become a LC Issuer, in each such case in JPMorgan’s or such Lender’s separate capacity (as applicable) as an issuer of Facility LCs hereunder.  All references in this Agreement and the other Loan Documents to the “LC Issuer” shall be deemed to apply equally to each of the institutions referred to in clauses (i) and (ii) of this definition in their respective capacities as LC Issuer of any and all Facility LCs issued by each such institution.
“LC Obligations” means, at any time, the sum, without duplication, of (i) the aggregate undrawn stated amount under all Facility LCs outstanding at such time plus (ii) the aggregate unpaid amount at such time of all Reimbursement Obligations.
“LC Payment Date” is defined in Section 2.19.5.
“Lenders” means the lending institutions listed on the signature pages of this Agreement, lending institutions that become a party hereto as a “lender” pursuant to the terms of Section 2.20 or lending institutions parties to Assignment Agreements delivered pursuant to Section 12.3, in each case together

25

with their respective successors and assigns.  Unless otherwise specified, the term “Lenders” includes each LC Issuer, the Non-Ratable Lender and the Agent with respect to Collateral Protection Advances.  For the avoidance of doubt, the term “Lenders” excludes all Departing Lenders.
“Lending Installation” means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof or set forth in its Administrative Questionnaire or on a Schedule or otherwise selected by such Lender or the Agent pursuant to Section 2.16.
“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.
“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement, and, in the case of stock, stockholders agreements, voting trust agreements and all similar arrangements).
“LIBOR Screen Rate” has the meaning assigned to such term in the definition of “Eurodollar Base Rate”. 
“Loan” means, with respect to a Lender, any loan of such Lender made pursuant to Article II (or any conversion or continuation thereof), including, without limitation, Revolving Loans, Collateral Protection Advances and Non-Ratable Loans. 
“Loan Documents” means this Agreement, the Collateral Documents, the Guaranty, and all other documents, instruments, notes (including any Notes issued pursuant to Section 2.12 (if requested)) and agreements executed in connection herewith or therewith or contemplated hereby or thereby, as the same may be amended, restated or otherwise modified and in effect from time to time.
“Loan Party” means the Borrower and each Subsidiary Guarantor.
“Material Adverse Effect” means a material adverse effect on (i) the business, Property, condition (financial or otherwise), operations or results of operations of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any Subsidiary Guarantor to perform its obligations under the Loan Documents, or (iii) the validity or enforceability of the Loan Documents or the rights or remedies of the Agent, the LC Issuers, or the Lenders thereunder or their rights with respect to the Collateral.
“Material Indebtedness” means any Indebtedness in an outstanding principal amount of $75,000,000 or more in the aggregate (or the equivalent thereof in any currency other than Dollars).
“Material Indebtedness Agreement” means any agreement under which any Material Indebtedness was created or is governed or which provides for the incurrence of Indebtedness in an amount which would constitute Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder).
“MLP” means Tesoro Logistics LP, a Delaware limited partnership.
“MLP Capital Expenditures” means, with respect to any period, the portion of Net Consolidated Capital Expenditures directly attributable to any asset that is sold, leased, conveyed, disposed or

26

otherwise transferred by the Borrower or any Subsidiary to the MLP or a Subsidiary thereof pursuant to the Drop Down Transactions during such period.
“MLP EBITDA” means, with respect to any period, the portion of Consolidated EBITDA directly attributable to any asset that is sold, leased, conveyed, disposed or otherwise transferred by the Borrower or any Subsidiary to the MLP or a Subsidiary thereof pursuant to the Drop Down Transactions during such period. 
“MLP GP” means Tesoro Logistics GP, LLC, a Delaware limited liability company.
“Modify” and “Modification” are defined in Section 2.19.1.
“Monthly Collateral Report” means a report, in form and substance substantially similar to Exhibit I-2 hereto and reasonably acceptable to the Agent, which shall include, among other things, the following additional information: 
(i) a detailed aged trial balance of each Receivable of the Borrower and its Subsidiaries in existence as of the date of such report specifying the name and balance due for the applicable Account Debtor, as reconciled in a manner reasonably acceptable to the Agent; 
(ii) with respect to Petroleum Inventory, a detailed listing of product type, volume on hand by location, and Current Petroleum Inventory Market Price;
(iii) a spreadsheet which identifies all Eligible Receivables and Eligible Petroleum Inventory and all non-Eligible Receivables and non-Eligible Petroleum Inventory; and 
(iv) a schedule and aging of the Borrower’s and its Subsidiaries’ accounts payable.
“Moody’s” means Moody’s Investors Services, Inc. and any successor thereto.
“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the Borrower or any member of the Controlled Group is obligated to make contributions.
“Net Cash Proceeds” means, with respect to any sale of Property by any Person, cash (freely convertible into Dollars) received by such Person or any Subsidiary of such Person from such sale of Property (including cash received as consideration for the assumption or incurrence of liabilities incurred in connection with or in anticipation of such sale of Property), after (i) provision for all income or other taxes measured by or resulting from such sale of Property, (ii) payment of all reasonable brokerage commissions and other fees and expenses related to such sale of Property, and (iii) all amounts used to repay Indebtedness secured by a Lien on any asset Disposed of in such sale of Property which is or may be required (by the express terms of the instrument governing such Indebtedness) to be repaid in connection with such sale of Property (including payments made to obtain or avoid the need for the consent of any holder of such Indebtedness).
“Net Consolidated Capital Expenditures” means, with respect to any fiscal quarter, Consolidated Capital Expenditures for such quarter minus the sum of (i) Net Cash Proceeds resulting from the sale of the Borrower’s or any Subsidiary’s Property constituting fixed or capital assets during such quarter and (ii) the aggregate amount of purchase money Indebtedness incurred during such quarter in respect of fixed or capital assets.

27

“Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from Rate Management Transactions.  “Unrealized losses” means the fair market value of the cost to such Person of replacing such Rate Management Transaction as of the date of determination (assuming the Rate Management Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Rate Management Transaction as of the date of determination (assuming such Rate Management Transaction were to be terminated as of that date).
“Non-Ratable Exposure” means, with respect to a Lender at any time, its Pro Rata Share of the total outstanding Non-Ratable Loans at such time.
“Non-Ratable Lender” means JPMorgan or such other Lender which may succeed to JPMorgan’s rights and obligations as Non-Ratable Lender pursuant to the terms of this Agreement.
“Non-Ratable Loan” has the meaning set forth in Section 2.1.3.
“Non-U.S. Lender” is defined in Section 3.5(iv).
“Note” is defined in Section 2.12.
“Obligations” means all Revolving Loans, Non-Ratable Loans, Reimbursement Obligations, advances, debts, liabilities, obligations, covenants and duties owing by the Borrower to the Agent, any Lender, the Non-Ratable Lender, any LC Issuer, the Arrangers, any affiliate of the Agent, any Lender, the Non-Ratable Lender, any LC Issuer, or the Arrangers, or any indemnitee under the provisions of Section 9.6 or any other provisions of the Loan Documents, in each case of any kind or nature, present or future, arising under this Agreement or any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, foreign exchange risk, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired.  The term includes, without limitation, all interest, charges, expenses, fees, attorneys’ fees and disbursements and any other sum chargeable to the Borrower or any of its Subsidiaries under this Agreement or any other Loan Document.
“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Off-Balance Sheet Liability” of a Person means the principal component of (i) any repurchase obligation or liability of such Person with respect to Receivables sold by such Person, (ii) any liability under any Sale and Leaseback Transaction which is not a Capitalized Lease, (iii) any liability under any so-called “synthetic lease” or “tax ownership operating lease” transaction entered into by such Person, (iv) any Receivables Purchase Facility, or (v) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person, but excluding from this clause (v) all Operating Leases.
“Off-Balance Sheet Trigger Event” is defined in Section 7.13.
“Operating Lease” of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any renewals effective at the option of the lessor) of one year or more.

28

“Operating Lease Obligations” means, as of any date of determination, the amount obtained by aggregating the present values, determined in the case of each particular Operating Lease by applying a discount rate (which discount rate shall equal the discount rate which would be applied under Agreement Accounting Principles if such Operating Lease were a Capitalized Lease) from the date on which each fixed lease payment is due under such Operating Lease to such date of determination, of all fixed lease payments due under all Operating Leases of the Borrower and its Subsidiaries.
“Other Taxes” is defined in Section 3.5(ii).
“Outstanding Credit Exposure” means, as to any Lender at any time, the aggregate principal amount of its Revolving Loans outstanding at such time (which shall include, without limitation, the amount of its ratable obligation to purchase participations in (a) the aggregate principal amount of Non-Ratable Loans outstanding at such time, (b) the LC Obligations at such time, and (c) Collateral Protection Advances outstanding at such time).
“Outstanding Revolving Loan Credit Exposure” means, as to any Lender at any time, the sum of (i) the aggregate principal amount of its Revolving Loans outstanding at such time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such time.
“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.
“Participants” is defined in Section 12.2.1.
“Participant Register” is defined in Section 12.2.1.
“Payment Date” means April 1st, July 1st, October 1st, and January 1st of each calendar year and the Termination Date.  Each Payment Date other than the Termination Date shall relate to the calendar quarter immediately preceding it.  For example, quarterly payments which accrue in respect of the quarter ending March 31st shall be due and payable on April 1st. 
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Perfected Cash Interests” means Dollars or Cash Equivalent Investments on deposit in collection accounts subject to control agreements in form and substance acceptable to the Agent that grant the Agent first priority perfected security interests in such accounts and the Dollars and Cash Equivalent Investments (including proceeds thereof) on deposit or otherwise maintained therein or other similar arrangements whereby the bank or financial institution holding such deposits have acknowledged the Lien created thereon and the Agent holds a first priority perfected security interest therein.
“Permitted Acquisition” is defined in Section 6.13.4.
“Permitted Credit Enhancement Transaction” means a silent payment undertaking, undisclosed payment guarantee, put arrangement or similar arrangement, contract or agreement relating to one or more Receivables entered into between the Borrower or any Subsidiary and a financial institution, pursuant to which (a) such financial institution undertakes to promptly pay to the Borrower or such Subsidiary, following notice by the Borrower or such Subsidiary and the delivery of related documentation, the amount of payments owed by an Account Debtor under the applicable Receivables to the Borrower or such Subsidiary if such Account Debtor fails to pay the amount due thereunder in full and (b) immediately upon or following such payment by the financial institution, all of the Borrower's or such Subsidiary's right, title and interest in such Receivable(s) and the underlying contract(s),

29

agreements(s), purchase order(s) or other documentation (the “Receivables Documentation”) giving rise to or evidencing such Receivables will be assigned to such financial institution; provided, that the aggregate outstanding face amount of all Receivables subject to Permitted Credit Enhancement Transactions which were Eligible Receivables immediately prior to the entry into such Permitted Credit Enhancement Transactions, shall not exceed $500,000,000 at any time.
“Permitted Credit Enhancement Transaction Reserve” means, with respect to any Receivable for which (x) the Company has provided notice pursuant to Section 6.1.15 that such Receivable is subject to a Permitted Credit Enhancement Transaction, but (y) the most recently received Interim Collateral Report or Monthly Collateral Report does not exclude such Receivable from Eligible Receivables, such amount as the Agent in its reasonable credit judgment shall establish after consultation with the Borrower.
“Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.
“Petroleum Inventory” means inventory consisting of crude oil, petroleum, refined petroleum products, byproducts and intermediate feedstocks, and other energy-related commodities, including, without limitation, blend components commonly used in the petroleum industry to improve characteristics of, or meet governmental or customer specifications for, petroleum or refined petroleum products, all of which inventory shall be valued at market.
“Petroleum Inventory Supply Arrangement” means any supply arrangement under which the Borrower or any of its Subsidiaries sells Petroleum Inventory to a third party and is obligated to repurchase such Petroleum Inventory for processing from time to time.
“Plan” means an employee pension benefit plan, excluding any Multiemployer Plan, which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Borrower or any member of the Controlled Group, may have any liability.
“Pricing Schedule” means the Schedule identifying the Applicable Margin and the Applicable Fee Rate, attached hereto and identified as such.
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“Prior Credit Agreement” means the Fifth Amended and Restated Credit Agreement, dated as of March 16, 2011, by and among the Borrower, certain financial institutions, and JPMorgan, as Administrative Agent, as amended or modified prior to the Closing Date.
“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction the numerator of which is such Lender’s Revolving Loan Commitment at such time (in each case, as adjusted from time to time in accordance with the provisions of this Agreement), and the denominator of which is the Aggregate Revolving Loan Commitment at such time; provided, that if the Revolving Loan Commitments have been terminated, “Pro Rata Share” means a fraction the numerator of which is such Lender’s Outstanding Credit Exposure at such time and the denominator of which is the Aggregate Outstanding Credit Exposure at such time; provided, further, that in the case of Section 2.21, if a Lender

30

is a Defaulting Lender, “Pro Rata Share” shall mean the percentage of the Aggregate Revolving Loan Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Revolving Loan Commitment.  If the Revolving Loan Commitments have terminated or expired, the Revolving Loan Pro Rata Share shall be determined based upon the Revolving Loan Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.
“Purchase Price” means the total consideration and other amounts payable in connection with any Acquisition, including, without limitation, any portion of the consideration payable in cash, all Indebtedness, liabilities and contingent obligations incurred or assumed in connection with such Acquisition and all transaction costs and expenses incurred in connection with such Acquisition, but exclusive of the value of any capital stock or other equity interests of the Borrower or any Subsidiary issued as consideration for such Acquisition.
“Purchasers” is defined in Section 12.3.1.
“Rate Management Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Rate Management Transactions, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Management Transactions.
“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by the Borrower or a Subsidiary which is (i) a rate swap, basis swap, credit derivative transaction, forward rate transaction, commodity swap, commodity option, forward contracts, future contracts, equity or equity index swap, equity or equity index option, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option swap option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell back transaction, securities lending transaction, prime brokerage margin or other cash loan, short sale, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, or equity prices or (ii) a type of transaction that is similar to any transaction referred to in clause (i) above or any combination thereof that is currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made.
“Receivable(s)” means and includes any and all of the Borrower’s and its Subsidiaries’ presently existing and hereafter arising or acquired accounts, accounts receivable, and all present and future rights of the Borrower and its Subsidiaries to payment for goods sold or leased or for services rendered (except those evidenced by instruments or chattel paper), whether or not they have been earned by performance, and all rights in and to any merchandise or goods which any of the same may represent, and all rights, title, security and guaranties with respect to each of the foregoing, including, without limitation, any right of stoppage in transit.

31

“Receivables Documentation” is defined in the definition of Permitted Credit Enhancement Transaction.
“Receivables Purchase Documents” means any series of receivables purchase or sale agreements generally consistent with terms contained in comparable structured finance transactions pursuant to which the Borrower or any of its Subsidiaries, in their respective capacities as sellers or transferors of any Receivables, sell or transfer to SPVs all or a portion of their respective right, title and interest in and to certain Receivables for further sale or transfer (or granting of Liens to other purchasers of or investors in such assets  or interests therein (and the other documents, instruments and agreements executed in connection therewith), as any such agreements may be amended, restated, supplemented or otherwise modified from time to time, or any replacement or substitution therefor.
“Receivables Purchase Facility” means any securitization facility made available to the Borrower or any of its Subsidiaries, pursuant to which Receivables of the Borrower or any of its Subsidiaries are transferred to one or more SPVs, and thereafter to certain investors, pursuant to the terms and conditions of the Receivables Purchase Documents.
“Recipient” means, as applicable, (a) the Agent, (b) any Lender and (c) any LC Issuer.
“Refinancing Indebtedness” means any Indebtedness permitted under this Agreement that exists (with respect to any amendments, modifications or supplements thereof) or that is incurred to refund, refinance, replace, exchange, renew, repay, extend, modify, amend or supplement (including pursuant to any defeasance or discharge mechanism) (collectively, “refinance”, “refinances” and “refinanced” shall have a correlative meaning) any other specified Indebtedness permitted under this Agreement, including any Indebtedness that refinances Refinancing Indebtedness, provided, however, that:
(i)    if the Stated Maturity (as such term is hereinafter defined) of the Indebtedness being refinanced is earlier than the Termination Date as set forth in clause (a) of the definition thereof, the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced, or if the Stated Maturity of the Indebtedness is being refinanced is later than the Termination Date as set forth in clause (a) of the definition thereof, the Refinancing Indebtedness has a Stated Maturity that is at least ninety-one (91) days later than such Termination Date;
    
(ii)    the Refinancing Indebtedness has an Average Life (as such term is hereinafter defined) at the time such Refinancing Indebtedness is incurred equal to or greater than the Average Life of the Indebtedness being refinanced;

(iii)    such Refinancing Indebtedness is incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness incurred to pay interest or premiums required by instruments governing such existing Indebtedness and fees incurred in connection therewith);

(iv)    after giving effect to the incurrence of such Refinancing Indebtedness, no Default or Unmatured Default would exist hereunder;

(v)    the obligor(s) of such Refinancing Indebtedness shall not be materially different than the obligors of the Indebtedness being refinanced;

32

(vi)    the terms and conditions of such Refinancing Indebtedness shall be no less favorable on the whole in any material respect than the terms and conditions of the Indebtedness being refinanced; and

(vii)    any Property securing such Refinancing Indebtedness shall not include Collateral and shall either (a) constitute Property that secures the Indebtedness being replaced by such Refinancing Indebtedness or other Indebtedness permitted by this Agreement or (b) constitute Property that secures or formerly secured purchase money Indebtedness permitted under Section 6.14.4. 

As used in this definition the term “Stated Maturity” means, with respect to any Indebtedness, the date specified in the documents or instruments evidencing such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory prepayment or redemption provision, but shall not include any contingent obligations to repay, prepay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.  As used in this definition, the term “Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (a) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness multiplied by the amount of such payment by (b) the sum of all such payments.
“Register” is defined in Section 12.3.4.
“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.
“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks, non-banks and non-broker lenders for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.
“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by foreign lenders for the purpose of purchasing or carrying margin stock (as defined therein).
“Reimbursement Obligations” means, at any time, the aggregate of all obligations of the Borrower then outstanding under Section 2.19 to reimburse each LC Issuer for amounts paid by such LC Issuer in respect of any one or more drawings under Facility LCs.
“Rental Reserve” means (i) with respect to any Eligible Carrier, such amount as the Agent in its reasonable credit judgment shall establish after consultation with the Borrower, from time to time for such Eligible Carrier and (ii) with respect to any location not owned by the Borrower or a Subsidiary Guarantor at which Petroleum Inventory is located, stored, processed, maintained or otherwise held, until such time as such location is subject to a Third Party Agreement, an amount equal to 1 month’s rent or storage for such location.
“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan subject to Title IV of ERISA, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of

33

ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with Section 4043(a) of ERISA.
“Required Lenders” means Lenders in the aggregate having greater than 50% of the Aggregate Revolving Loan Commitment; provided, that if the Revolving Loan Commitments have been terminated, “Required Lenders” means Lenders in the aggregate holding greater than 50% of the Aggregate Outstanding Credit Exposure.
“Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on “Eurocurrency liabilities” (as defined in Regulation D).
“Restricted Payments” is defined in Section 6.10.
“Retail Property” means Property of the Borrower or any Subsidiary owned in connection with the sale of motor fuels and convenience products and services to consumers in the retail market.
“Revolving Loan” means, with respect to a Lender, such Lender’s loan made pursuant to its commitment to lend set forth in Section 2.1 (and any conversion or continuation thereof).
“Revolving Loan Commitment” means, for each Lender, including, without limitation, each LC Issuer, such Lender’s obligation to make Revolving Loans to, participate in Non-Ratable Loans made to, and participate in Facility LCs issued upon the application of, the Borrower in an aggregate amount not exceeding the amount set forth for such Lender on the Commitment Schedule or in an Assignment Agreement delivered pursuant to Section 12.3, as such amount may be modified from time to time pursuant to the terms hereof.
“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor thereto.
“Sale and Leaseback Transaction” means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government, including those administered by OFAC or the U.S. Department of State.
“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means a Person that (a) is, or is owned fifty percent (50%) or more, individually or in the aggregate, by Persons, named on the list of “Specially Designated Nationals and Blocked Persons” on the most current list published by OFAC available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx or as otherwise published from time to time or (b) is (x) an agency of the government of a Sanctioned Country, (y) an organization controlled by a Sanctioned Country or (z) a Person organized or resident in a Sanctioned Country or (c) otherwise the subject of any Sanctions publicly administered by the U.S. government. 
“Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.

34

“Section” means a numbered section of this Agreement, unless another document is specifically referenced.
“Secured Obligations” means, collectively, (i) the Obligations, (ii) all Rate Management Obligations owing in connection with Rate Management Transactions to any Lender or any affiliate of any Lender, and (iii) to the extent not covered in clauses (i) and (ii), amounts owing to any Lender or the Agent under or in connection with Bank Products provided by such Lender or the Agent to the Borrower or its Affiliates; provided that the definition of “Secured Obligations” shall not create or include any guarantee by any Loan Party of (or grant of security interest by any Loan Party to support, as applicable) any Excluded Swap Obligations of such Loan Party for purposes of determining any obligations of any Loan Party.
“Security Agreement” means the Amended and Restated Security Agreement, dated as of March 16, 2011 and as amended by Omnibus Amendment No. 1 to Fifth Amended and Restated Credit Agreement and Amended and Restated Security Agreement, dated as of June 6, 2012, by and among the Borrower, certain Subsidiaries thereof and the Agent for the benefit of the Holders of Secured Obligations, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Single Employer Plan” means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group.
“Specified Customers” means nine customers of the Borrower and the Subsidiary Guarantors from time to time identified as “Specified Customers” to the Agent by the Borrower.  The Agent may from time to time request that the Borrower update or revise, to the Agent’s reasonable satisfaction, the list of “Specified Customers.”  The Agent agrees that it has received a list of “Specified Customers” as of the Closing Date.
“Specified Liens” means Liens permitted under Sections 6.15.2, 6.15.3, 6.15.4, 6.15.9 and 6.15.27.
“Specified Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.
 “SPV” means any special purpose entity established for the purpose of purchasing Receivables in connection with a Receivables securitization transaction permitted under the terms of this Agreement.
“Standard Reserve” means $50,000,000 unless the Fixed Charge Coverage Ratio is less than 1.00 to 1.00, in which case “Standard Reserve” means the greater of (x) $175,000,000 and (y) 10% of the then effective Borrowing Base (as calculated without giving effect to or including the Standard Reserve and as the amount of such Borrowing Base may change from time to time upon the delivery of Interim Collateral Reports or Monthly Collateral Reports).
“Subordinated Indebtedness” means any Indebtedness the payment of which is subordinated to the payment of the Secured Obligations to the reasonable written satisfaction of the Agent and the Required Lenders.
“Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries,

35

or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.  Unless otherwise expressly provided, all references herein to a “Subsidiary” means a Subsidiary of the Borrower and no Excluded Subsidiary shall constitute a Subsidiary of the Borrower. For the avoidance of doubt, any entity in which the Borrower and its Subsidiaries own equal to or less than fifty percent (50%) of the equity interests shall not constitute a Subsidiary of the Borrower, but shall be deemed a joint venture (and it is acknowledged and agreed that as of the effective date of the First Amendment, Tesoro Savage Petroleum Terminal LLC and Watson Cogeneration Company shall constitute the only joint ventures of the Borrower and its Subsidiaries).
“Subsidiary Guarantors” means (i) those Subsidiaries of the Borrower subject to the Guaranty as of the Closing Date, (ii) those other Persons organized under the laws of the United States or a state thereof that become subject to the Guaranty in accordance with Section 6.23 after the Closing Date and (iii) any other Person that is required to enter into or has entered into the Guaranty, in each case together with its permitted successors and assigns (including, without limitation, a debtor in possession on its behalf).
“Substantial Portion” means, with respect to the Property of the Borrower and its Subsidiaries, Property which represents more than 15% of the consolidated assets of the Borrower and its Subsidiaries or property which is responsible for more than 15% of the consolidated net sales or of the Consolidated Net Income of the Borrower and its Subsidiaries, in each case, as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries, as at the end of the four fiscal quarter period ending with the fiscal quarter immediately prior to the fiscal quarter in which such determination is made (or if financial statements have not been delivered hereunder for that fiscal quarter which ends the four fiscal quarter period, then the financial statements delivered hereunder for the quarter ending immediately prior to that quarter).
“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or other charges imposed by any Governmental Authority on or with respect to any payment made by the Borrower or any Subsidiary Guarantor under any Loan Document, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
“Termination Date” means the earliest of (a) November 18, 2019 and (b) the date of termination in whole of the Aggregate Revolving Loan Commitment pursuant to Section 2.4 hereof or the Revolving Loan Commitments pursuant to Section 8.1.
“Tesoro Canada” means Tesoro Canada Supply & Distribution Ltd.
“Tesoro Panama” means Tesoro Panama Company, S.A., a sociedad anónima organized under the laws of Panama.
“Third Party Agreement” means a letter agreement, in form and substance acceptable to the Agent, pursuant to which a landlord, bailee, consignee, pledgee, processor, warehouseman, terminal pipeline or other third party who stores, processes, maintains, transports or holds Collateral acknowledges, among other things, the Agent’s Lien on such Collateral, the Agent’s ability to enforce its Lien on such Collateral, and the subordination of any Lien held by such landlord, bailee, consignee, pledgee, processor, warehouseman, terminal pipeline or other third party on such Collateral to the Agent’s Lien thereon.
“Third Party Petroleum Inventory” means Petroleum Inventory owned by any Person other than the Borrower or any of its Subsidiaries.

36

“Throughput Documents” means, collectively, (i) the Second Transportation and Storage Agreement, dated as of September 18, 2007, by and between Castor Petroleum Ltd. and PetroTerminal de Panama, S.A., as previously amended by the First Amendment thereto dated November 28, 2008, and as the same may be further amended, restated, supplemented or otherwise modified from time to time and (ii) the Transportation and Storage Agreement, dated as of September 18, 2007, by and between Castor Petroleum Ltd. and Tesoro Panama, as previously amended by the First Amendment thereto dated November 27, 2008, and the Second Amendment thereto dated November 28, 2008, and supplemented by a Side Letter dated September, 2007, and as the same may be further amended, restated, supplemented or otherwise modified from time to time.
“Ticking Fee” is defined in Section 2.4.4.
“Trading with the Enemy Act” has the meaning assigned to such term in Section 5.21. 
“Transferee” is defined in Section 12.4.
“Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurodollar Advance and, with respect to any Loan, its nature as a Floating Rate Loan or a Eurodollar Loan.
“Unfunded Liabilities” means the amount, if any, by which the current liability (determined under Section 4044 of ERISA) under each Single Employer Plan subject to Title IV of ERISA exceeds the fair market value of all such Plan’s assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan.
“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.
“U.S. GAAP” means generally accepted accounting principles as in effect in the United States from time to time.
“U.S.” and “United States” means the United States of America.
“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company, association, joint venture or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled.
1.2    Other Definitional Provisions.
  
1.2.1    Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

1.2.2    As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to any Subsidiary not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP  (provided that all terms of an accounting or financial nature used herein shall be construed, and all computations

37

of amounts and ratios referred to herein shall be made, without giving effect to (a) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (b) any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof), (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) 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, capital stock, securities, revenues, accounts, leasehold interests and contract rights, and (v) references to agreements shall, unless otherwise specified, be deemed to refer to such agreements as amended, supplemented, restated or otherwise modified from time to time.

1.2.3    The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

1.2.4    The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

ARTICLE II

THE CREDITS

6.2Commitments; Loans.Revolving Loans.  From and including the Closing Date and prior to the Termination Date, upon the satisfaction of the conditions precedent set forth in Sections 4.1 and 4.2, as applicable, each Lender severally and not jointly agrees, on the terms and conditions set forth in this Agreement, to (i) make Revolving Loans to the Borrower from time to time and (ii) participate in Facility LCs issued upon the request of the Borrower, in each case in an amount not to exceed in the aggregate at any one time outstanding of its Pro Rata Share of the Available Aggregate Revolving Loan Commitment; provided that, unless caused by a Collateral Protection Advance, at no time shall the Aggregate Outstanding Credit Exposure hereunder exceed the Borrowing Base and at no time shall the Aggregate Outstanding Credit Exposure exceed the Aggregate Revolving Loan Commitment.  Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to the Termination Date.  The commitment of each Lender to lend hereunder shall automatically expire on the Termination Date.  Each LC Issuer will issue Facility LCs hereunder on the terms and conditions set forth in Section 2.19.

2.1.2    Collateral Protection Advances.  Subject to the limitations set forth below, the Agent is authorized by the Borrower and the Lenders, from time to time in the Agent’s sole discretion, (i) during the existence of a Default or an Unmatured Default, or (ii) at any time that any of the other conditions precedent set forth in Article IV have not been satisfied, to make Advances (each such advance to be a Floating Rate Advance) to the Borrower on behalf of the

38

Lenders in an aggregate amount outstanding at any time not to exceed $75,000,000 which the Agent, in its reasonable business judgment, deems necessary or desirable (A) to preserve or protect the Collateral, or any portion thereof, (B) to enhance the likelihood of, or maximize the amount of, repayment of the Secured Obligations, or (C) to pay any other amount chargeable to or required to be paid by the Borrower pursuant to the terms of this Agreement, including costs, fees, and expenses as described in Section 9.6 (any of such Advances are herein referred to as “Collateral Protection Advances”); provided that the Required Lenders may at any time revoke the Agent’s authorization to make Collateral Protection Advances.  Any such revocation must be in writing and shall become effective prospectively upon the Agent’s receipt thereof.  Absent such revocation, the Agent’s determination that the making of a Collateral Protection Advance is required for any such purposes shall be conclusive.  The Collateral Protection Advances shall be secured by the Liens in favor of the Agent in and to the Collateral and shall constitute Secured Obligations hereunder.  Each Lender shall participate in each Collateral Protection Advance in an amount equal to its Pro Rata Share thereof.  No Collateral Protection Advance shall be made hereunder if the result thereof causes (i) the Aggregate Outstanding Credit Exposure to exceed the Aggregate Revolving Loan Commitment or (ii) any Lender’s Pro Rata Share thereof to exceed such Lender’s Revolving Loan Commitment.

2.1.3    Making of Non-Ratable Loans.  If the Agent elects to have the terms of this Section 2.1.3 apply to a Floating Rate Advance requested by the Borrower in order to fund such Floating Rate Advance pursuant to this Section 2.1.3 instead of Section 2.7, the Non-Ratable Lender shall make a Floating Rate Advance in the amount requested available to the Borrower on the applicable Borrowing Date by transferring same day funds to the Borrower’s funding account.  Each Advance made solely by the Non-Ratable Lender pursuant to this Section 2.1.3 is referred to in this Agreement as a “Non-Ratable Loan,” and such Advances are referred to as the “Non-Ratable Loans.”  Each Non-Ratable Loan shall be subject to all the terms and conditions applicable to other Advances funded by the Lenders, except that all payments thereon shall be payable to the Non-Ratable Lender solely for its own account.  The Agent shall not request the Non-Ratable Lender to make any Non-Ratable Loan if (A) the Agent has received written notice from any Lender that one or more of the applicable conditions precedent set forth in Article IV will not be satisfied on the requested Borrowing Date for the applicable Non-Ratable Loan, or (B) the requested Non-Ratable Loan exceeds the Available Aggregate Revolving Loan Commitment (before giving effect to such Non-Ratable Loan) or would cause the Aggregate Outstanding Credit Exposure (after giving effect to such Non-Ratable Loan) to exceed the Borrowing Base on the applicable Borrowing Date, or would cause the Aggregate Outstanding Credit Exposure (after giving effect to such Non-Ratable Loan) to exceed the Aggregate Revolving Loan Commitment on the applicable Borrowing Date.  The Non-Ratable Loans shall be secured by the Liens granted to the Agent in and to the Collateral and shall constitute Secured Obligations hereunder.  All Non-Ratable Loans shall be Floating Rate Advances.  Each Lender shall participate in each Non-Ratable Loan in an amount equal to its Pro Rata Share thereof.  

2.2    Required Payments; Termination.

2.2.1    Generally.  Any outstanding Advances and all other unpaid Secured Obligations shall be paid in full by the Borrower on the Termination Date.  Notwithstanding the termination of the Revolving Loan Commitments under this Agreement on the Termination Date, until all of the Secured Obligations (other than contingent indemnity obligations) shall have been fully paid and satisfied and all financing arrangements among the Borrower and the Lenders hereunder and under the other Loan Documents shall have been terminated, all of the rights and remedies under this Agreement and the other Loan Documents shall survive.  In addition to the other mandatory prepayments required under this Agreement, if at any time and for any reason, including, without

39

limitation, as a result of the reduction of the Aggregate Revolving Loan Commitment or a fluctuation of the Borrowing Base, the Aggregate Outstanding Credit Exposure exceeds the Borrowing Base, the Borrower shall immediately make a mandatory prepayment of the Secured Obligations in an amount equal to such excess.

2.2.2    Asset Sales; Insurance Proceeds.  Upon the consummation by the Borrower or any Subsidiary of any sale of any Property constituting Collateral (other than sales permitted under Sections 6.12.1, 6.12.2 and 6.12.15), in each case except to the extent that the Net Cash Proceeds of such sale, when combined with the Net Cash Proceeds of all such sales during the immediately preceding twelve-month period, do not exceed $75,000,000 for any such sale or series of related sales, within three (3) Business Days after the Borrower’s or any of its Subsidiaries’ receipt of any Net Cash Proceeds from any such sale, or upon the Borrower’s receipt of Net Cash Proceeds under any insurance policy covering Collateral (but in no event under any insurance policy not covering Collateral) as contemplated in Section 6.24, the Borrower shall make a mandatory prepayment of the outstanding principal amount of the Revolving Loans in the amount of such Net Cash Proceeds.  Such mandatory prepayment shall be applied in accordance with Sections 2.2.3 and 2.2.5.  

2.2.3    Application to Revolving Loans.  With respect to each prepayment of Revolving Loans elected by the Borrower pursuant to Section 2.6 or required by this Section 2.2, the Borrower may designate (i) the Types of Revolving Loans that are to be prepaid and the specific Advance(s) pursuant to which made and (ii) the Revolving Loans to be prepaid; provided, that (x) Eurodollar Loans may be designated for prepayment pursuant to this Section 2.2 only on the last day of an Interest Period applicable thereto unless all Eurodollar Loans with Interest Periods ending on such date of required prepayment and all Floating Rate Loans have been paid in full; (y) each prepayment of any Revolving Loans made pursuant to an Advance shall be applied pro rata among such Revolving Loans; and (z) notwithstanding the provisions of the preceding clause (y), at the option of the Borrower, no prepayment made pursuant to Section 2.6 or this Section 2.2 of Revolving Loans shall be applied to Revolving Loans of any Defaulting Lender.  In the absence of a designation by the Borrower as described in the preceding sentence, the Agent shall, subject to the above, make such designation in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 3.4.

2.2.4    Effect on Aggregate Revolving Loan Commitment.  No prepayment described in Sections 2.2.2 shall result in a reduction of the Aggregate Revolving Loan Commitment and the Borrower may request an Advance immediately after such prepayment so long as the terms and conditions hereunder for an Advance have been satisfied.

2.2.5    Application and Priority of Mandatory Prepayments.  The Borrower shall remit a prepayment to the Agent in the amount of any Net Cash Proceeds described in Section 2.2.2 on the dates required under such Sections.  The Agent shall deposit such prepayment in a Collection Account or another cash collateral account subject to the Agent’s sole control and shall apply such prepayment to the Revolving Loans for application in accordance with Section 2.2.3.  Any portion of such prepayment remaining thereafter shall be returned to the Borrower for general corporate purposes.

2.3    Ratable Loans; Types of Advances.  (a)  Each Advance hereunder (other than a Non-Ratable Loan or a Collateral Protection Advance) shall consist of Revolving Loans made from the several Lenders ratably in proportion to the ratio that their respective Revolving Loan Commitments bear to the Aggregate Revolving Loan Commitment.

40

(b)    The Advances may be Floating Rate Advances or Eurodollar Advances, or a combination thereof, selected by the Borrower in accordance with Sections 2.7 and 2.8, or Non-Ratable Loans selected by the Borrower in accordance with Section 2.1.3.

2.4    Commitment Fee; Aggregate Revolving Loan Commitment; Ticking Fee.

2.4.1    Commitment Fee.  The Borrower shall pay to the Agent, for the account of the Lenders with Revolving Loan Commitments in accordance with their Pro Rata Shares of the Aggregate Revolving Loan Commitment, from and after the Closing Date until the date on which the Aggregate Revolving Loan Commitment shall be terminated in whole, a commitment fee (the “Commitment Fee”) accruing daily at the rate of the then Applicable Fee Rate on the Aggregate Revolving Loan Commitment minus the Aggregate Outstanding Revolving Loan Credit Exposure, each as in effect from time to time.  All such Commitment Fees payable hereunder shall be payable quarterly in arrears on each Payment Date.

2.4.2    Closing Fees.  The Borrower shall pay on the Closing Date those closing fees described in the fee letter dated November 30, 2012 by and between the Borrower and the Agent, as amended or modified from time to time.

2.4.3    Reductions in Aggregate Revolving Loan Commitment.  (a)  The Borrower may permanently reduce the Aggregate Revolving Loan Commitment to $0 at any time, and the Borrower may permanently reduce the Aggregate Revolving Loan Commitment from time to time in integral multiples of $10,000,000. Any such permitted reduction may only occur upon at least three (3) Business Days’ written notice to the Agent, which notice shall specify the amount of any such reduction, provided, however, that the amount of the Aggregate Revolving Loan Commitment may not be reduced below the Aggregate Outstanding Credit Exposure.  All accrued Commitment Fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Credit Extensions hereunder and on the final date upon which all Loans are repaid. No other optional reduction of the Aggregate Revolving Loan Commitment by the Borrower is permitted hereunder except in accordance with this Section 2.4.3.

(b)    [Reserved].

2.4.4    Ticking Fees.  The Borrower shall pay to the Agent, for the account of each Lender with a Revolving Loan Commitment that will increase on the Increase Effective Date pursuant to Section 2.22, from and after March 31, 2013 until the Increase Effective Date, a ticking fee (the “Ticking Fee”) in an amount equal to (i) (x) for the period beginning  on March 31, 2013 and ending on the earlier of (A) the Increase Effective Date and (B) June 29, 2013, 1⁄2 (one-half) of the Applicable Fee Rate in effect for the Commitment Fee during such period, and (y) if the Increase Effective Date has not occurred on or prior to June 30, 2013, for the period beginning on June 30, 2013 and ending on the earlier of (A) the Increase Effective Date and (B) August 7, 2013, the Applicable Fee Rate in effect for the Commitment Fee during such period, multiplied by (ii) the excess of (x) such Lender’s Revolving Loan Commitment as of the Increase Effective Date (as set forth on the Commitment Schedule) over (y) such Lender’s Revolving Loan Commitment as in effect from time to time.  All such Ticking Fees payable hereunder to such increasing Lenders shall be payable quarterly in arrears on each Payment Date, and on the Increase Effective Date.

2.5    Minimum Amount of Each Advance.  Each Eurodollar Advance shall be in the minimum amount of $1,000,000 (and in multiples of $500,000 if in excess thereof), and each Floating Rate Advance (other than an Advance to repay Non-Ratable Loans or Collateral Protection Advances) shall be in the minimum amount of $100,000 (and in multiples of $50,000 if in excess thereof), provided,

41

however, that any Floating Rate Advance may be in the amount of the Available Aggregate Revolving Loan Commitment.

2.6    Optional Principal Payments.  The Borrower may from time to time pay, without penalty or premium, all outstanding Floating Rate Advances, or any portion of the outstanding Floating Rate Advances.  The Borrower may from time to time pay, subject to the payment of any funding indemnification amounts required by Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any integral multiple of $500,000 in excess thereof, any portion of the outstanding Eurodollar Advances upon three (3) Business Days’ prior notice to the Agent.  Such prepayment shall be applied in accordance with Section 2.2.3.  

2.7    Method of Selecting Types and Interest Periods for New Advances.  Whenever the Borrower desires to incur Revolving Loans hereunder, the Borrower shall select the Type of Advance and, in the case of each Eurodollar Advance, the Interest Period applicable thereto from time to time; provided that there shall be no more than eight (8) Interest Periods in effect with respect to all of the Loans at any time, unless such limit has been waived by the Agent in its sole discretion.  The Borrower shall give the Agent irrevocable notice (a “Borrowing Notice”) not later than 12:00 noon (Chicago time) on the Borrowing Date of each Floating Rate Advance (other than a Non-Ratable Loan) and three (3) Business Days before the Borrowing Date for each Eurodollar Advance, specifying:

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

(ii)the aggregate amount of such Advance,

(iii)the Type of Advance selected, and

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

Not later than 2:00 p.m. (Chicago time) on each Borrowing Date, each Lender shall make available its Loan or Loans in Federal or other funds immediately available to the account of Agent most recently designated by it for such purpose by notice to the Lenders.  The Agent will promptly make the funds so received from the Lenders available to the Borrower by crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Agent.
2.8    Conversion and Continuation of Outstanding Advances; No Conversion or Continuation of Eurodollar Advances After Default.  Floating Rate Advances (other than Non-Ratable Loans) shall continue as Floating Rate Advances unless and until such Floating Rate Advances are converted into Eurodollar Advances pursuant to this Section 2.8 or are repaid in accordance with Section 2.6.  Each Eurodollar Advance shall continue as a Eurodollar Advance until the end of the then applicable Interest Period therefor, at which time such Eurodollar Advance shall be automatically converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with Section 2.6 or (y) the Borrower shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period.  Subject to the terms of Section 2.5, the Borrower may elect from time to time to convert all or any part of an Advance of any Type (other than a Non-Ratable Loan) into any other Type or Types of Advances; provided that any conversion of any Eurodollar Advance shall be made on, and only on, the last day of the Interest Period applicable thereto.  Notwithstanding anything to the contrary contained in this Section 2.8, during the continuance of a Default or an Unmatured Default, the Agent may (or shall at the direction of the Required Lenders), by notice to the Borrower, declare that no Advance may be made, converted or continued as a Eurodollar Advance.  The Borrower shall give the Agent irrevocable notice (a “Conversion/Continuation Notice”) of each conversion of an Advance or

42

continuation of a Eurodollar Advance not later than 11:00 a.m. (Chicago time) at least one (1) Business Day, in the case of a conversion into a Floating Rate Advance, or three (3) Business Days, in the case of a conversion into or continuation of a Eurodollar Advance, prior to the date of the requested conversion or continuation, specifying:

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

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

		
	(iii)
	the amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable thereto.

2.9    Changes in Interest Rate, etc.  Each Floating Rate Advance (other than a Non-Ratable Loan) shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.8, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to Section 2.8, at a rate per annum equal to the Floating Rate for such day.  Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in the Alternate Base Rate.  Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the Eurodollar Rate determined by the Agent as applicable to such Eurodollar Advance based upon the Borrower’s selections under Sections 2.7 and 2.8 and otherwise in accordance with the terms hereof.  No Interest Period with respect to Revolving Loans may end after the Termination Date.

2.10    Rates Applicable After Default.  (a) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at stated maturity, by acceleration or otherwise), the Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent of the Lenders to changes in interest rates), declare that such overdue amount shall bear interest at a rate per annum equal to (i) in the case of Loans, the rate that would otherwise be applicable thereto plus 2% per annum or (ii) in the case of Reimbursement Obligations, the Floating Rate in effect from time to time plus 2% per annum and (b) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), (i) such overdue amount shall bear interest at a rate per annum equal to the Floating Rate plus 2% per annum and (ii) the LC Fee shall be increased by 2% per annum, in each case, with respect to clauses (a) and (b) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment).

2.11    Method of Payment; Settlement.  

2.11.1    Method of Payment.  All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at the Agent’s address specified pursuant to Article XIII, or at any other Lending Installation of the Agent specified in writing by the Agent to the Borrower, by 12:00 p.m. (Chicago time) on the date when due and shall (except in the case of Reimbursement Obligations for which the applicable LC Issuer has not been fully indemnified by the Lenders, or as otherwise specifically required hereunder) be applied ratably by the Agent among the Lenders.  Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such

43

Lender in the same type of funds that the Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Agent from such Lender.  The Agent is hereby authorized to charge the account of the Borrower maintained with JPMorgan for each payment of the Obligations as it becomes due hereunder.  Subject to the terms and conditions of Section 6.25, the Agent is also hereby authorized to charge each Collection Account into which Receivables collections and other proceeds of Collateral are deposited.  Subject to the terms and conditions of Section 6.25, the Agent shall apply such amounts on a daily basis to reduce outstanding Obligations.  For purposes of computing interest, fees and the Available Aggregate Revolving Loan Commitment as of any date, (x) all amounts constituting immediately available goods funds shall be deemed received by the Agent on the Business Day on which such amounts are deposited into one of the aforementioned Collection Accounts maintained with JPMorgan or an Affiliate thereof, and (y) all amounts not constituting immediately available good funds shall be deemed received by the Agent on the first Business Day following the Business Day on which such amounts are deposited into one of the aforementioned Collection Accounts maintained with JPMorgan or an Affiliate thereof.  In the event any such amount is applied and the payment item evidencing such amount is subsequently dishonored, returned for insufficient funds, required to be returned to the applicable Account Debtor, or required to be remitted to a Person other than the Agent or a Lender, the Obligations shall be increased by the amount originally applied in reduction thereof and interest shall be deemed to have accrued on such amount from the Business Day on which such amount was originally credited as a reduction of the Obligations through the Business Day on which such amount is repaid.  The Borrower shall also be required to pay any fees that would have accrued during such period had such amount not been deemed paid during such period.  Each reference to the Agent in this Section 2.11 shall also be deemed to refer, and shall apply equally, to each LC Issuer in the case of payments required to be made by the Borrower to such LC Issuer pursuant to Section 2.19.6.

2.11.2    Settlement.  (a)  Each Lender’s funded portion of any Advance is intended by the Lenders to be equal at all times to such Lender’s Pro Rata Share of such Advance; provided, however, that for purposes of this Section 2.11.2 and all other applicable provisions of this Agreement, only Lenders with Revolving Loan Commitments shall participate in Collateral Protection Advances and Non-Ratable Loans in amounts equal to their respective Pro Rata Shares thereof.  Notwithstanding such agreement, the Agent, the Non-Ratable Lender (with respect to the Non-Ratable Loans), and the Lenders agree (which agreement shall not be for the benefit of or enforceable by the Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among them as to any Advance, including the Non-Ratable Loans and the Collateral Protection Advances, shall take place on a periodic basis in accordance with this Section 2.11.2.

(b)    The Agent shall request settlement (a “Settlement”) with the Lenders on at least a weekly basis, or on a more frequent basis at the Agent’s election, (A) on behalf of the Non-Ratable Lender, with respect to each outstanding Non-Ratable Loan, (B) for itself, with respect to each Collateral Protection Advance, and (C) with respect to collections received, in each case, by notifying the Lenders of such requested Settlement by telephone or facsimile, no later than 12:30 p.m. (Chicago time) on the date of such requested Settlement (the “Settlement Date”).  Each Lender (other than the Non-Ratable Lender, in the case of the Non-Ratable Loans, and the Agent in the case of the Collateral Protection Advances) shall transfer the amount of such Lender’s Pro Rata Share of the outstanding principal amount of the applicable Advances with respect to which Settlement is requested to the Agent, to such account of the Agent as the Agent may designate, not later than 2:30 p.m. (Chicago time), on the Settlement Date applicable thereto.  Settlements may occur during the existence of a Default or an Unmatured Default and whether or not the

44

applicable conditions precedent set forth in Article IV have then been satisfied.  Such amounts transferred to the Agent shall be applied against the amounts of the applicable Non-Ratable Loan or Collateral Protection Advance and, together with the portion of such Non-Ratable Loan or Collateral Protection Advance representing the Non-Ratable Lenders or the Agent’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders, respectively.  If any such amount is not transferred to the Agent by any Lender on the Settlement Date applicable thereto, the Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Alternate Base Rate for the first three (3) days from and after the Settlement Date and thereafter at the then applicable Floating Rate (1) on behalf of the Non-Ratable Lender with respect to each outstanding Non-Ratable Loan and (2) for itself with respect to each Collateral Protection Advance.

(c)    Notwithstanding the foregoing, not more than one (1) Business Day after demand is made by the Agent (whether before or after the occurrence of a Default or an Unmatured Default and regardless of whether the Agent has requested a Settlement with respect to a Non-Ratable Loan or Collateral Protection Advance), each other Lender (A) shall irrevocably and unconditionally purchase and receive from the Non-Ratable Lender or the Agent, as applicable, without recourse or warranty, an undivided interest and participation in such Non-Ratable Loan or Collateral Protection Advance equal to such Lender’s Pro Rata Share of such Non-Ratable Loan or Collateral Protection Advance, and (B) if Settlement has not previously occurred with respect to such Non-Ratable Loans or Collateral Protection Advances, upon demand by the Agent or the Non-Ratable Lender, as applicable, shall pay to the Agent or the Non-Ratable Lender, as applicable, as the purchase price of such participation an amount equal to 100% of such Lender’s Pro Rata Share of such Non-Ratable Loans or Collateral Protection Advances.  If such amount is not in fact transferred to the Agent or the Non-Ratable Lender, as applicable, by any Lender, the Agent shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Alternate Base Rate for the first three (3) days from and after such demand and thereafter at the then applicable Floating Rate.

(d)    From and after the date, if any, on which any Lender purchases an undivided interest and participation in any Non-Ratable Loan or Collateral Protection Advance pursuant to Section 2.11.2(c), the Agent shall promptly distribute to such Lender such Lender’s Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Non-Ratable Loan or Collateral Protection Advance.

(e)    Between Settlement Dates, to the extent no Collateral Protection Advances are outstanding, the Agent may pay over to the Non-Ratable Lender any payments received by the Agent, which in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Non-Ratable Lender’s Revolving Loans including Non-Ratable Loans.  If, as of any Settlement Date, collections received since the then immediately preceding Settlement Date have been applied to the Non-Ratable Lender’s Revolving Loans (other than to Non-Ratable Loans or Collateral Protection Advances in which a Lender has not yet funded its purchase of a participation pursuant to Section 2.11.2(c)), as provided for in the previous sentence, the Non-Ratable Lender shall pay to the Agent for the accounts of the Lenders, to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.  Subject to Section 2.11.1, during the period between Settlement Dates, the Non-Ratable Lender with respect to Non-Ratable Loans, the Agent with respect to Collateral Protection Advances, and each Lender with respect to the Revolving Loans other than Non-Ratable Loans and Collateral Protection Advances, in each case ratably in accordance with the funds employed by each of them, shall be entitled to interest at the applicable

45

rate or rates payable under this Agreement on the actual average daily amount of funds employed by the Non-Ratable Lender, the Agent, and the other Lenders.

2.12    Noteless Agreement; Evidence of Indebtedness.  (i)  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

		
	(ii)
	The Agent shall also maintain accounts in which it will record (a) the date and the amount of each Loan made hereunder, the Type thereof and the Interest Period (in the case of a Eurodollar Advance) with respect thereto, (b) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, (c) the original stated amount of each Facility LC and the amount of LC Obligations outstanding at any time, (d) the effective date and amount of each Assignment Agreement delivered to and accepted by it and the parties thereto pursuant to Section 12.3, (e) the amount of any sum received by the Agent hereunder from the Borrower and each Lender’s share thereof, and (f) all other appropriate debits and credits as provided in this Agreement, including, without limitation, all fees, charges, expenses and interest.

		
	(iii)
	The entries maintained in the accounts maintained pursuant to paragraphs (i) and (ii) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.

		
	(iv)
	Any Lender may request that its Revolving Loans be evidenced by a promissory note in substantially the form of Exhibit E (a “Note”).  In such event, the Borrower shall prepare, execute and deliver to such Lender the appropriate Note payable to the order of such Lender.  Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (prior to any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Lender subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (i) and (ii) above.

2.13    Telephonic Notices.  The Borrower hereby authorizes the Lenders and the Agent to extend, convert or continue Advances, effect selections of Types of Advances and to transfer funds based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be acting on behalf of the Borrower, it being understood that the foregoing authorization is specifically intended to allow Borrowing Notices and Conversion/Continuation Notices to be given telephonically.  The Borrower agrees to deliver promptly to the Agent a written confirmation, signed by an Authorized Officer, if such confirmation is requested by the Agent or any Lender, of each telephonic notice.  If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error.

2.14    Payments of Interest.

2.14.1    Interest Payment Dates; Interest and Fee Basis.  With respect to all Advances, interest shall be payable as follows.  Interest accrued on each Floating Rate Advance shall be payable in arrears on each Payment Date, commencing with the first such date to occur after the Closing Date, and at maturity, whether due to acceleration or otherwise.  Interest accrued on each

46

Eurodollar Advance shall be payable on the last day of its applicable Interest Period, on any date on which the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at maturity.  Interest accrued on each Eurodollar Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period.  Interest on Eurodollar Advances, LC Fees and all other fees hereunder shall be calculated for actual days elapsed on the basis of a 360-day year.  Interest on Floating Rate Advances shall be calculated for actual days elapsed on the basis of a 365/366-day year.  Interest shall be payable for the day an Advance is made but not for the day of any payment (unless payment is on the same date as the Advance) on the amount paid if payment is received prior to 12:00 p.m. (Chicago time) at the place of payment.  If any payment of principal of or interest on an Advance, any fees or any other amounts payable to the Agent or any Lender hereunder shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest, fees and commissions in connection with such payment.

2.14.2    Limitation on Interest.  The Borrower, the Agent and the Holders of Secured Obligations intend to strictly comply with all applicable laws, including applicable usury laws.  Accordingly, the provisions of this Section 2.14.2 shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section 2.14.2, even if such provision declares that it controls.  As used in this Section 2.14.2, the term “interest” includes the aggregate of all charges, fees, benefits, or other compensation which constitute interest under applicable law, provided that, to the maximum extent permitted by applicable law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance, or detention of money and not as interest and (b) all interest at any time contracted for, reserved, charged, or received shall be amortized, prorated, allocated, and spread, in equal parts during the full term of the Secured Obligations.  In no event shall the Borrower or any other Person be obligated to pay, or any Holder of Secured Obligations have any right or privilege to reserve, receive, or retain, (i) any interest in excess of the maximum amount of nonusurious interest permitted under the laws of the State of New York or the applicable laws (if any) of the U.S. or of any other applicable state or (ii) total interest in excess of the amount which such Holder of Secured Obligations could lawfully have contracted for, reserved, received, retained, or charged had the interest been calculated for the full term of the Secured Obligations at the Highest Lawful Rate.  On each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence.  Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate.  The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made.  None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 2.14.2, or be construed to create a contract to pay for the use, forbearance, or detention of money at an interest rate in excess of the Highest Lawful Rate.  If the term of any Secured Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Holder of Secured Obligations at any time, including but not limited to, the stated maturity, is owed or receives

47

(and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment, or other event which produces the excess, and, if such excess interest has been paid to such Holder of Secured Obligations, it shall be credited pro tanto against the then outstanding principal balance of the Borrower’s obligations to such Holder of Secured Obligations, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor.  Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15)) shall not apply to this Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or be subject to the provisions of such Chapter 346 in any manner whatsoever.

2.15    Notification of Advances, Interest Rates, Prepayments and Revolving Loan Commitment Reductions; Availability of Loans.  Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder.  Promptly after notice from the applicable LC Issuer, the Agent will notify each Lender of the contents of each request for issuance of a Facility LC hereunder.  The Agent will notify the Borrower and each Lender of the interest rate applicable to each Eurodollar Advance promptly upon determination of such interest rate and will give the Borrower and each Lender prompt notice of each change in the Alternate Base Rate.  Not later than 2:00 p.m. (Chicago time) on each Borrowing Date, each Lender shall make available its Loan or Revolving Loans in funds immediately available in Chicago to the Agent at its address specified pursuant to Article XIII.  The Agent will promptly make the funds so received from the Lenders available to the Borrower at the Agent’s aforesaid address.

2.16    Lending Installations.  Each Lender may book its Loans and its participation in any LC Obligations and other Obligations and each LC Issuer may book its Facility LCs at any Lending Installation selected by such Lender or such LC Issuer, as applicable, and may change its Lending Installation from time to time.  All terms of this Agreement shall apply to any such Lending Installation and the Loans, Facility LCs, and participations in LC Obligations and other Obligations, and any Notes issued hereunder shall be deemed held by each Lender or the relevant LC Issuer, for the benefit of any such Lending Installation.  Each Lender and each LC Issuer may, by written notice to the Agent and the Borrower in accordance with Article XIII, designate replacement or additional Lending Installations through which Loans will be made by it or Facility LCs will be issued by it and for whose account Loan payments or payments with respect to Facility LCs are to be made.

2.17    Non-Receipt of Funds by the Agent.  Unless the Borrower or a Lender, as the case may be, notifies the Agent prior to the date (or time, with respect to a Lender making proceeds of Floating Rate Advances available) on which it is scheduled to make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made.  The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption.  If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three (3) days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by the Borrower, the interest rate applicable to the relevant Loan.

48

2.18    Replacement of Lender.  If (i) the Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or continue, or to convert Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section 3.3, (ii) any Lender refuses to consent to certain proposed amendments, modifications, waivers, discharges or terminations with respect to this Agreement that require the consent of all Lenders (or all affected Lenders) pursuant to Section 8.2 and the same have been approved by the Required Lenders or (iii) any Lender becomes a Defaulting Lender or becomes subject to the penultimate paragraph of Section 2.21 (any Lender described in clause (i), clause (ii) or clause (iii) being an “Affected Lender”), the Borrower may elect to terminate or replace the Revolving Loan Commitment of such Affected Lender, provided that no Default shall have occurred and be continuing at the time of such termination or replacement, and provided further that, concurrently with such termination or replacement, (i) if the Affected Lender is being replaced, another bank or other entity which is reasonably satisfactory to the Borrower and the Agent shall agree, as of such date, to purchase for cash the Outstanding Credit Exposure of the Affected Lender pursuant to an Assignment Agreement substantially in the form of Exhibit C and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such Affected Lender in immediately available funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender, in each case to the extent not paid by the purchasing lender and (iii) if the Affected Lender is being terminated, the Borrower shall pay to such Affected Lender all Obligations due to such Affected Lender (including the amounts described in the immediately preceding clauses (i) and (ii) plus the outstanding principal balance of such Affected Lender’s Credit Extensions).

2.19    Facility LCs.

2.19.1    Issuance.  Each LC Issuer hereby agrees, on the terms and conditions set forth in this Agreement, to issue standby and commercial letters of credit (each, a “Facility LC”) and to renew, extend, increase, decrease or otherwise modify each Facility LC (“Modify,” and each such action, a “Modification”), from time to time from and including the Closing Date and prior to the Termination Date upon the request of the Borrower or any Subsidiary Guarantor; provided that immediately after each such Facility LC is issued or Modified, (i) the aggregate amount of the outstanding LC Obligations shall not exceed the Aggregate Revolving Loan Commitment, (ii) the Aggregate Outstanding Credit Exposure shall not exceed the Borrowing Base, (iii) the Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Revolving Loan Commitment and (iv) the aggregate face amount of all Facility LCs issued and then outstanding by any LC Issuer shall not exceed such LC Issuer’s Applicable LC Sublimit.  Any reference in this Section 2.19 to a request for a Facility LC by the Borrower shall be deemed to include requests by any Subsidiary Guarantor.  The Borrower agrees that it is obligated to satisfy any amount arising under or in connection with Facility LCs issued hereunder at the request of any Subsidiary Guarantor, including, without limitation, all Reimbursement Obligations, and that no Facility LC requested by any such Person shall be issued hereunder unless all conditions to issuance have been satisfied.  No Facility LC other than Extended Facility LCs issued pursuant to Section 2.19.13 shall have an expiry date later than the earlier of (x) the fifth (5th) Business Day prior to the Termination Date and (y) one year after its issuance; provided, however, that any Facility LC with a one-year term may provide for the renewal thereof for additional one-year periods that do not extend beyond the date referenced in clause (x) hereof.  Schedule 2.19.1 sets forth certain letters of credit issued under the Prior Credit Agreement.  Subject to the satisfaction on the Closing Date of the

49

conditions precedent set forth in Sections 4.1 and 4.2, such letters of credit shall constitute, on and after the Closing Date, Facility LCs and shall be subject to and benefit from this Agreement. 

2.19.2    Participations.  Upon the issuance or Modification by an LC Issuer of a Facility LC in accordance with this Section 2.19, such LC Issuer shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably sold to each Lender with a Revolving Commitment, and each such Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from such LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share thereof.

2.19.3    Notice.  Subject to Section 2.19.1, the Borrower shall give the applicable LC Issuer notice prior to 12:00 noon (Chicago time) at least one (1) Business Day prior to the proposed date of issuance or Modification of the applicable Facility LC, specifying the beneficiary, the proposed date of issuance (or Modification) and the expiry date of such Facility LC, and describing the proposed terms of such Facility LC and the nature of the transactions proposed to be supported thereby.  Upon receipt of such notice, the applicable LC Issuer shall promptly notify the Agent, and the Agent shall promptly notify each Lender, of the contents thereof and of the amount of such Lender’s Pro Rata Share of the Lenders’ aggregate participation in such proposed Facility LC.  The issuance or Modification by the applicable LC Issuer of a Facility LC shall, in addition to the conditions precedent set forth in Article IV (the satisfaction of which the applicable LC Issuer shall have no duty to ascertain), be subject to the conditions precedent that such Facility LC shall be satisfactory to the applicable LC Issuer and that the Borrower shall have executed and delivered such application agreement and/or such other instruments and agreements relating to such Facility LC as the applicable LC Issuer shall have reasonably requested (each, a “Facility LC Application”).  In the event of any conflict between the terms of this Agreement and the terms of any Facility LC Application, the terms of this Agreement shall control.

2.19.4    LC Fees.  The Borrower shall pay to the Agent, for the account of the Lenders with Revolving Loan Commitments (or, if the Revolving Loan Commitments have terminated, Outstanding Revolving Loan Credit Exposure) ratably in accordance with their respective Pro Rata Shares, with respect to issued and outstanding Facility LCs, a letter of credit fee at a per annum rate equal to the Applicable Margin for Revolving Loans that are Eurodollar Loans in effect from time to time on the maximum stated amount under such Facility LCs, with such fee to be payable in arrears on each Payment Date.  The Borrower shall also pay to the applicable LC Issuer for its own account (x) on the first Payment Date to occur after the issuance of a Facility LC issued by such LC Issuer, a fronting fee in an amount equal to 0.10% per annum times the face amount of such Facility LC, and (y) documentary and processing charges in connection with the issuance, amendment, cancellation, negotiation, transfer, or other Modification of and draws under Facility LCs in accordance with such LC Issuer’s standard schedule for such charges as in effect from time to time.  Each fee described in this Section 2.19.4 shall constitute an “LC Fee”.

2.19.5    Administration; Reimbursement by Lenders.  Upon receipt from the beneficiary of any Facility LC of any demand for payment under such Facility LC, the applicable LC Issuer shall notify the Agent and the Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid by such LC Issuer as a result of such demand and the proposed payment date (the “LC Payment Date”).  The responsibility of the applicable LC Issuer to the Borrower and each Lender shall be only to determine that the documents (including each demand for payment) delivered under each Facility LC issued by such LC Issuer in connection with such presentment shall be in conformity in all material respects with such Facility LC.  Each LC Issuer

50

shall endeavor to exercise the same care in the issuance and administration of its Facility LCs as it does with respect to letters of credit in which no participations are granted, it being understood that in the absence of any gross negligence or willful misconduct by such LC Issuer, each Lender shall be unconditionally and irrevocably liable without regard to the occurrence of any Default or any condition precedent whatsoever, to reimburse such LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount of each payment made by such LC Issuer under each Facility LC issued by it to the extent such amount is not reimbursed by the Borrower pursuant to Section 2.19.6 below, plus (ii) interest on the foregoing amount to be reimbursed by such Lender, for each day from the date of such LC Issuer’s demand for such reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time) on such date, from the next succeeding Business Day) to the date on which such Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Effective Rate for the first three (3) days and, thereafter, at a rate of interest equal to the rate applicable to Floating Rate Advances.  The Lenders shall be reimbursed for any payment required under this Section 2.19.5 to the extent of such Lender’s Pro Rata Share of any payment made by the Borrower as required under Section 2.19.6.  

2.19.6    Reimbursement by Borrower.  The Borrower shall be irrevocably and unconditionally obligated to reimburse each LC Issuer on or before the applicable LC Payment Date for any amounts to be paid by such LC Issuer upon any drawing under any Facility LC, issued by it, without presentment, demand, protest or other formalities of any kind; provided that neither the Borrower nor any Lender shall hereby be precluded from asserting any claim for direct (but not consequential) damages suffered by the Borrower or such Lender to the extent, but only to the extent, caused by (i) the willful misconduct or gross negligence of such LC Issuer in determining whether a request presented under any Facility LC issued by it complied with the terms of such Facility LC or (ii) such LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC.  Subject to the terms and conditions of this Agreement (including, without limitation, the submission of a Borrowing Notice in compliance with Section 2.7 and the satisfaction of the applicable conditions precedent set forth in Article IV), the Borrower may request an Advance hereunder for the purpose of satisfying any Reimbursement Obligation.  All such amounts paid by such LC Issuer and remaining unpaid by the Borrower, shall bear interest payable on demand, for each day until paid at a rate per annum equal to (x) the rate applicable to Floating Rate Advances for such day if such day falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to Floating Rate Advances for such day if such day falls after such LC Payment Date.  The Agent and each LC Issuer will pay to each Lender ratably in accordance with its Pro Rata Share all amounts received by it from the Borrower for application in payment, in whole or in part, of the Reimbursement Obligation in respect of any Facility LC issued by it, but only to the extent such Lender has made payment to such LC Issuer in respect of such Facility LC pursuant to Section 2.19.5.

2.19.7    Obligations Absolute.  The Borrower’s obligations under this Section 2.19 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against any LC Issuer, any Lender or any beneficiary of a Facility LC.  The Borrower further agrees with each LC Issuer and the Lenders that the LC Issuers and the Lenders shall not be responsible for, and the Borrower’s Reimbursement Obligation in respect of any Facility LC shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, any of its Affiliates, the beneficiary of any Facility LC or any financing institution or other party to whom any Facility LC may be

51

transferred or any claims or defenses whatsoever of the Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such transferee.  No LC Issuer shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Facility LC.  The Borrower agrees that any action taken or omitted by any LC Issuer or any Lender under or in connection with each Facility LC and the related drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon the Borrower and shall not put any LC Issuer or any Lender under any liability to the Borrower.  Nothing in this Section 2.19.7 is intended to limit the right of the Borrower to make a claim against the applicable LC Issuer for damages as contemplated by the proviso to the first sentence of Section 2.19.6.

2.19.8    Actions of LC Issuers.  Each LC Issuer shall be entitled to rely, and shall be fully protected in relying, upon any Facility LC issued by it, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by such LC Issuer.  Each LC Issuer shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first have received such advice or concurrence of the Required Lenders as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Notwithstanding any other provision of this Section 2.19, each LC Issuer shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Lenders and any future holders of a participation in any Facility LC.

2.19.9    Indemnification.  The Borrower hereby agrees to indemnify and hold harmless each Lender required to participate in Facility LCs under Section 2.19.2, each LC Issuer and the Agent, and their respective directors, officers, agents and employees from and against any and all claims and damages, losses, liabilities, costs or expenses which such Lender, such LC Issuer or the Agent may incur (or which may be claimed against such Lender, such LC Issuer or the Agent by any Person whatsoever) by reason of or in connection with the issuance, execution and delivery or transfer of or payment or failure to pay under any Facility LC or any actual or proposed use of any Facility LC, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which such LC Issuer may incur by reason of or in connection with (i) the failure of any other Lender to fulfill or comply with its obligations to such LC Issuer hereunder (but nothing herein contained shall affect any rights the Borrower may have against any Defaulting Lender) or (ii) by reason of or on account of such LC Issuer issuing any Facility LC which specifies that the term “Beneficiary” included therein includes any successor by operation of law of the named Beneficiary, but which Facility LC does not require that any drawing by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to the applicable LC Issuer, evidencing the appointment of such successor Beneficiary; provided that the Borrower shall not be required to indemnify any Lender, any LC Issuer or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of such LC Issuer in determining whether a request presented under any Facility LC complied with the terms of such Facility LC or (y) such LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. Nothing in this Section 2.19.9 is intended to limit the obligations of the Borrower under any other provision of this Agreement.

52

2.19.10    Lenders’ Indemnification.  Each Lender shall, ratably in accordance with its Pro Rata Share indemnify each LC Issuer, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct or such LC Issuer’s failure to pay under any Facility LC issued by it after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC) that such indemnitees may suffer or incur in connection with this Section 2.19 or any action taken or omitted by such indemnitees hereunder.

2.19.11    Facility LC Collateral Account.  Subsequent to the occurrence and during the continuance of a Default, or at any time the Aggregate Outstanding Credit Exposure exceeds the Borrowing Base, or at any time the Aggregate Outstanding Credit Exposure exceeds the Aggregate Revolving Loan Commitment, the Borrower agrees that it will, upon the request of the Agent or the Required Lenders and until the final expiration date of any Facility LC and thereafter as long as any amount is payable to any LC Issuer or the Lenders in respect of any Facility LC, maintain a special collateral account pursuant to arrangements satisfactory to the Agent (the “Facility LC Collateral Account”) at the Agent’s office at the address specified pursuant to Article XIII, in the name of the Borrower but under the sole dominion and control of the Agent, for the benefit of the Lenders and in which the Borrower shall have no interest other than as set forth in Section 8.1.  The Borrower hereby pledges, assigns and grants to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuers, a security interest in all of the Borrower’s right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Secured Obligations.  The Agent will invest any funds on deposit from time to time in the Facility LC Collateral Account in certificates of deposit of JPMorgan having a maturity not exceeding thirty (30) days.  Nothing in this Section 2.19.11 shall either obligate the Agent to require the Borrower to deposit any funds in the Facility LC Collateral Account or limit the right of the Agent to release any funds held in the Facility LC Collateral Account in each case other than as required by Section 8.1.

2.19.12    Rights as a Lender.  In its capacity as a Lender, each LC Issuer shall have the same rights and obligations as any other Lender.

2.19.13    Extended Facility LCs.  The Borrower or any Subsidiary Guarantor may request that an LC Issuer allow, and an LC Issuer may (in its sole discretion, subject to terms and conditions acceptable to such LC Issuer, including relating to reimbursement and indemnity) agree to allow, one or more Facility LCs issued by it to expire later than the date that is five (5) Business Days prior to the Termination Date. Any such Facility LC is referred to herein as an “Extended Facility LC”. The following provisions shall apply to any Extended Facility LC, notwithstanding any contrary provision set forth herein.

		
	(i)
	The participations of each Lender in each Extended Facility LC shall terminate at the close of business on the date that is five (5) Business Days prior to the Termination Date, with the effect that Lenders shall not have any obligations to acquire participations in any Facility LC and the related LC Obligations thereafter or otherwise with respect to such Extended Facility LC, except with respect to demands for drawings submitted on or prior to such date.

		
	(ii)
	On or prior to the date that is fifteen (15) days prior to the Termination Date, the Borrower and each Subsidiary Guarantor shall deposit with each LC Issuer an amount in

53

cash (or other credit support approved by such LC Issuer in its sole discretion) equal to one hundred and three percent (103%) of the LC Obligations as of such date attributable to the Extended Facility LCs issued by such LC Issuer for the account of the Borrower or such Subsidiary Guarantor, as applicable.  Each such deposit shall be held by the applicable LC Issuer in an account maintained by it as collateral for the obligations of the Borrower or such Subsidiary Guarantor, as applicable, in respect of such Extended Facility LCs.  Each applicable LC Issuer shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the request of the Borrower or Subsidiary Guarantor, as applicable, (and at the risk and expense of the Borrower or such Subsidiary Guarantor, as applicable) and subject to the agreement of the relevant LC Issuer (not to be unreasonably withheld), such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the relevant LC Issuer to reimburse any payment by an LC Issuer in respect of such Extended Facility LCs issued for the account of the Borrower or such Subsidiary Guarantor, as applicable, for which such LC Issuer has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of any reimbursement obligations of the Borrower or such Subsidiary Guarantor, as applicable, for such LC Issuer’s LC Exposure at such time and, to the extent of any excess over such LC Issuer’s LC Exposure at such time, returned to the Borrower or Subsidiary Guarantor, as applicable.

		
	(iii)
	After the close of business on the date that is five (5) Business Days prior to the Termination Date, the fees that would have accrued pursuant to Section 2.19.4 (if the participations of the Lenders in the Extended Facility LCs had not terminated) shall continue to accrue on the LC Obligations in respect of each Extended Facility LC and shall be payable to each applicable LC Issuer for its own account.

2.19.14    Issuing Bank Agreements. Unless otherwise requested by the Agent, each LC Issuer shall report in writing to the Agent (i) on the third Business Day of each calendar month, the daily activity (set forth by day) in respect of Facility LCs during the immediately preceding month, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such LC Issuer expects to issue, amend, renew or extend any Facility LC, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Facility LCs to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension occurred (and whether the amount thereof changed), it being understood that such LC Issuer shall not permit any issuance, renewal, extension or amendment resulting in an increase in the amount of any Facility LC to occur without first obtaining written confirmation from the Agent that it is then permitted under this Agreement, (iii) on each Business Day on which such LC Issuer makes any payment pursuant to a draw under a Facility LC, the date of such payment and the amount of such payment, (iv) on any Business Day on which the Borrower fails to reimburse a payment made by an LC Issuer required to be reimbursed to such LC Issuer on such day, the date of such failure and the amount of such non-payment and (v) on any other Business Day, such other information as the Agent shall reasonably request.

2.20.    Increase of Aggregate Revolving Loan Commitment.  

2.20.1    The Borrower may from time to time request that the Aggregate Revolving Loan Commitment be increased so long as the aggregate amount of the requested increase, together

54

with any previous increases of the Aggregate Revolving Loan Commitments pursuant to this Section 2.20, does not exceed $1,000,000,000; provided, however, that upon any such request, the Borrower shall demonstrate, to the reasonable satisfaction of the Agent, that such increase will not breach the terms of any of the indentures referenced in Section 9.17; provided, further, however, that (x) each requested increase shall be in an amount equal to $10,000,000 or an incremental amount in excess thereof, and (y) an increase in the Aggregate Revolving Loan Commitment hereunder may only be made at a time when no Unmatured Default or Default shall have occurred and be continuing or would result therefrom. The Agent may request an opinion of counsel from the Borrower in connection with any such increase.

2.20.2    The Borrower may increase the Aggregate Revolving Loan Commitments then in effect by increasing the Revolving Loan Commitment of a Lender or by causing a Person that at such time is not a Lender to become a Lender (an “Additional Lender”).  If the Borrower elects to increase the Aggregate Revolving Loan Commitments by increasing the Revolving Loan Commitment of a Lender, the Borrower and such Lender shall execute and deliver to Agent a certificate substantially in the form of Exhibit J-1 (a “Commitment Increase Certificate”).  If the Borrower elects to increase the Aggregate Revolving Loan Commitments by causing an Additional Lender to become a party to this Agreement, in which event the Borrower and such Additional Lender shall execute and deliver to Agent a certificate substantially in the form of Exhibit J-2 (an “Additional Lender Certificate”), together with an Administrative Questionnaire and a processing and recordation fee of $3,500. No increase hereunder shall be effective without the prior written consent of the Agent (no such consent to be unreasonably withheld).

2.20.3    No Lender’s Revolving Loan Commitment shall be increased without the consent of such Lender.  

2.20.4    On the effective date of any such increase, no Eurodollar Advance shall be outstanding or if any Eurodollar Advances are outstanding, then the effective date of such increase shall be the last day of the Interest Period in respect of such Eurodollar Advance unless Borrower pays compensation required by Section 3.4. 

2.20.5    Subject to the provisions of 2.20.2, 2.20.3, 2.20.4 and 2.20.6, from and after the effective date specified in the Commitment Increase Certificate or the Additional Lender Certificate (or if any Eurodollar Advances are outstanding, then the last day of the Interest Period in respect of such Eurodollar Advances, unless the Borrower has paid compensation required by Section 3.4): (i) the amount of the Aggregate Revolving Loan Commitments shall be increased as set forth therein, and (ii) in the case of an Additional Lender Certificate, any Additional Lender party thereto shall be a party to this Agreement and the other Loan Documents to which Lenders are parties thereto and have the rights and obligations of a Lender under this Agreement and the other Loan Documents. In addition, the Lender or the Additional Lender, as applicable, shall purchase a pro rata portion of the outstanding Loans (and participation interests in Non-Ratable Loans, LC Obligations and Collateral Protection Advances) of each of the other Lenders (and such Lenders hereby agree to sell and to take all such further action to effectuate such sale) such that each Lender (including any Additional Lender, if applicable) shall hold its Pro Rata Share of the outstanding Loans (and participation interests) after giving effect to the increase in the Aggregate Revolving Loan Commitments. 

2.20.6    Upon its receipt of a duly completed Commitment Increase Certificate or an Additional Lender Certificate, executed by the Borrower and the Lender or the Borrower and the Additional Lender party thereto, as applicable, the processing and recording fee, if any, referred to in Section 2.20.2, the Administrative Questionnaire referred to in Section 2.20.2, if applicable,

55

and the written consent of the Agent (no such consent to be unreasonably withheld or delayed),  the Agent shall accept such Commitment Increase Certificate or Additional Lender Certificate and record the information contained therein in the Register required to be maintained by Agent pursuant to Section 12.3.4. No increase in the Aggregate Revolving Loan Commitments shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 2.20.6.

2.21.    Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a)fees shall cease to accrue on the unfunded portion of the Revolving Loan Commitment of such Defaulting Lender pursuant to Section 2.4.1;

(b)the Revolving Loan Commitment and Outstanding Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 8.2); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby; 

(c)if any Non-Ratable Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

		
	(i)
	so long as no Default or Unmatured Default is then outstanding, all or any part of the Non-Ratable Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent the sum of all non-Defaulting Lenders’ Outstanding Credit Exposures plus such Defaulting Lender’s Non-Ratable Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Loan Commitments;

		
	(ii)
	if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within three (3) Business Days following notice by the Agent (x) first, prepay such Non-Ratable Exposure and (y) second, cash collateralize for the benefit of the relevant LC Issuers only the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 8.1 for so long as such LC Exposure is outstanding;

		
	(iii)
	if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any letter of credit fees to such Defaulting Lender pursuant to Section 2.19.4 with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure are cash collateralized;

		
	(iv)
	if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.4.1 and Section 2.19.4 shall be adjusted in accordance with such non-Defaulting Lenders’ Pro Rata Shares; and

		
	(v)
	if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any

56

rights or remedies of any LC Issuer or any other Lender hereunder, all letter of credit fees payable under Section 2.19.4 with respect to such Defaulting Lender’s LC Exposure shall be payable to the relevant LC Issuers until and to the extent that such LC Exposure are reallocated and/or cash collateralized; and

(d)so long as such Lender is a Defaulting Lender, the Non-Ratable Lender shall not be required to fund any Non-Ratable Loan and no LC Issuers shall be required to issue or Modify any Facility LC, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Revolving Loan Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.21(c), and participating interests in any newly made Non-Ratable Loan or any newly issued or increased Facility LC shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.21(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the Closing Date and for so long as such event shall continue or (ii) the Non-Ratable Lender or any LC Issuer has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Non-Ratable Lender shall not be required to fund any Non-Ratable Loan and no LC Issuer shall be required to issue or Modify any Facility LC, unless the Non-Ratable Lender or such LC Issuer, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Non-Ratable Lender or such LC Issuer, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Agent, the Borrower, each LC Issuer and the Non-Ratable Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Non-Ratable Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Loan Commitment and on such date such Lender shall purchase at par such of the Revolving Loans of the other Lenders as the Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Pro Rata Share.

2.22.    Increase of Aggregate Revolving Loan Commitment in Connection with BP Acquisition.  The Revolving Loan Commitment of each Lender shall automatically be increased to the amount set forth opposite such Lender’s name on the Commitment Schedule under the heading “Commitment Schedule As Of The Increase Effective Date”, and the Aggregate Revolving Loan Commitment shall correspondingly be increased to an amount up to $3,000,000,000, in each case, on the date the following conditions precedent have been satisfied by the Borrower (such date, the “Increase Effective Date”); provided, that, if such conditions have not been satisfied by August 7, 2013, or if the BP Acquisition Agreement shall be terminated on or before such date, the Increase Effective Date shall not occur:

 (i)    all necessary filings and notifications under the HSR Act in respect of the BP Acquisition shall have been made and the waiting period referred to in the HSR Act applicable to such acquisition, and any agreement with any Governmental Authority not to consummate such acquisition, shall have expired or been terminated;
(ii)    the Agent shall have received from the Borrower a certificate certifying that (A) the representations and warranties contained in Article V are true and correct in all material respects as of such date except (x) with respect to Sections 5.5 and 5.7, the representations and warranties set forth in such Sections shall have been true and correct in all material respects on and as of the date of the most recent Form 10-K or Form 10-Q filing, as applicable, made by the Borrower with the U.S. Securities and Exchange Commission, and (y) with respect to any other representation and warranty set forth in Article V, to the extent such representation or warranty is stated to relate solely to an earlier date, such representation or warranty shall have been true and correct in all material respects on and as of such

57

earlier date; provided that, in each case, any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on the date of such credit extension or on such earlier date, as the case may be (after giving effect to such qualification), and (B) there exists no Default or Unmatured Default; 
(iii)    the BP Acquisition Agreement shall be in full force and effect; and
(iv)     the Agent shall have received from the Borrower an Interim Collateral Report and such other evidence reasonably requested by the Agent to demonstrate that, among other things, Excess Availability on the Increase Effective Date, after giving effect to the increase of the Aggregate Revolving Loan Commitment and all Advances requested by the Borrower and to be made on the Increase Effective Date, equals or exceeds $750,000,000.
No failure by any Lender to consummate the increase in such Lender’s Revolving Loan Commitment on the Increase Effective Date will affect any other Lender’s Revolving Loan Commitment on the Increase Effective Date. Notwithstanding the provisions of this Section 2.22, as of the effective date of the First Amendment, the Aggregate Revolving Loan Commitment has been modified pursuant to the First Amendment as set forth on the Commitment Schedule.
ARTICLE III

YIELD PROTECTION; TAXES

3.1    Yield Protection.  If any Change in Law:

		
	(i)
	subjects any Recipient to any taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or other charges on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Taxes, (B) Other Taxes and (C) Excluded Taxes), or

		
	(ii)
	imposes or increases or deems applicable any reserve, liquidity, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or any LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or

		
	(iii)
	imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining its Revolving Loan Commitment or Eurodollar Loans or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or any LC Issuer in connection with its Revolving Loan Commitment or Eurodollar Loans or Facility LCs (including participations therein), or requires any Lender or any applicable Lending Installation or any LC Issuer to make any payment calculated by reference to the amount of Revolving Loan Commitment or Eurodollar Loans or Facility LCs (including participations therein) held or interest or LC Fees received by it, by an amount deemed material by such Lender or any LC Issuer, as applicable,

and the result of any of the foregoing is to increase the cost to the Agent, such Lender or applicable Lending Installation, such LC Issuer or any other Recipient of making or maintaining its Loans or Revolving Loan Commitment or of issuing or participating in Facility LCs, as applicable, or to reduce the return received by the Agent, such Lender or applicable Lending Installation, such LC Issuer or any other Recipient in connection with such Loans (in the case of clause (i), its Loans) or Revolving Loan

58

Commitment, or Facility LCs (including participations therein), then, within fifteen (15) days of demand, accompanied by the written statement required by Section 3.6, by the Agent, such Lender or LC Issuer or such other Recipient, as applicable, the Borrower shall pay the Agent, such Lender or LC Issuer or such other Recipient, as applicable, such additional amount or amounts as will compensate the Agent, such Lender or LC Issuer for such increased cost or reduction in amount received.
3.2.     Changes in Capital Adequacy Regulations.  If any Lender or LC Issuer determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or LC Issuer’s capital or on the capital of such Lender’s or LC Issuer’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Loans or Facility LCs held by, such Lender, or the Facility LCs issued by such LC Issuer, to a level below that which such Lender or LC Issuer or such Lender’s or LC Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or LC Issuer’s policies and the policies of such Lender’s or LC Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or LC Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or LC Issuer or such Lender’s or LC Issuer’s holding company for any such reduction suffered.

3.3.     Availability of Types of Advance.  If (x) any Lender determines that maintenance of its Eurodollar Loans at a suitable Lending Installation would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, or (y) the Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Eurodollar Base Rate, or (z) the Agent is advised by the Required Lenders that (i) deposits of a type and maturity appropriate to match fund Eurodollar Advances are not available or (ii) the interest rate applicable to Eurodollar Advances does not adequately and fairly reflect the cost to such Lenders of making or maintaining Eurodollar Advances for such Interest Period, then the Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter, and until the Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist (which notice shall be given promptly after such circumstances cease to exist),  the Agent shall suspend the availability of Eurodollar Advances and require any affected Eurodollar Advances to be repaid or converted to Floating Rate Advances on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law, subject to the payment of any funding indemnification amounts required by Section 3.4.

3.4.    Funding Indemnification.  If any payment of a Eurodollar Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not made or continued, or a Floating Rate Advance is not converted into a Eurodollar Advance, on the date specified by the Borrower for any reason other than default by the Lenders, or a Eurodollar Advance is not prepaid on the date specified by the Borrower for any reason, the Borrower will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain such Eurodollar Advance.

3.5    Taxes.

		
	(i)
	All payments by the Borrower to or for the account of any Lender, any LC Issuer, or the Agent hereunder or under any Note shall be made free and clear of and without deduction for any and all Taxes unless such deduction is required by law.  If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, any LC Issuer, or the Agent, (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender, LC Issuer, or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) the Borrower shall make such deductions, (c) the Borrower shall pay

59

the full amount deducted to the relevant Governmental Authority in accordance with applicable law and (d) the Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof or, if a receipt cannot be obtained with reasonable efforts, such other evidence of payment as is reasonably acceptable to the Agent, in each case within thirty (30) days after such payment is made.

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

		
	(iii)
	The Borrower shall indemnify the Agent, each LC Issuer, and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent, such LC Issuer, or such Lender as a result of its Revolving Loan Commitment, any Credit Extensions made by it hereunder, or any Facility LC issued or participated in by it hereunder, or otherwise in connection with its participation in this Agreement and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.  Payments due under this indemnification shall be made within thirty (30) days of the date the Agent or such LC Issuer or such Lender makes demand therefor pursuant to Section 3.6.

		
	(iv)
	Each Lender that is a “United States person” as defined in Section 7701(a)(30) of the Code shall deliver to each of the Borrower and the Agent, not more than ten (10) Business Days after the date on which it becomes a party to this Agreement (but in any event before a payment is due to it hereunder or under any other Loan Document) two properly completed and duly signed copies of a United States Internal Revenue Service Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax.  Each Lender that is not incorporated under the laws of the United States of America or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten (10) Business Days after the date on which it becomes a party to this Agreement (but in any event before a payment is due to it hereunder or under any other Loan Document), (i) deliver to each of the Borrower and the Agent two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement or under any other Loan Document without deduction or withholding of any United States federal income or withholding taxes, or (ii) in the case of a Non-U.S. Lender that is fiscally transparent, deliver to the Agent a United States Internal Revenue Form W-8IMY together with the applicable accompanying forms, W-8 or W-9, as the case may be, and certify that it is entitled to receive payments under this Agreement or under any other Loan Document without deduction or withholding of any United States federal income or withholding tax.  Each Non-U.S. Lender further undertakes to deliver to the Borrower and the Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Borrower or the Agent.  All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement or under any other Loan Document without deduction or withholding of any United States federal income or withholding taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which

60

any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

		
	(v)
	For any period during which a Non-U.S. Lender has failed to provide the Borrower and the Agent with an appropriate form pursuant to clause (iv) above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the United States; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (iv) above, the Borrower shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.

		
	(vi)
	Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or under any other Loan Document pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.  Without limiting the foregoing, if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower and the Agent as may be necessary for the Borrower and the Agent to comply with its obligations under FATCA, to determine whether such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  For purposes of this clause (vi), “FATCA” shall include any amendments made to FATCA after the Closing Date.

		
	(vii)
	Each Lender and each LC Issuer shall severally indemnify the Agent for any taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or other charges (but, in the case of any Taxes or Other Taxes, only to the extent that the Borrower has not already indemnified the Agent for such Taxes or Other Taxes and without limiting the obligation of the Borrower to do so) attributable to such Lender or LC Issuer that are paid or payable by the Agent in connection with any Loan Document and any reasonable expenses or liabilities arising therefrom or with respect thereto, whether or not such amounts were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 3.5(vii) shall be paid within ten (10) days after the Agent delivers to the applicable Lender or LC Issuer a certificate stating the amount so paid or payable by the Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.  The obligations of the Lenders under

61

this Section 3.5(vii) shall survive the payment of the Obligations and termination of this Agreement.

		
	(viii)
	If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section 3.5 (including by the payment of additional amounts pursuant to this Section 3.5), 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 3.5 with respect to the Taxes or Other 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 clause (viii) (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 clause (viii), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (viii) 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 or Other 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 or Other 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.

		
	(ix)
	For purposes of determining withholding Taxes imposed under FATCA, from and after the effective date of the First Amendment, the Borrower and the Agent shall treat (and the Lenders hereby authorize the Agent to treat) the Obligations under this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

3.6    Lender Statements; Survival of Indemnity.  Each Lender shall deliver a written statement of such Lender to the Borrower (with a copy to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5.  Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be rebuttably presumptive evidence of the amount owed.  Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type, currency and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not.  Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrower of such written statement.  The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.

3.7    Alternative Lending Installation.  To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, reasonably disadvantageous to such Lender.  A Lender’s designation of an alternative Lending Installation shall not affect the Borrower’s rights under Section 2.18 to replace a Lender.

62

ARTICLE IV

CONDITIONS PRECEDENT

4.1    Effectiveness of Revolving Loan Commitments.  The Lenders’ Revolving Loan Commitments shall not be effective hereunder until the Agent shall have received on the Closing Date a fully executed copy of this Agreement and the following conditions precedent have been satisfied by the Borrower:

4.1.1Copies of the articles or certificate of incorporation (or the equivalent thereof) of (a) the Borrower and (b) each Subsidiary Guarantor, in each case together with all amendments thereto, and a certificate of good standing, each certified by the appropriate governmental officer in its jurisdiction of organization.

4.1.2Copies, certified by the Secretary or Assistant Secretary (or the equivalent thereof) of (a) the Borrower and (b) each Subsidiary Guarantor, in each case, of its by-laws and of its Board of Directors’ resolutions and of resolutions or actions of any other body authorizing the execution of the Loan Documents to which the Borrower or such Subsidiary, as applicable, is a party.

4.1.3An incumbency certificate, executed by the Secretary or Assistant Secretary (or the equivalent thereof) of (a) the Borrower and (b) each Subsidiary Guarantor, in each case which shall identify by name and title and bear the signatures of the Authorized Officers and any other officers of the Borrower and such Subsidiary authorized to sign the Loan Documents to which the Borrower and such Subsidiary are parties, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Borrower or such Subsidiary, as applicable.

4.1.4A certificate, in substantially the form of Exhibit G, signed by the chief financial officer or vice president, finance and treasurer of the Borrower, stating that on the initial Credit Extension Date (a) no Default or Unmatured Default has occurred and is then continuing, (b) all of the representations and warranties in Article V shall be true and correct in all material respects as of such date (or an earlier date if a representation or warranty relates to a specified earlier date) and (c) certifications in respect of Section 9.17.

4.1.5A written opinion of (i) Charles S. Parrish, General Counsel to the Borrower and the Subsidiary Guarantors and (ii) Simpson Thacher & Bartlett LLP, special counsel to the Borrower and the Subsidiary Guarantors, in each case in form and substance satisfactory to the Agent and addressed to the Lenders.

4.1.6Any Notes requested by a Lender at least three (3) Business Days prior to the Closing Date pursuant to Section 2.12 payable to the order of each such requesting Lender.

4.1.7Written money transfer instructions, in substantially the form of Exhibit D, addressed to the Agent and signed by an Authorized Officer, together with such other related money transfer authorizations as the Agent may have reasonably requested.

4.1.8An Interim Collateral Report for January 3, 2013 and such other evidence reasonably requested by the Agent to demonstrate that, among other things, Excess Availability on the Closing Date, after giving effect to all Advances requested by the Borrower and to be made on the Closing Date, equals or exceeds $450,000,000.

63

4.1.9An initial compliance certificate dated as of the Closing Date, in substantially the form of Exhibit B hereto, together with (i) the Borrower’s most recently completed financial summaries, and (ii) the Borrower’s financial projections, in a format reasonably acceptable to the Agent, for the period beginning January 1, 2012 and ending December 31, 2017.

4.1.10 (a) All fees owing to the Agent and the Lenders on the Closing Date, including, without limitation, those referenced in Sections 2.4.2 and 10.13, shall have been fully paid, and (b) each Departing Lender shall have received payment in full of all of the “Obligations” under the Prior Credit Agreement that are owing to it (other than obligations to pay fees and expenses with respect to which the Borrower has not received an invoice, “Rate Management Obligations”, contingent indemnity obligations and other contingent obligations owing to it under the “Loan Documents” as defined in the Prior Credit Agreement).

4.1.11Such other documents as any Lender or its counsel may have reasonably requested, as set forth on Exhibit H hereto.

4.2Each Credit Extension.  The Lenders shall not be required to make any Credit Extension (except as otherwise set forth in Section 2.1.3(d) with respect to Revolving Loans extended for purposes of repaying Non-Ratable Loans and other than in connection with Collateral Protection Advances) unless on the applicable Credit Extension Date:
4.2.1.There exists no Default or Unmatured Default.

4.2.2.The representations and warranties contained in Article V are true and correct in all material respects as of such Credit Extension Date except (x) with respect to Sections 5.5 and 5.7, the representations and warranties set forth in such Sections shall have been true and correct in all material respects on and as of the date of the most recent Form 10-K or Form 10-Q filing, as applicable, made by the Borrower with the U.S. Securities and Exchange Commission, and (y) with respect to any other representation and warranty set forth in Article V, to the extent such representation or warranty is stated to relate solely to an earlier date, such representation or warranty shall have been true and correct in all material respects on and as of such earlier date; provided that, in each case, any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on the date of such credit extension or on such earlier date, as the case may be (after giving effect to such qualification).

Each Borrowing Notice, or request for issuance of a Facility LC with respect to each such Credit Extension shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.2.1 and 4.2.2 have been satisfied.
ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to each Lender and the Agent as of each of (i) the Closing Date and (ii) each date as required by Section 4.2:
5.1Existence and Standing.  Each of the Borrower and its Subsidiaries is a corporation, partnership (in the case of Subsidiaries only) or limited liability company duly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite authority

64

to conduct its business in each jurisdiction in which its business is conducted, except where the failure to be so qualified does not or would not be expected to cause or result in the occurrence of a Material Adverse Effect.

5.2Authorization and Validity.  Each of the Borrower and each Subsidiary Guarantor has the power and authority and legal right to execute and deliver the Loan Documents to which the Borrower or each such Subsidiary Guarantor, as applicable, is a party and to perform its obligations thereunder.  The execution and delivery by each of the Borrower and each Subsidiary Guarantor of the Loan Documents to which the Borrower or each such Subsidiary Guarantor, as applicable, is a party and the performance of its obligations thereunder have been duly authorized by proper proceedings, and the Loan Documents to which the Borrower or such Subsidiary Guarantor, as applicable, is a party constitute legal, valid and binding obligations of the Borrower or such Subsidiary Guarantor, as applicable, enforceable against the Borrower or such Subsidiary Guarantor, as applicable, in accordance with their terms, except as enforceability may be limited by (i) bankruptcy, insolvency, fraudulent conveyances, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally; (ii) general equitable principles (whether considered in a proceeding in equity or at law); and (iii) requirements of reasonableness, good faith and fair dealing.

5.3No Conflict; Government Consent.  Neither the execution and delivery by the Borrower or the Subsidiary Guarantors, as applicable, of the Loan Documents, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (i) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or any of the Subsidiary Guarantors, or (ii) the Borrower’s or any Subsidiary Guarantor’s articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating agreement or other management agreement, as the case may be, or (iii) the provisions of any indenture, instrument or agreement to which the Borrower or any of the Subsidiary Guarantors is a party or is subject, or by which it, or its Property, is bound, or conflict with, or constitute a default under, or result in, or require, the creation or imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary Guarantor pursuant to the terms of, any such indenture, instrument or agreement except where such violation would not reasonably be expected to have a Material Adverse Effect.  No order, consent, adjudication, approval, license, authorization, or validation of, or exemption by, any governmental or public body or authority, or any subdivision thereof, which has not been obtained by the Borrower or any of the Subsidiary Guarantors, is required to be obtained by the Borrower or any of the Subsidiary Guarantors in connection with the execution and delivery of the Loan Documents, the borrowings under this Agreement, the payment and performance by the Borrower of the Obligations or the legality, validity, binding effect or enforceability of any of the Loan Documents except where failure to obtain the same would not reasonably be expected to have a Material Adverse Effect.

5.4Financial Statements.  The December 31, 2011, March 30, 2012, June 30, 2012 and September 30, 2012 consolidated financial statements of the Borrower and its Subsidiaries heretofore delivered to the Agent and the Lenders were prepared in accordance with U.S. GAAP in effect on the date such statements were prepared and fairly present the consolidated financial condition of the Borrower and its Subsidiaries at such date in all material respects.

5.5Material Adverse Change.  Since December 31, 2011, there has been no change in the business, Property, condition (financial or otherwise) or results of operations of the Borrower and its Subsidiaries, taken together, which would reasonably be expected to have a Material Adverse Effect.

5.6Taxes.  The Borrower and its Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed (except where failure to file such other tax returns would not reasonably be expected to have a Material Adverse Effect) and have paid all taxes due pursuant

65

to said returns or pursuant to any assessment received by the Borrower or any of its Subsidiaries, except in respect of such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with Agreement Accounting Principles and as to which no Lien exists (except as permitted by Section 6.15.2).  The United States income tax returns of the Borrower and its Subsidiaries have been audited by the Internal Revenue Service through the fiscal year ended 2007.

5.7Litigation and Contingent Obligations.  There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any of its Subsidiaries which would reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Loans. Other than any liability incident to any litigation, arbitration or proceeding which would not reasonably be expected to have a Material Adverse Effect, the Borrower has no material contingent obligations not provided for or disclosed in the financial statements referred to in Section 5.4.

5.8Subsidiaries.  Schedule 5.8 contains an accurate list of all Subsidiaries of the Borrower as of the Closing Date, setting forth their respective jurisdictions of organization and the percentage of their respective capital stock or other ownership interests owned by the Borrower or other Subsidiaries.  Schedule 5.8 also identifies those Subsidiaries that constitute Subsidiary Guarantors.  All of the issued and outstanding shares of capital stock or other ownership interests of such Subsidiaries have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.

5.9ERISA.  As of the Closing Date, the Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $100,000,000.  As of the Closing Date, each Plan complies with all minimum funding requirements under ERISA.  Except as provided on Schedule 5.9, as of the Closing Date, neither the Borrower nor any member of the Controlled Group is party to a Multiemployer Plan or has, or would reasonably be expected to have, any liability to a Multiemployer Plan.

5.10Accuracy of Information.  The information, exhibits or reports furnished by the Borrower to the U.S. Securities and Exchange Commission on Form 10-K and Form 10-Q do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.  The information furnished by the Borrower in each Monthly Collateral Report and Interim Collateral Report is, to the best of the Borrower’s knowledge, accurate in all material respects.

5.11Regulation U.  Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate of buying or carrying margin stock (as defined in Regulation U), and after applying the proceeds of each Credit Extension, margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge, or any other restriction hereunder.

5.12Material Agreements.  Neither the Borrower nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement or instrument to which it is a party, which default would reasonably be expected to have a Material Adverse Effect or (ii) any agreement or instrument evidencing or governing Material Indebtedness.

5.13Compliance With Laws.  The Borrower and its Subsidiaries have complied with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government or any instrumentality or agency thereof having jurisdiction over the conduct of their respective businesses

66

or the ownership of their respective Property, except where the failure to do so has not caused or resulted in the occurrence of a Material Adverse Effect.

5.14Ownership of Properties.  On the Closing Date, the Borrower and its Subsidiaries have good title, free of all Liens other than those permitted by Section 6.15, to all of the assets reflected in the Borrower’s most recent consolidated financial statements provided to the Agent, as owned by the Borrower and its Subsidiaries.

5.15Plan Assets; Prohibited Transactions.  The Borrower is not 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 an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the execution of this Agreement nor the making of Revolving Loans hereunder gives rise to a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

5.16Environmental Matters.  In the ordinary course of its business, the officers of the Borrower consider the effect of Environmental Laws on the business of the Borrower and its Subsidiaries, in the course of which they identify and evaluate potential risks and liabilities accruing to the Borrower due to Environmental Laws.  On the basis of this consideration, the Borrower has concluded that, in its good faith determination, the risks and liabilities accruing to the Borrower due to Environmental Laws are not reasonably expected to have a Material Adverse Effect.  Neither the Borrower nor any Subsidiary has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable Environmental Laws or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any Hazardous Material into the environment, which non-compliance or remedial action would reasonably be expected to have a Material Adverse Effect.

5.17Investment Company Act.  Neither the Borrower nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

5.18Insurance.  The Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their Property in such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as is consistent with sound business practice.  The Borrower has delivered to the Agent and the Lenders a complete and accurate list of its insurance policies and programs and the Property subject thereto as of the Closing Date.  The Borrower has caused all such policies to be subject to provisions which prohibit the cancellation thereof by the provider thereof without at least thirty (30) days’ prior written notice to the Borrower and each loss payee thereof.

5.19No Default or Unmatured Default.  No Default or Unmatured Default has occurred and is continuing.

5.20Anti-Corruption Laws and Sanctions, Etc..  The Borrower has implemented and maintains in effect policies and procedures reasonably intended to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and to the knowledge of the Borrower, their respective officers, employees and directors, are in compliance in all material respects with (i) Anti-Corruption Laws and (ii) applicable Sanctions.  None of (a) the Borrower, any Subsidiary or (b) any of their respective directors, officers or employees or any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby,

67

is a Sanctioned Person. To the actual knowledge of the Borrower, neither the Borrower nor any Subsidiary (i) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any applicable law (collectively, "Anti-Money Laundering Laws"), (ii) has been assessed civil penalties under any Anti-Money Laundering Laws or (iii) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws.

ARTICLE VI

COVENANTS

During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing:
6.1Financial Reporting.  The Borrower will maintain, for itself and each Subsidiary Guarantor, a system of accounting established and administered in accordance with U.S. GAAP, and furnish to the Agent for the benefit of the Lenders:

6.1.1Within 105 days after the close of each of its fiscal years, (a) financial statements prepared in accordance with Agreement Accounting Principles on a consolidated basis for itself and its Subsidiaries, as filed on Form 10-K with the U.S. Securities and Exchange Commission, accompanied by (i) an auditor’s report, unqualified as to scope, of a nationally recognized firm of independent public accountants or other independent public accountants reasonably acceptable to the Required Lenders; (ii) any management letter prepared by said accountants; and (iii) a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof.

6.1.2Within (x) thirty (30) days after the end of each calendar month other than those calendar months that end the first three fiscal quarters of each of the Borrower’s fiscal years, and (y) forty-five (45) days after the end of each December of each calendar year, for itself and its consolidated Subsidiaries, the Borrower’s financial summaries for such month, which shall be prepared on a consolidated basis and shall be in form and substance substantially similar to the financial summaries delivered on or prior to the Closing Date or shall otherwise be in form and substance reasonably acceptable to the Agent.

6.1.3Within forty-five (45) days after the close of each of the first three fiscal quarters of each of its fiscal years, for itself and its Subsidiaries, consolidated unaudited financial statements for such period as filed on Form 10-Q with the U.S. Securities and Exchange Commission, prepared in accordance with Agreement Accounting Principles and (except for the exclusion of any disclosure permitted by the U.S. Securities and Exchange Commission) certified as to fairness of presentation and consistency by its chief financial officer or treasurer.

6.1.4Together with the financial statements required under Sections 6.1.1 and 6.1.3, a compliance certificate in substantially the form of Exhibit B signed by its chief financial officer or treasurer or vice president, finance showing the calculations necessary to determine compliance with this Agreement, stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.

68

6.1.5Within three hundred (300) days after the close of each fiscal year of the Borrower, a copy of the actuarial report and Form 5500 with Schedule B showing the Unfunded Liabilities of each Single Employer Plan as of the valuation date occurring in such fiscal year, certified by an actuary enrolled under ERISA.

6.1.6As soon as practicable and in any event within thirty (30) days after the Borrower knows that any Reportable Event has occurred with respect to any Plan, a statement, signed by the chief financial officer or treasurer of the Borrower, describing said Reportable Event and the action which the Borrower proposes to take with respect thereto.

6.1.7As soon as practicable and in any event within ten (10) Business Days after receipt by the Borrower, a copy of (a) any notice or claim to the effect that the Borrower or any of its Subsidiaries is or may be liable to any Person as a result of the release by the Borrower, any of its Subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (b) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Borrower or any of its Subsidiaries, which, in either case, the Borrower in good faith believes would reasonably be expected to have a Material Adverse Effect.

6.1.8Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, or other regular reports which the Borrower or any of its Subsidiaries files with the U.S. Securities and Exchange Commission, including, without limitation, all certifications and other filings required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 and all rules and regulations related thereto.

6.1.9On each date on which an Interim Collateral Report or a Monthly Collateral Report is delivered, the Borrower shall provide the Agent with all supporting documents the Agent reasonably deems desirable, all certified as being true and correct by an Authorized Officer of the Borrower.  The Borrower may update Interim Collateral Reports and Monthly Collateral Reports more frequently than the periods set forth below and, so long as such Interim Collateral Reports or Monthly Collateral Reports are delivered together with all supporting information reasonably requested by the Agent, the most recently delivered Interim Collateral Report or Monthly Collateral Report, as applicable, shall be the applicable Interim Collateral Report or Monthly Collateral Report for purposes of determining the Borrowing Base at any time.  Each Interim Collateral Report and Monthly Collateral Report shall (i) set forth the ratings of both S&P and Moody’s in effect on the date of such report in respect of the Borrower’s senior long-term secured indebtedness (without giving effect to any credit enhancement) and (ii) indicate whether either of such ratings have changed since the most recently delivered Interim Collateral Report or Monthly Collateral Report, as applicable, prior to such date.

6.1.10As soon as practicable, and in any event within fifteen (15) calendar days of the end of each calendar month, the Borrower shall provide the Agent with a Monthly Collateral Report for such calendar month certified as being true and correct in all material respects by an Authorized Officer of the Borrower.  In addition to the foregoing, the Borrower, shall deliver copies of invoices, purchase orders, credit memoranda, shipping and delivery documents and other information related to Eligible Receivables and Eligible Petroleum Inventory identified in the applicable Monthly Collateral Report as Agent shall reasonably request.

6.1.11For so long as Excess Availability is less than or equal to $300,000,000, as soon as practicable, and in any event within three (3) Business Days after the end of each calendar week during such period, the Borrower shall provide to the Agent an Interim Collateral Report for

69

the applicable one-week period certified as being true and correct by an Authorized Officer of the Borrower.  Each Interim Collateral Report shall identify, for the applicable reporting period, the aggregate amount of all contra-accounts related to Specified Customers net of the aggregate of the face amounts of all letters of credit issued on behalf of the Borrower or the applicable Subsidiary Guarantor to Specified Customers as payment for goods or services purchased by the Borrower or the applicable Subsidiary Guarantor from the Specified Customers.  No Interim Collateral Report described in this Section 6.1.11 shall be required to be delivered by the Borrower pursuant to this Section 6.1.11. during any period in which Excess Availability exceeds $300,000,000.

6.1.12If on any date Excess Availability exceeds 35% of the then effective Borrowing Base, and the dollar value of the then existing Eligible Petroleum Inventory is less than 80% of the dollar value of Eligible Petroleum Inventory reported in the last Interim Collateral Report or Monthly Collateral Report delivered to the Agent, as applicable, the Borrower shall provide to the Agent, within five (5) Business Days of such date, a new Interim Collateral Report certified as being true and correct by an Authorized Officer of the Borrower, together with all supporting documentation reasonably requested by the Agent.  If on any date Excess Availability is greater than $300,000,000 but less than or equal to 35% of the then effective Borrowing Base, and the dollar value of the then existing Eligible Petroleum Inventory is less than 85% of the dollar value of Eligible Petroleum Inventory reported in the last Interim Collateral Report or Monthly Collateral Report delivered to the Agent, as applicable, the Borrower shall provide to the Agent, within five (5) Business Days of such date, a new Interim Collateral Report certified as being true and correct by an Authorized Officer of the Borrower, together with all supporting documentation reasonably requested by the Agent.

6.1.13Within sixty (60) days after the close of each of its fiscal years, a copy of the plan and forecast (including a projected balance sheet, projected income statements, and projected funds flow statement) of the Borrower and its Subsidiaries, for the upcoming fiscal year prepared in such detail as shall be reasonably satisfactory to the Agent.  Any plan and forecast in form and substance substantially similar to the plan and forecast delivered on or prior to the Closing Date shall be deemed to be reasonably satisfactory by the Agent.

6.1.14Such other information (including non-financial information and additional or supplemental reporting) as the Agent or any Lender may from time to time reasonably request.

6.1.15Within five (5) Business Days after the Company or any Subsidiary enters into a Permitted Credit Enhancement Transaction, copies of the agreements, contracts, confirmations or other documentation evidencing such Permitted Credit Enhancement Transaction.

Information required to be delivered pursuant to Section 6.1.1 or 6.1.3 (to the extent any such documents are included in materials otherwise filed with the U.S. Securities and Exchange Commission) or and 6.1.8 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower files such documents on the U.S. Securities and Exchange Commission’s EDGAR system (or any successor thereto) or any other publicly available database maintained by the U.S. Securities and Exchange Commission, or provides a link thereto on the Borrower’s website on the Internet, to which each Lender and the Agent have access; or (ii) on which such documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that upon the written request of the Agent or any Lender, the Borrower shall deliver paper copies of such documents to the Agent or such Lender, as the case may be.  The Agent shall have no obligation to request the delivery or to maintain copies of the financial statements referred to above,

70

and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
6.2Use of Proceeds.  The Borrower will, and will cause each Subsidiary to, use the proceeds of the Credit Extensions (a) to repay amounts outstanding under the Prior Credit Agreement on the Closing Date, including any fees or expenses incurred in connection therewith, (b) for general corporate purposes, including, without limitation, for working capital, to repay certain Indebtedness, expenditures constituting Consolidated Capital Expenditures, Permitted Acquisitions, other investments and dividends and other distributions permitted hereunder and to pay fees and expenses incurred in connection with this Agreement.  The use of proceeds of Credit Extensions shall not result in a violation of Regulation U and X. The Borrower will not request any Credit Extension, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and, to its knowledge, agents shall not use, the proceeds of any Credit Extension (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C)  in any manner that would result in the violation of any Sanctions applicable to any party hereto.

6.3Notice of Default.  Within five (5) Business Days after an Authorized Officer has knowledge thereof, the Borrower will, and will cause each Subsidiary Guarantor to, give notice in writing to the Lenders of the occurrence of any Default or Unmatured Default.

6.4Conduct of Business.  The Borrower will, and will cause each Subsidiary Guarantor to, carry on and conduct its business in substantially the same manner and in similar fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a corporation, partnership or limited liability company in each of its jurisdictions of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so would not reasonably be expected to cause or result in the occurrence of a Material Adverse Effect.

6.5Taxes.  The Borrower will, and will cause each Subsidiary to, timely file complete and correct United States federal and applicable material foreign, state and local tax returns required by law and pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with Agreement Accounting Principles.

6.6Insurance.  The Borrower will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies insurance in such amounts, subject to such deductibles and self-insurance retentions, and covering such risks as is consistent with sound business practices.  The Borrower shall deliver to the Agent lender’s loss payable endorsements in form and substance reasonably acceptable to the Agent for insurance policies providing coverage for the Collateral.  Each such policy providing coverage for the Collateral maintained by the Borrower or a Subsidiary shall provide that the insurer will endeavor to give at least thirty (30) days’ prior written notice of any cancellation to the Borrower or the applicable Subsidiary, and the Agent.

6.7Compliance with Laws.  The Borrower will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject (including Anti-Money Laundering Laws), except where the Borrower believes in good faith

71

that the failure to do so would not reasonably be expected to cause or result in the occurrence of a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures reasonably intended to promote compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.

6.8Maintenance of Properties.  Subject to Section 6.12, the Borrower will, and will cause each Subsidiary to, maintain, preserve, protect and keep its Property used in the operation of its business in good repair, working order and condition (ordinary wear and tear excepted), and make all necessary repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times in the ordinary course; provided, however, that the foregoing shall not prohibit, limit or impair the Borrower’s or any Subsidiary’s ability to sell or discontinue the use of, in its reasonable business judgment, any Property.

6.9Inspection; Keeping of Books and Records.  The Borrower will, and will cause each Subsidiary to, permit the Agent, by its respective representatives and agents, to inspect any of the Property, books and financial records of the Borrower and each Subsidiary (including all insurance policies), including, without limitation, at least one field exam per calendar year, to examine and make copies of the books of accounts and other financial records of the Borrower and each Subsidiary, and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as to the same by, their respective officers, at such reasonable times during the Borrower’s or such Subsidiary’s normal business hours not more than one (1) time per fiscal year, provided that, to the extent a Default then exists, as often as reasonably requested.  The Borrower shall keep and maintain, and cause each of its Subsidiaries to keep and maintain, in all material respects, proper books of record and account in which entries in conformity with Agreement Accounting Principles shall be made of all dealings and transactions in relation to their respective businesses and activities.  If a Default has occurred and is continuing, the Borrower, shall turn over copies of any such records to the Agent or its representatives as the Agent shall reasonably request.  The Agent agrees that it shall conduct any such inspection or examination in reasonable accordance with the Borrower’s and its Subsidiaries’ safety policies and procedures and shall not materially interfere with or impair the Borrower’s or its Subsidiaries’ operations.

6.10Restricted Payments.  The Borrower will not, nor will it permit any Subsidiary to, declare or pay any dividend or make any distribution with respect to its capital stock or other equity interests (other than dividends or other distributions payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock or other equity interests at any time outstanding (any of the foregoing, a “Restricted Payment”), except that:

(a)any Subsidiary may declare and pay dividends or make distributions to the Borrower or any Subsidiary Guarantor or redeem, repurchase or otherwise acquire or retire any of its capital stock (and the Borrower may purchase or otherwise acquire such capital stock using additional shares of its capital stock);

(b)the Borrower and its Subsidiaries may make a Restricted Payment in any amount so long as no Revolving Loans are outstanding immediately before or after making such Restricted Payment and so long as no Default exists at the time of declaration thereof;

(c)the Borrower and its Subsidiaries may make a Restricted Payment in any amount so long as immediately before the time of declaration of such Restricted Payment, (i) no Default or Unmatured Default exists, and (ii) Excess Availability equals or exceeds 35% of the Borrowing Base then in effect and shall remain equal to or in excess of 35% for the remainder of the day on which such declaration is made;

72

(d)the Borrower and its Subsidiaries may make Restricted Payments in an aggregate amount not in excess of $100,000,000 during any rolling four quarter period, so long as immediately before the time of declaration of such Restricted Payment (and in each case as determined on a pro forma basis after giving effect to the applicable Restricted Payment as of the date of declaration thereof) no Default or Unmatured Default exists and Excess Availability equals or exceeds 20% of the Borrowing Base then in effect and shall remain equal to or in excess of 20% for the remainder of the day on which such declaration is made.

6.11Merger.  The Borrower will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that (a) a Subsidiary may merge into the Borrower or a Subsidiary Guarantor and the Borrower may merge with or into any Person so long and the Borrower is the surviving Person and (b) any Subsidiary may liquidate or dissolve if (i) the continued existence and operation of such Subsidiary is no longer in the best interests of the Borrower and its  Subsidiaries taken as a whole (as reasonably determined by the Borrower), (ii) the Borrower has provided at least five (5) days prior written notice of such liquidation or dissolution to the Agent and the Agent has determined, in its reasonable discretion, that such liquidation and dissolution is not disadvantageous in any material respect to the Lenders, and (iii) at the time thereof and immediately after giving effect thereto, no Default shall occur and be continuing.

6.12Sale of Assets.  The Borrower will not, nor will it permit any Subsidiary to, Dispose of its Property to any other Person, except:

6.12.1Dispositions of inventory in the ordinary course of business.

6.12.2Dispositions of assets by a Subsidiary to the Borrower or a Subsidiary Guarantor or by the Borrower to a Subsidiary Guarantor.

6.12.3Dispositions of obsolete property, property no longer used in the business of the Borrower or its Subsidiaries or other assets in the ordinary course of business of the Borrower or any Subsidiary.

6.12.4Dispositions of Retail Property.

6.12.5Dispositions arising from condemnation or similar action with respect to any property or other assets, or voluntary exercise of termination rights under any lease, license, concession or other agreement or pursuant to buy/sell arrangements under any joint venture or similar agreement or arrangement.

6.12.6The Drop Down Transactions.

6.12.7Dispositions of Property pursuant to Catalyst Sale/Leaseback Transactions.

6.12.8In addition to each of the other Dispositions provided for in this Section 6.12, the Borrower and its Subsidiaries may enter into Dispositions of any of its Property, so long as immediately before and after making such Disposition, on a pro forma basis (i) no Default or Unmatured Default exists, (ii) Excess Availability equals or exceeds 20% of the Borrowing Base then in effect and shall remain equal to or in excess of 20% for the remainder of the day on which said Disposition is made and (iii) the Fixed Charge Coverage Ratio exceeds 1.10 to 1.00.

6.12.9Dispositions or assignments of Receivables and related Receivables Documentation pursuant to any Permitted Credit Enhancement Transaction.

73

6.12.10In addition to the foregoing, so long as no Default exists immediately prior to or after giving effect to such Disposition, sales of other assets not constituting the Collateral for consideration not to exceed $75,000,000 in the aggregate in any fiscal year.

6.12.11The lapse or abandonment or other Disposition of patents, trademarks or other intellectual property that are, in the reasonable judgment of the Borrower, no longer economically practicable to maintain or useful in the conduct of the business of the Borrower and its Subsidiaries taken as a whole.

6.12.12Leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business and which do not materially interfere with the business of the Borrower and its Subsidiaries, taken as a whole.

6.12.13The unwinding of Rate Management Transactions.

6.12.14(i) Any dividend or other Restricted Payment permitted pursuant to (or expressly not prohibited by) Section 6.10, (ii) Dispositions permitted pursuant to Section 6.11, (iii) any Investment pursuant to Section 6.13 and (iv) any Lien permitted by Section 6.15.

6.12.15Dispositions of Receivables in connection with the collection or compromise thereof in the ordinary course of business and Cash and Cash Equivalent Investments in the ordinary course of business.

6.12.16Dispositions of equipment or real property to the extent that such property is exchanged for credit against, or the proceeds of such Disposition are reasonably and promptly applied to the purchase price of other property used in the ordinary course of business.

6.13Investments and Acquisitions.  The Borrower will not, nor will it permit any Subsidiary to, make any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or contractual commitments therefor, or to create any Subsidiary or to become or remain a partner in any partnership or joint venture, or to make any Acquisition of any Person, except:

6.13.1Cash Equivalent Investments.

6.13.2Existing Investments in Subsidiary Guarantors and other Investments in existence on the Closing Date and described in Schedule 6.13.

6.13.3The Drop Down Transactions.

6.13.4Other Acquisitions or Investments meeting the following requirements, or otherwise approved by the Required Lenders (each such Acquisition or Investment constituting a “Permitted Acquisition”):

		
	(i)
	immediately before and after the consummation of such Acquisition or Investment, no Default or Unmatured Default shall have occurred and be continuing or would result from such Acquisition or Investment, and the representation and warranty contained in Section 5.11 shall be true both before and after giving effect to such Acquisition or Investment;

		
	(ii)
	such Acquisition or Investment is consummated on a non-hostile basis pursuant to a negotiated acquisition agreement approved by the board of directors or other applicable

74

governing body of the seller or entity to be acquired, and no material challenge to such Acquisition or Investment (excluding the exercise of appraisal rights) shall be pending by any shareholder or director of the seller or entity to be acquired;

		
	(iii)
	immediately before and after making such Acquisition or Investment, on a pro forma basis (x) Excess Availability equals or exceeds 20% of the Borrowing Base then in effect and shall remain equal to or in excess of 20% for the remainder of the day on which said Acquisition or Investment is made, and (y) the Fixed Charge Coverage Ratio exceeds 1.10 to 1.00; provided that this clause (y) need not be satisfied in connection with any Acquisition in respect of which (1) the Borrower or any Subsidiary acquires only capital stock or other equity interests of the target and (2) the consideration paid by the Borrower or such Subsidiary is comprised entirely of its capital stock and contains no cash or cash-equivalent component; and

		
	(iv)
	with respect to each Permitted Acquisition for which the consideration paid exceeds $500,000,000, the Borrower shall provide prompt notice thereof to the Agent and, promptly after Agent’s request therefor, Borrower shall deliver to Agent all material agreements, documents and instruments in respect of such Permitted Acquisition, including, without limitation, the purchase, sale or transfer agreements therefor, pro forma financial information necessary to determine the Borrower’s and its Subsidiaries’ compliance with the terms of this Agreement after giving effect to such Permitted Acquisition, and all collateral and guaranty documents required by this Agreement (including all field audits for Property the Borrower wishes to include in the Borrowing Base).

6.13.5Investments (i) made by the Borrower in or to any Subsidiary Guarantor, (ii) made by any Subsidiary in or to the Borrower or any Subsidiary Guarantor, (iii) made by any Subsidiary that is not a Subsidiary Guarantor into any other Subsidiary, and (iv) made by the Borrower or any Subsidiary in or to any Excluded Subsidiary or other Subsidiary that is not a Subsidiary Guarantor; provided that, with respect to any Investment described in clause (iv), the aggregate amount at any one time of all such Investments (valued at cost as of the date of such Investment) made after the Closing Date shall not exceed $200,000,000 (and no more than $100,000,000 of such $200,000,000 shall be comprised of Investments in Excluded Subsidiaries); provided further that a conversion or exchange of Indebtedness of an Excluded Subsidiary or Subsidiary that is not a Subsidiary Guarantor held by the Borrower or a Subsidiary Guarantor to or for equity of such Excluded Subsidiary or Subsidiary that is not a Subsidiary Guarantor shall not be considered an incremental Investment.

6.13.6Extensions of customer or trade credit in the ordinary course of business.

6.13.7Guarantee obligations permitted by Section 6.14.

6.13.8All Investments constituting Indebtedness permitted by Section 6.14.

6.13.9All Investments arising from transactions by the Borrower or any Subsidiary in the ordinary course of business, including endorsements of negotiable instruments, earnest money deposits and deposits to secure obligations that do not constitute Indebtedness or obligations under Rate Management Transactions, debt obligations and other Investments received by the Borrower or any Subsidiary in connection with the bankruptcy or reorganization of customers and in settlement of delinquent obligations of, and other disputes with, customers.

75

6.13.10So long as no Default or Unmatured Default has occurred and is continuing, any Investments by the Borrower or any Subsidiary in any Persons; provided that the aggregate amount of all such Investments made pursuant to this clause 6.13.10 outstanding at any one time shall not exceed $100,000,000 in the aggregate (valued at cost as of the date of such Investment).

6.13.11Loans and advances to directors, officers and employees in the ordinary course of business consistent with prior practice, not to exceed an aggregate amount of $10,000,000 at any one outstanding.

6.13.12Investments constituting Rate Management Transactions permitted pursuant to Section 6.17.

6.13.13Guarantees by the Borrower or any Subsidiary of operating leases or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any  Subsidiary in the ordinary course of business.

6.13.14Investments of any Person that becomes a Subsidiary of the Borrower after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, consolidation or amalgamation and were in existence on the date of such acquisition, merger or consolidation.

6.13.15Any Investment by the Borrower or one or more of its Subsidiaries in a Person, if as a result of such Investment such Person becomes a Subsidiary or such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, the Borrower or a Subsidiary.

6.13.16Any Investment constituting non-cash consideration received in any asset sale permitted by Section 6.12.

6.13.17The BP Acquisition.

6.13.18Any Investments by the Borrower or one or more of its Subsidiaries in any joint venture which is not a Subsidiary of the Borrower (including Tesoro Savage Petroleum Terminal LLC, Watson Cogeneration Company or any other entity in which the Borrower and its Subsidiaries collectively own equal to or less than fifty percent (50%) of the equity interests in such joint venture), so long as immediately before the making of such Investments, (i) no Default or Unmatured Default exists, and (ii) Excess Availability equals or exceeds 35% of the Borrowing Base then in effect and shall remain equal to or in excess of 35% for the remainder of the day on which such Investment is made.

For the avoidance of doubt, to the extent any Investment could be attributable to more than one subsection of this Section 6.13, the Borrower or any Subsidiary may categorize all or any portion of such Investment to any one or more subsections of this Section 6.13 as it elects and unless as otherwise expressly provided, in no event shall the same portion of any Investment be deemed to utilize or be attributable to more than one subsection of this Section 6.13. For purposes of Section 6.13.5 and 6.13.10, the aggregate Investments thereunder shall be determined net of the cost of any such Investment (x) that is subsequently sold, redeemed or repaid or (y) in an Excluded Subsidiary that is subsequently designated as a Subsidiary.
6.14Indebtedness.  The Borrower will not, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

76

6.14.1The Obligations.

6.14.2Indebtedness existing on the Closing Date and described in Schedule 6.14, together with (other than in the case of the Indebtedness in respect of the Prior Credit Agreement as of December 31, 2012 as referenced in such Schedule 6.14) any Refinancing Indebtedness in respect thereof.

6.14.3Indebtedness arising under Rate Management Transactions.

6.14.4Purchase money Indebtedness, whether secured or unsecured (including Capitalized Leases) incurred by the Borrower or any of its Subsidiaries after the Closing Date to finance the construction or the acquisition of assets (other than Collateral) used in its business, if (1) at the time of such incurrence, no Default or Unmatured Default has occurred and is continuing or would result from such incurrence, and (2) such Indebtedness does not exceed $250,000,000, and any Refinancing Indebtedness in respect thereof.

6.14.5Indebtedness arising from intercompany loans and advances (i) made by any Subsidiary to the Borrower or any Subsidiary Guarantor, (ii) made by the Borrower to any Subsidiary Guarantor, (iii) made by the Borrower or any Subsidiary to any Wholly-Owned Subsidiary not constituting a Subsidiary Guarantor; provided that all such Indebtedness shall be expressly subordinated to the Secured Obligations.

6.14.6Indebtedness of Tesoro Panama (so long as the lender in respect of such Indebtedness is not an Affiliate of the Borrower or any Subsidiary or Excluded Subsidiary) that does not at any time exceed an aggregate amount equal to $50,000,000.

6.14.7Indebtedness at any time arising under or in connection with Letters of Credit (other than Facility LCs) issued for the account of the Borrower or any Subsidiary thereof; provided, that such Letters of Credit shall be used only in connection with the Borrower’s or such Subsidiary’s acquisition of Petroleum Inventory outside of the United States of America.

6.14.8Indebtedness at any time arising under or in connection with Letters of Credit (other than Facility LCs) issued for the account of the Borrower or any Subsidiary thereof; provided, that such Letters of Credit shall be used only for general corporate purposes in the ordinary course of business.

6.14.9Indebtedness to the extent constituting Contingent Obligations permitted by Section 6.19.

6.14.10Indebtedness of the Borrower to the MLP, the MLP GP or any of their respective Subsidiaries; provided that all such Indebtedness shall be expressly subordinated to the Secured Obligations.

6.14.11Indebtedness incurred by the Borrower or any of its Subsidiaries pursuant to a Catalyst Sale/Leaseback Transaction; provided, that the aggregate principal amount for all such Indebtedness shall not exceed $150,000,000 at any time.

6.14.12Additional unsecured Indebtedness of the Borrower or any Subsidiary (other than Tesoro Panama), so long as (i) the lender in respect of such Indebtedness is not an Affiliate of the Borrower or any Subsidiary or Excluded Subsidiary and (ii) at the time such Indebtedness is incurred no Default or Unmatured Default has occurred and is continuing or would result

77

immediately after giving effect (including pro forma effect) to the incurrence of such Indebtedness.

6.14.13Indebtedness under Permitted Credit Enhancement Transactions to the extent such Indebtedness results from the assignment of Receivables and related Receivables Documentation, and to the extent such Indebtedness arises solely under clause (iii) of the definition thereof; provided, however, that the aggregate amount of such Indebtedness shall not exceed at any time the aggregate outstanding face amount of all Receivables subject to such Permitted Credit Enhancement Transactions.

6.14.14Indebtedness of a Person which becomes a Subsidiary after the Closing Date, if (i) such Indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation thereof, (ii) at the time such Person becomes a Subsidiary of the Borrower or a Subsidiary, no Default or Unmatured Default has occurred and is continuing or would result after giving effect (including pro forma effect) thereto and (iii) such Indebtedness does not exceed $250,000,000, and any Refinancing Indebtedness in respect thereof;

6.14.15Endorsements of negotiable instruments for collection in the ordinary course of business.

6.14.16Indebtedness consisting of performance bonds, surety bonds, appeal bonds, injunctions bonds and other obligations of a like nature provided by the Borrower or any Subsidiary.

6.14.17Indebtedness constituting Investments permitted by Section 6.13.

6.14.18Additional Indebtedness of the Borrower or any Subsidiary (other than Tesoro Panama), so long as (i) the lender in respect of such Indebtedness is not an Affiliate of the Borrower or any Subsidiary or Excluded Subsidiary, (ii) at the time such Indebtedness is incurred no Default or Unmatured Default has occurred and is continuing or would result immediately after giving effect (including pro forma effect) to the incurrence of such Indebtedness and (iii) such Indebtedness does not exceed $1,000,000,000 in the aggregate at any one time outstanding.

6.14.19Indebtedness associated with worker’s compensation claims, unemployment insurance laws or similar legislation incurred in the ordinary course of business.

6.14.20Taxes, assessments or other governmental charges which are not yet due or are being contested in good faith in accordance with Section 6.5.

6.14.21The guarantee of the Borrower or any Subsidiary in respect of any Indebtedness permitted to be incurred pursuant to another provision of this Section 6.14.

6.14.22Indebtedness arising pursuant to any Petroleum Inventory Supply Arrangement; provided, that the aggregate principal amount for all such Indebtedness shall not exceed $750,000,000 in the aggregate at any one time outstanding.

For the avoidance of doubt, to the extent any Indebtedness could be attributable to more than one subsection of this Section 6.14, the Borrower or any Subsidiary may categorize all or any portion of such Indebtedness to any one or more subsections of this Section 6.14 as it elects and unless as otherwise expressly provided, in no event shall the same portion of any Indebtedness be deemed to utilize or be attributable to more than one subsection of this Section 6.14.

78

6.15Liens.  The Borrower will not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except for the following, which are permitted hereunder:
6.15.1Liens, if any, securing Secured Obligations.

6.15.2Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books.

6.15.3Liens for landlords’, wage earners’, carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 180 days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books.

6.15.4Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation.

6.15.5Liens existing on the Closing Date and described in Schedule 6.15.

6.15.6Deposits securing liability to insurance carriers under insurance or self-insurance arrangements.

6.15.7Deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business.

6.15.8Easements, reservations, rights-of-way, restrictions, survey exceptions and other similar encumbrances as to real property of the Borrower and its Subsidiaries which customarily exist on properties of Persons engaged in similar activities and similarly situated and which do not materially interfere with the conduct of the business of the Borrower or such Subsidiary conducted at the property subject thereto.

6.15.9Liens arising by reason of any judgment, decree or order of any court or other Governmental Authority, if appropriate legal proceedings are being diligently prosecuted and shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired, in an aggregate amount not to at any time exceed $75,000,000.

6.15.10Liens existing on any asset of any Subsidiary of the Borrower at the time such Subsidiary becomes a Subsidiary and not created in contemplation of such event.

6.15.11Liens on any asset (other than Collateral) securing Indebtedness permitted pursuant to Section 6.14.4; provided that such Lien attaches to such asset concurrently with or within eighteen (18) months after the acquisition or completion or construction thereof (or otherwise attaches to replacement assets upon a casualty or condemnation event).

79

6.15.12Liens existing on any asset of any Subsidiary of the Borrower at the time such Subsidiary is merged or consolidated with or into the Borrower or any Subsidiary and not created in contemplation of such event.

6.15.13Liens existing on any asset prior to the acquisition thereof by the Borrower or any Subsidiary and not created in contemplation thereof; provided that such Liens do not encumber any other property or assets (other than replacement assets as a result of a casualty or condemnation event).

6.15.14Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted under Sections 6.15.12 and 6.15.13; provided that (a) such Indebtedness is not secured by any additional assets (other than replacement assets as a result of a casualty or condemnation event), and (b) the amount of such Indebtedness secured by any such Lien is not increased.

6.15.15Liens on (i) the ownership interests in one or more Subsidiaries, (ii) the marketing brands of the Borrower and its Subsidiaries securing Indebtedness incurred pursuant to Section 6.14.18, and (iii) the Collateral securing Indebtedness incurred pursuant to Section 6.14.18; provided, that such Lien is subordinate to the Liens of the Agent and the Lenders in the Collateral pursuant to subordination or intercreditor arrangements substantially similar to then current market conditions and on terms and conditions acceptable to the Agent.

6.15.16Any Lien securing Indebtedness, neither assumed nor guaranteed by the Borrower or any of its Subsidiaries nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by the Borrower for refining, substation, metering station, pump station, storage, gathering line, transmission line, transportation line, distribution line or for right-of-way purposes, any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this Section 6.15.16 does not materially impair the use of the Property covered by such Lien for the purposes of which such Property is held by the Borrower or any of its Subsidiaries.

6.15.17Liens arising under ERISA provided that such Liens do not secure liabilities which, in the aggregate, equal or exceed $75,000,000.

6.15.18Any obligations or duties affecting any of the Property of the Borrower or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit which do not materially impair the use of such Property for the purposes for which it is held.

6.15.19Defects, irregularities and deficiencies in title of any rights of way or other Property constituting real estate of the Borrower or any Subsidiary thereof which in the aggregate do not materially impair the use of such rights of way or other Property constituting real estate for the purposes for which such rights of way and other Property constituting real estate are held by the Borrower or any Subsidiary, and defects, irregularities and deficiencies in title to any Property constituting real estate of the Borrower or its Subsidiaries, which defects, irregularities or deficiencies have been cured by possession under applicable statutes of limitation.

6.15.20Any interest or title of a lessor under any lease entered into by the Borrower or any other Subsidiary in the ordinary course of its business and covering only the assets so leased.

80

6.15.21Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Borrower or any of its Subsidiaries on deposit with or in possession of such bank.

6.15.22Liens upon Retail Property not constituting Collateral.

6.15.23Liens in favor of counterparties arising in connection with the Borrower’s or any Subsidiary’s commodity hedging activities, including, without limitation, hydrocarbon hedging.

6.15.24Liens relating to a Catalyst Sale/Leaseback Transaction that are upon catalysts containing one or more precious metals (i) subject to such Catalyst Sale/Leaseback Transaction and (ii) used by the Borrower or any of the Subsidiaries in the ordinary course of business.

6.15.25Liens securing Indebtedness incurred pursuant to Section 6.14.7; provided that none of the Borrower or any Subsidiary’s Property, other than Petroleum Inventory directly acquired through the use of those Letters of Credit described in Section 6.14.7 and Investment Accounts and amounts on deposit therein shall be subject to any such Lien (it being acknowledged and understood that any such Liens on such property may be first priority Liens, senior to the Lien of the Agent, subject to subordination or intercreditor arrangements substantially similar to then current market arrangements and on terms and conditions reasonably acceptable to the Agent).

6.15.26Liens on Receivables or the related Receivables Documentation arising under any Permitted Credit Enhancement Transaction.

6.15.27Liens arising pursuant to Section 107(l) of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9607(l), or other Environmental Law, unless such Lien:  (i) by action of the lienholder, or by operation of law, takes priority over any Lien filed pursuant to this Agreement or any other Loan Document on the property upon which it is a Lien, and (ii) secures liabilities of the Borrower and its Subsidiaries which, in the aggregate, are reasonably likely to equal or exceed $75,000,000.

6.15.28Liens securing Indebtedness incurred pursuant to Section 6.14.22 granted by the Borrower or any of its Subsidiaries in their respective interests in Third Party Petroleum Inventory.

6.15.29Liens on ownership interests of the Borrower or its Subsidiaries in Excluded Subsidiaries.
For the avoidance of doubt, to the extent any Lien could be attributable to more than one subsection of this Section 6.15, the Borrower or any Subsidiary may categorize all or any portion of such Lien to any one or more subsections of this Section 6.15 as it elects and unless as otherwise expressly provided, in no event shall the same portion of any Lien be deemed to utilize or be attributable to more than one subsection of this Section 6.15.
6.16Affiliates.  The Borrower will not, and will not permit any Subsidiary to, enter into any transaction not otherwise permitted by this Agreement (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate (other than the Borrower and its Subsidiaries) except in the ordinary course of business and pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in a

81

comparable arm’s-length transaction; provided that, for the avoidance of doubt, nothing in this Section 6.16 shall prohibit the consummation of the Drop Down Transactions.

6.17Financial Contracts.  The Borrower will not, nor will it permit any Subsidiary to, enter into or remain liable upon any Rate Management Transactions except for those that (i) are entered into by the Borrower or such Subsidiary in the ordinary course of business, including for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Borrower or such Subsidiary, or changes in the value of securities issued by the Borrower or such Subsidiary, and not for purposes of speculation, (ii) are permitted under the risk management policies approved by the Borrower's or such Subsidiary's board of directors from time to time; and (iii) do not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.

6.18Subsidiary Covenants.  The Borrower will not, and will not permit any Subsidiary to, create or otherwise cause to become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary (i) to pay dividends or make any other distribution on its stock, (ii) to pay any Indebtedness or other obligation owed to the Borrower or any other Subsidiary, (iii) to make loans or advances or other Investments in the Borrower or any other Subsidiary, or (iv) to sell, transfer or otherwise convey any of its property to the Borrower or any other Subsidiary.

6.19Contingent Obligations.  The Borrower will not, nor will it permit any Subsidiary to, make or suffer to exist any Contingent Obligation (including, without limitation, any Contingent Obligation with respect to the obligations of a Subsidiary), except (i) by endorsement of instruments for deposit or collection in the ordinary course of business, (ii) the Reimbursement Obligations, (iii) any guaranty of the Secured Obligations, (iv) Contingent Obligations arising in connection with Indebtedness permitted under Section 6.14 and (v) Contingent Obligations in respect of obligations (other than Indebtedness) entered into in the ordinary course of business.

6.20MLP Agreements and Arrangements.  The Borrower will not, nor will it permit any Subsidiary to, amend, modify, terminate or permit to expire any Access, Asset or Service Arrangement between (x) the Borrower or any Subsidiary thereof and (y) the MLP or any Subsidiary thereof or any Drop Down Subsidiary, if the result thereof would adversely affect the Borrower and its Subsidiaries, taken together on a consolidated basis, in any material respect. No Access, Asset or Service Arrangement shall be entered into by (x) the Borrower or any Subsidiary thereof and (y) the MLP or any Subsidiary thereof or any Drop Down Subsidiary, unless such Access, Asset or Service Arrangement arises in the ordinary course of business, and is entered into upon fair and reasonable terms no less favorable than those that would be obtained by the Borrower or such Subsidiary in a comparable arm’s-length transaction.  For purposes hereof, Access, Asset or Service Arrangement means any agreement, document, instrument or arrangement pursuant to which the Borrower or any Subsidiary thereof is provided or otherwise receives access to, use of, or services from the MLP or any Subsidiary thereof or any Drop Down Subsidiary (including any Property thereof).

6.21Fixed Charge Coverage Ratio.  The Borrower, as of the end of each of its fiscal quarters, will not permit the Fixed Charge Coverage Ratio to be less than 1.00 to 1.00 for each fiscal quarter of the applicable four fiscal quarter period; provided, however, that if the aforementioned ratio shall at any time be less than 1.00 to 1.00 for any fiscal quarter then the Standard Reserve shall be recalculated in accordance with terms of the definition of “Standard Reserve”.  For the avoidance of doubt, so long as the Borrower is in compliance with the Standard Reserve that is required to be in effect when the aforementioned ratio is less than 1.00 to 1.00 (including, without limitation, such Standard Reserve not resulting in an overadvance), such ratio may be less than 1.00 to 1.00 and no Default or Unmatured Default shall result therefrom.

82

6.22Minimum Consolidated Tangible Net Worth.  The Borrower will at all times maintain Consolidated Tangible Net Worth of not less than (i) $2,700,000,000, plus (ii) 75% of Consolidated Net Income (if positive) earned in the fiscal year ending December 31, 2013, plus (iii) 50% of Consolidated Net Income (if positive) earned in each completed fiscal year beginning with the fiscal year ending December 31, 2014.

6.23Subsidiary Collateral Documents; Subsidiary Guarantors.  The Borrower shall execute or shall cause to be executed:
(i)on the date any Person that is organized under the laws of the United States or any state thereof becomes a Subsidiary of the Borrower, (a) a supplement to the Guaranty pursuant to which such Person shall become a party thereto; provided, that such Person shall not guaranty any of its own obligations owing to the Holders of Secured Obligations or Secured Obligations that arose prior to its becoming a party to the Guaranty, (b) a Security Agreement in substantially the form executed on March 16, 2011 (or a supplement thereto); and (c) a supplement to Schedule 5.8 identifying the applicable additional new Subsidiary Guarantor;

(ii)in order to further effect the requirements of this Section 6.23, the Borrower shall deliver or cause to be delivered to the Agent all Collateral Documents, together with appropriate corporate resolutions and other documentation (including opinions of counsel, UCC financing statements, and such other documents as shall be reasonably requested to perfect the Agent’s Lien), in each case in form and substance reasonably satisfactory to the Agent, necessary to reasonably satisfy the Agent that it has a first priority perfected pledge of, security interest in and Lien upon the Collateral owned by such new Subsidiary Guarantor subject to Liens permitted pursuant to Section 6.15;

(iii)The Borrower shall cause each Subsidiary Guarantor to acknowledge and agree that such Subsidiary Guarantor’s entry into the Guaranty is a condition to and is given as an inducement for and in consideration of credit accommodations extended to the Borrower under this Agreement and the other Loan Documents and not for any credit accommodation extended to such Subsidiary Guarantor.

(iv)This Section 6.23 shall not apply with respect to Excluded Subsidiaries.

6.24Insurance Proceeds.  The Borrower directs (and, if applicable, shall cause its Subsidiaries to direct) all insurers under policies relating to Property constituting Collateral to pay all proceeds payable under such policies or with respect to such claim or award for any loss with respect to the Collateral directly to the Agent, for the benefit of the Agent and the Holders of the Secured Obligations; provided, however, in the event that such proceeds or awards are less than $10,000,000 (“Excluded Proceeds”), unless a Default shall have occurred and be continuing, the Agent shall remit such Excluded Proceeds to the Borrower.  Such amounts shall reduce outstanding principal Obligations pursuant to the mandatory prepayment provision of Section 2.2.  Each such policy shall contain a long-form loss-payable endorsement naming the Agent as lender loss payee, which endorsement shall be in form and substance acceptable to the Agent.  The foregoing shall not apply to Property that does not constitute Collateral.

6.25Collection Accounts.  The Borrower and its Subsidiaries shall cause all collections of Receivables constituting Collateral and all proceeds of Collateral to be directly deposited into collection accounts (such accounts, “Collection Accounts”) maintained with JPMorgan or an Affiliate thereof or other financial institutions.  Collection Accounts shall be subject to account control agreements, in form and substance acceptable to the Agent, which grant the Agent control over and a first-priority perfected security interest in such Collection Accounts, including, without limitation, amounts and other items on

83

deposit therein.  Amounts and other items on deposit in Collection Accounts that are not maintained with JPMorgan or an Affiliate thereof shall be transferred at least once a week to one or more Collection Accounts maintained with JPMorgan or an Affiliate thereof.  If any collections referred to in the first sentence of this Section 6.25 are received by the Borrower, a Subsidiary, or any other Person, such collections shall be deemed to have been received by the Borrower, such Subsidiary or such other Person in trust for the Agent, and, upon the Borrower’s, such Subsidiary’s, or such other Person’s receipt thereof, the Borrower shall (or shall cause such Subsidiary or other Person to) promptly remit all of such collections, in their original form, for deposit into a Collection Account.  Following the occurrence and during the continuance of a Default, all amounts received by the Agent, all amounts on deposit in the Collection Accounts, and all amounts constituting collections required to be deposited into Collection Accounts shall be the sole property of the Agent for the benefit of the Holders of Secured Obligations and shall be deemed received by the Agent for application to the Secured Obligations pursuant to the terms of this Agreement.  With respect to any Collection Account described in this Section 6.25 not already subject to a control agreement on the Closing Date, the Borrower and its Subsidiaries shall have ninety (90) days from the later of the Closing Date and the date on which such Collection Account is opened or converted to cause such account to become subject to one of the aforementioned account control agreements.  Notwithstanding the foregoing, or anything to the contrary in Section 2.11.1, at all times that (i) no Default exists and (ii) Excess Availability equals or exceeds $300,000,000, amounts which are on deposit in Collection Accounts shall be released, in a manner mutually satisfactory to the Borrower and the Agent, on a daily basis to the Borrower’s operating accounts maintained with JPMorgan Chase Bank, National Association, and such released amounts shall be automatically released from the Lien created by the Security Agreement and cease to be Collateral without delivery of any instrument or performance of any act by any party, and all rights to such released amounts shall revert to the Borrower or applicable Subsidiary.  In connection therewith, the Agent, at the request and sole expense of the Borrower, shall execute and deliver to the Borrower all releases or other documents reasonably necessary or desirable for the release of the Lien on such released amounts.

6.26Repayment of Indebtedness.  The Borrower will not, and will not permit any Subsidiary to, make any amendment or modification to any indenture, note agreement or other agreement, document or instrument evidencing or governing Subordinated Indebtedness or directly or indirectly voluntarily prepay, defease, or in substance defease, purchase, redeem, retire, or otherwise acquire, any Indebtedness unless, with respect to a prepayment, defeasance, purchase, redemption, retirement or acquisition, immediately before and after giving effect thereto the Indebtedness Prepayments Conditions have been satisfied; provided that, regardless of whether Indebtedness Prepayment Conditions have been so satisfied, the Borrower shall be permitted to prepay or repay Indebtedness using the proceeds of Indebtedness incurred in accordance with the terms of the definition of Refinancing Indebtedness.

6.27Multiemployer Plans.  Except as provided in Schedule 5.9, the Borrower will not, nor will it permit any Subsidiary to, become a party to a Multiemployer Plan.

ARTICLE VII

DEFAULTS

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

7.1    Any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or in connection with this Agreement, any Credit Extension, or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be false in any material respect on the date as of which made or deemed made.

84

7.2    Nonpayment of (i) principal of any Loan when due, (ii) any Reimbursement Obligation within one (1) Business Day after the same becomes due, or (iii) interest upon any Loan or any Commitment Fee, Ticking Fee, LC Fee, or other Obligations under any of the Loan Documents within three (3) Business Days after such interest, fee or other Obligation becomes due.

7.3    The breach by the Borrower of any of the terms or provisions of Section 6.1.11, 6.1.14, 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15 (to the extent related to or affecting Property constituting or required to constitute Collateral), 6.16, 6.17, 6.21, 6.22, 6.25, 6.26, or 6.27.

7.4    The breach by the Borrower (other than a breach which constitutes a Default under another Section of this Article VII) of: 

(i)Section 6.1.9 (solely with respect to the Interim Collateral Reports described therein) or Section 6.15 (to the extent related to or affecting Property not constituting or not required to constitute Collateral) and such breach is not remedied within five (5) Business Days of the earlier to occur of (x) written notice from the Agent or any Lender to the Borrower or (y) an Authorized Officer otherwise has knowledge of any such breach;

(ii) Section 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.9 (solely with respect to the Monthly Collateral Reports described therein), 6.1.10, 6.1.12, 6.1.13, 6.6, 6.9 or 6.24 and such breach is not remedied within ten (10) Business Days of written notice from the Agent or any Lender to the Borrower; or

(iii)any of the other terms or provisions of this Agreement or any Loan Document which is not remedied within thirty (30) Business Days after the earlier to occur of (x) written notice from the Agent or any Lender to the Borrower or (y) an Authorized Officer otherwise has knowledge of any such breach.

7.5    Failure of the Borrower or any of its Subsidiaries to pay when due any Material Indebtedness; or the default by the Borrower or any of its Subsidiaries in the performance (beyond the applicable grace period with respect thereto, if any) of any term, provision or condition contained in any Material Indebtedness Agreement, or any other event shall occur or condition exist, the effect of which default, event or condition is to cause, or to permit the holder(s) of such Material Indebtedness or the lender(s) under any Material Indebtedness Agreement to cause, such Material Indebtedness to become due prior to its stated maturity or any commitment to lend under any Material Indebtedness Agreement to be terminated prior to its stated expiration date; or any Material Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the stated maturity thereof; or the Borrower or any of its Subsidiaries shall not pay, or admit in writing its inability to pay, its debts generally as they become due.

7.6    The Borrower or any of its Subsidiaries shall (i) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (iv) institute any proceeding seeking an order for relief under the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) take any corporate or partnership action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding described in Section 7.7.

85

7.7    Without the application, approval or consent of the Borrower or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Borrower or any of its Subsidiaries or any Substantial Portion of its Property, or a proceeding described in Section 7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of forty-five (45) consecutive days.

7.8    Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of the Borrower and its Subsidiaries which, when taken together with all other Property of the Borrower and its Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such action occurs, constitutes a Substantial Portion.

7.9    The Borrower or any of its Subsidiaries shall fail within sixty (60) days to pay, bond or otherwise discharge one or more (i) judgments or orders for the payment of money in excess of $75,000,000 (or the equivalent thereof in currencies other than Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested in good faith.

7.10    The Unfunded Liabilities of all Single Employer Plans shall exceed $75,000,000 in the aggregate, or any Reportable Event shall occur in connection with any Plan with Unfunded Liabilities in excess of $75,000,000.

7.11    Any Change in Control shall occur.

7.12    Any Loan Document shall fail to remain in full force or effect or any action shall be taken by the Borrower or any Subsidiary Guarantor to discontinue or to assert the invalidity or unenforceability of any Loan Document or any Lien in favor of the Agent under the Loan Documents, or such Lien shall not have the priority contemplated by the Loan Documents.

7.13    An event (such event, an “Off-Balance Sheet Trigger Event”) shall occur which (i) permits the investors or purchasers in respect of Off-Balance Sheet Liabilities of the Borrower or any Affiliate of the Borrower to require the amortization or liquidation of such Off-Balance Sheet Liabilities in excess of $75,000,000 and (x) such Off-Balance Sheet Trigger Event shall not be remedied or waived within the later to occur of the tenth (10th) day after the occurrence thereof or the expiry date of any grace period related thereto under the agreement evidencing such Off-Balance Sheet Liabilities, or (y) such investors shall require the amortization or liquidation of such Off-Balance Sheet Liabilities as a result of such Off-Balance Sheet Trigger Event, (ii) results in the termination of reinvestments of collections or proceeds of receivables and related assets under the agreements evidencing such Off-Balance Sheet Liabilities other than as a result of the termination or expiration of the agreement creating such Off-Balance Sheet Liability upon maturity, or (iii) causes or otherwise permits the replacement or substitution of the Borrower or any Affiliate thereof as the servicer under the agreements evidencing such Off-Balance Sheet Liabilities; provided, however, that this Section 7.13 shall not apply on any date with respect to any voluntary request by the Borrower or an Affiliate thereof for an above-described amortization, liquidation, or termination of reinvestments so long as the aforementioned investors or purchasers cannot independently require on such date such amortization, liquidation or termination of reinvestments.

86

ARTICLE VIII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

8.1    Acceleration.  (i)  If any Default described in Section 7.6 or 7.7 occurs with respect to the Borrower, the obligations of the Lenders to make Loans hereunder, and the obligation and power of the LC Issuers to issue Facility LCs shall automatically terminate and the Secured Obligations shall immediately become due and payable without any election or action on the part of the Agent, any LC Issuer, or any Lender.  With respect to Facility LCs, the Borrower will be and become thereby unconditionally obligated, without any further notice, act or demand, to pay the Agent an amount in immediately available funds, which funds shall be held in the Facility LC Collateral Account, equal to the difference of (x) the amount of LC Obligations at such time less (y) the amount or deposit in the Facility LC Collateral Account at such time which is free and clear of all rights and claims of third parties and has not been applied against the Obligations (the “Collateral Shortfall Amount”).  If any other Default occurs, the Required Lenders (or the Agent with the consent of the Required Lenders) may (a) terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuers to issue Facility LCs, or declare the Secured Obligations to be due and payable, or both, whereupon the Secured Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives and (b) upon notice to the Borrower and in addition to the continuing right to demand payment of all amounts payable under this Agreement, make demand on the Borrower to pay, and the Borrower will forthwith upon such demand and without any further notice or act pay to the Agent the Collateral Shortfall Amount which funds shall be deposited in the Facility LC Collateral Account.

(ii)    If at any time while any Default is continuing, the Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Agent may (and, at the direction of the Required Lenders, shall) make demand on the Borrower to pay, and the Borrower will, forthwith upon such demand and without any further notice or act, pay to the Agent the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.

(iii)    The Agent may at any time or from time to time after funds are deposited in the Facility LC Collateral Account, apply such funds to the payment of the Secured Obligations and any other amounts as shall from time to time have become due and payable by the Borrower to the Lenders or the LC Issuers under the Loan Documents.

(iv)    At any time while any Default is continuing, neither the Borrower nor any Person claiming on behalf of or through the Borrower shall have any right to withdraw any of the funds held in the Facility LC Collateral Account. After all of the Secured Obligations have been paid in full in cash and the Aggregate Revolving Loan Commitment has been terminated, any funds remaining in the Facility LC Collateral Account shall be returned promptly by the Agent to the Borrower or paid to whomever may be legally entitled thereto at such time.  

(v)    If, after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and power of the LC Issuers to issue Facility LCs hereunder as a result of any Default (other than any Default as described in Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the Borrower, rescind and annul such acceleration and/or termination.

8.2    Amendments.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and

87

the Required Lenders or by the Borrower and the Agent with the consent of the Required Lenders; provided, however, that no such agreement shall (i) increase the Revolving Loan Commitment of any Lender without the written consent of such Lender (provided that the Agent may make Collateral Protection Advances as set forth in Section 2.1.2), (ii) reduce or forgive the principal amount of any Loan or Reimbursement Obligation or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender directly affected thereby (other than (x) a waiver of the application of the default rate of interest pursuant to Section 2.10 and (y) any reduction of the amount of or any modification of the payment date for the mandatory payments required under Section 2.2 (other than Section 2.2.1), in each case which shall only require the approval of the Borrower and the Required Lenders), (iii) postpone any scheduled date of payment of the principal amount of any Loan or Reimbursement Obligation, or any date for the scheduled payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Revolving Loan Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 11.1, 11.2 or 11.3 or the definition of “Pro Rata Share” in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender directly affected thereby, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (vi) other than in a transaction permitted under this Agreement, release the Borrower from its obligations hereunder, without the consent of each Lender,  (vii) other than as expressly provided in the definition of Borrowing Base with respect to Required Lenders approving an increase in percentages reduced during a Default, increase the advance rate percentages for Perfected Cash Interests, Eligible Receivables and/or Eligible Petroleum Inventory set forth in the definition of Borrowing Base as of the Closing Date without the consent of each Lender, (viii) other than in connection with a transaction permitted under this Agreement, release all or substantially all of the Collateral without the written consent of each Lender, (ix) other than in connection with a transaction permitted under this Agreement, release all or substantially all of the Subsidiary Guarantors from their obligations under the Guaranty or any other agreement pursuant to which such Guarantors guarantee the repayment of the Secured Obligations without the written consent of each Lender, (x) amend Section 2.19.13 in a manner that would alter the participation obligation of any Lender without the consent of such Lender or (xi) extend the date by which the Increase Effective Date must occur in Section 2.22 without the consent of each Lender directly affected thereby.  No amendment of any provision of this Agreement relating to (a) the Agent shall be effective without the written consent of the Agent, (b) the Non-Ratable Lender or any Non-Ratable Loan shall be effective without the written consent of the Non-Ratable Lender and (c) any LC Issuer or any Facility LC shall be effective without the written consent of such LC Issuer.  No amendment to Section 2.21 of this Agreement shall be effective without the written consent of the Non-Ratable Lender and each LC Issuer.  The limit set forth in Section 2.1.2 on the aggregate amount of Collateral Protection Advances that may be outstanding at any time shall not be increased without the written consent of the Agent and the Lenders in the aggregate having 75% or more of the Aggregate Revolving Loan Commitment; provided, however, that if all of the Revolving Loan Commitments have been terminated, the consent of Lenders holding 75% or more of the Aggregate Outstanding Credit Exposure shall be required to approve any such increase.  Notwithstanding the foregoing, no Lender’s consent shall be required for any amendment, modification or waiver if (i) by the terms of such amendment, modification or waiver the Revolving Loan Commitment of such Lender shall terminate upon the effectiveness of such amendment, modification or waiver and (ii) at the time such amendment, modification or waiver becomes effective, such Lender receives payment in full of all of the Obligations owing to it under the Loan Documents.  Notwithstanding anything to the contrary herein the Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency (and the Lenders shall be notified of any such change to this Agreement or any other Loan Document).

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans and the accrued interest and fees in respect thereof; provided, that no Lender shall be required to participate or hold commitments under any such credit facility without the consent of such Lender and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and other definitions related to such new credit facilities; provided, however, that no such additional credit facility may be added hereto or incurred hereunder unless, (x) after the addition or incurrence thereof, the sum of (A) the Aggregate Outstanding Credit Exposure and (B) the aggregate principal amount of such additional credit facility, would not exceed the  Borrowing Base (and the definition of Borrowing Base shall not be amended in contravention of Section 8.2 to permit such additional credit 

88

facility) and (y) any amendment to or amendment and restatement of this Agreement effected in connection with the addition of any such credit facility shall include necessary modifications to the definitions of “Borrowing Base”, “Excess Availability” and related provisions to ensure that such new credit facility is included when determining Borrowing Base and Excess Availability compliance.

8.3    Preservation of Rights.  No failure to exercise and no delay in exercising, on the part of the Agent, the LC Issuers, and the Lenders, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
ARTICLE IX

GENERAL PROVISIONS

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

9.2    Governmental Regulation.  Anything contained in this Agreement to the contrary notwithstanding, neither any LC Issuer nor any Lender shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation.

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

9.4    Entire Agreement.  The Loan Documents embody the entire agreement and understanding among the Borrower, the Agent, the LC Issuers, and the Lenders and supersede all prior agreements and understandings among the Borrower, the Agent, the LC Issuers, and the Lenders relating to the subject matter thereof other than those contained in the fee letter described in Section 10.13 which shall survive and remain in full force and effect during the term of this Agreement.

THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

9.5    Several Obligations; Benefits of this Agreement.  The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such).  The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder.  This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns, provided, however, that the parties hereto expressly agree that the Arrangers shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.

9.6    Expenses; Indemnification.  (i)  The Borrower shall reimburse the Agent and the Arrangers for any reasonable costs, internal charges and out-of-pocket expenses (including outside attorneys’ fees and time charges of attorneys for the Agent and expenses of and fees for other advisors and professionals engaged by the Agent or the Arrangers of one counsel to the Agent and the Arrangers and one counsel in each relevant local jurisdiction and, in the case of an actual or reasonably perceived conflict of interest where the parties affected by such conflict notify the Borrower of any existence of such conflict and has retained its own counsel, of another firm of counsel for such affected 

89

parties) paid or incurred by the Agent or the Arrangers in connection with the investigation, preparation, negotiation, documentation, execution, delivery, syndication, distribution (including, without limitation, via the internet), review, amendment, modification and administration of the Loan Documents.  The Borrower also agrees to reimburse the Agent, the Arrangers, the LC Issuers, and the Lenders for any reasonable costs, internal charges and out-of-pocket expenses (including outside attorneys’ fees and time charges and expenses of attorneys of one counsel for the Agent, the Arrangers, the LC Issuers, and the Lenders and one counsel in each relevant local jurisdiction and, in the case of an actual or reasonably perceived conflict of interest where the parties affected by such conflict notify the Borrower of any existence of such conflict and has retained its own counsel, of another firm of counsel for such affected parties) paid or incurred by the Agent, the Arrangers, any LC Issuer, or any Lender in connection with the collection and enforcement of the Loan Documents.  In addition to expenses set forth above, the Borrower agrees to reimburse, without duplication, the Agent, promptly after the Agent’s request therefor, for each audit and field exam, or other business analysis performed by or for the benefit of the Holders of Secured Obligations in accordance with Section 6.9 of this Agreement or the other Loan Documents in an amount equal to the Agent’s then customary charges for each person employed to perform such audit, field exam or analysis (which, solely with respect to charges for audits of Collateral, shall not exceed a rate of $850 per day for the Agent performing such audit), plus all reasonable costs and expenses (including without limitation, travel expenses) incurred by the Agent in the performance of such audit or analysis.

(ii)    The Borrower hereby further agrees to indemnify the Agent, each Arranger, each LC Issuer, each Lender, and their respective affiliates, and each of their directors, officers, employees, agents and advisors against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, any Arranger, any LC Issuer, any Lender or any affiliate is a party thereto, and all reasonable attorneys’ fees, time charges and reasonable expenses of one firm of counsel for all indemnified parties, taken as a whole (and, in the case of an actual or perceived conflict of interest where the indemnified parties affected by such conflict notify the Borrower of any existence of such conflict and in connection with the investigating or defending any of the foregoing (including the reasonable fees) has retained its own counsel, of another firm of counsel for such affected indemnified parties), and to the extent required, one firm or local counsel in each relevant jurisdiction (which may include a single special counsel acting in multiple jurisdictions)  which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby, collectively, “Indemnified Costs”, including any such Indemnified Costs arising out of or relating to any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any Affiliate thereof or any liability under Environmental Laws related in any way to the property or operations of the Borrower or its Affiliates, or the direct or indirect application or proposed application of the proceeds of any Credit Extension hereunder, and whether arising in a suit, claim or action brought by a third party or by the Borrower or any of its Subsidiaries; provided that the Borrower shall have no obligation hereunder to any Indemnified Party with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of such indemnified party or any related Person as determined in a final and non-appealable judgment as determined by a court of competent jurisdiction, (ii) a material breach of the obligations of such indemnified party or any related Person under the terms of this Agreement by such indemnified party or any related Person as determined in the final and non-appealable judgment as determined by a court of competent jurisdiction in a proceeding brought by the Borrower or any Subsidiary, or (iii) any proceeding between and among indemnified parties that does not involve an act or omission by the Borrower or its Subsidiaries; provided that the Agent, the Arrangers, the LC Issuers and the Lenders to the extent acting in their capacity as such, shall remain indemnified in respect of such proceeding, to the extent that none of the exceptions set forth in clause (i),  (ii) or (iii) of the immediately preceding proviso applies to such person at such time.  The obligations of the Borrower under this Section 9.6 shall survive the termination of this Agreement.

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

9.8    Accounting.  Except as provided to the contrary herein, all accounting terms used in the calculation of any financial covenant or test shall be interpreted and all accounting determinations hereunder in the calculation of any financial covenant or test shall be made in accordance with Agreement Accounting Principles.  If any changes in U.S. GAAP are hereafter required or permitted and are adopted by the Borrower or any of its Subsidiaries with the agreement 

90

of its independent certified public accountants and such changes result in a change in the method of calculation of any of the financial covenants, tests, restrictions or standards herein or in the related definitions or terms used therein (“Accounting Changes”), the parties hereto agree, at the Borrower’s request, to enter into negotiations, in good faith, in order to amend such provisions in a credit neutral manner so as to reflect equitably such changes with the desired result that the criteria for evaluating the Borrower’s and its Subsidiaries’ financial condition shall be the same after such changes as if such changes had not been made; provided, however, until such provisions are amended in a manner reasonably satisfactory to the Agent and the Required Lenders, no Accounting Change shall be given effect in such calculations.  In the event such amendment is entered into, all references in this Agreement to Agreement Accounting Principles means U.S. GAAP as of the date of such amendment.  

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

9.10    Nonliability of Lenders.  The relationship between the Borrower on the one hand and the Lenders, the LC Issuers, and the Agent on the other hand shall be solely that of borrower and lender.  Neither the Agent, any Arranger, any LC Issuer, nor any Lender shall have any fiduciary responsibilities to the Borrower.  Neither the Agent, any Arranger, any LC Issuer, nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower’s business or operations.  The Borrower agrees that neither the Agent, any Arranger, any LC Issuer, nor any Lender shall have liability to the Borrower (whether sounding in tort, contract or otherwise) for losses suffered by the Borrower in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought or any related Person.  Neither the Agent, any Arranger, any LC Issuer, any Lender, the Borrower or any Subsidiary Guarantor shall have any liability with respect to, and each such Person hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by it in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.

9.11    Confidentiality.  Each Lender agrees to hold any confidential information which it may receive from the Borrower pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates and to other Lenders and their respective Affiliates, for use solely in connection with the transactions contemplated hereby, (ii) to legal counsel, accountants, and other professional advisors to such Lender or to a Transferee, in each case which have been informed as to the confidential nature of such information, (iii) to regulatory officials having jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners or the National Association of Securities Dealers), (iv) to any Person as required by law, regulation, or legal process, (v) to any Person in connection with any legal proceeding to which such Lender is a party, (vi) to such Lender’s direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, in each case which have been informed as to the confidential nature of such information, (vii) to credit insurance providers which have been informed as to the confidential nature of such information, so long as such credit insurance providers agree in writing to be bound by the requirements of this Section 9.11, and (viii) permitted by Section 12.4.

9.12    Lenders Not Utilizing Plan Assets.  Each Lender represents and warrants that none of the consideration used by such  Lender to make its Loans constitutes for any purpose of ERISA or Section 4975 of the Code assets of any “plan” as defined in Section 3(3) of ERISA or Section 4975 of the Code and the rights and interests of such  Lender in and under the Loan Documents shall not constitute such “plan assets” under ERISA.

9.13    Nonreliance.  Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for herein.

91

9.14    Disclosure.  The Borrower and each Lender, including each LC Issuer, hereby acknowledge and agree that each Lender and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with the Borrower and its Affiliates.

9.15    Performance of Obligations.  The Borrower agrees that the Agent may, but shall have no obligation to (i) at any time, pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against any Collateral and (ii) after the occurrence and during the continuance of a Default make any other payment or perform any act required of the Borrower under any Loan Document or take any other action which the Agent in its discretion deems necessary or desirable to protect or preserve the Collateral, including, without limitation, any action to (x) effect any repairs or obtain any insurance called for by the terms of any of the Loan Documents and to pay all or any part of the premiums therefor and the costs thereof and (y) pay any rents payable by the Borrower which are more than thirty (30) days past due, or as to which the landlord has given notice of termination, under any lease.  The Agent shall use its best efforts to give the Borrower notice of any action taken under this Section 9.15 prior to the taking of such action or promptly thereafter provided the failure to give such notice shall not affect the Borrower’s obligations in respect thereof.  The Borrower agrees to pay the Agent, upon demand, the principal amount of all funds advanced by the Agent under this Section 9.15, together with interest thereon at the rate from time to time applicable to Floating Rate Loans from the date of such advance until the outstanding principal balance thereof is paid in full.  If the Borrower fails to make payment in respect of any such advance under this Section 9.15 within one (1) Business Day after the date the Borrower receives written demand therefor from the Agent, the Agent shall promptly notify each Lender and each Lender agrees that it shall thereupon make available to the Agent, in Dollars in immediately available funds, the amount equal to such Lender’s Pro Rata Share of such advance.  If such funds are not made available to the Agent by such Lender within one (1) Business Day after the Agent’s demand therefor, the Agent will be entitled to recover any such amount from such Lender together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of such demand and ending on the date such amount is received.  The failure of any Lender to make available to the Agent its Pro Rata Share of any such unreimbursed advance under this Section 9.15 shall neither relieve any other Lender of its obligation hereunder to make available to the Agent such other Lender’s Pro Rata Share of such advance on the date such payment is to be made nor increase the obligation of any other Lender to make such payment to the Agent.  All outstanding principal of, and interest on, advances made under this Section 9.15 shall constitute Obligations secured by the Collateral until paid in full by the Borrower.

9.16    Subordination of Intercompany Indebtedness.  The Borrower agrees that any and all claims of the Borrower against any of its Subsidiaries that is a guarantor with respect to any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other guarantor of all or any part of the Secured Obligations, or against any of its properties shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Secured Obligations; provided that, and not in contravention of the foregoing, so long as no Default has occurred and is continuing the Borrower may make loans to and receive payments in the ordinary course with respect to such Intercompany Indebtedness from each such guarantor to the extent permitted by the terms of this Agreement and the other Loan Documents.  Notwithstanding any right of the Borrower to ask, demand, sue for, take or receive any payment from any guarantor, all rights, liens and security interests of the Borrower, whether now or hereafter arising and howsoever existing, in any assets of any guarantor shall be and are subordinated to the rights of the Holders of Secured Obligations in those assets.  The Borrower shall not have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until all of the Secured Obligations (other than contingent indemnity obligations) shall have been fully paid and satisfied (in cash) and all financing arrangements pursuant to any Loan Document among the Borrower and the Holders of Secured Obligations (or any affiliate thereof) have been terminated.  If all or any part of the assets of any guarantor, or the proceeds thereof, are subject to any distribution, division or application to the creditors of such guarantor, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of any such guarantor is dissolved or if substantially all of the assets of any such guarantor are sold, then, and in any such event (such events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon or with respect to any Indebtedness of any guarantor to the Borrower (“Intercompany Indebtedness”) shall be paid or delivered directly to the Agent for application on any of the Secured Obligations, due or to become due, until such Secured Obligations (other than contingent indemnity obligations) shall have first been fully paid and satisfied 

92

(in cash).  Should any payment, distribution, security or instrument or proceeds thereof be received by the Borrower upon or with respect to the Intercompany Indebtedness after an Insolvency Event prior to the satisfaction of all of the Secured Obligations (other than contingent indemnity obligations) and the termination of all financing arrangements pursuant to any Loan Document among the Borrower and the Holders of Secured Obligations (and their Affiliates), the Borrower shall receive and hold the same in trust, as trustee, for the benefit of the Holders of Secured Obligations and shall forthwith deliver the same to the Agent, for the benefit of such Persons, in precisely the form received (except for the endorsement or assignment of the Borrower where necessary), for application to any of the Secured Obligations, due or not due, and, until so delivered, the same shall be held in trust by the Borrower as the property of the Holder of Secured Obligations.  If the Borrower fails to make any such endorsement or assignment to the Agent, the Agent or any of its officers or employees are irrevocably authorized to make the same.  The Borrower agrees that until the Secured Obligations (other than the contingent indemnity obligations) have been paid in full (in cash) and satisfied and all financing arrangements pursuant to any Loan Document among the Borrower and the Holders of  the Secured Obligations (and their Affiliates) have been terminated, the Borrower will not assign or transfer to any Person (other than the Agent) any claim the Borrower has or may have against any guarantor.

9.17    Certifications Regarding Indentures.  The Borrower hereby certifies to the Agent and the Lenders that, immediately prior to the effectiveness of the Revolving Loan Commitments, and immediately prior to each Credit Extension hereunder, the Borrower’s incurrence of Indebtedness under this Agreement and the other Loan Documents does not violate (i) Section 4.09 of the Indenture, dated as of June 5, 2009, as amended or modified from time to time, to which the Borrower and certain of its Subsidiaries are subject and pursuant to which the Borrower issued certain 93/4% Senior Notes Due 2019, and (ii) Section 4.09 of the Indenture, dated as of September 27, 2012, as amended or modified from time to time, to which the Borrower and certain of its Subsidiaries are subject and pursuant to which the Borrower issued certain 41/4% Senior Notes Due 2017 and 53/8% Senior Notes Due 2022.  The Borrower further certifies to the Agent and the Lenders that the Revolving Loan Commitment component of this Agreement and the other Loan Documents constitute a “Credit Facility” and a “Senior Credit Facility” under each of the foregoing Indentures.  The Borrower further certifies that the Revolving Loan Commitments, this Agreement, and the other Loan Documents collectively constitute “Senior Debt” under each of the foregoing Indentures.

9.18    Co-Agents.  Other than as set forth in Section 9.6, no Lender identified in this Agreement as the syndication agent, the co-documentation agents or any other Co-Agent shall have any right, power, obligation, liability, responsibility, or duty under any Loan Document other than those applicable to any Lender as such.  Without limiting the foregoing, no such Lender shall have or be deemed to have a fiduciary relationship with any Lender.

9.19    Releases of Collateral and Subsidiary Guarantors.

(a)The Lenders hereby irrevocably agree that the Liens granted to the Agent by the Loan Parties on any Collateral shall be released by the Agent (i) in full, as set forth in clause (c) below, (ii) upon the Disposition of such Collateral (including as part of or in connection with any other Disposition permitted hereunder) to any Person other than another Loan Party, to the extent such Disposition is made in compliance with the terms of this Agreement (and the Agent may rely conclusively on a certificate to that effect provided to it by any Loan Party upon its reasonable request without further inquiry), (iii) to the extent such Collateral is comprised of property leased to a Loan Party, upon termination or expiration of such lease, (iv) if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders (or such other percentage of the Lenders whose consent may be required in accordance with Section 8.2), (v) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of such Guarantor from its obligations under the Guarantee, (vi) as required by the Agent to effect any Disposition of Collateral in connection with any exercise of remedies of the Agent pursuant to the Security Agreement and (vii) upon such Collateral no longer constituting Collateral pursuant to the terms of the Loan Documents.  Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those being released) upon (or obligations (other than those being released) of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any Disposition, all of which shall continue to constitute part of the Collateral except to the extent otherwise released in accordance with the provisions of the Loan Documents.  Additionally, a Subsidiary Guarantor shall automatically be released from its obligations under the Guaranty upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary; provided that, 

93

if so required by this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise.  In connection with any termination or release pursuant to this Section, the Agent shall (and is hereby irrevocably authorized by each Lender to) execute and deliver to any Loan Party, at such Loan Party’s expense, all instruments, documents and agreements that such Loan Party shall reasonably request to evidence such termination or release all without further consent or joinder of any Lender.  Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Agent.  Any representation, warranty or covenant contained in any Loan Document relating to any such Collateral or Guarantor shall no longer be deemed to be repeated.

(b)Further, the Agent may (and is hereby irrevocably authorized by each Lender to), upon the request of the Borrower, release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Subsidiary Guarantor is no longer required to be a Subsidiary Guarantor pursuant to the definition thereof.

(c)At such time as the principal and interest on the Loans, all LC Obligations, the fees, expenses and other amounts payable under the Loan Documents and the other Obligations (other than contingent indemnity obligations and Rate Management Obligations not yet due and payable) at any time arising under or in respect of this Agreement or the Loan Documents or the transactions contemplated hereby or thereby shall have been paid in full in cash, the Aggregate Revolving Loan Commitment shall have been terminated and no Facility LCs shall be outstanding, the Subsidiary Guaranty and all obligations (other than those expressly stated to survive such termination) of each Subsidiary Guarantor thereunder shall automatically terminate and all Liens granted to the Agent by the Loan Parties on any Collateral shall be released by the Agent in full, all without delivery of any instrument or performance of any act by any Person.

ARTICLE X

THE AGENT

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

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

10.3    General Immunity.  Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, or any Lender or Holder of Secured Obligations for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent 

94

such action or inaction is determined in a final, non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person or any related Person.

10.4    No Responsibility for Loans, Recitals, etc.  Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Unmatured Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any Collateral; or (g) the financial condition of the Borrower or any guarantor of any of the Obligations or of any of the Borrower’s or any such guarantor’s respective Subsidiaries.  The Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Borrower to the Agent at such time, but is voluntarily furnished by the Borrower to the Agent (either in its capacity as Agent or in its individual capacity).

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

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

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

10.8    Agent’s Reimbursement and Indemnification.  The Lenders agree to reimburse and indemnify the Agent ratably in proportion to the Lenders’ Pro Rata Shares of the Aggregate Revolving Loan Commitment (or, if the Aggregate Revolving Loan Commitment has been terminated, of the Aggregate Outstanding Revolving Loan Credit Exposure) (i) for any amounts not reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against the Agent in connection with any dispute between the Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such 

95

other documents, provided that (i) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (ii) any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this Section 10.8, be paid by the relevant Lender in accordance with the provisions thereof.  The obligations of the Lenders under this Section 10.8 shall survive payment of the Secured Obligations and termination of this Agreement.

10.9    Notice of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of default”.  In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders.

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

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

10.12    Successor Agent.  The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five (45) days after the retiring Agent gives notice of its intention to resign.  The Agent may not be removed at any time without its prior written consent.  Upon any resignation, the Required Lenders shall have the right, with the consent of the Borrower so long as no Default has occurred and is continuing (such consent not to be unreasonably withheld or delayed), to appoint, on behalf of the Borrower and the Lenders, a successor Agent.  If no successor Agent shall have been so appointed by the Required Lenders within thirty (30) days after the resigning Agent’s giving notice of its intention to resign, then the resigning Agent may appoint, with the consent of the Borrower so long as no Default has occurred and is continuing (such consent not to be unreasonably withheld or delayed), on behalf of the Borrower and the Lenders, a successor Agent.  Notwithstanding the previous sentence, the Agent may at any time without the consent of the Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Agent hereunder.  If the Agent has resigned and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders.  No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment.  Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000.  Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning Agent.  Upon the effectiveness of the resignation of the Agent, the resigning Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents.  After the effectiveness of the resignation of the Agent, the provisions of this Article X shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents.  In the event that there is a successor to the Agent by merger, or the Agent assigns its duties and obligations to an Affiliate pursuant to this Section 10.12, then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Agent.

96

10.13    Agent and Arrangers Fees.  The Borrower agrees to pay to the Agent and the Arrangers, for their respective accounts, the fees agreed to by the Borrower, the Agent and the Arrangers pursuant to the fee letter dated November 30, 2012 by and between the Borrower and the Agent, as amended or modified from time to time.

10.14    Delegation to Affiliates.  The Borrower and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates.  Any such Affiliate (and such Affiliate’s directors, officers, agents and employees) which performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under Articles IX and X.

10.15    Collateral Documents.  (a)  Each Lender authorizes the Agent to enter into each of the Collateral Documents to which it is a party (including Amendment No. 2 to the Security Agreement) and to take all action contemplated by such documents.  Each Lender agrees that no Holder of Secured Obligations (other than the Agent) shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Agent for the benefit of the Holders of Secured Obligations upon the terms of the Collateral Documents.

(b)    In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Agent is hereby authorized to execute and deliver on behalf of the Holders of Secured Obligations any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Agent on behalf of the Holders of Secured Obligations.

(c)    The Lenders hereby authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent upon any Collateral (i) upon termination of the Aggregate Revolving Loan Commitment and payment and satisfaction of all of the Obligations (other than contingent indemnity obligations and Rate Management Obligations) at any time arising under or in respect of this Agreement or the Loan Documents or the transactions contemplated hereby or thereby; (ii) as permitted by, but only in accordance with, the terms of the applicable Loan Document; or (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder.  Upon request by the Agent at any time, the Lenders will confirm in writing the Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.15.

(d)    Upon any sale or transfer of assets constituting Collateral which is permitted pursuant to the terms of any Loan Document, or consented to in writing by the Required Lenders or all of the Lenders, as applicable, and upon at least five (5) Business Days’ prior written request by the Borrower to the Agent, the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Agent for the benefit of the Holders of Secured Obligations herein or pursuant hereto upon the Collateral that was sold or transferred; provided, however, that (i) the Agent shall not be required to execute any such document on terms which, in the Agent’s opinion, would expose the Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Secured Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary Guarantor in respect of) all interests retained by the Borrower or any Subsidiary Guarantor, including, without limitation, the proceeds of the sale, all of which shall continue to constitute part of the Collateral.

10.16    Exercise of Certain Remedies.  Except with respect to the exercise of setoff rights of any Lender in accordance with Section 11.1, the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or with respect to any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, with the consent of the Agent.

ARTICLE XI

SETOFF; RATABLE PAYMENTS

97

11.1    Setoff.  In addition to, and without limitation of, any rights of the Lenders under applicable law, if the Borrower becomes insolvent, however evidenced, or any Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or any Affiliate of any Lender to or for the credit or account of the Borrower may be offset and applied toward the payment of the Secured Obligations owing to such Lender, whether or not the Secured Obligations, or any part thereof, shall then be due and Borrower shall be promptly notified in writing thereof by such Lender and Affiliate.

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

11.3    Application of Payments.  Principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Loans to which such payments relate held by each Lender) and payments of the fees shall, as applicable, be apportioned ratably among the Lenders, except for fees payable solely to the Agent or any LC Issuer and except as provided in the fee letter referenced in Section 10.13.  Subject to the provisions of Section 2.2 governing the application of mandatory prepayments, all payments shall be remitted to the Agent and all such payments not relating to principal or interest of specific Loans, or not constituting payment of specific fees, and all proceeds of any Collateral received by the Agent following acceleration of the maturity of the Obligations pursuant to Section 8.1, shall be applied, ratably, subject to the provisions of this Agreement, first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Agent from the Borrower, second, to pay any fees, indemnities, or expense reimbursements then due to the Lenders from the Borrower, third, to pay interest due in respect of the Revolving Loans, including Non-Ratable Loans and Collateral Protection Advances, fourth, to pay or prepay ratably the principal amount of the Collateral Protection Advances, fifth, to pay or prepay ratably the principal amount of the Non-Ratable Loans and the Revolving Loans, unpaid Reimbursement Obligations in respect of Facility LCs, and an amount to the Agent equal to one hundred and three percent (103%) of the aggregate undrawn face amount of all outstanding Facility LCs to be held as cash collateral for such Obligations, sixth, to pay any amounts owing with respect to Bank Products, seventh, to the payment of any other Secured Obligation due to the Agent or any Lender by the Borrower, and eighth, to the Borrower.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, neither the Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan, or (b) in the event, and only to the extent, that there are no outstanding Floating Rate Loans and, in any event, the Borrower shall pay the breakage losses with respect to Eurodollar Loans in accordance with Section 3.4.  The Agent and the Required Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.  Unless otherwise required by the terms of this Agreement, all principal payments in respect of Loans (other than Non-Ratable Loans and Collateral Protection Advances) shall be applied first to repay outstanding Floating Rate Loans, and then to repay outstanding Eurodollar Loans with those Eurodollar Loans which have earlier expiring Interest Periods being repaid prior to those which have later expiring Interest Periods.

11.4    Failure to Make Payment.  If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.11, 2.18, 2.19.5, 9.15 or 10.8, then the Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Agent for the account of such Lender for the benefit of the Agent, the Non-Ratable Lender or any LC Issuer to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash 

98

collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Agent in its discretion.

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1    Successors and Assigns.  The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower, the Agent and the Lenders and their respective successors and assigns permitted hereby, except that (i) the Borrower shall not have the right to assign its rights or obligations under the Loan Documents without the prior written consent of each Lender, (ii) any assignment by any Lender must be made in compliance with Section 12.3, and (iii) any transfer by Participants must be made in compliance with Section 12.2.  Any attempted assignment or transfer by any party not made in compliance with this Section 12.1 shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with Section 12.3.2.  The parties to this Agreement acknowledge that clause (ii) of this Section 12.1 relates only to absolute assignments and this Section 12.1 does not prohibit assignments creating security interests, including, without limitation, (x) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to a Federal Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or assignment of all or any portion of its rights under this Agreement and any Note to its trustee in support of its obligations to its trustee or (z) any pledge or assignment by any Lender of all or any portion of its rights under this Agreement and any Note to direct or indirect contractual counterparties in swap agreements relating to the Loans; provided, however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the parties thereto have complied with the provisions of Section 12.3.  The Agent may treat the Person which made any Loan or which holds any Note as the owner thereof for all purposes hereof unless and until such Person complies with Section 12.3; provided, however, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan or which holds any Note to direct payments relating to such Loan or Note to another Person.  Any assignee of the rights to any Loan or any Note agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents.  Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan (whether or not a Note has been issued in evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan.

12.2    Participations.

12.2.1    Permitted Participants; Effect.  Any Lender may at any time sell to one or more banks or other entities (“Participants”) participating interests in any Outstanding Credit Exposure of such Lender, any Note held by such Lender, any Revolving Loan Commitment of such Lender or any other interest of such Lender under the Loan Documents.  In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Outstanding Credit Exposure and the holder of any Note issued to it in evidence thereof for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents.

12.2.2    Register.  Each Lender that sells a participating interest, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement; provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Outstanding Credit Exposure, any Note, any Revolving Loan Commitment or any other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Outstanding Credit Exposure, Note, Revolving Loan Commitment or other 

99

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 the Borrower, such Lender and the Agent 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 notice to the contrary.

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

12.2.4    Benefit of Certain Provisions.  The Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant.  The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender.  The Borrower further agrees that each Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.3, provided that (i) a Participant shall not be entitled to receive any greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the Borrower, and (ii) any Participant agrees to comply with the provisions of Section 3.5 to the same extent as if it were a Lender.

12.3    Assignments.

12.3.1    Permitted Assignments.  Any Lender may at any time assign to one or more banks or other entities (“Purchasers”) all or any part of its rights and obligations under the Loan Documents.  Such assignment shall be evidenced by an agreement substantially in the form of Exhibit C or in such other form as may be agreed to by the parties thereto (each such agreement, an “Assignment Agreement”).  Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall, unless otherwise consented to in writing by the Borrower and the Agent, either be in an amount equal to the entire applicable Outstanding Credit Exposure of the assigning Lender or (unless each of the Borrower and the Agent otherwise consents) be in an aggregate amount not less than $10,000,000 with respect to Revolving Loans. The amount of the assignment shall be based on the Outstanding Credit Exposure subject to the assignment, determined as of the date of such assignment or as of the “Trade Date,” if the “Trade Date” is specified in the Assignment Agreement.

12.3.2    Consents.  The consent of the Borrower shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within fifteen (15) Business Days after having received notice thereof; provided, further, that the consent of the Borrower shall not be required if (i) a Default has occurred and is continuing or (ii) such assignment is in connection with the physical settlement of any Lender’s obligations to direct or indirect contractual counterparties in swap agreements relating to the Loans; provided, that the assignment without the Borrower’s consent pursuant to clause (ii) shall not increase the Borrower’s liability under Section 3.5.  The consent of the Agent and each LC Issuer hereunder shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund.  Any consent required under this Section 12.3.2 shall not be unreasonably withheld or delayed.

100

12.3.3    Effect; Effective Date.  Upon (i) delivery to the Agent of an Assignment Agreement, together with any consents required by Sections 12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent or unless such assignment is made to such assigning Lender’s Affiliate or an Approved Fund), such assignment shall become effective on the effective date specified in such assignment.  The Assignment Agreement shall contain a representation and warranty by the Purchaser to the effect that the assignment evidenced thereby will not result in a non-exempt “prohibited transaction” under Section 406 of ERISA.  On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights, benefits and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Outstanding Credit Exposure assigned to such Purchaser without any further consent or action by the Borrower, the Lenders or the Agent.  In the case of an assignment covering all of the assigning Lender’s rights, benefits and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the Loan Documents.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.2.  Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3.3, the transferor Lender, the Agent and the Borrower shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that, upon cancellation and surrender to the Borrower of the Notes (if any) held by the transferor Lender, new Notes or, as appropriate, replacement Notes are issued to such transferor Lender, if applicable, and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their Revolving Loan Commitments (or, if the Termination Date has occurred, their respective Outstanding Credit Exposure), as adjusted pursuant to such assignment.

12.3.4    Register.  The Agent, acting solely for this purpose as an agent of the Borrower (and the Borrower hereby designates the Agent to act in such capacity), shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, and the Revolving Loan Commitments of, and principal amounts of and interest on the Loans owing to, each Lender pursuant to the terms hereof from time to time and whether such Lender is an original Lender or assignee of another Lender pursuant to an assignment under this Section 12.3.  The entries in the Register shall be conclusive, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

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

12.5    Tax Certifications.  If any interest in any Loan Document is transferred to any Transferee, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 3.5(iv).

ARTICLE XIII

NOTICES

13.1    Notices.

101

(a)    Except as otherwise permitted by Section 2.13 with respect to borrowing notices, (and subject to Section 13.1(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i)if to the Borrower, to it at 19100 Ridgewood Parkway, San Antonio, Texas 78259, Attention of Corporate Secretary (Telecopy No. 210-569-5130; Telephone No. 210-626-6000), with copies to the Finance Department/Treasurer, Attention Tracy Jackson (Telecopy No. 210-569-5130; Telephone No. 210-626-6779);

(ii)if to the Agent, to JPMorgan Chase Bank, N.A., 2200 Ross Avenue, 9th Floor, Dallas, Texas 75201, Attention of Region Manager (Telecopy No. (214) 965-4731),with a copy to JPMorgan Chase Bank, N.A., 2200 Ross Avenue, 9th Floor, Dallas, Texas 75201, Attention of J. Devin Mock (Telecopy No. (214) 965-2594);

(iii)If to JPMorgan as LC Issuer, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn, 22nd Floor, Chicago, Illinois 60603, Attention of Olga Prado (Telecopy No. (312) 732-7606),or in the case of any other LC Issuer, to it at the address and telecopy number specified from time to time by such LC Issuer to the Borrower and the Agent;

(iv)if to the Non-Ratable Lender, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn, 22nd Floor, Chicago, Illinois 60603, Attention of Olga Prado (Telecopy No. (312) 732-7606); and

(v)if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

(b)    Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Agent and the applicable Lender.  The Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

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

ARTICLE XIV

COUNTERPARTS; INTEGRATION; EFFECTIVENESS

This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.1, this Agreement shall become effective when it shall have been executed by the Agent and when the Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.

102

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

15.1    CHOICE OF LAW.  THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15.2    CONSENT TO JURISDICTION.  THE BORROWER, THE AGENT AND EACH LENDER AND EACH LC ISSUER EACH HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK STATE COURT SITTING IN OR WITH DIRECT JURISDICTION OVER THE BOROUGH OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS (OTHER THAN ANY COLLATERAL DOCUMENTS).  THE BORROWER, THE AGENT, EACH LC ISSUER AND EACH LENDER EACH HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  
15.3    WAIVER OF JURY TRIAL.  THE BORROWER, THE AGENT, EACH LC ISSUER, EACH LENDER, AND EACH OTHER HOLDER OF SECURED OBLIGATIONS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE XVI

PRIOR CREDIT AGREEMENT

The Borrower, certain of the Lenders, and the Agent are parties to the Prior Credit Agreement.  The Borrower, the Lenders, and the Agent agree that upon (i) the execution and delivery of this Agreement by each of the parties hereto and (ii) satisfaction (or waiver by the aforementioned parties) of the conditions precedent set forth in Section 4.1, the terms and conditions of the Prior Credit Agreement shall be and hereby are amended, superseded, and restated in their entirety by the terms and provisions of this Agreement.  All amounts outstanding or otherwise due and payable under the Prior Credit Agreement prior to the Closing Date shall, on and after the Closing Date, be outstanding and due and payable under this Agreement.  Notwithstanding the foregoing, the Borrower affirms its rights, duties and obligations under the Security Agreement, including, without limitation, the security interest granted thereunder, and the other Loan Documents delivered in connection herewith, and agrees and acknowledges that this Agreement constitutes the “Credit Agreement” referenced therein.  Without limiting the foregoing, upon the effectiveness hereof, the Agent shall make such reallocations, sales, assignments or other relevant actions in respect of each Lender’s credit and loan exposure under the Prior Credit Agreement as are necessary in order that each such Lender’s Outstanding Credit Exposure hereunder reflects such Lender’s Pro Rata Share of the Aggregate Outstanding Credit Exposure on the Closing Date.  Upon the effectiveness hereof, each Departing Lender’s “Revolving Loan Commitment” under the Prior Credit Agreement shall be terminated, each Departing Lender shall have received payment in full of all of the “Obligations” under the Prior Credit Agreement (other than obligations to pay fees and expenses with respect to which the Borrower has not received an invoice, “Rate Management Obligations”, contingent indemnity obligations and other contingent obligations owing to it under the “Loan Documents” as defined in the Prior Credit Agreement) and each Departing Lender shall not be a Lender hereunder.  All Lenders agree and acknowledge that only Departing Lenders shall receive 

103

full repayment of their “Obligations” under the Prior Credit Agreement on the effective Closing Date, as such Departing Lenders shall not constitute Lenders hereunder, and the Lenders consent to such full repayment as described above.

ARTICLE XVII

USA PATRIOT ACT

Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrower and each Subsidiary Guarantor that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies such Person, which information includes the name and address of such Person and other information that will allow such Lender to identify such Person in accordance with the Act.

The remainder of this page is intentionally blank

104

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

TESORO CORPORATION,
as the Borrower

By:______________________________
Name:
Title:

105

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
individually, as initial LC Issuer, and as Agent

By:______________________________
Name:
Title:

[OTHER AGENTS AND LENDERS TO COME]

    

106

COMMITMENT SCHEDULE 
(AS OF THE EFFECTIVE DATE OF THE FIRST AMENDMENT) 

	
		
	LENDER
	REVOLVING LOAN COMMITMENT

	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
	$200,000,000

	THE ROYAL BANK OF SCOTLAND PLC
	$200,000,000

	WELLS FARGO BANK, N.A.
	$200,000,000

	BANK OF AMERICA, N.A.
	$125,000,000

	BARCLAYS BANK PLC
	$125,000,000

	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
	$125,000,000

	CITIBANK, N.A.
	$125,000,000

	CRÉDIT AGRICOLE CORPORATE & INVESTMENT BANK
	$125,000,000

	MIZUHO BANK, LIMITED
	$125,000,000

	NATIXIS, NEW YORK BRANCH
	$125,000,000

	BANCO BILBAO VIZCAYA ARGENTARIA S.A.,  NEW YORK BRANCH
	$100,000,000

	BNP PARIBAS
	$100,000,000

	DEUTSCHE BANK AG NEW YORK BRANCH
	$100,000,000

	REGIONS BANK
	$100,000,000

	SUNTRUST BANK
	$100,000,000

	UBS AG, STAMFORD BRANCH
	$100,000,000

	THE BANK OF NOVA SCOTIA
	$85,000,000

	ROYAL BANK OF CANADA
	$85,000,000

	CIBC INC.
	$75,000,000

	FIFTH THIRD BANK
	$75,000,000

	SUMITOMO MITSUI BANKING CORPORATION
	$75,000,000

	RB INTERNATIONAL FINANCE (USA), LLC
	$70,000,000

	PNC BANK, NATIONAL ASSOCIATION
	$65,000,000

	CAPITAL ONE, N.A.
	$50,000,000

	HSBC BANK USA, NATIONAL ASSOCIATION
	$50,000,000

	U.S. BANK NATIONAL ASSOCIATION
	$50,000,000

	AMEGY BANK NATIONAL ASSOCIATION
	$40,000,000

	CITY NATIONAL BANK
	$35,000,000

	FROST BANK
	$35,000,000

	COMERICA BANK
	$30,000,000

	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
	$30,000,000

	AMALGAMATED BANK
	$25,000,000

	BANK HAPOALIM
	$25,000,000

	SIEMENS FINANCIAL SERVICES, INC.
	$25,000,000

	TOTAL
	$3,000,000,000

107

PRICING SCHEDULE
	
				
	Index Debt Ratings
	Commitment Fee Rate
	Eurodollar Rate Margin
	Floating Rate Margin

	Category 1: Index Debt Rating of BBB+ by S&P or Baa1 by Moody’s or higher
	0.375%
	1.25%
	0.25%

	Category 2: Index Debt Rating of BBB by S&P or Baa2 by Moody’s
	0.375%
	1.50%
	0.50%

	Category 3:   Index Debt Rating of BBB- by S&P or Baa3 by Moody’s
	0.375%
	1.75%
	0.75%

	Category 4:  Index Debt Rating of BB+ by S&P or Ba1 by Moody’s
	0.50%
	2.00%
	1.00%

	Category 5:  Index Debt Rating of BB by S&P or Ba2 by Moody’s or lower
	0.50%
	2.25%
	1.25%

For purposes of, and notwithstanding, the foregoing, (i) if either Moody’s or S&P shall not have in effect an Index Debt Rating for the Borrower, then such rating agency shall be deemed to have established such a rating in Category 5; (ii) if the Index Debt Ratings established or deemed to have been established by Moody’s and S&P shall fall within different categories, the Applicable Margin and the Applicable Fee Rate shall be based on the higher of the two ratings; and (iii) if the Index Debt Ratings established or deemed to have been established by Moody’s and S&P shall be changed, such change shall be effective as of the date on which it is first announced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the Agent and the Lenders pursuant to the Loan Documents or otherwise.  Each change in the Applicable Margin and the Applicable Fee ate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.

108

DEPARTING LENDER SCHEDULE

Lloyds TSB Bank Plc
Société Générale

109

ANNEX B
TO
OMNIBUS AMENDMENT NO. 1

Schedule 1.1(b) – Drop Down Assets

Attached

SCHEDULE 1.1(b)
DROP DOWN ASSETS
Kenai Pipeline
Anacortes Wharf (dock) 
Avon Wharf (dock)
Pittsburg Terminal (idle)
All rail loading and unloading facilities
All sulfur and coke handling and transporting facilities and assets
Membership Interest in Tesoro Savage Petroleum Terminal LLC
Membership Interest in, or assets of, Trans-Foreland Pipeline Company LLC
Membership Interest in, or assets of, Uinta Express Pipeline Company LLC
 

ANNEX C
TO
OMNIBUS AMENDMENT NO. 1

Schedule 5.8 – Subsidiaries

Attached

SCHEDULE 5.8(i)

SUBSIDIARIES
	
			
	Entity Name
	Jurisdiction of Formation
	% Ownership Interest

	Tesoro Wasatch, LLC
	Delaware
	100.0%

	Tesoro Companies, Inc.
	Delaware
	100.0%

	Tesoro Alaska Company LLC
	Delaware
	100.0%

	Tesoro Refining & Marketing Company LLC
	Delaware
	100.0%

	Kenai Pipe Line Company
	Delaware
	100.0%

	Tesoro Logistics GP, LLC
	Delaware
	100.0%

	Tesoro High Plains Pipeline Company LLC
	Delaware
	35.4%*

	Tesoro Logistics LP
	Delaware
	35.4%

	Tesoro Logistics Operations LLC
	Delaware
	35.4%*

	Tesoro Logistics Finance Corp.
	Delaware
	35.4%*

	Tesoro Logistics Pipelines LLC
	Delaware
	35.4%*

	Tesoro Logistics Northwest Pipeline LLC
	Delaware
	35.4%*

	Interior Fuels Company
	Alaska
	100.0%

	Tesoro Panama Company, S.A.
	Panama/Delaware
	100.0%

	Tesoro Petroleum (Singapore) Pte. Ltd.
	Singapore
	100.0%

	Tesoro Canada Supply & Distribution Ltd.
	British Columbia, Canada
	100.0%

	Tesoro West Coast Company, LLC
	Delaware
	100.0%

	Tesoro Sierra Properties, LLC
	Delaware
	100.0%

	Tesoro Northstore Company
	Alaska
	100.0%

	Tesoro South Coast Company, LLC
	Delaware
	100.0%

	Tesoro Trading Company
	Delaware
	100.0%

	Tesoro Environmental Resources Company
	Delaware
	100.0%

	Tesoro Aviation Company
	Delaware
	100.0%

	Tesoro Maritime Company
	Delaware
	100.0%

	Tesoro Far East Maritime Company
	Delaware
	100.0%

	Gold Star Maritime Company
	Delaware
	100.0%

	Redland Vision, LLC
	Delaware
	100.0%

	RW Land Company
	Delaware
	100.0%

	Ridgewood Insurance Company
	Vermont
	100.0%

	Tesoro Insurance Holding Company
	Delaware
	100.0%

	Tesoro SoCal Pipeline Company LLC
	Delaware
	35.4%*

	Treasure Franchise Company LLC
	Delaware
	100.0%

	Carson Cogeneration Company
	Delaware
	100.0%

	Tesoro Renewables Company LLC
	Delaware
	100.0%

	Tesoro SoCal Cogen Company LLC
	Delaware
	100.0%

	
			
	Trans-Foreland Pipeline Company LLC
	Delaware
	100.0%

	Uinta Express Pipeline Company LLC
	Delaware
	100.0%

*based on percentage ownership of Tesoro Logistics LP, of which the identified company is a wholly-owned direct or direct subsidiary

SCHEDULE 5.8(ii)
SUBSIDIARY GUARANTORS

Tesoro Wasatch, LLC
Tesoro Companies, Inc.
Tesoro Alaska Company LLC (formerly known as Tesoro Alaska Company)
Tesoro Refining & Marketing Company LLC
Tesoro Panama Company, S.A.
Tesoro Canada Supply & Distribution Ltd.
Tesoro West Coast Company, LLC
Tesoro Sierra Properties, LLC
Tesoro Northstore Company
Tesoro South Coast Company, LLC
Tesoro Trading Company
Tesoro Environmental Resources Company
Tesoro Aviation Company 
Tesoro Maritime Company
Tesoro Far East Maritime Company
Gold Star Maritime Company
Tesoro Insurance Holding Company
Treasure Franchise Company LLC
Tesoro Renewables Company LLC
Tesoro SoCal Cogen Company LLC
Carson Cogeneration Company    
Trans-Foreland Pipeline Company LLC
Uinta Express Pipeline Company LLC

ANNEX D
TO
OMNIBUS AMENDMENT NO. 1

Exhibit B – Form of Compliance Certificate

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

		
	To:
	The Lenders parties to the

Credit Agreement described below

This Compliance Certificate is furnished pursuant to that certain Sixth Amended and Restated Credit Agreement, dated as of January 4, 2013 (as the same may be amended, modified, renewed or extended from time to time, the “Agreement”), among Tesoro Corporation (the “Borrower”), the financial institutions from time to time party thereto as Lenders (the “Lenders”) and JPMorgan Chase Bank, National Association, as Administrative Agent (the “Agent”) for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the duly elected          of the Borrower;

2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;

3.  The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Default or Unmatured Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below;

4.  All of the representations and warranties set forth in Article V of the Agreement are true and correct in all material respects as of the date hereof or as of such earlier date that may be specified in the Agreement;

5.  No material adverse change in the business, Property, condition (financial or otherwise), operations or results of operations of the Borrower or any of its Subsidiary Guarantors has occurred since December 31, 2011 other than as disclosed in Form 10-K filed by the Borrower with the U.S. Securities and Exchange Commission for the fiscal year ending December 31, 2011 with respect to the operations and results of operations of the Borrower and its consolidated Subsidiaries; and

6.  Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of _________, 20___.

The Borrower hereby certifies, through its [insert title of certifying officer], that the information set forth herein is accurate as of _________  ___, 20___, to the best of such officer’s knowledge, after diligent inquiry, and that the financial statements delivered herewith present fairly the financial position of the Borrower and its consolidated Subsidiaries at the dates indicated and the results of their operation and  changes in their financial position for the periods indicated in conformity with Agreement Accounting Principles, consistently applied.

Attached hereto are true and correct copies of the certificates filed by the Borrower in connection with Form 10[-K][-Q] with the U.S. Securities and Exchange Commission relating to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 for the accounting period covered by the attached financial statements.

Dated ________  __, 20___

TESORO CORPORATION

   By:                     
Name:
Title:

SCHEDULE I TO COMPLIANCE CERTIFICATE
[BORROWER TO ADD ADDITIONAL INFORMATION WHEN REQUIRED]

I.    FINANCIAL COVENANTS

For the purposes of the following covenants, Consolidated EBITDA for the Borrower and its Subsidiaries shall be calculated as follows, in each case on a consolidated basis:1 

	
					
	a.
	 
	net income
	$_______

	b.
	+
	interest expense
	$_______

	c.
	+
	income and franchise tax expense
	$_______

	d.
	+
	depreciation
	$_______

	e.
	+
	amortization
	$_______

	f.
	+
	other non-cash charges
	$_______

	g.
	-
	interest income
	$_______

	h.
	-
	other non-cash
income
	$_______

	i.
	-
	Consolidated EBITDA for any Material Disposition
(if positive)
	$_______

	j.
	+
	Consolidated EBITDA for any Material Acquisition
(if positive)
	$_______

	k.
	=
	EBITDA
	$_______

_____________________________
1 No amounts in respect of Net Mark-to-Market Exposure shall be included in any computation of Consolidated
EBITDA

		
	A.
	Fixed Charge Coverage Ratio (Section 6.21).

		
	(1)
	Consolidated EBITDA (excluding any MLP

EBITDA but including, for the avoidance of doubt,
proceeds resulting from any Disposition or contribution of
assets from the Borrower or any Subsidiary to any Drop
Down Subsidiary), minus expenses for cash federal income
taxes paid, minus Net Consolidated Capital
Expenditures (excluding any MLP Capital
Expenditures), minus Restricted Payments, plus any
Cash dividend or cash distribution made by any
Excluded Subsidiary in respect of its equity interests
to the Borrower or any Subsidiary, plus cash federal
income tax refunds received                      $______________

		
	(2)
	Fixed Charges, all calculated on a rolling four-quarter

basis for the Borrower and its Subsidiaries, on a
consolidated basis, and without duplication
with respect to Capitalized Leases                      $______________

		
	(3)
	“Fixed Charge Coverage Ratio”

(Ratio of (1) to (2))                        _________to 1.00

		
	(4)
	Fixed Charge Coverage Ratio not to

be less than 1.00 to 1.00 for the reporting
period covered hereby unless Excess Availability
exceeds the greater of (i) $175,000,000
and (ii) 10% of the Borrowing Base

		
	(5)
	Does Excess Availability exceed (i) $175,000,000

and (ii) 10% of the Borrowing Base                     Yes/No
If yes, please provide supporting information.

		
	B.
	Minimum Consolidated Tangible Net Worth (Section 6.22).

State whether Consolidated Tangible Net Worth of the Borrower was less than (i) $2,700,000,000 plus (ii) seventy-five percent (75%) of Consolidated Net Income (if positive) earned in the fiscal year ended December 31, 2013, plus (iii) fifty percent (50%) of Consolidated Net Income (if positive) earned in each completed fiscal year beginning with the fiscal year ending December 31, 2014.

    Yes/No

ANNEX E
TO
OMNIBUS AMENDMENT NO. 1

List of Closing Deliverables1 

		
	1.
	Omnibus Amendment No. 1 to Sixth Amended and Restated Credit Agreement and Guaranties (the “Amendment”) by and among the Borrower, the Lenders signatory thereto, the Agent, and the Subsidiary Guarantors. 

		
	2.
	Amendment Fee Letter by and among the Borrower, the Agent and J.P. Morgan Securities LLC.

		
	3.
	Certificate of the Secretary or an Assistant Secretary of each Loan Party certifying (i) that there have been no changes in the Articles or Certificate of Incorporation, Certificate of Formation or other analogous charter document of such Credit Party,  either as attached thereto and as certified as of a recent date by the Secretary of State (or the equivalent thereof) of its jurisdiction of organization since the date of the certification thereof by such Secretary of State (or equivalent thereof) or as previously certified to the Agent as of a prior date pursuant to documentation delivered in connection with the closing of the Credit Agreement, (ii) that there has been no change to the By-Laws, Limited Liability Company Agreement, Partnership Agreement or other analogous organizational document of such Loan Party as previously certified to the Agent as of a prior date pursuant to documentation delivered in connection with the closing of the Credit Agreement, (iii) resolutions of the Board of Directors, Board of Managers or other analogous governing body of such Loan Party authorizing the execution, delivery and performance of the Amendment and the Credit Agreement as amended thereby,, and (iv) the names and true signatures of the incumbent officers of such Loan Party authorized to sign the Amendment and, in the case of the Borrower, authorized to request a Borrowing and the issuance, amendment, renewal or extension of a Letter of Credit under the Credit Agreement.

		
	4.
	Good Standing Certificates (or the equivalent thereof) for each Loan Party from its respective jurisdiction of organization.

		
	5.
	Opinion of (i) Simpson Thacher & Bartlett LLP, special outside counsel to the Borrower and the other Loan Parties, and (ii) internal counsel to the Borrower and the other Loan Parties, each addressed to the Agent and the Lenders.

__________________________
1 Items appearing in bold and italics shall be prepared and/or provided by the Borrower and/or Borrower’s counsel.Execution Version

 

 

Roberts
realty investors, inc.

STOCK PURCHASE AGREEMENT

 

    	 

    	 

    

TABLE
OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	Purchase and Sale of Common Stock.	1
	 	1.1	Issuance and Sale of Common Stock.	1
	 	1.2	Closing; Delivery.	1
	 	1.3	Post-Closing Adjustment.	1
	 	1.4	Defined Terms Used in this Agreement.	2
	 	 	 
	2.	Representations and Warranties of the Company and the Operating Partnership.	8
	 	2.1	Organization of the Company.	9
	 	2.2	Organization of the Operating Partnership.	9
	 	2.3	Authorization; Enforceability.	10
	 	2.4	Capitalization.	10
	 	2.5	Subsidiaries.	11
	 	2.6	Valid Issuance of Shares.	12
	 	2.7	Brokers.	12
	 	2.8	Governmental Consents and Filings.	12
	 	2.9	Legal Actions.	12
	 	2.10	Possession of Intellectual Property.	13
	 	2.11	Certain Transactions.	13
	 	2.12	Rights of Registration and Voting Rights.	14
	 	2.13	Absence of Violation, Defaults and Conflicts.	14
	 	2.14	Financial Statements; Non-GAAP Financial Measures.	15
	 	2.15	Compliance with Laws and Orders.	16
	 	2.16	Changes.	16
	 	2.17	Employee Matters.	17
	 	2.18	ERISA.	18
	 	2.19	Transfer Taxes.	19
	 	2.20	Permits.	19
	 	2.21	Title to Property.	19
	 	2.22	Accounting Controls and Disclosure Controls.	20
	 	2.23	Compliance with the Sarbanes-Oxley Act.	20
	 	2.24	Investment Company Act.	21
	 	2.25	Insurance.	21
	 	2.26	Organizational Documents.	21
	 	2.27	Environmental and Safety Laws.	21
	 	2.28	Data Privacy.	22
	 	2.29	Foreign Corrupt Practices Act.	22
	 	2.30	Money Laundering Laws.	23
	 	2.31	OFAC.	23
	 	2.32	Shell Company.	23
	 	2.33	SEC Reports.	23
	 	2.34	Company Proxy Statement.	24
	 	2.35	Material Contracts.	24

 

    	i

    	 

    

TABLE OF CONTENTS

(continued)

 

	 	2.36	Loans and Guarantees.	26
	 	2.37	Taxes.	26
	 	2.38	Certificates.	27
	 	 	 	 
	3.	Representations and Warranties of the Purchaser.	27
	 	3.1	Organization.	27
	 	3.2	Authorization; Enforceability.	28
	 	3.3	No Violation of Conflict; No Consents.	28
	 	3.4	Purchase Entirely for Own Account.	28
	 	3.5	Accredited Investor.	28
	 	3.6	Brokers.	29
	 	3.7	Governmental Consents and Filings.	29
	 	3.8	Company Proxy Statement.	29
	 	3.9	Financial Capability.	29
	 	3.10	Legal Actions.	29
	 	 	 	 
	4.	Conditions to the Purchaser’s Obligations at Closing.	29
	 	4.1	Representations and Warranties.	30
	 	4.2	Performance.	30
	 	4.3	No Litigation.	30
	 	4.4	Compliance Certificate.	31
	 	4.5	Opinion of the Company Counsel.	31
	 	4.6	REIT Tax Certificate	31
	 	4.7	No Shell Company Status.	31
	 	4.8	No Suspension in Trading or De-Listing of Common Stock.	31
	 	4.9	Board of Directors.	32
	 	4.10	Governance and Voting Agreement.	32
	 	4.11	Management Agreement.	32
	 	4.12	Registration Rights Agreement.	32
	 	4.13	Tax Protection Agreement.	32
	 	4.14	Warrant Agreement.	32
	 	4.15	Shareholder Vote.	33
	 	4.16	Resignation of Employees, Officers and Directors.	33
	 	4.17	Employment Agreement.	33
	 	4.18	Ownership Limit Exemption	33
	 	4.19	Waiver and Termination of Related Party Fees and Obligations.	33
	 	4.20	Secretary’s Certificate.	33
	 	 	 	 
	5.	Conditions of the Company’s Obligations at Closing.	34
	 	5.1	Representations and Warranties.	34
	 	5.2	Performance.	34
	 	5.3	No Litigation.	34
	 	5.4	Qualifications.	34
	 	5.5	Shareholder Vote.	35
	 	 	 

 

    	ii

    	 

    
TABLE OF CONTENTS

(continued)

 

 

	6.	Covenants.	35
	 	6.1	Affirmative Covenants.	35
	 	6.2	Negative Covenants.	36
	 	6.3	Access.	39
	 	6.4	Cooperation; Other Approvals.	40
	 	6.5	Public Announcements.	41
	 	6.6	Update of Schedules; Knowledge of Breach.	41
	 	6.7	Regulatory Matters.	42
	 	6.8	Shareholders Meeting.	43
	 	6.9	Reservation of Common Stock.	43
	 	6.10	No-Shop.	43
	 	6.11	Directors’ and Officers’ Indemnification and Insurance.	46
	 	6.12	Repayment of North Springs, Bradley Park and Highway 20 Loans.	47
	 	6.13	Escrow of Purchaser Funds.	48
	 	6.14	Update to Closing Date Net Asset Value Exhibit.	48
	 	 	 
	7.	Post-Closing Covenants.	49
	 	7.1	Securities Laws Compliance.	49
	 	7.2	Reincorporation and Name Change.	49
	 	7.3	Proxy Statement and Reverse Stock Split.	49
	 	7.4	Post-Closing Transition Services.	49
	 	 	 
	8.	Termination.	49
	 	8.1	Events of Termination.	49
	 	8.2	Termination Fees.	51
	 	 	 
	9.	Miscellaneous.	52
	 	9.1	Further Assurances.	52
	 	9.2	Non-survival of Representations, Warranties and Agreements.	53
	 	9.3	Successors and Assigns.	53
	 	9.4	Governing Law.	53
	 	9.5	Counterparts.	53
	 	9.6	Titles, Subtitles and Interpretation.	53
	 	9.7	Notices.	53
	 	9.8	No Finder’s Fees.	54
	 	9.9	Attorneys’ Fees.	54
	 	9.10	Amendments and Waivers.	54
	 	9.11	Severability.	54
	 	9.12	Delays or Omissions.	55
	 	9.13	Entire Agreement.	55
	 	9.14	Waiver of Jury Trial.	55

 

    	iii

    	 

    
TABLE OF CONTENTS

(continued)

 

 

	Exhibit A -	CLOSING DATE NET ASSET VALUE
	 	 
	Exhibit B -	FORM OF EMPLOYMENT AGREEMENT
	 	 
	Exhibit C -	FORM OF GOVERNANCE AND VOTING AGREEMENT
	 	 
	Exhibit D -	FORM OF MANAGEMENT AGREEMENT
	 	 
	Exhibit E -	FORM OF REGISTRATION RIGHTS AGREEMENT
	 	 
	Exhibit F -	FORM OF TAX PROTECTION AGREEMENT
	 	 
	Exhibit G -	DISCLOSURE SCHEDULE
	 	 
	Exhibit H - 	FORM OF COMPLIANCE CERTIFICATE
	 	 
	Exhibit I -	FORM OF WARRANT AGREEMENT
	 	 
	Exhibit J-1 -	FORM OF DIRECTOR RESIGNATION AND RELEASE
	 	 
	Exhibit J-2 -  	FORM OF OFFICER AND EMPLOYEE RESIGNATION AND RELEASE
	 	 
	Exhibit K -	FORM OF ESCROW AGREEMENT

 

    	iv

    	 

    

STOCK
PURCHASE AGREEMENT

THIS STOCK PURCHASE
AGREEMENT (this “Agreement”) is made as of the 19th day of November, 2014 (the “Effective Date”)
by and among Roberts Realty Investors, Inc., a Georgia corporation (the “Company”), Roberts Properties Residential,
L.P., a Georgia limited partnership (the “Operating Partnership”), and A-III Investment Partners LLC, a Delaware
limited liability company (the “Purchaser”).

In consideration
of the respective representations, warranties and covenants set forth in this Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.                 
Purchase and Sale of Common Stock.

1.1             
Issuance and Sale of Common Stock.

Subject to the terms
and conditions of this Agreement, the Purchaser agrees to purchase at the Closing and the Company agrees to issue and sell to the
Purchaser at the Closing the number of shares of common stock, $.01 par value per share, of the Company (the “Common Stock”)
equal to $12,000,000 (the “Gross Proceeds”) divided by the Purchase Price Per Share (as defined below), subject
to adjustment pursuant to Section 6.2(c) hereof and the post-Closing adjustment pursuant to Section 1.3
hereof. The shares of Common Stock issued to the Purchaser pursuant to this Agreement shall be referred to in this Agreement as
the “Shares.”

1.2             
Closing; Delivery.

(a)               
The purchase and sale of the Shares (the “Closing”) shall take place remotely via the exchange
of documents and signatures, at 10:30 a.m. (Eastern), on the Closing Date.

(b)              
At the Closing, the Company shall deliver, or cause to be delivered, the Shares through the facilities of the Depositary
Trust Company for the account of the Purchaser, against payment by the Purchaser of the Gross Proceeds therefor by wire transfer
of immediately available funds to a bank account designated by the Company.

1.3             
Post-Closing Adjustment.

Within ten (10)
Business Days after the closing of the last Property Disposition (the “Adjustment Date”), the Manager shall
recalculate the Closing Date Net Asset Value (the “Post-Closing Net Asset Value”) using the same accounting
methods, practices, principles, policies and procedures, with consistent classifications, judgments and estimation methodologies
that were used in the preparation of the Closing Date Net Asset Value, but as adjusted to reflect (i) the actual net sale proceeds
received by the Company (gross sale proceeds less all actual Selling Costs) in the Property Dispositions instead of the agreed
property values less budgeted Selling Costs included in the Closing Date Net Asset Value, (ii) any changes in the Liabilities of
the Company calculated in accordance with GAAP that arose on or prior to the Closing Date that are discovered after the Closing
Date and on or prior to the Adjustment Date and (iii) any costs that were not reflected in the Closing Date Net Asset Value that
are incurred by the Company, whether incurred before or after the Closing, in connection with (a) any restatement, recharacterization
or correction of the Company’s financial statements or related amendment to any Company Exchange Act Report required as a
result of the Company’s loss of its REIT status for the 2009 fiscal year and subsequent periods or (b) the Company’s
satisfaction of the requirements of any Listing Compliance Plan. Upon completion of the calculation by the Manager of the Post-Closing
Net Asset Value, the Manager will provide a copy of such calculation to Mr. Roberts for his review and comment. Mr. Roberts will
have five (5) Business Days to notify the Manager of any comments on such calculation. The Manager will consider in good faith
any comments provided by Mr. Roberts and will make any adjustments to the calculation that it deems appropriate in its reasonable
discretion. The Manager will then provide a copy of the Post-Closing Net Asset Value calculation to the Company’s registered
independent public accounting firm for review. After making any final adjustments to the calculation based on any comments provided
by the Company’s registered independent public accounting firm, the Manager will report the final calculation to the Audit
Committee of the Board of Directors. Within five (5) Business Days after the final determination of the Post-Closing Net Asset
Value, the Company shall issue to the Purchaser in a private placement an amount of additional shares of Common Stock equal to
the difference, if any, between (A) the Gross Proceeds divided by the Adjustment Date Purchase Price Per Share and (B) the number
of Shares issued to the Purchaser at the Closing (the “Post-Closing Issuance”). The Post-Closing Issuance, if
any, shall be effected through the same closing and delivery mechanics for the Shares as provided in this Agreement and, for federal
income tax purposes, the parties shall treat the Post-Closing Issuance as an adjustment to the Purchase Price Per Share with respect
to the issuance and sale of Common Stock pursuant to Section 1.1 hereof.

    	 

    	 

    

1.4             
Defined Terms Used in this Agreement.

In addition to the
terms defined above or elsewhere in this Agreement, the following terms used in this Agreement shall be construed to have the meanings
set forth or referenced below.

“Acquisition
Agreement” has the meaning set forth in Section 6.10(a).

“Acquisition
Proposal” has the meaning set forth in Section 6.10(a).

“Adjustment
Date” has the meaning set forth in Section 1.3.

“Adjustment
Date Purchase Price Per Share” means the Post-Closing Net Asset Value divided by the sum of (x) the number of shares
of Common Stock issued and outstanding immediately prior to the Closing Date and (y) the number of shares of Common Stock for which
the number of OP Units issued and outstanding immediately prior to the Closing Date may be redeemed in accordance with the terms
of the Partnership Agreement (in each case excluding from such calculation shares of Common Stock and OP units owned by the Company
and shares of Common Stock owned by the Operating Partnership immediately prior to the Closing Date).

“Affiliate”
means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under
common control with such Person, including, without limitation, any general partner, managing member, officer or director of such
Person.

    	2

    	 

    

“Agreement”
has the meaning set forth in the Preamble.

“Agreements
and Instruments” has the meaning set forth in Section 2.13.

“articles
of incorporation” means the articles of incorporation of the Company or any subsidiary, as the case may be, as amended
and restated as of the date of this Agreement.

“Board
Confidential Matters” has the meaning set forth in Section 6.3(c).

“Board
of Directors” means the board of directors of the Company.

“Board
Recommendation” has the meaning set forth in Section 6.8.

“Business
Days” means each day other than a Saturday, Sunday or other day on which banks in New York, New York are not required
by Law to be open.

“bylaws”
means the amended and restated bylaws of the Company or any subsidiary, as the case may be.

“Charter
Amendment” means the amendment to the Company’s articles of incorporation pursuant to Section 5.10 thereof in order
to amend the definition of “Restriction Termination Date” in Section 5.1 thereof to make “Restriction Termination
Date” mean the Closing Date.

“Closing”
has the meaning set forth in Section 1.2(a).

“Closing
Date” means the date the Closing occurs, which shall be (i) the date that is three (3) Business Days after satisfaction
of the conditions set forth in Section 4 and Section 5 of the Agreement (or waiver thereof in writing by
the party benefited by the condition being waived), excluding those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions, or (ii) such other date on which the parties hereto may
mutually agree in writing.

“Closing
Date Net Asset Value” is as set forth on Exhibit A hereto as of the Effective Date, subject to updating such Exhibit
A in connection with the Closing in accordance with the requirements of Section 6.14.

“Code”
means the Internal Revenue Code of 1986, as amended.

“Company
Adverse Recommendation Change” has the meaning set forth in Section 6.10(d).

“Company
Exchange Act Report” means each final registration statement, prospectus, report, schedule and definitive proxy statement
filed with or furnished to the SEC by the Company pursuant to the Securities Act or the Exchange Act (collectively, the “Company
Exchange Act Reports”).

    	3

    	 

    

“Company
Intellectual Property” means all patents, patent applications, trademarks, trademark applications, service marks, service
mark applications, trade names, copyrights, trade secrets, domain names, mask works, information and proprietary rights and processes,
similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing,
licenses in, to, and under any of the foregoing, that are owned or used by the Company in the conduct of the Company’s business
as now conducted.

“Company
Proxy Statement” has the meaning set forth in Section 2.13.

“Contract”
means any contract, agreement, option, right to acquire, preferential purchase right, preemptive right, warrant, indenture, debenture,
note, bond, loan, loan agreement, collective bargaining agreement, lease, mortgage, franchise, license, purchase order, bid, commitment,
letter of credit, guaranty, surety or any other legally binding arrangement, whether oral or written.

“Credit
Facility” has the meaning set forth in Section 6.12.

“Director
and Officer Indemnification Agreements” has the meaning set forth in Section 6.11(a).

“Employment
Agreement” means the agreement between the Company and Charles S. Roberts, dated as of the Closing, in the form of Exhibit B
attached to this Agreement.

“Environmental
Laws” has the meaning set forth in Section 2.27.

“ERISA”
has the meaning set forth in Section 2.18.

“Escrow
Agent” has the meaning set forth in Section 6.13.

“Escrow
Agreement” has the meaning set forth in Section 6.13.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Expense
Reimbursement” has the meaning set forth in Section 8.2(c).

“FCPA”
has the meaning set forth in Section 2.29.

“GAAP”
has the meaning set forth in Section 2.14.

“Governance
and Voting Agreement” means the agreement among the Company, the Purchaser and Charles S. Roberts, dated as of the date
of the Closing, in the form of Exhibit C attached to this Agreement.

“Governmental
Entity” means any United States, federal, state, regional, local or municipal or other governmental department, commission,
board, bureau, agency, taxing authority or instrumentality, or any court, in each case having jurisdiction over the applicable
matter and whether of the United States, another country or supranational organization.

    	4

    	 

    

“Governmental
Licenses” has the meaning set forth in Section 2.20.

“Gross
Proceeds” shall have the meaning set forth in Section 1.1.

“Hazardous
Materials” has the meaning set forth in Section 2.27.

“Indemnified
Party” has the meaning set forth in Section 6.11(a).

“knowledge,”
means (i) with respect to the Company, the actual knowledge or awareness of any director, officer or employee of the Company, the
Operating Partnership or any Subsidiary and (ii) with respect to the Purchaser, the actual knowledge or awareness of Edward Gellert
or Gregory Simon or any director, officer or employee of the Purchaser.

“Law”
means any U.S. federal, U.S. state, national, local, foreign or other statute, law, treaty, rule, code, regulation, ordinance or
other requirement of any kind of any Governmental Entity, including the common law.

“Legal
Action” means claim, action, suit, proceeding, arbitration, complaint, charge or investigation.

“Liability”
means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including but not limited to any legal fees
or expenses, court fees, damages, settlement costs, Taxes or other costs.

“License
Agreement” has the meaning set forth in Section 2.10.

“Listing
Compliance Plan” has the meaning set forth in Section 4.8.

“Management
Agreement” means the agreement among the Company, the Operating Partnership and the Manager, dated as of the date of
the Closing, in the form of Exhibit D attached to this Agreement.

“Manager”
is identified in the form of the Management Agreement attached to this Agreement as Exhibit D.

“Material
Adverse Effect” means a material adverse change or any development that could reasonably be expected to result in a material
adverse change in (A) the business, assets (including intangible assets), liabilities, financial condition, property, or results
of operations of the Company and its subsidiaries, considered as one enterprise or (B) the ability of the Company to enter into
and perform any of its obligations under, or to consummate any of the transactions contemplated by this Agreement or any Transaction
Agreement, other than changes or developments in economic conditions or the Company’s industry generally.

“Material
Contracts” has the meaning set forth in Section 2.35.

“Money
Laundering Laws” has the meaning set forth in Section 2.30.

    	5

    	 

    

“New Directors”
has the meaning set forth in Section 4.9.

“Notice
Period” has the meaning set forth in Section 6.10(d).

“NYSE MKT
Exchange” has the meaning set forth in Section 4.8.

“OP Exchanges”
the issuance of OP Units in exchange for shares of Common Stock in the manner approved by the Board of Directors in 2013.

“OP Redemptions”
means the redemption by the Operating Partnership of OP Units in exchange for shares of Common Stock in accordance with the Partnership
Agreement.

“OP Units”
means limited partnership interests of the Operating Partnership.

“Order”
means a judgment, order, writ, decree, injunction, award or ruling by a Governmental Entity (excluding routine zoning rulings and
orders that do not materially and adversely affect the value or use of the Company’s Properties).

“Organizational
Documents” means the articles of incorporation, bylaws, agreement of limited partnership, limited liability company operating
agreement, declaration of trust or other similar organizational documents of the Company, the Operating Partnership or any Subsidiary,
or of the Purchaser, as applicable.

“Partnership
Agreement” means the First Amended and Restated Partnership Agreement of the Operating Partnership, as amended.

“Person”
means any individual, corporation, partnership, trust, limited liability company, association or other entity.

“Personal
Information” has the meaning set forth in Section 2.28.

“Plan”
has the meaning set forth in Section 2.18.

“Post-Closing
Issuance” has the meaning set forth in Section 1.3.

“Post-Closing
Net Asset Value” has the meaning set forth in Section 1.3.

“Preapproved
Loan” means (a) any refinancing of any recourse mortgage indebtedness secured by the North Springs, Bradley Park and
Highway 20 properties on terms that are similar to the current terms of such existing indebtedness (provided that the interest
rate may be up to 1% per annum higher and the maturity date of any such refinanced or extended indebtedness shall not be later
than May 1, 2015), and (b) any loan or loans of up to $2,000,000 in aggregate principal amount secured by one or more of the Company’s
properties that are on terms that are commercially reasonable for a loan of that nature; provided, however, that, prior
to closing any loan under this clause (b), the Company shall first consult with the Purchaser regarding the terms and conditions
of such loan and request the prior written consent of the Purchaser of such loan.

“Preferred
Stock” has the meaning set forth in Section 2.4(a).

    	6

    	 

    

“Property
Dispositions” means the sale of the properties set forth on Schedule 1.4 of the Disclosure Schedule and the
pay-off of all indebtedness secured by such properties to the extent such indebtedness has not previously been paid off by the
Company.

“Purchase
Price Per Share” means the Closing Date Net Asset Value divided by the sum of (x) the number of shares of Common Stock
issued and outstanding immediately prior to the Closing Date and (y) the number of shares of Common Stock for which the number
of OP Units issued and outstanding immediately prior to the Closing Date may be redeemed in accordance with the terms of the
Partnership Agreement (in each case excluding from such calculation shares of Common Stock and OP units owned by the Company and
shares of Common Stock owned by the Operating Partnership immediately prior to the Closing Date).

“Purchaser
Proxy Information” has the meaning set forth in Section 3.8.

“Registration
Rights Agreement” means the agreement between the Company and the Purchaser dated as of the date of the Closing, in the
form of Exhibit E attached to this Agreement.

“REIT”
means a real estate investment trust within the meaning of Section 856 of the Code.

“Requisite
Company Vote” means (a) for the approval of this Agreement, the issuance of the Shares, the warrants pursuant to the
Warrant Agreement and the shares of Common Stock issuable upon any exercise of such warrants, and the other transactions contemplated
herein and in the other Transaction Agreements (other than the Charter Amendment) – the affirmative vote of the holders of
a majority of the votes cast at the Shareholders Meeting and (b) for the approval of the Charter Amendment – the affirmative
vote of the holders of a majority of the votes entitled to be cast on the Charter Amendment.

“Reverse
Termination Fee” has the meaning set forth in Section 8.2(b).

“Roberts
Companies” has the meaning set forth in Section 2.11(b).

“Sanctions”
has the meaning set forth in Section 2.31.

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

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Selling
Costs” means (i) sales commissions, (ii) all costs and expenses paid, incurred or reimbursed by the Company in connection
with the employment by the Company of Mr. Roberts under the Employment Agreement or the performance of Mr. Roberts’ duties
under the Employment Agreement, and (iii) all other costs and expenses incurred, paid or reimbursed by the Company in connection
with or relating to the Property Dispositions, including but not limited to (A) costs incurred, paid or reimbursed by the Company
in connection with or as a result of the engagement of any service provider, vendor, legal counsel, consultant, civil engineer,
environmental consultant, architect, land planner, broker, surveyor, photographer, marketing firm, website designer or developer
or other third party, (B) transfer taxes, (C) all costs incurred by the Company in connection with the services of employees of
the Roberts Companies to assist with the Property Dispositions and (D) all other miscellaneous sales and closing costs incurred
by the Company in connection with or related to the Property Dispositions.

    	7

    	 

    

“Shareholders
Meeting” has the meaning set forth in Section 6.8.

“Stock
Plan” means the 2006 Roberts Realty Investors, Inc. Restricted Stock Plan, as amended effective January 27, 2009.

“Subsidiary”
or “Subsidiaries” has the meaning set forth in Section 2.5.

“Superior
Proposal” has the meaning set forth in Section 6.10(b).

“Tax”
or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment-related,
excise, goods and services, harmonized sales, severance, stamp, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.

“Tax Protection
Agreement” means the agreement among the Company, the Operating Partnership, the Purchaser and the Manager, dated as
of the date of the Closing, in the form of Exhibit F attached to this Agreement.

“Tax Returns”
means any return, declaration, report, claim for refund, or information return or statement related to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.

“Termination
Fee” has the meaning set forth in Section 8.2(a).

“Transaction
Agreements” means this Agreement, the Employment Agreement, the Management Agreement, the Registration Rights Agreement,
the Tax Protection Agreement, the Warrant Agreement and the Governance and Voting Agreement.

“Warrant
Agreement” means the agreement between the Company and the Purchaser, dated as of the date of the Closing, in the form
of Exhibit I attached to this Agreement, pursuant to which the Purchaser or one or more of its Affiliates shall have
the right, for a term of three years, to purchase up to $38 million of additional shares of Common Stock at an exercise price
in cash equal to the Purchase Price Per Share, as adjusted based on the Post Closing Net Asset Value pursuant to Section 1.3.

2.                 
Representations and Warranties of the Company and the Operating Partnership.

The Company and
the Operating Partnership hereby represent and warrant to the Purchaser, on a joint and several basis, that, except as (i) set
forth on the Disclosure Schedule attached as Exhibit G to this Agreement or (ii) as disclosed in any Company Exchange
Act Report publicly available prior to the Effective Date, including the exhibits and schedules thereto but excluding disclosures
made in the “Risk Factors” or “Forward Looking Statements” sections thereof or any other disclosure included
in such Company Exchange Act Reports that is cautionary, predictive or forward looking in nature, which exceptions shall be deemed
to be part of the representations and warranties made hereunder, the following representations are true and complete as of the
date hereof and as of the Closing. Section headings in the Disclosure Schedule correspond to the sections of this Agreement, but
information provided in any section of the Disclosure Schedule and any disclosure included in such Company Exchange Act Reports,
including the exhibits and schedules thereto but excluding disclosures made in the “Risk Factors” or “Forward
Looking Statements” sections thereof or any other disclosure included in such Company Exchange Act Reports that is cautionary,
predictive or forward looking in nature, shall constitute disclosure for purposes of each section of this Agreement where such
information is relevant.

    	8

    	 

    

2.1             
Organization of the Company.

The Company is validly
existing and in good standing as a corporation under the laws of the State of Georgia. The Company has full power and authority
to carry on its business as it is currently being conducted and to own, operate and hold under lease its assets and properties
as, and in the places where, such assets and properties are currently owned, operated or held. The Company is duly qualified as
a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of business in all material respects.

2.2             
Organization of the Operating Partnership.

The Operating Partnership
has been duly formed and is validly existing as a limited partnership in good standing under the laws of the State of Georgia and
has partnership power and authority to own or lease, as the case may be, and to operate its properties and to conduct its business
and to enter into and perform its obligations under this Agreement; and the Operating Partnership is duly qualified as a foreign
partnership to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business in all material respects. The Company is the sole
general partner of the Operating Partnership. The aggregate percentage ownership interest of the Company in the Operating Partnership
is, and at the Closing, will be (except for the effect of OP Redemptions and OP Exchanges, if any, that occur between the Effective
Date and the Closing Date), as set forth on Schedule 2.2 of the Disclosure Schedule. Each of the holders of OP Units (other
than the Company) issued and outstanding as of the date of this Agreement are, and at the Closing will be (except for the effect
of OP Redemptions and OP Exchanges, if any, that occur between the Effective Date and the Closing Date), as set forth on the records
of the Company’s transfer agent, a true and correct copy of which records has been provided to the Purchaser. The Partnership
Agreement has been duly and validly authorized, executed and delivered by or on behalf of the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general
principles of equity and, with respect to rights to indemnity and contribution thereunder, except as such rights may be limited
by applicable Law or policies underlying such Law.

    	9

    	 

    

2.3             
Authorization; Enforceability.

(a)               
Each of the Company and the Operating Partnership has full power and authority to enter into the Transaction Agreements
to which it is a party. The Board of Directors has unanimously determined that the issuance of the Shares, on the terms and conditions
set forth in this Agreement, is advisable and in the best interests of the Company and its shareholders and has directed that this
Agreement, the issuance of the Shares and the other transactions contemplated hereby be submitted to the Company’s shareholders
for approval at a meeting of such shareholders and has adopted a resolution to the foregoing effect.

(b)              
Each of the Transaction Agreements to which the Company is a party, when executed and delivered by the Company, will constitute
a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.

(c)               
Each of the Transaction Agreements to which the Operating Partnership is a party, when executed and delivered by the Operating
Partnership, will constitute a valid and legally binding obligation of the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited
by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

2.4             
Capitalization.

(a)               
The authorized capital of the Company consists, as of the date hereof and immediately prior to the Closing (subject to the
effect of OP Redemptions and OP Exchanges, if any, that occur between the date hereof and the Closing Date), of:

(i)                
100,000,000 shares of Common Stock, 10,724,009 shares of which are issued and 10,066,907 of which are outstanding. All of
the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance
with all applicable federal and state securities Laws.

(ii)              
20,000,000 shares of preferred stock, $0.01 par value per share, of the Company (“Preferred Stock”),
none of which are issued and outstanding. The rights, privileges and preferences of the Preferred Stock are as stated in
the Company’s articles of incorporation and as provided by the Georgia Business Corporation Code.

    	10

    	 

    

(b)              
The Stock Plan has been duly adopted by the Board of Directors and approved by the Company’s shareholders. 139,038
shares have been issued under the Stock Plan pursuant to restricted stock award agreements and all such grants have fully vested.
No options to purchase shares have been granted under the Stock Plan, no other awards or grants have been promised by the Company
or approved by the Board of Directors, and 514,962 shares of Common Stock remain available for future issuance under the Stock
Plan to officers, directors, employees and consultants. The Company has furnished to the Purchaser complete and accurate copies
of the Stock Plan and forms of agreements used thereunder.

(c)               
Other than the provisions of the Partnership Agreement governing OP Redemptions and the offering materials related
to the OP Exchanges, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of
first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common
Stock or Preferred Stock, or from the Operating Partnership any OP Units or any securities convertible into or exchangeable for
shares of Common Stock or Preferred Stock.

(d)              
The Company’s restricted stock agreements contain a provision for acceleration of vesting or other changes in the
vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events,
but there are no unvested shares of restricted stock outstanding. The Company has never granted any stock options.

(e)               
The OP Units issued and outstanding prior to the Effective Date were issued in accordance
with the Partnership Agreement and in compliance with applicable securities Laws and were not issued in violation of any preemptive
or similar rights. Other than the provisions of the Partnership Agreement governing OP Redemptions and the offering
materials related to the OP Exchanges, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, OP Units of
or ownership interests in the Operating Partnership are or will be outstanding at the Closing.

2.5             
Subsidiaries.

The only direct
and indirect subsidiaries of the Company are the Operating Partnership and Northridge Parkway, LLC (each a “Subsidiary”
and, together, the “Subsidiaries”). Each Subsidiary has been duly organized or formed and is validly existing
in good standing under the Laws of the State of Georgia, has the power and authority as a limited partnership or limited liability
company, as applicable, to own, lease and operate its properties and to conduct its business and is not required to qualify to
transact business and be in good standing in any other jurisdiction, whether by reason of the ownership or leasing of property
or the conduct of its business in all material respects. All of the issued and outstanding equity interests of each Subsidiary
were duly authorized and were issued in accordance with its Organizational Documents. Other than outstanding OP Units held by Persons
other than the Company, all of the issued and outstanding equity interests of each Subsidiary are owned by the Company or the Operating
Partnership, directly or through a Subsidiary, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. None of the outstanding equity interests of either Subsidiary were issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary.

    	11

    	 

    

2.6             
Valid Issuance of Shares.

The Shares, when
issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly
issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction
Agreements, applicable state and federal securities Laws and liens or encumbrances created by or imposed by the Purchaser. Assuming
the accuracy of the representations of the Purchaser in Section 3.4 and Section 3.5 of this Agreement and,
subject to the filings described in Section 2.8 below, the Shares will be issued in compliance with all applicable
federal and state securities Laws.

2.7             
Brokers.

The Company has
not retained any broker or finder in connection with any of the transactions contemplated by this Agreement, and the Company has
not incurred or agreed to pay, or taken any other action that would entitle any Person to receive, any brokerage fee, finder’s
fee or other similar fee or commission with respect to any of the transactions contemplated by this Agreement.

2.8             
Governmental Consents and Filings.

Except as set forth
on Schedule 2.8 of the Disclosure Schedule, and assuming the accuracy of the representations made by the Purchaser
in Section 3.4 and Section 3.5 of this Agreement, no consent, approval, Order or authorization of, or registration,
qualification, designation, declaration or filing with, any Governmental Entity is required on the part of the Company and the
Operating Partnership in connection with the consummation of the transactions contemplated by this Agreement, except for filings
pursuant to Regulation D of the Securities Act and applicable state securities laws, which have been made or will be made
in a timely manner.

2.9             
Legal Actions.

Except as set forth
on Schedule 2.9 of the Disclosure Schedule, there is no Legal Action pending or, to the Company’s knowledge,
currently threatened (i) against the Company, the Operating Partnership or any Subsidiary; (ii) to the Company’s knowledge,
against any officer, director or employee of the Company, the Operating Partnership or any Subsidiary arising out of their employment
or board relationship with the Company, the Operating Partnership or any Subsidiary; or (iii) that questions the validity of the
Transaction Agreements or the right of the Company or the Operating Partnership to enter into them or to consummate the transactions
contemplated by the Transaction Agreements. Neither the Company, the Operating Partnership nor any Subsidiary nor, to the Company’s
knowledge, any of their respective officers, directors or employees is a party or is named as subject to the provisions of any
Order of any Governmental Entity (in the case of officers, directors or employees, such as would affect the Company). There is
no Legal Action by the Company, the Operating Partnership or any Subsidiary pending or that the Company, the Operating Partnership
or any Subsidiary intends to initiate. The foregoing includes, without limitation, Legal Actions pending or, to the Company’s
knowledge, threatened involving the prior employment of any of the Company’s, the Operating Partnership’s or any Subsidiaries’
employees, their services provided in connection with the Company’s business, or any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any agreements with prior employers.

    	12

    	 

    

2.10         
Possession of Intellectual Property.

The Company and
its Subsidiaries own or possess or have the right to use on reasonable terms all Company Intellectual Property necessary to carry
on their respective businesses as currently conducted; the only such Company Intellectual Property is commercially available software
licensed by the Company on terms typically available to entities like the Company; and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to
any Company Intellectual Property or of any facts or circumstances which would render any Company Intellectual Property invalid
or inadequate to protect the interests of the Company or any of its subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, could
be material to the Company. Given the nature of the Company Intellectual Property, the Company has not required former and current
employees of the Company or any of its Subsidiaries (or other agents, consultants and contractors of the Company or any of its
subsidiaries) to execute written Contracts that assign to the Company all rights to any inventions, improvements, discoveries or
information relating to the business of the Company and its subsidiaries. To the knowledge of the Company, there is no unauthorized
use, infringement or misappropriation of any of the Company Intellectual Property by any third party, employee or former employee.
Each agreement and instrument (each, a “License Agreement”) pursuant to which any Company Intellectual Property
is licensed to the Company or any of its subsidiaries is in full force and effect, has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company or the applicable subsidiary, as the case may be, enforceable against
the Company or such subsidiary in accordance with its terms, except as enforcement thereof may be subject to bankruptcy, insolvency
or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; the Company
and its Subsidiaries are in compliance with their respective obligations under all License Agreements and, to the knowledge of
the Company, all other parties to any of the License Agreements are in compliance with all of their respective obligations thereunder,
no event or condition has occurred or exists that gives or would give any party to any License Agreement the right, either immediately
or with notice or passage of time or both, to terminate or limit (in whole or in part) any such License Agreement or any rights
of the Company or any of its Subsidiaries thereunder to exercise any of such party’s remedies thereunder, or to take any
action that would adversely affect any rights of the Company or any of its Subsidiaries thereunder or that might have a Material
Adverse Effect, and the Company is not aware of any facts or circumstances that would result in any of the foregoing or give any
party to any License Agreement any such right; and neither the Company nor any of its subsidiaries has received any notice of default,
breach or noncompliance under any License Agreement.

2.11         
Certain Transactions.

(a)               
Except as set forth on Schedule 2.11 of the Disclosure Schedule, other than (i) standard employee benefits generally
made available to all employees, (ii) standard director and officer indemnification agreements approved by the Board of Directors,
(iii) transactions and compensation described in or referred to in the Company Exchange Act Reports, and (iv) the transactions
described in the Transaction Documents, there are no agreements or understandings between the Company and any of its officers,
directors, employees, or any Affiliate thereof that are currently in effect or that are proposed to take effect between the date
hereof and the Closing.

    	13

    	 

    

(b)              
None of the Company, the Operating Partnership or any Subsidiary is indebted, directly or indirectly, to any of its respective
directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other
than in connection with (i) expenses or advances of expenses incurred in the ordinary course of business and for other customary
employee benefits made generally available to all employees, (ii) the reimbursement arrangement for services to the Company provided
by Roberts Properties, Inc. and Roberts Properties Construction, Inc. (the “Roberts Companies”), and (iii) payments
owed to the Roberts Companies for services owed to those companies under existing Contracts with them. None of the Company’s
directors, officers or employees, or any members of their immediate families, or any Affiliate of the foregoing are, directly or
indirectly, indebted to the Company, the Operating Partnership or any Subsidiary.

2.12         
Rights of Registration and Voting Rights.

Except as provided
in the Registration Rights Agreement and in Section 6.7(e) of the Partnership Agreement, the Company is not under any obligation
to register or seek to register under the Securities Act any of its currently outstanding securities or any securities issuable
upon exercise, conversion or redemption of the currently outstanding securities of the Company or of the Operating Partnership.
To the Company’s knowledge, except pursuant to the Governance and Voting Agreement, no shareholder of the Company has entered
into any agreement with respect to the voting of capital stock of the Company.

2.13         
Absence of Violation, Defaults and Conflicts.

(a)               
Neither the Company, the Operating Partnership, nor any of the Subsidiaries is (A) in violation of its Organizational Documents,
or (B) in default in any material respect in the performance or observance of any Material Contract to which the Company, the Operating
Partnership or any Subsidiary is a party or by which it or any of them may be bound or to which any of the properties or assets
of the Company, the Operating Partnership or any Subsidiary is subject (collectively, “Agreements and Instruments”).

(b)              
Except for the recourse mortgage indebtedness of the Company and the Operating Partnership described in Section 6.12,
which indebtedness shall be repaid in full on the Closing Date, the execution, delivery and performance of this Agreement and the
other Transaction Agreements and the consummation of the transactions contemplated herein and therein (including the approval of
this Agreement and the transactions contemplated hereby, including the Charter Amendment, by the Requisite Company Vote and the
filing with the SEC of a proxy statement in definitive form relating to the meeting of the Company’s shareholders to be held
in connection with this Agreement and the transactions contemplated hereby (including any amendments or supplements thereto, the
“Company Proxy Statement”) and the issuance and sale of the Shares) and compliance by the Company with its obligations
hereunder do not and will not, whether with or without the giving of notice or passage of time or both, (A) conflict with, or constitute
a breach of or default under, any Agreements and Instruments, (B)  result in the creation or imposition of any lien, charge
or encumbrance upon any properties or assets of the Company, the Operating Partnership or any Subsidiary pursuant to any of the
Agreements and Instruments, (C) give any party to any of the Agreements and Instruments any right of termination, cancellation,
acceleration or modification thereunder, (D) result in the termination or nonrenewal of any material permit or license applicable
to the Company and the Operating Partnership, or (E) result in any violation of (i) the provisions of the Organizational Documents
of the Company, the Operating Partnership or any Subsidiary; or (ii) any Law or Order applicable to the Company, the Operating
Partnership or any Subsidiary or any of their respective properties or other assets.

    	14

    	 

    

2.14         
Financial Statements; Non-GAAP Financial Measures.

The financial statements
included in the Company Exchange Act Reports filed with the SEC since December 31, 2010, together with the related schedules and
notes, presented fairly in all material respects the financial position of the Company and its Subsidiaries at the dates indicated
and the statement of operations, shareholders’ equity and cash flows of the Company and its Subsidiaries for the periods
specified, subject, in the case of unaudited interim financial statements, to normal and year-end audit adjustments as permitted
by (i) U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods
involved and (ii) the applicable rules and regulations of the SEC; and said financial statements have been prepared in conformity
with GAAP applied on a consistent basis throughout the periods involved. The supporting schedules, if any, presented fairly in
accordance with GAAP the information required to be stated therein. Except as included therein, no historical or pro forma financial
statements or supporting schedules were required to be included in the Company Exchange Act Reports filed with the SEC since December
31, 2010. To the knowledge of the Company, all disclosures contained in the Company Exchange Act Reports filed with the SEC since
December 31, 2010 regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of
the SEC) complied in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities
Act, to the extent applicable. To the knowledge of the Company, the interactive data in extensible Business Reporting Language
included in the Company Exchange Act Reports filed with the SEC since December 31, 2010 fairly presented the information called
for in all material respects and has been prepared in accordance with the SEC’s rules and guidelines applicable thereto.
Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, neither
the Company, the Operating Partnership nor any of its Subsidiaries has any Liability of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether due or to become due), except for those Liabilities that are reflected or reserved
against on the consolidated balance sheet of the Company included in its Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2014 (including any notes thereto) and for Liabilities incurred in the ordinary course of business or in connection with
this Agreement and the transactions contemplated hereby. Schedule 2.33 of the Disclosure Schedule applies to this Section
2.14.

    	15

    	 

    

2.15         
Compliance with Laws and Orders.

To the knowledge
of the Company, each of the Company, the Operating Partnership and each Subsidiary is, and has been at all times during the past
five (5) years, in compliance in all material respects with all Laws related to its business or operations or ownership or the
use of any property. There is no Order of any Governmental Entity having jurisdiction over, and applicable to, the Company, the
Operating Partnership or any Subsidiary or any of their respective properties, assets or operations that has had or could reasonably
be expected to have a Material Adverse Effect or to materially affect the value of any of the Company’s properties. Neither
the Company, the Operating Partnership nor any Subsidiary has received, at any time during the past five (5) years, any written
notice of any alleged or threatened Legal Action, violation of, liability under or potential responsibility under any Laws or Orders
relating to its business or to the use, ownership and operation of its properties, which Legal Action, violation, liability or
responsibility has had or could reasonably be expected to have a Material Adverse Effect or could reasonably be expected to materially
affect the value of any of the Company’s properties.

2.16         
Changes.

Since June 30, 2014,
there has not been:

(a)               
any material change in the assets, Liabilities, financial condition or operating results of the Company, other than (i)
a reduction in the Company’s cash balance as a result of expenditures made by the Company in the ordinary course of business,
subject to the terms and conditions of this Agreement, and (ii) in connection with this Agreement and the transactions contemplated
hereby and the Company’s performance of its obligations under this Agreement in accordance with the terms and conditions
hereof;

(b)              
any material damage, destruction or loss, whether or not covered by insurance;

(c)               
any waiver or compromise by the Company of a valuable right or of a material debt owed to it;

(d)              
any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by the Company, except in
the ordinary course of business;

(e)               
any material change to a Contract by which the Company or any of its assets is bound or subject; provided, however,
that the parties hereto agree that, for purposes of this Section 2.16(e) only, a “material change to a Contract by
which the Company or any of its assets is bound or subject” shall mean a material change to a Contract by which the Company
or any of its assets is bound or subject that the Company would have had or has an affirmative obligation to disclose in a Company
Exchange Act Report pursuant to the Exchange Act;

(f)               
any new, or material change in any existing, compensation arrangement or agreement with any employee, officer, director
or shareholder;

    	16

    	 

    

(g)              
any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, with respect to any of its properties
or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially
impair the Company’s ownership or use of such property or assets;

(h)              
any loans or guarantees made by the Company to or for the benefit of its employees, officers or directors, or any members
of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(i)                
any declaration, setting aside or payment or other distribution in respect of any of the Company’s capital stock (excluding
OP Redemptions), or any direct or indirect redemption, purchase, or other acquisition of any of such stock by the Company (other
than OP Exchanges);

(j)                
any sale, assignment or transfer of any material Company Intellectual Property;

(k)              
to the Company’s knowledge, any other event or condition of any character that could reasonably be expected to result
in a Material Adverse Effect; or

(l)                
any arrangement or commitment by the Company to do any of the things described in this Section 2.16.

2.17         
Employee Matters.

(a)               
Schedule 2.17 of the Disclosure Schedule sets forth a description of all compensation, including salary,
bonus, severance obligations and deferred compensation paid or payable for each officer, employee, consultant and independent contractor
of the Company for the fiscal year ended December 31, 2013 and for the fiscal year ending December 31, 2014, including
any such compensation that would be triggered by the transactions under this Agreement.

(b)              
To the Company’s knowledge, none of its employees is obligated under any Contract (including licenses, covenants or
commitments of any nature) or is subject to any Order of any Governmental Entity, that would materially interfere with such employee’s
ability to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution
or delivery of the Transaction Agreements, nor the carrying on of the Company’s business by the employees of the Company,
nor the conduct of the Company’s business as now conducted, will, to the Company’s knowledge, conflict with or result
in a breach of the terms, conditions, or provisions of, or constitute a default under, any Contract under which any such employee
is now obligated.

(c)               
The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages,
salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required
to be reimbursed to such employees, consultants, or independent contractors. The Company has complied and is in compliance in all
material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment,
including those related to wages, hours, worker classification, and collective bargaining. The Company has withheld and paid to
the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be
withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or other sums for failure
to comply with any of the foregoing.

    	17

    	 

    

(d)              
The employment of each officer and employee of the Company is terminable at the will of the Company. Except as set forth
in Schedule 2.17 of the Disclosure Schedule or as required by Law, upon termination of the employment of any such
officer or employee, no severance or other payments will become due. Except as set forth in Schedule 2.17 of the Disclosure
Schedule, the Company has no policy, practice, plan, or program of paying severance pay or any form of severance compensation in
connection with the termination of employment services.

(e)               
The Company has not made any representations regarding equity incentives to any officer, employee, director or consultant
that are inconsistent with the share amounts and terms set forth in the minutes of meetings of the Company’s Board of Directors.

(f)               
To the Company’s knowledge, none of the Company’s current officers, employees or directors has been (a) except
as described in the Company Exchange Act Reports filed with the SEC since December 31, 2010, subject to voluntary or involuntary
petition under the federal bankruptcy laws or any state insolvency Law or the appointment of a receiver, fiscal agent or similar
officer by a court for his business or property; (b) convicted in a criminal proceeding or named as a subject of a pending criminal
proceeding (excluding traffic violations and other minor offenses); (c) subject to any Order (not subsequently reversed, suspended,
or vacated) of any court of competent jurisdiction permanently or temporarily enjoining him from engaging, or otherwise imposing
limits or conditions on his engagement in any securities, investment advisory, banking, insurance, or other type of business or
acting as an officer or director of a public company; or (d) found by a court of competent jurisdiction in a civil action
or by the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair
trade practices Law, which such judgment or finding has not been subsequently reversed, suspended, or vacated.

2.18         
ERISA.

(i) Each “employee
benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Security Act of 1974, as amended (“ERISA”)),
for which the Company or any member of its “Controlled Group” (defined as an organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the Code) would have any liability (each a “Plan”)
has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules and regulations including
ERISA and the Code; (ii) with respect to each Plan subject to Title IV of ERISA (a) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, (b) no “accumulated funding deficiency”
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred or is reasonably
expected to occur, (c) the fair market value of the assets under each Plan exceeds the present value of all benefits accrued under
such Plan (determined based on those assumptions used to fund such Plan) and (d) neither the Company or any member of its Controlled
Group has incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan
or premiums to the Pension Benefit Guaranty Corporation in the ordinary course of business and without default) in respect of a
Plan (including a “multiemployer plan,” within the meaning of Section 4001(c)(3) of ERISA); and (iii) each Plan
that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.

    	18

    	 

    

2.19         
Transfer Taxes.

Under the Laws of
the State of Georgia, there are no stock or other transfer taxes, stamp duties, capital duties or other similar duties, taxes or
charges payable in connection with the execution or delivery of this Agreement by the Company or the issuance or sale by the Company
of the Shares to be sold by the Company to the Purchaser hereunder.

2.20         
Permits.

The Company and
its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except
where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and its
Subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses that the Company,
the Operating Partnership or any Subsidiary currently possess are valid and in full force and effect, except when the invalidity
of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or
in the aggregate, result in a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notice
of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

2.21         
Title to Property.

All of the real
property or investments in real property by the Company, the Operating Partnership and each Subsidiary are accurately described
in the Company Exchange Act Reports or in Schedule 2.21 of the Disclosure Schedule. The Company, the Operating Partnership
and the Subsidiaries have good and marketable title to all real property owned by them and good title to all other properties owned
by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances
of any kind except such as (A) are described in the Company’s Exchange Act Reports or in Schedule 2.21 of the
Disclosure Schedule or (B) do not, singly or in the aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company, the Operating Partnership or any of its Subsidiaries
as described in the Company Exchange Act Reports filed with the SEC since December 31, 2010. The Company has provided to the Purchaser
true, correct and complete copies of title reports and surveys relating to the Company’s Properties. All of the leases and
subleases material to the business of the Company, the Operating Partnership and its Subsidiaries, considered as one enterprise,
and under which the Company, the Operating Partnership or any of its Subsidiaries holds properties described in the Company’s
Exchange Act reports, are in full force and effect, and neither the Company, the Operating Partnership nor any such Subsidiary
has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company, the Operating
Partnership or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the
Company, the Operating Partnership or such Subsidiary to the continued possession of the leased or subleased premises under any
such lease or sublease.

    	19

    	 

    

2.22         
Accounting Controls and Disclosure Controls.

The Company, the
Operating Partnership and each of its Subsidiaries maintain effective internal control over financial reporting (as defined under
Rule 13a-15(f) and 15d-15(f) under the Exchange Act) and a system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability
for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization;
(D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences; and (E) the interactive data in eXtensible Business Reporting Language included in the
Company’s Exchange Act Reports filed with the SEC since December 31, 2010 fairly present the information called for in all
material respects and are prepared in accordance with the SEC’s rules and guidelines applicable thereto. Except as described
in the Company’s Exchange Act Reports, since December 31, 2013, there has been (1) no material weakness in the Company’s,
the Operating Partnership’s and the Subsidiaries internal control over financial reporting (whether or not remediated) and
(2) no change in the Company’s, the Operating Partnership’s or the Subsidiaries’ internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting. The Company, the Operating Partnership and each of its Subsidiaries maintain an effective system of disclosure
controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and
communicated to the Company’s management, including its principal executive officer or officers and principal financial officer
or officers, as appropriate, to allow timely decisions regarding disclosure. Schedule 2.33 of the Disclosure Schedule applies
to this Section 2.22.

2.23         
Compliance with the Sarbanes-Oxley Act.

Since December 31,
2010, there is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans
and Sections 302 and 906 related to certifications.

    	20

    	 

    

2.24         
Investment Company Act.

The Company is not
required to register as an “investment company” under the Investment Company Act of 1940, as amended. Neither the Operating
Partnership nor any of the Subsidiaries is an “investment company” as defined in the Investment Company Act of 1940,
as amended.

2.25         
Insurance.

The Company, the
Operating Partnership and the Subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and effect. The Company and the Operating Partnership have no
reason to believe that they or any of the Subsidiaries will not be able (A) to renew its existing insurance coverage as and
when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect. Neither of the Company
nor any of its Subsidiaries has been denied any insurance coverage that it has sought or for which it has applied.

2.26         
Organizational Documents.

The Organizational
Documents of the Company, the Operating Partnership and each Subsidiary are in the form provided to the Purchaser. The copy of
the minute books of the Company provided to the Purchaser contains minutes of all meetings of directors and shareholders and all
actions by written consent without a meeting by the directors and shareholders from December 31, 2010 through September 22, 2014
and accurately reflects in all material respects all actions by the directors (and any committee of directors) and shareholders
with respect to all transactions referred to in such minutes (excluding matters that have been redacted (a) to preserve the attorney-client
privilege with respect to the matters referenced in Item 9A in the Company’s Annual Report on Form 10-K filed with the SEC
on April 1, 2013 or (b) to conceal the identity of other parties to, and the specific terms of, potential strategic transactions
contemplated by the Company prior to June 3, 2014).

2.27         
Environmental and Safety Laws.

(A) To the knowledge
of the Company, neither the Company, the Operating Partnership nor any of the Subsidiaries is in violation of any Law, or any judicial
or administrative interpretation thereof, including any judicial or administrative Order, relating to pollution or protection of
human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, Laws relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or
mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”) that could
reasonably be expected to have a Material Adverse Effect or to materially affect the value of any of the Company’s current
properties, (B) to the knowledge of the Company, the Company, the Operating Partnership and the Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws and are each in compliance in all material respects
with their requirements, (C) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or
judicial Legal Actions, demands, demand letters, liens, notices of noncompliance or violation relating to any Environmental Law
against the Company, the Operating Partnership or any of the Subsidiaries that could reasonably be expected to have a Material
Adverse Effect or to materially affect the value of any of the Company’s properties and (D) to the knowledge of the Company,
there are no events or circumstances that would reasonably be expected to form the basis of an Order for clean-up or remediation,
or a Legal Action by any private party or Governmental Entity, against or affecting the Company, the Operating Partnership or any
of the Subsidiaries or properties of the Company relating to Hazardous Materials or any Environmental Laws. To the knowledge of
the Company, except as disclosed in Schedule 2.27 of the Disclosure Schedule, there have been no and are no (i) aboveground
or underground storage tanks, (ii) polychlorinated biphenyls (“PCBs”) or PCB-containing equipment, (iii)
asbestos or asbestos containing materials, (iv) lead based paints, (v) dry-cleaning facilities, or (vi) wet lands, in each case
in, on, under, or adjacent to any currently owned property or other assets currently owned by the Company, the Operating Partnership
or the Subsidiaries.

    	21

    	 

    

2.28         
Data Privacy.

In connection with
its collection, storage, transfer (including without limitation, any transfer across national borders) and/or use of any personally
identifiable information from any individuals, including, without limitation, any customers, prospective customers, employees and/or
other third parties (collectively, “Personal Information”), the Company is and has been in compliance with all
applicable Laws, the Company’s privacy policies, and the requirements of any Contract or codes of conduct to which the Company
is a party. The Company has commercially reasonable physical, technical, organizational and administrative security measures and
policies in place to protect all Personal Information collected by it or on its behalf from and against unauthorized access, use
and/or disclosure. The Company is and has been in compliance in all material respects with all Federal and state laws relating
to data loss, theft and breach of security notification obligations.

2.29         
Foreign Corrupt Practices Act.

None of the Company,
the Operating Partnership nor any of its Subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee,
Affiliate or other Person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly
or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA, and the Company and, to the knowledge of the Company, its
Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

    	22

    	 

    

2.30         
Money Laundering Laws.

The operations of
the Company and the Operating Partnership and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”);
and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its subsidiaries with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

2.31         
OFAC.

None
of the Company, the Operating Partnership, any of the Subsidiaries or, to the knowledge of the Company, any director, officer,
agent, employee, affiliate or representative of the Company or any of the Subsidiaries is an individual or entity currently the
subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the
U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union,
Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the
Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly
or indirectly use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any
subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country
or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation
by any of Sanctions.

2.32         
Shell Company.

The Company is not,
and has not been at any time previously, an issuer described in Rule 144(i)(1)(i) under the Securities Act.

2.33         
SEC Reports.

As of their respective
filing dates (or, if amended or superseded by a subsequent filing made prior to the date of this Agreement, as of the date of the
last such amendment or superseding filing prior to the date hereof), except as disclosed on Schedule 2.33 of the Disclosure
Schedule, no Company Exchange Act Report filed with the SEC since December 31, 2010 (and, in the case of registration statements
and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively, since December 31, 2010)
contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances in which they were made, not misleading. As of their respective
dates, all Company Exchange Act Reports filed under the Securities Act and the Exchange Act with the SEC since December 31, 2010
complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto. As of the
date of this Agreement, no executive officer of the Company has failed in any respect to make the certifications required of him
or her under Section 302 or 906 of the Sarbanes-Oxley Act. As of the date of this Agreement, there are no outstanding comments
from or unresolved issues raised by the SEC with respect to any of the Company Exchange Act Reports. Except as disclosed on Schedule
2.33 of the Disclosure Schedule, the Company has timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that it was required to file since December 31, 2010 with the SEC, and
has paid all fees and assessments due and payable in connection therewith.

    	23

    	 

    

2.34         
Company Proxy Statement.

None of the information
with respect to the Company that the Company furnishes for use in the Company Proxy Statement (which expressly excludes the Purchaser
Proxy Information), will, at the date such Company Proxy Statement is first mailed to the Company’s shareholders or at the
time of the Shareholders Meeting or at the time of any amendment or supplement thereof, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.

2.35         
Material Contracts.

Schedule 2.35
of the Disclosure Schedule sets forth a list of all Contracts meeting the following descriptions (“Material Contracts”)
that (i) are currently in effect or (ii) were previously in effect and have been terminated or expired but have continuing material
obligations on the part of the Company, the Operating Partnership or any Subsidiary, true and complete copies of which (including
all amendments, modifications, extensions, renewals, and other agreements with respect thereto) have been provided or made available
to Purchaser:

(a)               
each Contract whereby the Company, the Operating Partnership or any Subsidiary has an obligation to make an investment in
or loan to any Person;

(b)              
each Contract that constitutes a lease of any real or personal property with (A) aggregate rental payments in excess of
$50,000.00 or (B) the remaining term in excess of one year and which is non-cancelable without penalty and aggregate annual rental
payments in excess of $10,000.00 or (C) the loss of which would be material to the operation of the business of the Company;

(c)               
each Contract that involves performance of services, delivery of goods or materials or payments by the Company of an amount
or value in excess of $25,000.00;

(d)              
each Contract that was not entered into in the ordinary course of business;

(e)               
each Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real
or personal property (except personal property leases having a value per item or aggregate payments of less than $25,000.00);

    	24

    	 

    

(f)               
each Contract with respect to Company Intellectual Property (excluding standard commercial software licenses);

(g)              
each Contract that constitutes an agreement to purchase or sell a capital asset for a price in excess of $25,000.00;

(h)              
each Contract that constitutes or amends any employment, consulting, management, severance, change in control or indemnification
arrangement, agreement or understanding between the Company or the Operating Partnership, on the one hand, and any directors, officers,
or other employees, on the other hand, that make in excess of $25,000.00 per year;

(i)                
each Contract pursuant to which the Company has granted a power of attorney or other similar grant of agency;

(j)                
each Contract with any labor union or association representing any employee;

(k)              
each Contract that constitutes a bonus, pension, profit sharing, retirement or other form of deferred compensation plan;

(l)                
each Contract that prohibits the Company or the Operating Partnership from freely engaging in business anywhere in the world
or concerning confidentiality (except that the Company is permitted to redact certain confidentiality agreements executed by Persons
that previously expressed interest in a strategic transaction with the Company in order to conceal the identity of such Persons);

(m)            
each Contract, including any joint venture, partnership, or limited liability company agreement, involving a sharing of
profits, losses, costs, taxes, or other liabilities by the Company or the Operating Partnership with any other Person;

(n)              
each Contract under which the Company or the Operating Partnership has created, incurred, assumed or guaranteed debt obligations
in excess of $25,000.00;

(o)              
each Contract relating to a sales broker, sales agency, advertising agency or finder’s relationship with the Company;

(p)              
each Contract that is a settlement, conciliation or similar agreement with any Governmental Entity or pursuant to which
the Company will be required to pay in excess of $25,000.00 after the date of this Agreement;

(q)              
each Contract pursuant to which the Company has obligations to indemnify another Person (other than (x) Contracts entered
into in the ordinary course of business and (y) agreements and other documents the Company entered into in connection with secured
loans to the Company that provided for environmental indemnities); and

(r)                
each Contract relating to any surety bond or letter of credit.

    	25

    	 

    

All of the Material
Contracts set forth (or required to be set forth) on Schedule 2.35 of the Disclosure Schedule are valid, binding and
enforceable and, to the knowledge of the Company, the other parties thereto, in accordance with their respective terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors’ rights or remedies generally as from time to time in effect or (ii) principles of equity,
whether considered at law or in equity. The Company has not received written notice that any party to any such Material Contract
intends to cancel or terminate such Material Contract before the end of its stated term, and to the knowledge of the Company, no
party to any such Material Contract otherwise intends to exercise any right of cancellation or termination before the end of its
stated term. The Company and the Operating Partnership have not made any prior assignment of any Material Contract or any of their
rights or obligations thereunder other than in connection with the typical documents evidencing or securing a loan secured by real
estate.

With respect to any
non-disclosure or confidentiality agreement previously entered into by the Company or its affiliates with any third party that
is a publicly traded entity wherein the Company agreed to keep confidential information relating to such third party, to the Company’s
knowledge, the Company is not currently in possession of any material non-public information relating to any such third party.

2.36         
Loans and Guarantees.

(a)               
All of the indebtedness of the Company, the Operating Partnership and each Subsidiary, whether recourse or non-recourse,
in excess of $25,000.00 is accurately described in the Company Exchange Act Reports or in Schedule 2.36 of the Disclosure
Schedule.

(b)              
Except as set forth on Schedule 2.36 of the Disclosure Schedule, there are no outstanding loans by the Company, the
Operating Partnership or any Subsidiary nor has any of them loaned any money to any Person that has not been repaid, and there
are no debts owing to any of the Company, the Operating Partnership or any Subsidiary other than as set forth in the Financial
Statements.

(c)               
Except as set forth on Schedule 2.36 of the Disclosure Schedule, neither the Company, the Operating Partnership nor
any Subsidiary has given or entered into any guarantee, mortgage, pledge, lien, assignment or other security agreement or arrangement
or is responsible for the indebtedness, or for the default in the performance of any obligation, of any other Person.

(d)              
Except as set forth on Schedule 2.36 of the Disclosure Schedule, there are no bonds, guarantees or other forms of
credit support or similar arrangements provided by any Affiliates of the Company for the benefit of any of the Company, the Operating
Partnership or any Subsidiary.

2.37         
Taxes.

The Company makes
the following representations and warranties with respect to tax matters:

    	26

    	 

    

(a)               
To the knowledge of the Company, it qualified to be taxed as a REIT under the Code for its taxable years ended December
31, 2005 through December 31, 2008. No challenge by the Internal Revenue Service to the Company’s status as a REIT for those
taxable years is pending or, to the knowledge of the Company, has been threatened. To the knowledge of the Company, (i) it has
not taken any actions that could cause it to fail to qualify as a REIT for its taxable years ended December 31, 2005 through December
31, 2008, and (ii) it has not failed to take any actions that could cause it to qualify as a REIT for its taxable years ended December
31, 2005 through December 31, 2008. To the knowledge of the Company, it will be eligible to elect to be taxed as a REIT no later
than its taxable year ending December 31, 2015.

(b)              
All Tax Returns required to have been filed by or with respect to the Company have been timely filed (taking into account
any extension of time to file granted or obtained), and such Tax Returns have been duly and accurately prepared in all material
respects (except that the Company’s federal income tax returns for its taxable years ended December 31, 2009 through December
31, 2013 incorrectly reported that the Company qualified to be taxed as a REIT for those years). After taking into account the
use of the Company’s net operating losses and net capital losses, the Company will have no Liability for federal, state or
local income taxes for its taxable years ended December 31, 2009 through December 31, 2013 as a result of being taxed as a C corporation
for federal income tax purposes for such years, and it will have no such Liability as a result of the Company’s operations
from January 1, 2014 through the Closing.

(c)               
Prior to the Closing, neither the Company nor any of its Subsidiaries has experienced any event that imposed a material
limitation on the utilization of net operating loss carryforwards, capital loss carryforwards, built-in losses, tax credits or
similar items of the Company or any of its Subsidiaries under Sections 269, 382, 383, 384 or 1502 of the Code, and the Treasury
Regulations thereunder and comparable provisions of state, local or foreign law.

2.38         
Certificates.

Any
certificate signed by any officer of the Company, the Operating Partnership or any of the Subsidiaries in such capacity and delivered
to the representatives of the Purchaser or to its counsel pursuant to this Agreement shall be deemed a representation and warranty
by the Company, the Operating Partnership or the Subsidiaries as the case may be, to the Purchaser as to the matters covered thereby.

3.                 
Representations and Warranties of the Purchaser.

The Purchaser hereby
represents and warrants to the Company and the Operating Partnership that:

3.1             
Organization.

The Purchaser is
validly existing and in good standing as a limited liability company under the laws of the State of Delaware. The Purchaser has
full limited liability company power and authority to carry on its business as it is currently being conducted and to own, operate
and hold under lease its assets and properties as, and in the places where, such assets and properties are currently owned, operated
or held.

    	27

    	 

    

3.2             
Authorization; Enforceability.

The Purchaser has
full power and authority to enter into the Transaction Agreements. Each of the Transaction Agreements to which the Purchaser is
a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and
as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

3.3             
No Violation of Conflict; No Consents.

The execution, delivery
and performance of this Agreement, and the other agreements, documents and instruments required hereby to which the Purchaser is
a party, do not and will not (a) conflict with, or result in any violation of, or default (with or without notice or lapse of time,
or both) under (i) the Organizational Documents of the Purchaser, (ii) any Law or Order binding on the Purchaser or (iii) any Contract
to which the Purchaser is a party or by which the Purchaser is bound, or (b) give any party to any Contract to which the Purchaser
is a party or by which the Purchaser is bound any right of termination, cancellation, acceleration or modification thereunder.

3.4             
Purchase Entirely for Own Account.

This Agreement is
made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution
of this Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the Purchaser will be acquired for investment
for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the
same; provided, however, that the Purchaser shall have the right to admit a joint venture partner as a new member of the
Purchaser at or prior to the Closing as previously disclosed by the Purchaser to the Company. By executing this Agreement, the
Purchaser further represents that the Purchaser does not presently have any Contract or undertaking to sell, transfer or grant
participations to any Person who is not an Affiliate of the Purchaser with respect to any of the Shares, except that the Purchaser
shall have the right to admit a joint venture partner as a new member of the Purchaser at or prior to the Closing as previously
disclosed by the Purchaser to the Company.

3.5             
Accredited Investor.

The Purchaser is,
or each beneficial owner of equity interests in the Purchaser is, an accredited investor as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act.

    	28

    	 

    

3.6             
Brokers.

Other than the engagement
of The CenterCap Group LLC, the Purchaser has not retained any broker or finder in connection with any of the transactions contemplated
by this Agreement, and Purchaser has not incurred or agreed to pay, or taken any other action that would entitle any Person to
receive, any brokerage fee, finder’s fee or other similar fee or commission with respect to any of the transactions contemplated
by this Agreement. The Purchaser, and expressly not the Company or any of its Affiliates, is responsible for any payment to which
The CenterCap Group LLC is or may be entitled in connection with any of the transactions contemplated by this Agreement.

3.7             
Governmental Consents and Filings.

No consent, approval,
Order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Entity is
required on the part of the Purchaser in connection with the consummation of the transactions contemplated by this Agreement, except
for filings pursuant to Regulation D of the Securities Act and applicable state securities laws for which the Company is responsible.

3.8             
Company Proxy Statement.

None of the information
with respect to the Purchaser, the directors proposed to be added to the Board of Directors on the Closing Date, the description
of the Management Agreement and any other information (the “Purchaser Proxy Information”) that the Purchaser
furnishes in writing to the Company expressly for use in the Company Proxy Statement, will, at the date such Company Proxy Statement
is first mailed to the Company’s shareholders or at the time of the Shareholders Meeting or at the time of any amendment
or supplement thereof, contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not
misleading.

3.9             
Financial Capability.

The Purchaser has
or will have, on the Closing Date, sufficient funds to pay the Gross Proceeds and to perform the other obligations of the Purchaser
contemplated by this Agreement.

3.10         
Legal Actions.

As of the date hereof,
there is no pending or, to the knowledge of the Purchaser, threatened, Legal Action against the Purchaser or any of its Affiliates,
nor is there any Order imposed upon the Purchaser, in each case, by or before any Governmental Entity, that would, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the Purchaser’s ability to consummate the
transactions contemplated by this Agreement.

4.                 
Conditions to the Purchaser’s Obligations at Closing.

    	29

    	 

    

The obligations
of the Purchaser to purchase the Shares at the Closing are subject to the fulfillment, on or before such Closing, of each of the
following conditions, unless otherwise waived:

4.1             
Representations and Warranties.

Each of the representations
and warranties of the Company and the Operating Partnership contained in this Agreement (or in any of the other documents or instruments
to be delivered in connection herewith), to the extent qualified by Material Adverse Effect or other materiality qualification
contained in any such representation or warranty, shall (except for representations and warranties made as of a specific date,
which shall have been complete and accurate as of such date) have been complete and accurate as of the Effective Date and shall
be complete and accurate as of the Closing Date as if made as of the Closing Date, and, to the extent not qualified by any Material
Adverse Effect or other materiality (or equivalent) qualification contained in any such representation or warranty, shall (except
for representations and warranties made as of a specific date, which shall have been complete and accurate in all material respects
as of such date) have been complete and accurate in all material respects as of the date of this Agreement and shall be complete
and accurate in all material respects as of the Closing as if made as of the Closing; provided that the representations
and warranties set forth in Sections 2.1, 2.2, 2.3, 2.4 (other than any de minimis discrepancy
in the aggregate number of issued and outstanding shares of Common Stock and OP Units), 2.5 and 2.6 shall be complete
and accurate in all respects.

4.2             
Performance.

The Company and
the Operating Partnership shall have (A) delivered all documents and other items required of the Company or the Operating
Partnership, as applicable, pursuant to this Section 4 and (B) performed and complied in all material respects with
all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied
with by the Company or the Operating Partnership on or before the Closing.

4.3             
No Litigation.

No investigation,
suit, action or other proceeding shall be (i) threatened in writing or pending by a Governmental Entity that seeks restraint, prohibition,
damages, monetary relief or other relief in connection with this Agreement or the consummation of the transactions contemplated
hereby, (ii) pending before any Governmental Entity by a non-Governmental Entity that seeks restraint or prohibition in connection
with this Agreement and that the Purchaser reasonably determines to be reasonably likely to result in the incurrence by the Company
or the Purchaser of any Liability in excess of $100,000, and there shall be no effective injunction, writ or restraint in place
concerning any of the foregoing, or (iii) threatened in writing or pending before any Governmental Entity in which a Governmental
Entity is a party that would or is reasonably likely to result in a governmental investigation or material governmental damages
being imposed on the Purchaser or the Company or any of their respective Affiliates. There shall not have been any change in any
Law that would prohibit the consummation of the transactions contemplated by this Agreement.

    	30

    	 

    

4.4             
Compliance Certificate.

The President and
Chief Financial Officer of the Company and the General Partner of the Operating Partnership shall deliver to the Purchaser at the
Closing a certificate in the form of Exhibit H attached hereto certifying:

(a)               
as to the matters set forth in Sections 4.1, 4.2, 4.3, 4.7, 4.8, 4.15, 4.16
and 4.19; and

(b)              
that, subsequent to the Effective Date, there has not been (A) any change, or any development or event that reasonably could
be expected to result in a change, that has or reasonably could be expected to have a Material Adverse Effect, (B) any increase
in the aggregate outstanding consolidated indebtedness of the Company and the Subsidiaries (other than a Preapproved Loan) to which
the Purchaser has not consented in accordance with Section 6 hereof, (C) any dividend or distribution of any kind declared,
paid or made on the capital stock or other equity interests of the Company or any of the Subsidiaries (other than OP Redemptions
and OP Exchanges), or (D) any loss or damage (whether or not insured) to any of the current properties of the Company or any of
the Subsidiaries that has been sustained or is expected to be sustained that has or could reasonably be expected to have a Material
Adverse Effect.

4.5             
Opinion of the Company Counsel.

The Purchaser shall
have received from Nelson, Mullins, Riley & Scarborough LLP, counsel for the Company and the Operating Partnership, an opinion,
dated as of the Closing, in a form approved by the Purchaser.

4.6             
REIT Tax Certificate

The Purchaser shall
receive from Mr. Roberts an officer’s certificate regarding REIT qualification in a form approved by the Purchaser addressing
the Company’s satisfaction of the requirements to be taxed as a REIT for its taxable years ended December 31, 2005 through
December 31, 2008 and its sources of income during its taxable year ended December 31, 2009. Mr. Roberts shall review the REIT
qualification tax certificate with counsel to the Purchaser prior to its execution and delivery to the Purchaser.

4.7             
No Shell Company Status.

The Company shall
not be deemed to be an issuer described in Rule 144(i)(1)(i) under the Securities Act.

4.8             
No Suspension in Trading or De-Listing of Common Stock.

Trading in the Common
Stock on the NYSE MKT exchange (the “NYSE MKT Exchange”) shall not be suspended, the shares of the Common Stock
shall not have been de-listed from the NYSE MKT Exchange nor shall any such suspension of trading or de-listing be pending or threatened
by the NYSE MKT Exchange. In addition, the Company shall have received a letter from the NYSE MKT Exchange confirming that the
Company’s late filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 shall not result in a
de-listing of the Company’s Common Stock. Notwithstanding the foregoing, if the Company has received a notification of non-compliance
from the NYSE MKT Exchange relating to the Company’s late filing of its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2014 and for any other reason, the conditions in this Section 4.8 shall be deemed satisfied if (i) the Company
has submitted a written compliance plan to the NYSE MKT Exchange that has been approved in writing by the Purchaser setting forth
a plan to correct all of the instances of non-compliance set forth in such notification of non-compliance in accordance with applicable
NYSE MKT rules and regulations (a “Listing Compliance Plan”), (ii) the NYSE MKT Exchange has accepted such Listing
Compliance Plan in a written letter that states that the Common Stock shall not be de-listed from the NYSE MKT Exchange if the
Company satisfies the terms and conditions set forth in the Listing Compliance Plan, (iii) the Company has satisfied or is in the
process of satisfying the terms and conditions set forth in the Listing Compliance Plan in accordance with the terms thereof and
(iv) there is no other outstanding notice of non-compliance from the NYSE MKT Exchange that has not been addressed in the Listing
Compliance Plan and there is no other pending or threatened suspension in trading or delisting of the Company’s Common Stock
by the NYSE MKT Exchange.

    	31

    	 

    

4.9             
Board of Directors.

As of the Closing,
the Company shall have an authorized Board of Directors of seven (7), and the Board of Directors shall be comprised of the Persons
designated pursuant to the terms of the Governance and Voting Agreement, six (6) of whom shall not have previously served on the
Board of Directors (the “New Directors”).

4.10         
Governance and Voting Agreement.

The Company,
the Purchaser and the shareholder of the Company named as a party thereto shall have executed and delivered the Governance
and Voting Agreement.

4.11         
Management Agreement.

The Company, the
Operating Partnership and the Manager shall have executed and delivered the Management Agreement.

4.12         
Registration Rights Agreement.

The Company and
the Purchaser shall have executed and delivered the Registration Rights Agreement.

4.13         
Tax Protection Agreement.

The Company, the
Operating Partnership, the Purchaser and the Manager shall have executed and delivered the Tax Protection Agreement.

4.14         
Warrant Agreement.

The Company and
the Purchaser shall have executed and delivered the Warrant Agreement.

    	32

    	 

    

4.15         
Shareholder Vote.

The Requisite Company
Vote shall have been obtained.

4.16         
Resignation of Employees, Officers and Directors.

The Company shall
have received duly executed resignation and release letters of each member of the Board of Directors in the form of Exhibit J-1,
as well as all officers and employees of the Company in the form set forth in Exhibit J-2 to this Agreement.

4.17         
Employment Agreement.

The Company and
Charles S. Roberts shall have executed and delivered the Employment Agreement.

4.18         
Ownership Limit Exemption

The Board of Directors
of the Company shall have recommended the Charter Amendment to the Company’s shareholders, the Requisite Shareholder Vote
for the Charter Amendment shall have been obtained and the Charter Amendment shall have been duly authorized and filed with the
Secretary of State of the State of Georgia effective as of the Closing Date.

4.19         
Waiver and Termination of Related Party Fees and Obligations.

The Company shall
have received a written waiver from the Roberts Companies in form and substance reasonably acceptable to the Purchaser, and in
recordable form if deemed necessary by the Purchaser in its reasonable discretion, pursuant to which the Roberts Companies waive
(a) any covenant on any of the Company’s properties and any special rights that entitle the Roberts Companies to receive
any compensation or provide any right to participate in the development or construction of any property and any related reimbursement,
and (b) any other Contract to participate in the development or construction of any property and any related reimbursement. Such
waiver shall exclude any rights of the Roberts Companies to receive post-Closing compensation for work provided under Section
7.4 and under the Employment Agreement.

4.20         
Secretary’s Certificate.

The Secretary of
the Company shall have delivered to the Purchaser at the Closing a certificate certifying (i) the Organizational Documents of the
Company, (ii) resolutions of the Board of Directors approving the Transaction Agreements and the transactions contemplated under
the Transaction Agreements (including the Charter Amendment), and (iii) the certificate of the inspector of election regarding
the results of the Shareholders Meeting.

    	33

    	 

    

5.                 
Conditions of the Company’s Obligations at Closing.

The obligations
of the Company to sell Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each
of the following conditions, unless otherwise waived:

5.1             
Representations and Warranties.

Each of the representations
and warranties of the Purchaser contained in this Agreement (or in any of the other documents or instruments to be delivered in
connection herewith), to the extent qualified by a materiality qualification contained in any such representation or warranty,
shall (except for representations and warranties made as of a specific date, which shall have been complete and accurate as of
such date) have been complete and accurate as of the Effective Date and shall be complete and accurate as of the Closing Date as
if made as of the Closing Date, and, to the extent not qualified by any materiality (or equivalent) qualification contained in
any such representation or warranty, shall (except for representations and warranties made as of a specific date, which shall have
been complete and accurate in all material respects as of such date) have been complete and accurate in all material respects as
of the date of this Agreement and shall be complete and accurate in all material respects as of the Closing as if made as of the
Closing; provided that the representations and warranties set forth in Sections 3.1, 3.2 and 3.3
shall be complete and accurate in all respects.

5.2             
Performance.

The Purchaser shall
have (A) delivered all documents and other items required of the Purchaser pursuant to this Section 5 and (B) performed
and complied in all material respects with all covenants, agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the Closing.

5.3             
No Litigation.

No investigation,
suit, action or other proceeding shall be threatened in writing or pending (i) by a Governmental Entity that seeks restraint, prohibition,
damages, monetary relief or other relief in connection with this Agreement or the consummation of the transactions contemplated
hereby or (ii) before any Governmental Entity in which a Governmental Entity is a party that would or is reasonably likely to result
in a governmental investigation or material governmental damages being imposed on the Company or any of its Affiliates. There shall
not have been any change in any Law that would reasonably be expected to prevent the consummation of the transactions contemplated
by this Agreement.

5.4             
Qualifications.

All authorizations,
approvals or permits, if any, of any Governmental Entity of the United States or of any state that are required in connection with
the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.

    	34

    	 

    

5.5             
Shareholder Vote.

The Requisite Company
Vote shall have been obtained.

6.                 
Covenants.

6.1             
Affirmative Covenants.

From the date hereof
through the Closing Date, except as otherwise expressly contemplated or prohibited by this Agreement or as consented to by the
Purchaser in writing, the Company and the Operating Partnership, as applicable, shall:

(a)               
conduct its business in the ordinary course of business;

(b)              
keep full, complete and accurate books and records in accordance with past practice;

(c)               
maintain its existence and good standing in its jurisdiction of organization and in each jurisdiction in which the ownership
or leasing of its property or the conduct of its business requires such qualification;

(d)              
duly and timely file or cause to be filed Tax Returns and all other material reports and returns required to be filed with
any Governmental Entity and promptly pay or cause to be paid when due all Taxes and other material assessments and governmental
charges, including interest and penalties levied or assessed, unless diligently contested in good faith by appropriate proceedings;

(e)               
as soon as reasonably practicable following the written request of the Purchaser, the Company will use its commercially
reasonable efforts to file amended federal, state and local income tax returns for its taxable years ended December 31, 2009 through
December 31, 2013 reporting that the Company was taxed as a C corporation for federal income tax purposes, unless the filing of
such amended federal, state and local income tax returns is prohibited under the Code and the rules and regulations thereunder;

(f)               
take such commercially reasonable action as may be necessary to (i) preserve intact the current business organization of
the Company, (ii) preserve the tangible and intangible assets of the Company in good condition and repair, casualty and normal
wear and tear excepted, (iii) keep available the services of the current officers, employees and agents of the Company, (iv) maintain
the relations and goodwill with suppliers, landlords, creditors, regulators, employees and agents of, and others having business
relationships with the Company and (v) maintain all insurance policies in effect as of the Effective Date;

(g)              
continue its cash management practices in the ordinary course of business;

(h)              
comply in all material respects with all obligations under the Material Contracts, except for such failures to comply as
could not reasonably be expected to result, individually or in the aggregate, in the incurrence by the Company of any Liability
in an amount in excess of $100,000;

    	35

    	 

    

(i)                
comply in all material respects with all Laws applicable to the Company in the conduct of its business;

(j)                
continue to timely file (i) all necessary filings under the Exchange Act (excluding periodic reports that cannot be filed
until the reports referenced in clause (ii) are filed); and (ii) any necessary amendments to Company Exchange Act Reports relating
to or arising out of the Company’s loss of its REIT status for the 2009 fiscal year or subsequent periods as determined after
consultation with and as approved by the Purchaser, including to the extent required under any Listing Compliance Plan that has
been accepted by the NYSE MKT Exchange as described in Section 4.8;

(k)              
take no action that would cause it to be characterized as a “shell company” or a company that has ceased operations
under applicable SEC or NYSE MKT rules;

(l)                
take no action which materially adversely affects the ability of any party to (i) obtain the Requisite Company Vote
and continued listing on the NYSE MKT, or (ii) perform its covenants and agreements under this Agreement; and

(m)            
take no action which materially adversely affects the ability of any party to perform its covenants and agreements under
this Agreement.

6.2             
Negative Covenants.

From the date hereof
through the Closing, except as consented to by Purchaser in writing and except for the execution, delivery and performance of the
Transaction Agreements and the filing of the Charter Amendment pursuant to this Agreement, the Company and the Operating Partnership,
as applicable, shall not:

(a)               
(i) take any affirmative action that would result, or would reasonably be expected to result, (x) in the occurrence of any
of the changes or events listed in Section 2.13 or (y) in a material change in the Company’s cash management
practices, or (ii) fail to take any reasonable action within their control that would avoid such a result;

(b)              
authorize for issuance or issue any additional shares of its capital stock (including any OP Units) or securities convertible
into or exchangeable for shares of its capital stock, or issue or grant any right, option or other commitment for the issuance
of shares of its capital stock or of such securities, or split, combine or reclassify any shares of its capital stock; provided,
however, that OP Redemptions and OP Exchanges shall not be deemed to breach this covenant so long as such OP Redemptions result
in the issuance of Common Stock only and OP Exchanges result in the issuance of OP Units only;

(c)               
declare or pay any dividends or other distributions with respect to any shares in its capital or redeem or purchase, directly
or indirectly, any shares of its capital stock (except as provided in subsection (b) above), any options or any other rights
to acquire any of its equity interests, it being agreed and understood that the Closing Date Net Asset Value will be reduced by
an amount equal to the amount of any dividends or distributions with respect to the shares of capital stock of the Company that
are consented to by the Purchaser and that are not for the benefit of the Purchaser;

    	36

    	 

    

(d)              
amend or modify the Organizational Documents of the Company, the Operating Partnership or any Subsidiary;

(e)               
create any subsidiary to acquire any shares or other equity securities of any corporation or acquire any equity or ownership
interest in any business or entity (except as provided in subsection (b) above);

(f)               
dispose of or permit to lapse any right to the use of any material patent, trademark, trade name, service mark, license
or copyright (including any of the Company Intellectual Property), or dispose of or disclose to any Person (other than customers,
licensors and suppliers in the ordinary course of business that are contractually bound to maintain the confidentiality thereof),
any trade secret, formula, process, technology or know-how of the Company not heretofore a matter of public knowledge; or

(g)              
(1) create, incur or assume any indebtedness (other than any Preapproved Loan), (2) grant, create or incur any lien,
or suffer to exist any lien on any asset of any the Company that did not exist on the date hereof (other than liens securing any
Preapproved Loan), (3) incur any Liability or obligation (absolute, accrued or contingent) in an amount that exceeds, individually
or in the aggregate with other Liabilities incurred, $100,000 (other than any Preapproved Loan), (4) write-off any guaranteed
check, note or account receivable, except in the ordinary course of business, (5) write-down the value of any material asset
or investment on the books or records of the Company except for depreciation and amortization in the ordinary course of business
and for impairment losses as required or appropriate under the Company’s critical accounting policies as described in the
Company Exchange Act Reports (any such impairment losses to be reflected in the Closing Date Net Asset Value), (6) cancel
any material debt (other than in connection with a refinancing effected with a Preapproved Loan) or waive any material claim or
right, (7) make any commitment for any capital expenditure to be made on or following the date hereof;

(h)              
acquire or dispose of any investment in any real property or any other asset in an amount in excess of $10,000 or enter
into any agreement to do the same;

(i)                
increase in any manner the base compensation of, or enter into any new bonus, incentive or other compensation agreement
or arrangement with, any of its employees, officers, directors, third party contractors or consultants, except as set forth in
Schedule 2.11 or Schedule 2.17 of the Disclosure Schedule;

(j)                
other than vesting eligibility requirements that change or come into effect with the passage of time pursuant to the terms
of Stock Plan, pay or agree to pay any additional pension, retirement allowance or other employee benefit under any benefit plan
to any of its employees or consultants, whether past or present, except as may be required by the terms of any applicable plan
or agreement in effect prior to the date hereof or except as required by applicable Law;

    	37

    	 

    

(k)              
adopt, amend or terminate any benefit plan applicable to and relating to the Company resulting in additional payments or
benefits provided by the Company or materially increase the benefits provided under any Company Benefit Plan applicable to and
having a material effect on the Company, or promise or commit to undertake any of the foregoing in the future;

(l)                
amend any existing employment agreement or enter into any new employment agreement or pay any bonus, severance payment (except
as set forth in Schedule 2.17 of the Disclosure Schedule) or other compensation other than current base salaries for
officers and employees;

(m)            
other than as provided in Section 6.1(d) and Section 6.1(e)or as related to item 1 of Schedule 2.33
of the Disclosure Schedule, with respect to Taxes, make or change any election, change an annual accounting period, adopt or change
any material accounting method, file any amended Tax Return, enter into any closing agreement, settle Tax claims or assessments,
surrender rights to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax
claim or assessment or appeal any real property Tax assessment;

(n)              
fail to perform in all material respects all of its obligations, or default or suffer to exist any event or condition that
with notice or lapse of time or both could constitute a default, under any Material Contract, except for such failures as could
not reasonably be expected to result, individually or in the aggregate, in the incurrence by the Company of any Liability in excess
of $100,000;

(o)              
pay, discharge or satisfy any claim, liability or obligation (absolute, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business of claims, liabilities and obligations reflected or reserved against
in the financial statements or incurred in the ordinary course of business;

(p)              
(i) take any action that could prevent the Company from electing to be taxed as a REIT for its taxable year ending December
31, 2015, or (ii) fail to take any reasonable action within their control that would enable the Company to elect to be taxed as
a REIT for its taxable year ending December 31, 2015;

(q)              
erect any improvements, or make any modifications thereto, on any leased real property of the Company;

(r)                
enter into any agreement that would be a Material Contract; provided, however, that (i) the Purchaser acknowledges
that the Company has negotiated the terms and conditions of a proposed sale of the Bradley Park property to an Affiliate of Roberts
Properties, Inc., which terms and conditions are set forth in a non-binding letter of intent dated as of October 27, 2014, a true
and correct copy of which has been provided by the Company to the Purchaser, and the Purchaser hereby consents in writing to the
execution and delivery by the Company of a definitive purchase and sale contract with respect to the sale of the Bradley Park property
to an Affiliate of Roberts Properties, Inc. that is in all material respects consistent with the form of definitive purchase and
sale contract provided by the Company to the Purchaser on October 27, 2014, which reflects the material terms and conditions set
forth in such non-binding letter of intent and (ii) the Company shall not commence any construction on or other improvements to
the Bradley Park property or incur expenses in excess of $10,000 in the aggregate pursuant to the Reciprocal Easements Agreement
by and between Highway Nine Investors, LLC and Roberts Properties Residential, L.P. dated November 3, 2014, which agreement is
identified on Schedule 2.21 of the Disclosure Schedule, without the prior written consent of the Purchaser (it being agreed
that any expenses incurred by the Company pursuant to such Reciprocal Easement Agreement shall be reimbursed by the purchaser of
the Bradley Park property upon closing of the sale of the Bradley Park property or, if not so reimbursed, deducted from the Closing
Date Net Asset Value); or

    	38

    	 

    

(s)               
modify, amend, or terminate, or waive, release, compromise or assign any rights or claims under, any Material Contract.

6.3             
Access.

(a)               
From the date hereof through the earlier to occur of the Closing or the termination of this Agreement, the Company shall
provide to the Purchaser and such Purchaser’s authorized agents, Affiliates, officers and representatives (including financing
sources and their respective representatives) (a) reasonable access to the books and records, customers, properties, directors,
managers and officers of the Company, including copies of minutes of all meetings of directors and shareholders (and all actions
by written consent) from September 22, 2014 through the Closing; provided, however, that such examinations and investigations
shall be conducted during the Company’s normal business hours and in the presence of a designated representative of the Company
and shall not unreasonably interfere with the operations and activities of the Company; (b) copies of all Contracts, books and
records, documents relating to the terms of employment or any other matter relating to any officer, director, manager or employee
of any of the Company and other existing documents and data as such Purchaser may reasonably request; and (c) such additional financial,
operating and other data and information as such Purchaser may reasonably request.

(b)              
Without limiting the foregoing, but subject to the other terms of this Section 6.3, the Company shall consult
with the Purchaser, and allow the Purchaser the opportunity to reasonably participate in, at the Purchaser’s cost, and keep
the Purchaser reasonably informed with respect to, any Legal Action brought by any shareholder of the Company against the Company
or any of its directors or officers. The Company shall also provide the officers of the Purchaser with access to the personnel
of the Company relating to responsibilities and/or potential contractual arrangements of the Company to be effective on or after
the Closing. Neither the Company, the Purchaser, nor any of their respective subsidiaries, shall be required to provide access
to or to disclose information (i) where such access or disclosure would jeopardize the attorney-client privilege of such party
or its subsidiaries or contravene any Law, Order, fiduciary duty or binding agreement entered into prior to the date of this Agreement
or (ii) relating to its board’s officers’, employees’, agents’, or financial advisers’ consideration
or deliberation of the transactions contemplated hereby. The parties hereto shall make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of part (i) of the preceding sentence apply.

    	39

    	 

    

(c)               
A designee of the Purchaser shall be invited and entitled to attend all meetings of the Board of Directors; provided,
however, such individuals (i) will attend such meetings in an observational capacity only and shall not participate in any
deliberations or decisions of such boards or committees, (ii) shall be excluded from any portions of such meetings involving (A)
discussion relating to the transactions contemplated by this Agreement, (B) matters for which the inclusion of such individuals
would or could reasonably be expected to violate applicable Law or Orders of a Governmental Entity, or (C) discussions relating
to matters which are otherwise reasonably deemed by the Board of Directors to be confidential (together, “Board Confidential
Matters”). Board packages and notices shall be submitted by the Company to the Purchaser for distribution to the Purchaser’s
designated attendee simultaneously with their submission to board members; provided that information relating to Board Confidential
Matters may be excluded therefrom. All information and materials provided pursuant to this Agreement shall be subject to the provisions
of the Amended Mutual Non-Disclosure Agreement entered into between Avenue Investments, L.P. and the Company as of January 9, 2014.

(d)              
This Section 6.3 shall not affect or otherwise diminish or obviate in any respect, or affect the Purchaser’s
right to rely upon, any of the representations, warranties or covenants contained in this Agreement.

6.4             
Cooperation; Other Approvals.

(a)               
Subject to the terms and conditions herein provided, each of the parties hereto agrees to use commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper and advisable under applicable
Law, to consummate the transactions contemplated by this Agreement as promptly as practicable.

(b)              
Upon the terms and subject to the conditions set forth in this Agreement, each of the parties hereto agrees to use commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper, or advisable to consummate and make effective, the transactions contemplated
by this Agreement, including the obtaining of all necessary actions or non-actions, waivers, consents and approvals from Governmental
Entities. Each of the Purchaser and the Company shall, upon request by the other, furnish the other party with such necessary information
and reasonable assistance as such other party and its Affiliates may reasonably request in connection with their preparation of
necessary filings, registrations, or submissions of information to any Governmental Entity in connection with this Agreement and
the transactions contemplated hereby.

(c)               
Upon request by the Purchaser, the Company shall, and will cause its counsel, financial advisors, accountants, agents and
other authorized representatives to, fully cooperate and promptly furnish to the Purchaser all such information required to effectuate
the timely filing with the SEC of all reports, documents, consents or amendments thereto contemplated under this Agreement or required
under the Securities Act or Exchange Act, as applicable, and the rules and regulations thereunder, as a result of or in connection
with the transactions contemplated under this Agreement.

    	40

    	 

    

6.5             
Public Announcements.

The Company and
the Purchaser shall cooperate and consult with each other prior to issuing any press release or making any other public statement,
announcement or SEC filing with respect to this Agreement or the Transaction Agreements, and shall not issue any such press release,
public statement or announcement or make any such SEC filing prior to review and approval (such approval not to be unreasonably
withheld or delayed) by the other; provided, however, that, with respect to the Current Report on Form 8-K that the Company
will be required to file with the SEC within four (4) Business Days after the Effective Date regarding this Agreement and the transactions
contemplated hereby, the Company shall provide the Purchaser with a draft of such Current Report on Form 8-K by no later than 5:00
pm Eastern time on the second Business Day immediately following the Effective Date and the Purchaser shall provide any written
comments it has on such draft Current Report on Form 8-K within one (1) Business Day after the Purchaser receives such draft. The
Company shall consider in good faith and shall use its commercially reasonable best efforts to address any comments provided by
the Purchaser with respect to such Current Report on Form 8-K in a manner that is mutually acceptable to the Company and the Purchaser
before filing such Current Report on Form 8-K; provided, however, that, so long as the information relating to the Purchaser
and its Affiliates and contemplated members contained in such Current Report on Form 8-K is consistent in all material respects
with any information with respect to the Current Report on Form 8-K furnished by the Purchaser for inclusion therein, the Company
shall not be required under this Section 6.5 to delay filing such Current Report on Form 8-K beyond its due date in accordance
with the requirements of Form 8-K under the Exchange Act.

6.6             
Update of Schedules; Knowledge of Breach.

From time to time
up to the Closing, the Company shall promptly supplement or amend any Disclosure Schedule that it has delivered in response
to Section 2 with respect to (a) any matter first existing or occurring following the date hereof that (i) if existing
or occurring at or prior to the date hereof would have been required to be set forth or described in the schedule or (ii) is
necessary to correct any information in the Disclosure Schedule that has been rendered inaccurate thereby or (b) any matter that
first is existing or occurring prior to the date of this Agreement that was not previously set forth in the Disclosure Schedule.
No supplement or amendment to any Disclosure Schedule shall have any effect for the purpose of determining satisfaction of
the conditions set forth in Section 5. No supplement or amendment to any schedule delivered pursuant to the preceding
sentence shall in any way limit the ability of the Purchaser from making a claim for breach of this Agreement (subject to Section
8.2(d)). Any supplement or amendment to any Disclosure Schedule shall be deemed to have been delivered solely for informational
purposes and shall not be deemed to update the Disclosure Schedule or cure any breach of any representation, warranty, covenant
or other agreement for any purpose under this Agreement or to prejudice any rights of the Purchaser under this Agreement, including
the right to claim that the representations and warranties of the Company, when made on the date of this Agreement, were untrue.

    	41

    	 

    

6.7             
Regulatory Matters.

As promptly as practicable
following the Effective Date, the Company shall prepare and file with the SEC the Company Proxy Statement. The Purchaser and the
Company will cooperate and consult with each other in the preparation of the Company Proxy Statement. Without limiting the generality
of the foregoing, the Purchaser will use its commercially reasonable efforts to furnish the Company with the information relating
to it (and to the New Directors) required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth
in the Company Proxy Statement three (3) Business Days after the Effective Date. At least five (5) Business Days prior to the filing
of the Company Proxy Statement, the Company shall provide a draft of the Company Proxy Statement to the Purchaser for review. No
filing of the Company Proxy Statement with the SEC shall occur without the written approval of the Purchaser or its counsel, which
approval shall not be unreasonably withheld, delayed or conditioned. The Company shall consider in good faith and shall use its
commercially reasonable best efforts to address any comments provided by the Purchaser with respect to such draft of the Company
Proxy Statement in a manner that is mutually acceptable to the Company and the Purchaser before filing it with the SEC. Notwithstanding
the foregoing, if the Company has given the Purchaser a draft of the Company Proxy Statement for review as provided above and the
Purchaser or its counsel shall not have provided written comments on such draft of the Company Proxy Statement within five (5)
Business Days thereafter, the Company may assume that the Purchaser has approved of such draft and may proceed to file the Company
Proxy Statement with the SEC without being deemed to have breached this Section 6.7 (but only if the information relating
to the Purchaser and its Affiliates and contemplated members and to the New Directors is consistent in all material respects with
any information furnished by the Purchaser). The Company shall use its commercially reasonable best efforts to respond as promptly
as practicable to and resolve any written or oral comments from the SEC as promptly as practicable after such filing and to file
the Company Proxy Statement in definitive form as soon as practicable thereafter, and each party agrees to consult and cooperate
with the other party in that regard. Upon filing of the Company Proxy Statement in definitive form with the SEC, the Company shall
thereafter mail or deliver the Company Proxy Statement to its shareholders. If at any time prior to the Closing any event occurs
or information relating to the Company, or any of its affiliates, directors or officers, or the Purchaser or any of its Affiliates,
officers, or the New Directors, should be discovered by the Company or the Purchaser that should be set forth in an amendment or
supplement to the Company Proxy Statement, so that such document would not include any misstatement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, the applicable party shall promptly disclose the same to the other, and the Company shall as soon as practicable
file an appropriate amendment or supplement describing such information and, to the extent required by applicable Law, cause the
same to be disseminated to the Company’s shareholders. No amendment or supplement to the Company Proxy Statement shall be
filed without the approval of the Purchaser, which approval shall not be unreasonably withheld, delayed or conditioned.

    	42

    	 

    

6.8             
Shareholders Meeting.

The Company shall,
and shall cause its Board of Directors to, (i) take all action in accordance with the federal securities laws, applicable state
Law, the Company’s articles of incorporation and the Company’s bylaws necessary to call and give notice of a special
meeting of its shareholders (the “Shareholders Meeting”) for the purpose of obtaining the Requisite Company
Vote within thirty-four (34) days following the date of the filing date of the definitive Company Proxy Statement; (ii) use its
commercially reasonable best efforts (x) to cause the Shareholders Meeting to be convened and held on the scheduled date, and (y)
to obtain the Requisite Company Vote; and (iii) subject to Section 6.10, include in the Company Proxy Statement the
recommendation of the Board of Directors that the Company’s shareholders approve this Agreement, the issuance of the Shares,
the warrants pursuant to the Warrant Agreement and the shares of Common Stock issuable upon any exercise of such warrants, the
Charter Amendment, and the other transactions contemplated herein and in the other Transaction Agreements (the “Board
Recommendation”). Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required
to hold the Shareholders Meeting if this Agreement is terminated pursuant to Section 8 prior to the scheduled time
of the Shareholders Meeting.

6.9             
Reservation of Common Stock.

The Company agrees
at all times from the Effective Date until the Closing and the issuance of the Shares to reserve a sufficient number of shares
of Common Stock to fulfill its obligations under this Agreement.

6.10         
No-Shop.

(a)               
Except as expressly set forth in this Section 6.10, prior to the Closing or termination of this Agreement, the
Company will not, and will cause its Subsidiaries not to, and will not authorize, encourage, permit or instruct any of its representatives
or Affiliates to, directly or indirectly, (a) solicit, initiate or encourage or assist in the making, submission or announcement
of, or take any action that could reasonably be expected to lead to, any proposal by a third party (other than the Purchaser) to
acquire any assets or capital stock of the Company (i) through any form of recapitalization transaction or any sale, merger, consolidation,
business combination, tender or exchange offer, spin-off or liquidation, (ii) through a purchase of the assets of the Company,
(iii) through a purchase of any shares of any class or series of capital stock or limited partnership interests in the Operating
Partnership, or (iv) through any other transaction designed to acquire the business of the Company, any assets or any part thereof
or any capital stock of the Company (each, an “Acquisition Proposal”), (b) engage, continue or participate in
any discussions or negotiations, or provide any information to any Person (other than the Purchaser or the Purchaser’s representatives),
regarding any Acquisition Proposal; or (c) agree to, approve, execute, enter into or become bound by any letter of intent
or other contract or understanding between or among the Company or any of its subsidiaries and any Person that is related to or
provides for any Acquisition Proposal (each, an “Acquisition Agreement”). (The marketing of one of more of the
Company’s existing properties for sale, and the negotiation of terms of any such sale, shall not be deemed to be soliciting,
initiating, encouraging or assisting in an Acquisition Proposal, nor shall any agreement for the sale thereof be deemed to be an
Acquisition Agreement.) The Company shall, and shall direct its Affiliates and representatives to, immediately cease any solicitations,
discussions or negotiations with any Person (other than the Purchaser) that has made or indicated an intention to make an Acquisition
Proposal and request that each such Person destroy any information in connection therewith.

    	43

    	 

    

(b)              
Notwithstanding Section 6.10(a), before the receipt of the Requisite Company Vote, the Company, directly or
indirectly through any representative, may, subject to Section 6.10(c) and (d), (i) participate in negotiations
or discussions with any third party that has made after the date hereof (and not withdrawn) a bona fide Acquisition Proposal in
writing that is not the result of a breach of Section 6.10(a) and that the Board of Directors believes in good faith, after
consultation with outside legal counsel and the Company’s financial advisor (if any), constitutes or would reasonably be
expected to result in a Superior Proposal (as defined below) and (ii) thereafter furnish to such third party non-public information
relating to the Company or any of its Subsidiaries pursuant to an executed confidentiality agreement (a copy of which shall be
provided to the Purchaser) on terms no less favorable to the Company than the confidentiality agreement between the Company and
the Purchaser, provided that, in each case referred to in the foregoing clauses (i) and (ii), only if the Board of Directors determines
in good faith, after consultation with outside legal counsel, that the failure to take such action would reasonably be expected
to cause the Board of Directors to be in breach of its fiduciary duties under applicable Law. Nothing contained herein shall prevent
the Company from disclosing to the Company’s shareholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated
under the Exchange Act with regard to an Acquisition Proposal, if the Company determines, after consultation with outside legal
counsel, that failure to disclose such position would constitute a violation of applicable Law (provided that any such disclosure
that constitutes a Company Adverse Recommendation Change must be made in accordance with this Section 6.10). “Superior
Proposal” means a bona fide written Acquisition Proposal received after the date of this Agreement and not in violation
of this Section 6.10 that the Board of Directors determines in good faith (after consultation with outside legal counsel
and the Company’s financial advisor, if any) is more favorable from a financial point of view to the holders of the Common
Stock than the transactions contemplated by this Agreement, taking into account (a) all financial considerations (including the
obligation to pay any Termination Fee the Company may incur as a result of terminating this Agreement pursuant to Section 8),
(b) the identity of the third party making such Acquisition Proposal, (c) the anticipated timing, conditions (including any financing
condition or the reliability of any debt or equity funding commitments) and prospects for completion of such Acquisition Proposal,
(d) the other terms and conditions of such Acquisition Proposal and the implications thereof on the Company, including relevant
legal, regulatory and other aspects of such Acquisition Proposal deemed relevant by the Board of Directors and (e) if applicable,
any revisions to the terms of this Agreement proposed by the Purchaser during the Notice Period set forth in Section 6.10(d).

(c)               
The Board of Directors shall not take any of the actions referred to in clauses (i) or (ii) of Section 6.10(b)
unless the Company shall have delivered to the Purchaser a prior written notice advising the Purchaser that it intends to take
such action. The Company shall notify the Purchaser promptly (but in no event later than twenty-four (24) hours) after it obtains
Knowledge of the receipt by the Company of any Acquisition Proposal or any inquiry or request that would reasonably be expected
to lead to an Acquisition Proposal. In such notice, the Company shall identify the third party making, and details of the material
terms and conditions of, any such Acquisition Proposal, inquiry or request. The Company shall keep the Purchaser reasonably informed,
on a reasonably current basis, of the status and material terms of any such Acquisition Proposal, inquiry or request, including
any material amendments or proposed amendments as to price or other material terms thereof. The Company shall provide the Purchaser
with at least forty-eight (48) hours prior notice of any meeting of the Board of Directors (or such lesser notice as is provided
to the members of the Board of Directors) at which the Board of Directors is reasonably expected to consider any Acquisition Proposal.
The Company shall promptly provide the Purchaser with all non-public information concerning the Company or its Subsidiaries provided
to any third party in connection with an Acquisition Proposal to the extent such information has not been previously provided to
the Purchaser.

    	44

    	 

    

(d)              
Except as expressly set forth in this Section 6.10(d), the Board of Directors shall not (1) recommend an Acquisition
Proposal, (2) fail to make the Board Recommendation, (3) withdraw, amend, modify or qualify, in a manner adverse to the Purchaser,
the Board Recommendation, or (4) resolve or agree to take any of the foregoing actions (any of the foregoing, a “Company
Adverse Recommendation Change”). Notwithstanding anything to the contrary in this Section 6.10, if at any time
prior to the receipt of the Requisite Company Vote, the Board of Directors shall have determined in good faith that an Acquisition
Proposal constitutes a Superior Proposal, the Board of Directors may (x) make a Company Adverse Recommendation Change or (y) authorize
the Company to enter into an Acquisition Agreement and terminate this Agreement pursuant to Section 8.1(d)(iii), in
each case, with respect to such Superior Proposal if: (i) the Company notifies the Purchaser, in writing, at least three (3) Business
Days (the “Notice Period”) before taking such action, which notice shall state expressly that the Company has
received an Acquisition Proposal that the Board of Directors intends to declare a Superior Proposal and that the Board of Directors
intends to make a Company Adverse Recommendation Change and/or the Company intends to terminate this Agreement and enter into an
Acquisition Agreement with respect to such Superior Proposal; (ii) the Company describes the material terms of such Acquisition
Proposal in such notice, attaches to such notice the most current version of the proposed agreement (which version shall be updated
on a prompt basis) and the identifies the third party making such Superior Proposal; (iii) the Company shall, and shall cause its
Subsidiaries to, and shall use its reasonable best efforts to cause its and its Subsidiaries’ representatives to, during
the Notice Period, negotiate exclusively with the Purchaser in good faith to make such adjustments in the terms and conditions
of this Agreement so that such Acquisition Proposal ceases to constitute a Superior Proposal, if the Purchaser, in its discretion,
proposes to make such adjustments; and (iv) the Board of Directors determines in good faith, after consulting with outside legal
counsel and the Company’s financial advisor (if any), that (A) such Acquisition Proposal continues to constitute a Superior
Proposal after taking into account any adjustments agreed to by the Purchaser during the Notice Period in the terms and conditions
of this Agreement (the Company shall consider any Termination Fee payable pursuant to Section 8 when evaluating any
adjustments made by the Purchaser to any terms and conditions of this Agreement) and (B) that the failure of the Board of Directors
to make such Company Adverse Recommendation Change and/or cause the Company to enter into such Acquisition Agreement with respect
to such Superior Proposal would reasonably be expected to cause the Board of Directors to be in breach of its fiduciary duties
under applicable Law. A subsequent amendment to any financial or other material term in connection with any Acquisition Proposal
shall require the Company to comply again with the procedures set forth in this Section 6.10(d).

    	45

    	 

    

(e)               
The Company agrees that any violations of or the taking of any actions that are inconsistent with the provisions of this
Section 6.10 by any of the Company’s Representatives shall be deemed to be a breach of this Section 6.10
by the Company. Unless this Agreement shall have been terminated in accordance with Section 8.1, the obligation of the Company
to call, give notice of, convene and hold the Shareholders Meeting, to mail the Company Proxy Statement and to solicit from the
Company’s shareholders proxies in respect of the approval of this Agreement, the issuance of the Shares and the other transactions
contemplated hereby shall not be affected by a Company Adverse Recommendation Change or the receipt of an Acquisition Proposal.

6.11         
Directors’ and Officers’ Indemnification and Insurance.

(a)               
The Company agrees that all rights to indemnification, advancement of expenses and exculpation by the Company now existing
in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Effective Time
an officer or director (or manager) of the Company and its Subsidiaries (each an “Indemnified Party”) as provided
in the Organizational Documents of the Company and its Subsidiaries, in each case as in effect on the date of this Agreement, and
pursuant to the indemnification agreements between the Company and each of its officers and directors listed in subsection (h)
of Schedule 2.35 of the Disclosure Schedule (the “Director and Officer Indemnification Agreements”),
each as in effect on the date hereof, shall continue in effect in accordance with their terms, without further action, and shall
survive the transactions contemplated hereby after the Closing Date, and, if any proceeding is pending or asserted or any claim
made during such period, until the final disposition of such proceeding or claim.

(b)              
For six (6) years after the Closing Date, to the fullest extent permitted under applicable Law, the applicable Organizational
Documents in effect on the Closing Date and the Director and Officer Indemnification Agreements, the Company shall indemnify, defend
and hold harmless each Indemnified Party against all losses, claims, damages, liabilities, fees, expenses, judgments and fines
arising in whole or in part out of actions or omissions in their capacity as such occurring at or prior to the Closing Date (and
for Charles S. Roberts thereafter through the date on which he ceases to be an officer or director of the Company), including in
connection with the transactions contemplated by this Agreement, and shall reimburse each Indemnified Party for any legal or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such losses, claims, damages,
liabilities, fees, expenses, judgments and fines as such expenses are incurred, subject to the Company’s receipt of an undertaking
by such Indemnified Party to repay such legal and other fees and expenses paid in advance if it is ultimately determined in a final
and non-appealable judgment of a court of competent jurisdiction that such Indemnified Party is not entitled to be indemnified
under applicable Law; provided, however, that the Company will not be liable for any settlement effected without the Company’s
prior written consent (which consent shall not be unreasonably withheld or delayed).

(c)               
The Company shall (i) maintain in effect for a period of six (6) years after the Closing Date, if available, the current
policies of directors’ and officers’ liability insurance maintained by the Company immediately prior to the Closing
Date (provided that the Company may substitute therefor policies, of at least the same coverage and amounts and containing
terms and conditions that are not less advantageous in the aggregate to the directors and officers of the Company and its Subsidiaries
when compared to the insurance maintained by the Company as of the date hereof), or (ii) obtain as of the Closing Date “tail”
insurance policies with a claims period of six (6) years from the Closing Date with at least the same coverage and amounts and
containing terms and conditions that are not less advantageous in the aggregate to the directors and officers of the Company and
its Subsidiaries, in each case with respect to claims arising out of or relating to events which occurred before or at the Closing
Date (including in connection with the transactions contemplated by this Agreement). Notwithstanding the foregoing, if the coverage
described in this Section 6.11(c) cannot be obtained, or can only be obtained by paying aggregate premiums in excess
of 250% of the annual amount currently paid by the Company for such coverage, the Company shall only be required to provide as
much coverage as can be obtained by paying aggregate premiums equal to 250% of the aggregate annual amount currently paid by the
Company for such coverage.

    	46

    	 

    

(d)              
The obligations of the Company under this Section 6.11 shall survive the consummation of the transactions contemplated
by this Agreement and shall not be terminated or modified in such a manner as to adversely affect any Indemnified Party to whom
this Section 6.11 applies without the consent of such affected Indemnified Party (it being expressly agreed that the
Indemnified Parties to whom this Section 6.11 applies shall, from and after the Closing, be third party beneficiaries
of this Section 6.11, each of whom may enforce the provisions of this Section 6.11).

(e)               
If the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall
not be the continuing or surviving corporation or entity in such consolidation or merger (including but not limited to pursuant
to Section 7.2 below) or (ii) transfers all or substantially all of its properties and assets to any Person, then,
and in either such case, proper provision shall be made so that the successors and assigns of the Company shall assume all of the
obligations of the Company set forth in this Section 6.11. The agreements and covenants contained herein shall not
be deemed to be exclusive of any other rights to which any Indemnified Party is entitled, whether pursuant to Law, Contract or
otherwise. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors’
and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or its officers
or directors, it being understood and agreed that the indemnification provided for in this Section 6.11 is not prior
to, or in substitution for, any such claims under any such policies.

(f)               
Notwithstanding anything in this Agreement to the contrary, the covenants and obligations set forth in this Section 6.11
are those of the Company, and neither the Purchaser nor any of its Affiliates (other than, after the Closing, the Company) shall
have any liability to the Company, any Indemnified Party or any other Person arising out of or with respect to this Section 6.11.

6.12         
Repayment of North Springs, Bradley Park and Highway 20 Loans.

The Purchaser agrees
that, contingent upon the occurrence of the Closing, the Company will, promptly upon the Closing, pay off in full the outstanding
principal and accrued interest and other amounts owing to the lenders with respect to the recourse mortgage indebtedness on the
North Springs, Bradley Park and Highway 20 properties. Such indebtedness will be repaid with a portion of the Gross Proceeds unless
the Purchaser elects, in its discretion, to assist the Company in obtaining a new credit facility (the “Credit Facility”)
and the parties are able to obtain such Credit Facility effective as of the Closing, in which case the Purchaser may elect, in
its discretion, to use borrowings under the Credit Facility to pay off all or a portion of the recourse mortgage indebtedness on
the North Springs, Bradley Park and Highway 20 properties in lieu of using a portion of the Gross Proceeds. Any such Credit Facility
will be on commercially reasonable terms that are mutually acceptable to the Purchaser and the Company. In the event the Purchaser
elects to assist the Company in obtaining such Credit Facility, the Company agrees to use commercially reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the Purchaser in doing, all
things reasonably necessary, proper, or advisable to assist in the process of obtaining the Credit Facility. The Purchaser shall
have no obligation to obtain or to assist the Company in obtaining a Credit Facility.

    	47

    	 

    

6.13         
Escrow of Purchaser Funds.

On the date of the
execution and delivery of this Agreement by all of the parties, the Purchaser agrees to deposit in an escrow account with New York
Land Title Company, a division of Commonwealth Land Title Insurance Company (the “Escrow Agent”), subject to
the terms of an escrow agreement among the Purchaser, the Company and the Escrow Agent in the form attached hereto as Exhibit
K (the “Escrow Agreement”) the sum of $750,000 as security for its obligation to pay the Reverse Termination
Fee and the Expense Reimbursement if the Purchaser becomes required to pay the Reverse Termination Fee pursuant to Section 8.2(b)
hereof and the Expense Reimbursement pursuant to Section 8.2(b) hereof.

6.14         
Update to Closing Date Net Asset Value Exhibit.

Not fewer than three
(3) Business Days before the Closing Date, the Company shall prepare and deliver to the Purchaser an updated calculation of the
Closing Date Net Asset Value set forth on Exhibit A, which update shall reflect the same (i) aggregate estimated market
value of the properties to be sold in the Property Dispositions, (ii) estimated Selling Costs, and (iii) the value attributed to
the Company’s public status, each as shown on Exhibit A hereto as of the Effective Date, and shall reflect the actual
cash, restricted cash, note receivable and Liabilities of the Company, calculated in accordance with GAAP, as of the Closing Date.
The Purchaser shall have the right to review and comment on such updated calculation of the Closing Date Net Asset Value, and,
upon the mutual agreement of the Company and the Purchaser regarding such updated calculation of the Closing Date Net Asset Value,
such updated calculation shall be substituted on Exhibit A for the calculation of the Closing Date Net Asset Value that
is set forth on Exhibit A hereto as of the Effective Date.

    	48

    	 

    

7.                 
Post-Closing Covenants.

7.1             
Securities Laws Compliance.

Following the Closing,
the Company shall make any filings required to be filed by the Company by the federal securities laws or the securities or blue
sky laws of any other applicable jurisdiction.

7.2             
Reincorporation and Name Change.

The Company agrees
to use its commercially reasonable best efforts to reincorporate as a Maryland corporation at such time as the Manager recommends,
and to change the name of the Company in connection with such reincorporation to a new name that is acceptable to the Manager.
Immediately upon the completion of the Closing, the Company shall change its corporate name, and shall cause each Subsidiary to
change its corporate or entity name, to a name that the Purchaser has approved and that does not include the word “Roberts”
or any derivative thereof.

7.3             
Proxy Statement and Reverse Stock Split.

As soon as practicable
after the Closing, the Company shall file a proxy statement with the SEC requesting the shareholders of the Company to approve
an amendment to the Company’s articles of incorporation providing for an increase in the authorized number of shares of Common
Stock to 100,000,000 (after giving effect to the reverse stock split referenced later in this sentence) and a reverse stock split
with a ratio of approximately 1-for-10, the exact ratio (or range to be approved by the shareholders so that the Board of Directors
will have discretion to select a ratio within that range) to be determined at the discretion of the Board of Directors.

7.4             
Post-Closing Transition Services.

For a period of
180 days after the Closing Date, the Company shall have the right to request the reasonable assistance of employees of Roberts
Properties, Inc. with respect to transition issues and questions relating to the Company’s properties and operations, and
such employees shall use commercially reasonable efforts to assist the Company with such requests during normal business hours
on a consulting basis in accordance with the terms and conditions of the reimbursement arrangements between the Company and the
Roberts Companies as described in the Company Exchange Act Reports and in Exhibits 10.8.1, 10.8.2 and 10.8.3 to the Company’s
Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2013.

8.                 
Termination.

8.1             
Events of Termination.

This Agreement may
be terminated prior to the Closing as follows:

(a)               
by mutual consent of the Company and the Purchaser (notwithstanding any approval of this Agreement by the shareholders of
the Company);

    	49

    	 

    

(b)              
by the Company or the Purchaser (notwithstanding any approval of this Agreement by the shareholders of the Company), upon
notice to the other party, if:

(i)                
there shall be in effect a final nonappealable Order of a Governmental Entity of competent jurisdiction restraining, enjoining
or otherwise prohibiting the consummation of the transactions contemplated by this Agreement; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not be available to any party whose breach
of any representation, warranty, covenant or agreement set forth in this Agreement has been the cause of, or resulted in, the issuance,
promulgation, enforcement or entry of any such Order;

(ii)              
the transactions contemplated by this Agreement have not been consummated on or prior to the later of (A) the 35th
day after the date on which the definitive Company Proxy Statement is first mailed to the Company’s shareholders and (B)
seven (7) days after (x) the Company’s receipt of a notice under Section 8.1(c)(ii) or (iii) for a breach that
is capable of being cured or (y) the Purchaser’s receipt of a notice under Section 8.1(d)(i) or (ii) for a
breach that is capable of being cured; provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b)(ii)
shall not be available to any party (x) whose breach of any representation, warranty, covenant or agreement set forth in this Agreement
has been the cause of, or resulted in, the failure of the transactions contemplated by this Agreement to be consummated on or before
such date or (y) who has received a notice referred to in clause (B) of this Section 8.1(b)(ii) and who has not cured such
breach to the reasonable satisfaction of the party who provided such notice; or

(iii)            
this Agreement has been submitted to the shareholders of the Company for adoption at a duly convened Shareholders Meeting
and the Requisite Company Vote shall not have been obtained at such meeting (including any adjournment or postponement thereof);

(c)               
by the Purchaser if:

(i)                
(A) a Company Adverse Recommendation Change shall have occurred, or (B) the Company shall have authorized, entered into,
or announced its intention to enter into, an Acquisition Agreement;

(ii)              
there shall have been a breach of any representation or warranty on the part of the Company set forth in this Agreement
such that the condition to the Closing of the transactions contemplated by this Agreement set forth in Section 4.1
would not be satisfied; provided that, if capable of being cured, such failure to be complete and accurate is not cured
to the reasonable satisfaction of the Purchaser within seven (7) days after the receipt by the Company of written notice of such
failure;

(iii)            
there shall have been a breach of any covenant or agreement on the part of the Company or the Operating Partnership set
forth in this Agreement such that the condition to the Closing of the transactions contemplated by this Agreement set forth in
Section 4.2 would not be satisfied, which failure to perform, if capable of being cured, has not been cured to the
reasonable satisfaction of the Purchaser within seven (7) days following receipt by the Company of written notice of such failure
to perform; or

    	50

    	 

    

(iv)            
the Company incurred any indebtedness constituting a Preapproved Loan pursuant to clause (b) under the definition of Preapproved
Loan without obtaining the prior written consent of the Purchaser;

(d)              
by the Company if:

(i)                
there shall have been a breach of any representation or warranty on the part of the Purchaser set forth in this Agreement
such that the condition to the Closing of the transactions contemplated by this Agreement set forth in Section 5.1
would not be satisfied; provided that, if capable of being cured, such failure to be complete and accurate is not cured
to the reasonable satisfaction of the Company within seven (7) days after the receipt by the Purchaser of written notice of such
failure;

(ii)              
there shall have been a breach of any covenant or agreement on the part of the Purchaser set forth in this Agreement such
that the condition to the Closing of the transactions contemplated by this Agreement set forth in Section 5.2 would
not be satisfied, which, if capable of being cured, failure to perform has not been cured to the reasonable satisfaction of the
Company within seven (7) days following receipt by the Purchaser of written notice of such failure to perform;

(iii)            
prior to the receipt of the Requisite Company Vote, the Board of Directors authorizes the Company to enter into an Acquisition
Agreement in respect of a Superior Proposal in accordance with Section 6.10(d); provided that the Company shall have
paid any amounts due to the Purchaser pursuant to Section 8.2, in accordance with the terms, and at the times, specified
therein.

8.2             
Termination Fees.

(a)               
If (i) the Purchaser terminates this Agreement pursuant to Section 8.1(c)(ii) due to an Intentional Breach (as defined
below) of any representation or warranty by the Company, or (ii) the Purchaser terminates this Agreement pursuant to Section
8.1(c)(iii), and the Company does not then have the right to terminate this Agreement pursuant to Section 8.1(d)(i)
or Section 8.1(d)(ii), then the Company shall pay, by wire transfer of immediately available funds to an account designated
in writing by the Purchaser, a termination fee in an amount equal to five hundred thousand dollars ($500,000). If the Purchaser
terminates this Agreement pursuant to Section 8.1(c)(i) or the Company terminates this Agreement pursuant to Section 8.1(d)(iii),
then the Company will pay, by wire transfer of immediately available funds to an account designated in writing by the Purchaser,
a termination fee in an amount equal to seven hundred fifty thousand dollars ($750,000) (in each case, the “Termination
Fee”);

For purposes of this
Section 8.2, “Intentional Breach” shall mean, with respect to any breach of a representation or warranty
contained in this Agreement, a breach of such representation or warranty that has been made with the Knowledge of the breaching
Party.

    	51

    	 

    

(b)              
If (i) the Company terminates this Agreement pursuant to Section 8.1(d)(i) due to an Intentional Breach of any
representation or warranty by the Purchaser or (ii) the Company terminates this Agreement pursuant to Section 8.1(d)(ii)
(other than as a result of the failure by the Purchaser to perform its obligation set forth in the third sentence of Section
6.7), and the Purchaser does not then have the right to terminate this Agreement pursuant to Section 8.1(c)(ii) or Section
8.1(c)(iii), then the Purchaser shall pay, by wire transfer of immediately available funds to an account designated in writing
by the Company, a termination fee in an amount equal to five hundred thousand ($500,000) (the “Reverse Termination Fee”);
provided, however, that the Company shall only be entitled to the Reverse Termination Fee if the Purchaser is not
entitled to terminate this Agreement under Section 8.

(c)               
In no event shall (i) a Termination Fee be payable more than once or (ii) a Reverse Termination Fee be payable more than
once. If the Company or the Purchaser is obligated to pay a Termination Fee or Reverse Termination Fee, as applicable, then the
applicable party shall also pay, by wire transfer of immediately available funds to an account designated in writing by the applicable
party, $250,000 (the “Expense Reimbursement”) to the party that is entitled to receive the Termination Fee or
Reverse Termination Fee, as applicable, as reimbursement for the out-of-pocket expenses, including but not limited to legal fees,
incurred by the party entitled to receive the Termination Fee or Reverse Termination Fee, as applicable.

(d)              
If the Purchaser terminates this Agreement pursuant to Section 8.1(c)(iv), then the Purchaser shall be entitled to
the immediate return and release of its deposit with the Escrow Agent as referenced in Section 6.13. For the avoidance of
doubt, the Company shall not be entitled to any Reverse Termination Fee or Expense Reimbursement in the event the Purchaser terminates
this Agreement pursuant to Section 8.1(c)(iv).

(e)               
Notwithstanding anything to the contrary contained in this Agreement, nothing in this Agreement shall establish a right
on the part of any party hereto to seek or pursue any claim, damages or other remedy for a default or breach by another party hereto
of its obligations hereunder other than to exercise the termination right set forth in Section 8.1 hereof and the accompanying
right to be paid a Termination Fee or Reverse Termination Fee, as applicable, by the non-terminating party as set forth in Section 8.2(a)
and Section 8.2(b) hereof and the right to receive the Expense Reimbursement from the non-terminating party as set
forth in Section 8.2(c) hereof.

9.                 
Miscellaneous.

9.1             
Further Assurances.

In case at any time
after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each party to this
Agreement shall take all such reasonably necessary action to (a) execute and deliver to each other such other documents and (b)
do such other acts and things as a party may reasonably request for the purpose of carrying out the intent of this Agreement and
the documents referred to in this Agreement.

    	52

    	 

    

9.2             
Non-survival of Representations, Warranties and Agreements.

None of the representations,
warranties, covenants and agreements set forth in this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Closing, except for those covenants and agreements contained in this Agreement that expressly by their terms apply
or are to be performed in whole or in part after the Closing.

9.3             
Successors and Assigns.

The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Neither
party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement. No assignment shall relieve the assigning party
of any of its obligations hereunder.

9.4             
Governing Law.

This Agreement shall
be governed by the laws of the State of Georgia.

9.5             
Counterparts.

This Agreement may
be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf) or other transmission
method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for
all purposes.

9.6             
Titles, Subtitles and Interpretation.

The titles and subtitles
used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall
be deemed to be followed by the words “without limitation.” A reference in this Agreement to $ or dollars is to U.S.
dollars. The words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

9.7             
Notices.

All notices and
other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the
earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail
during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next
business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business
day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address
or email address as set forth on the signature page hereto, or to such other address or email address as subsequently modified
by written notice given in accordance with this Section 9.7.

    	53

    	 

    

9.8             
No Finder’s Fees.

Each party represents
that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction except for
the Purchaser’s obligation to pay The CenterCap Group LLC, which shall not be a deduction from the Gross Proceeds. The Purchaser
agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s
or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted
liability) for which the Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to
indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s
or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or representatives is responsible.

9.9             
Attorneys’ Fees.

If any action at
law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of the Transaction Agreements, the
prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

9.10         
Amendments and Waivers.

At any time prior
to the Effective Date, this Agreement may be amended or supplemented in any and all respects, whether before or after receipt of
the Requisite Company Vote, by written agreement signed by each of the parties hereto; provided, however, that following
the receipt of the Requisite Company Vote, there shall be no amendment or supplement to the provisions of this Agreement which
by Law or in accordance with the rules of any relevant self-regulatory organization would require further approval by the holders
of the Common Stock without such approval. Any amendment or waiver effected in accordance with this Section 9.10 shall
be binding upon the Purchaser and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future
holder of all such securities, and the Company.

9.11         
Severability.

The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

    	54

    	 

    

9.12         
Delays or Omissions.

No delay or omission
to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party
under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be
in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement
or by Law or otherwise afforded to any party, shall be cumulative and not alternative.

9.13         
Entire Agreement.

This Agreement (including
the Exhibits hereto) and the other Transaction Agreements constitute the full and entire understanding and agreement between the
parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof
existing between the parties are expressly canceled.

9.14         
Waiver of Jury Trial.

EACH PARTY HEREBY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION
AGREEMENTS, THE SHARES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS.
EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

[Signatures on following
page]

    	55

    	 

    

IN WITNESS WHEREOF,
the parties have executed this Stock Purchase Agreement as of the date first written above.

	 	ROBERTS REALTY INVESTORS, INC.	 
	 	 	 
	 	 	 
	 	By:  	/s/
    Charles S. Roberts 	 
	 	Name:   	Charles
    S. Roberts 	 
	 	 	(print)	 
	 	Title:	President 	 

 

	 	Address:  	375 Northridge Road	 
	 	 	Suite 330	 
	 	 	Atlanta, GA  30350	 
	 	 	Attention:  Charles S. Roberts	 
	 	 	Telephone:  770-394-6000	 
	 	 	Email:  cr@robertsproperties.com	 

 

 

	 	ROBERTS PROPERTIES RESIDENTIAL, L.P.	 
	 	By: Roberts Realty Investors, Inc., its G.P.	 
	 	 	 
	 	 	 
	 	By:  	/s/ Charles S. Roberts 	 
	 	Name:   	Charles S. Roberts	 
	 	 	(print)	 
	 	 	 	 
	 	Title:	President 	 

 

	 	Address:  	375 Northridge Road	 
	 	 	Suite 330	 
	 	 	Atlanta, GA  30350	 
	 	 	Attention:  Charles S. Roberts	 
	 	 	Telephone:  770-394-6000	 
	 	 	Email:  cr@robertsproperties.com	 

 

 

    	 

    	 

    

 

	 	A-III INVESTMENT PARTNERS LLC	 
	 	 	 
	 	 	 
	 	By:  	/s/ Edward Gellert 	 
	 	Name:	Edward Gellert 	 
	 	 	(print)	 
	 	 	 	 
	 	Title:	Authorized Signatory 	 

 

	 	Address:	 	 
	 	c/o Avenue Capital Group	 	 
	 	399 Park Avenue	 	 
	 	New York, New York 10022	 	 
	 	Attention:  Edward Gellert	 	 
	 	Telephone:  212-850-7534	 	 
	 	Email:  egellert@avenuecapital.com	 	 

 

    	 

    	 

    

Exhibit
A

CLOSING
DATE NET ASSET VALUE

 

	 	 	TOTALS
	Land value	 	$	24,438,000	 
	Add: Prepaid sewer tap fees	 	$	1,825,000	 
	Add: Reimbursable development costs	 	$	400,000	 
	Total value of real estate assets	 	$	26,663,000	 
	Less: Mortgage loans outstanding	 	($	10,280,000	)
	Net Asset Value of Real Estate Assets	 	$	16,383,000	 
	Add: Cash balance	 	$	585,884	 
	Add: Restricted cash	 	$	164,901	 
	Add: Prepaid items related to post-Closing periods	 	 	$104,975	(1)
	Add: Note receivable	 	$	15,000	 
	Add: Public entity value	 	$	3,000,000	 
	Less: Other Liabilities / Company's estimated use of cash through the Closing Date	 	($	1,607,465 	)(2)
	Less: Estimated "Selling Costs" (as defined in the Purchase Agreement)	 	($	1,079,487	)
	NET ASSET VALUE	 	$	17,566,808	 
	TOTAL SHARES AND UNITS OUTSTANDING	 	 	12,547,720	 
	NET ASSET VALUE PER SHARE	 	$	1.40	 

 

NOTES:

 

	 	(1)	Includes the following prepaid expenses for post-Closing period, subject to adjustment based on actual Closing Date:

 

	Prepaid Expenses	 	Amount
	Prepaid insurance	 	$	56,750	 
	Prepaid rent	 	$	2,648	 
	Lease deposit	 	$	20,577	 
	NYSE MKT listing fee	 	$	25,000	 
	Total Prepaid Expenses	 	$	104,975	 

 

	 	(2)	Excludes the following Liabilities that will be accrued as of the Closing Date that relate to the post-Closing period, subject to adjustment based on actual Closing Date:

 

	Excluded Accrued Liabilities	 	Amount
	2015 Annual Report and Meeting	 	$	52,500	 
	Annual SOX Compliance Testing	 	$	19,707	 
	Annual SEC Reporting	 	$	20,613	 
	Annual Audit and Tax fees	 	$	115,166	 
	Accrued Legal for SEC Reporting	 	$	59,166	 
	Total Excluded Accrued Liabilities	 	$	267,152	 

    	 

    	 

    

EXHIBIT
B

FORM
OF EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is made and effective as of the ___ day of ___________, 20___, by and between ROBERTS REALTY
INVESTORS, INC., a Georgia corporation (the “Company”) and CHARLES S. ROBERTS (“Employee”).

 

WHEREAS, the Company,
Roberts Properties Residential, L.P, a Georgia limited partnership (together with the Company, the “Seller Parties”)
and A-III Investment Partners LLC, a Delaware limited liability company (the “Purchaser”) have entered into
a Stock Purchase Agreement (the “Stock Purchase Agreement”), dated as of November 19, 2014, pursuant to which,
among other things, (i) on the date hereof, the Purchaser has purchased from the Company, and the Company has issued and sold to
the Purchaser, ____________ shares (the “Closing Shares”) of common stock, $.01 par value per share, of the
Company, (ii) the Company has agreed, in general terms and subject to the terms and conditions of the Stock Purchase Agreement
(including Section 1.3 thereof), to issue additional shares of Common Stock to the Purchaser if, as a result of a post-closing
true-up that takes into account, among other things, the actual aggregate net sale proceeds received by the Company for its four
Legacy Properties, the adjusted net asset value of the Company is less than the estimated aggregate net asset value determined
as of the Closing Date (the “True-up”), and (iii) the Company will grant to Purchaser a warrant to purchase
up to $38 million of additional shares of Common Stock at a purchase price per share that is determined after giving effect to
the True-Up; and

WHEREAS, as an essential
element of the willingness of the Seller Parties to agree to the True-up, the Stock Purchase Agreement provides that the Company
and Employee shall enter into this Agreement to provide that Employee shall supervise the disposition by the Seller Parties of
the Legacy Properties, subject to the terms and conditions of this Agreement; and

WHEREAS, Employee
is willing to assume the duties provided below to achieve the business goals of the Seller Parties and the Purchaser as reflected
in the True-up if and only if he has the broad authority described below;

NOW, THEREFORE,
in consideration of the respective representations, warranties, covenants and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

	Condition of Employment; Title, Duties and Authority.

	 	(a)	The Company agrees to employ Employee, and Employee accepts such employment, subject to the terms and condition of this Agreement. Employee shall be an officer of the Company and shall have the title of Executive Vice President. Employee shall conduct a marketing process (which may, but shall not be required in all cases to, include the use of third party commercial real estate brokers) with respect to the sale of the following properties that are currently owned by the Company (the “Legacy Properties”): North Springs, Northridge, Highway 20 and Bradley Park. Employee shall be responsible for the marketing process, including positioning the properties for sale, identifying buyers, and negotiating terms of sale that are customary for similarly situated properties. All sales shall be subject to approval by the Board of Directors of the Company, including by a majority of the independent members of the Board of Directors of the Company, which approval shall not be unreasonably withheld or delayed, subject to their fiduciary duties. The Company acknowledges that Employee shall not be required to, and in fact will not, devote his full-time business attention to his duties and responsibilities hereunder. 

    	 

    	 

    	 	(b)	Employee shall keep the Company’s Chief Executive Officer informed, through telephone calls and emails, on a regular basis (and in any event no less frequently than bi-weekly), of the status of the marketing process with respect to the Legacy Properties. Employee shall provide copies to the Chief Executive Officer (and any other officer of the Company designated by the Chief Executive Officer) of the following written communications to the extent that Employee deems them to be material: term sheets, letters of intent, indications of interest, offers, due diligence requests, responses to due diligence requests and other material written communications with potential purchasers.

	 	(c)	Without the express prior written consent of the Chief Executive Officer and, if applicable, the prior approval of the Board of Directors, which consent or approval shall not be unreasonably withheld or delayed, subject to their fiduciary duties, Employee shall not be authorized to enter into, on behalf of the Company or any of its affiliates, any agreement, contract, term sheet, letter of intent, indication of interest or other binding or non-binding agreement with a potential buyer of a Legacy Property with respect to any potential sale of a Legacy Property, and Employee shall promptly provide the Chief Executive Officer copies of all such documents once they are signed by Employee on behalf of the Company. 

	 	(d)	Employee is expressly authorized, without the prior written consent of the Chief Executive Officer or the prior approval of the Board of Directors, to engage, on behalf of the Company or any of its affiliates, any service provider, vendor, legal counsel, consultant, civil engineer, environmental consultant, architect, land planner, broker, surveyor, photographer, marketing firm, website designer or developer or other third party as Employee deems appropriate, necessary or helpful in selling the Legacy Properties, so long as such engagements are on terms that are commercially reasonable and do not, when taken together with all other Selling Costs (as such term is defined on Exhibit A hereto), cause the aggregate Selling Costs to exceed $810,362 (the “Budgeted Selling Costs”). In that regard, Employee is authorized to retain, on behalf of the Company or any of its affiliates, without the need for any further approval by the Chief Executive Officer, the services of employees of Roberts Properties, Inc. and Roberts Properties Construction, Inc. (the “Roberts Companies”) to assist with the sale of the Legacy Properties, including assisting Employee in negotiating letters of intent and sales contracts in that regard, providing potential buyers with due diligence materials, responding to requests by potential buyers, reviewing the closing documents, closing the sales and other related matters. The Company shall pay for such services of employees of the Roberts Companies in accordance with the Company’s current reimbursement arrangement with the Roberts Companies, and such reimbursements shall be part of the Selling Costs. Employee shall promptly provide the Chief Executive Officer copies of all agreements engaging third parties as described in this Section 1(d) once they are signed by Employee on behalf of the Company. 

    	2

    	 

    	 	(e)	Employee shall provide to the Company monthly statements of payment and reimbursement obligations and other Selling Costs incurred by Employee on behalf of the Company in accordance with this Agreement, together with copies of invoices, receipts and other reasonable documentation, and the Company shall pay or reimburse such amounts within 30 days after Employee provides such documentation to the Company. For the avoidance of doubt, Employee shall not have the right to bind the Company under any of the contractual arrangements referenced in Section 1(d) above or otherwise, to incur any costs or to obligate the Company to pay any amounts if and to the extent that any such contractual arrangements, costs or amounts, when taken together with all other Selling Costs, cause the aggregate Selling Costs to exceed the Budgeted Selling Costs. 

	 	(f)	The Company acknowledges that Employee’s business location shall be metropolitan Atlanta and, although Employee may be required to travel from time to time in the course of performing his duties for the Company, Employee shall not be required to relocate his residence or his place of business outside of the metropolitan Atlanta area. 

	 	2.	Term and Termination.

	 	(a)	Term; Termination. The term of this Agreement shall commence on the date hereof and, unless sooner terminated as hereinafter provided, shall continue until the first (1st) anniversary of the date hereof (the “Term”). Notwithstanding the foregoing, this Agreement shall terminate earlier than the first (1st) anniversary of the date hereof in the event any of the following occurs prior to such first (1st) anniversary: (i) the death of Employee or long-term disability of Employee; (ii) termination of this Agreement by the Company for Cause in accordance with Section 2(b) below; or (iii) the closing of the sale of all of the Legacy Properties. Even if all of the Legacy Properties have not been sold by the first (1st) anniversary of the date hereof, this Agreement and Employee’s employment with the Company shall nonetheless terminate on the first (1st) anniversary of the date hereof, and the Company’s other officers shall immediately assume responsibility for the disposition of any remaining Legacy Properties.

 

	 	(b)	Termination for Cause. The Company shall have the right to terminate Employee’s employment at any time prior to expiration of the Term upon delivery of written notice of termination for Cause (as defined below) to Employee (which notice shall specify in reasonable detail the basis upon which such termination is made), such employment to terminate immediately upon delivery of such notice (provided that Employee has received any prior notice and opportunity to cure required by this Section 2(b)), unless otherwise specified by the Board of Directors of the Company, if a majority of the independent members of the Board of Directors determines that Employee’s employment hereunder shall be terminated for Cause. “Cause” shall be deemed to have occurred if Employee: (i) has misappropriated, stolen or embezzled funds or property from the Company or an affiliate of the Company, (ii) has been convicted of or entered a plea of “nolo contendere” for a felony which, in the reasonable opinion of a majority of the independent members of the Board of Directors, brings Employee or the Company into disrepute or is likely to cause material harm to the Company’s (or any affiliate of the Company) business, financial condition or prospects, (iii) has materially violated or breached any material provision of this Agreement and failed to cure such breach or violation to the reasonable satisfaction of the Board of Directors within 30 days after receipt of written notice of such breach or violation, or (iv) has violated any material law or regulation.

 

    	3

    	 

    	 	(c)	Effects of Termination. Upon the expiration of the Term or the earlier termination of Employee’s employment hereunder, all rights and obligations of the parties arising under this Agreement shall immediately cease, except as follows:

 

	 	(i)	if this Agreement is terminated prior to expiration of the one-year Term because of (1) the death of Employee or long-term disability of Employee; or (2) the earlier closing of the sale of all of the Legacy Properties, the Company shall (A) remain obligated to continue to pay the remaining amount of Employee’s Base Salary (as defined in Section 3(a) below) to Employee or Employee’s estate, as applicable, as if he had been employed through the first (1st) anniversary of the date hereof, which amount shall be paid to Employee or his estate, as applicable, in a lump sum not later than thirty (30) days after the termination of this Agreement, (B) promptly reimburse Employee under Section 3(b) below for all reasonable business expenses incurred through the date of termination of this Agreement and (C) promptly reimburse the Roberts Companies for all amounts that were incurred under, and in accordance with the terms and conditions of, Section 1(d) above through the date of termination of this Agreement; and

 

	 	(ii)	Sections 4, 5, 6, 7 and 8 of this Agreement shall survive its termination or expiration.

 

	 	3.	Compensation and Expenses.

	 	(a)	Base Salary. During the Term, the Company shall pay Employee a base salary at the rate of $250,000 per annum (the “Base Salary”), payable on a monthly basis in equal monthly installments in accordance with customary payroll policies and procedures, including withholding requirements.

	 	(b)	Business Expenses. During the Term, Employee shall be authorized to incur, and shall be reimbursed for, all reasonable out-of-pocket business expenses incurred by Employee in connection with the performance of his duties and responsibilities under this Agreement. “Reasonable” is defined as that which enables Employee to perform his duties for the Company (including meals and travel) comfortably but not extravagantly. Employee shall provide to the Company receipts or other reasonable documentation of such expenses for any individual expenditure over $25, and the Company shall reimburse Employee for such expenses promptly and in any event not later than 30 days after Employee provides such documentation to the Company. Employee shall provide the Chief Executive Officer with a monthly written summary of all reimbursable business expenses incurred by Employee. 

    	4

    	 

    	 	(c)	Employee Compensation and Related Expenses Not Part of Budgeted Selling Costs. Employee and the Company acknowledge that the Base Salary and related employment expenses incurred by the Company in connection with the employment of the Employee under this Agreement, and all business expenses incurred personally by Employee that are payable or reimbursable by the Company under this Agreement, shall not be Selling Costs that count towards the aggregate Budgeted Selling Costs under this Agreement, but such costs and expenses shall be deemed to be Selling Costs for purposes of the True-Up under the Stock Purchase Agreement. (Payments to the Roberts Companies shall not be deemed to be business expenses incurred personally by Employee.)

	Severability. In the event that any portion of this Agreement
is determined to be invalid or unenforceable for any reason, such determination shall in no way affect the enforceability of other
portions of the Agreement, which shall remain in full force and effect. To the extent that a court or other body construing this
Agreement can render it enforceable by modifying any clause, while continuing to preserve the intent of the parties to protect
their legitimate business interests, then the parties intend that the court or other body shall do so.
	Assignment. The rights and obligations of the Company
under this Agreement shall inure to the benefit of the successors and permitted assigns of the Company. Neither party may assign
its rights or obligations under this Agreement without the prior written consent of the other party; provided, however,
that the Company may assign its rights and obligations hereunder to any successor in connection with any sale, transfer or other
disposition of all or substantially all of the Company’s assets, stock, or business, whether by merger, share exchange, asset
sale, consolidation or otherwise.
	Governing Law. The validity and effect of this Agreement
and the rights and obligations of the parties hereto shall be construed and determined in accordance with Georgia law excluding
the “conflicts of law” rules thereof. Each party hereby expressly consents to the exclusive jurisdiction and venue
of the state and federal courts located in Atlanta, Georgia for any lawsuit filed by either party arising from or relating to this
Agreement.
	Waiver of Jury Trial. The parties waive any right to
a trial by jury in any action or proceeding to enforce or defend any rights under this Agreement or under any instrument, document
or agreement delivered in connection herewith or hereafter and agree that any such action or proceeding shall be tried before a
court and not before a jury.

    	5

    	 

    	Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior agreements and discussions
between the parties in that regard. This Agreement may not be changed or amended orally but only by an agreement in writing signed
by both the parties.
	Opportunity to Consult Counsel. Employee acknowledges
receipt of a copy of this Agreement prior to the date hereof and also acknowledges having had ample time to consult counsel of
Employee’s choice concerning the terms and conditions of this Agreement.
	Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts
have been signed by each party and delivered to each other party. Copies of executed counterparts transmitted by telecopy, telefax
or other electronic means shall be considered original executed counterparts for purposes of this Section, provided that receipt
of copies of such counterparts is confirmed.

[Signatures are on the following page]

 

    	6

    	 

    IN WITNESS WHEREOF, the Company and Employee
have duly executed this Agreement as of the day and year first written above.

 

THE COMPANY:

 

ROBERTS REALTY INVESTORS, INC.

 

 

 

	By: 	 	 	 

Name:

Title:

 

Address for Notices:

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com 

 

 

EMPLOYEE:

 

CHARLES S. ROBERTS

 

 

 

	 	 	 

 Signature

 

 

Address for Notices:

Charles S. Roberts

375 Northridge Road

Suite 330

Atlanta, Georgia 30350

Telephone: (770) 394-6000

Email: cr@robertsproperties.com

 

 

    	7

    	 

    Exhibit A

SELLING
COSTS

 

Defined terms used
in this Exhibit A and not defined shall have the meanings set forth in the Employment Agreement to which it is attached.

For purposes of this
Exhibit A and the Employment Agreement, “Selling Costs” means (i) sales commissions, and (ii) all costs
incurred by the Company or by Employee on behalf of the Company in connection with the performance of Employee’s duties under
the Employment Agreement and the marketing and sale of the Legacy Properties (excluding Base Salary, reimbursable business expenses
incurred by Employee, and other employment expenses incurred by the Company in connection with the employment of Employee), including
but not limited to (A) costs incurred in connection with the engagement of any service provider, vendor, legal counsel, consultant,
civil engineer, environmental consultant, architect, land planner, broker, surveyor, photographer, marketing firm, website designer
or developer or other third party, (B) transfer taxes, (C) all costs incurred by the Company in connection with the services
of employees of the Roberts Companies to assist with the sale of the Legacy Properties and (D) miscellaneous sales and closing
costs.

 

    	8

    	 

    

EXHIBIT
C

FORM
OF GOVERNANCE AND VOTING AGREEMENT

 

THIS GOVERNANCE
AND VOTING AGREEMENT (this “Agreement”) is made as of the ____ day of ___________, 20___ by and among Roberts
Realty Investors, Inc., a Georgia corporation (the “Company”), A-III Investment Partners LLC, a Delaware limited
liability company (the “Purchaser”), and Charles S. Roberts, an individual (“Roberts”
and, together with the Company and the Purchaser, the “Parties” and each a “Party”).

WHEREAS, the Company,
Roberts Properties Residential, L.P, a Georgia limited partnership, and the Purchaser have entered into a Stock Purchase Agreement
(the “Stock Purchase Agreement”), dated the 19th day of November, 2014, pursuant to which, among other things,
the Purchaser has agreed to purchase from the Company, and the Company has agreed to issue and sell to the Purchaser, _______________
shares of common stock, $.01 par value per share, of the Company (the “Common Stock”) on the terms and subject
to the conditions set forth in the Stock Purchase Agreement; and

WHEREAS, upon the
closing of the transactions contemplated by the Stock Purchase Agreement (the “Closing”), the Purchaser and
Roberts will each beneficially own and have the power to direct the voting or disposition of certain shares of the Company’s
capital stock; and

WHEREAS,
the Parties desire to enter into this Agreement to provide for the composition of the Board of Directors of the Company (the “Board”)
immediately following the Closing and to provide for certain other rights and obligations of the Purchaser, the Company and Roberts
with respect to certain shares of the Company’s capital stock beneficially owned by the Purchaser and Roberts, all in accordance
with the terms and conditions set forth herein.

NOW,
THEREFORE, in consideration of the respective representations, warranties, covenants and agreements set forth in the Stock Purchase
Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows:

1.                 
Initial Board Composition and Representation. In connection with the Closing, the Company agrees to take all Necessary
Actions (as defined below) to effectuate the following results:

(a)               
At the Closing, the existing Board shall take all Necessary Actions to increase the number of directors on the Board from
five to seven effective upon the Closing, thereby creating two vacancies on the Board. In accordance with the provisions of the
Georgia Business Corporation Code, the increase or decrease in the number of directors shall be so apportioned among the classes
as to make all classes as nearly equal in number as possible. In that regard, the class of 2015 shall have two directors, the class
of 2016 shall have three directors and the class of 2017 shall have two directors. Each of the seven directors shall be appointed
into a particular class as described in Sections 1(b) through 1(f) below.

(b)              
Prior to the Closing, all five directors serving on the Board immediately prior to the Closing (including Roberts, subject
to Section 1(f) below) shall deliver letters of resignation and release to the Company, and the Company shall deliver copies of
such letters to the Purchaser in accordance with the requirements of the Stock Purchase Agreement. Such resignations shall be effective
only if the Closing occurs and otherwise at the times and in the sequence described in Sections 1(c) through 1(f) below.

 

    	1

    	 

    (c)               
At or immediately following the Closing, the resignations of Weldon R. Humphries and Wm. Jarell Jones shall become effective,
and the members of the Board at that time shall appoint ___________ and _____________ (the “Purchaser Directors”)
to fill two of the vacancies in the class of 2017. Neither of the Purchaser Directors (or any replacement) shall be required to
qualify as an Independent Director (as defined below).

(d)              
Immediately after the events described in the preceding Section 1(c), the resignations of John L. Davis and Charles R. Elliott
shall become effective, and the members of the Board at that time shall appoint ______________ and ______________, each qualifying
as an “Independent Director” as defined below as of the Closing Date (each a “New Independent Director”),
to fill the two vacancies in the class of 2016. If either such person is unable or unwilling to serve, another person designated
in writing by the Purchaser and qualifying as an “Independent Director” as defined below shall be appointed to the
class of 2016.

(e)               
Immediately after the events described in the preceding Sections 1(c) and 1(d) above, the resignation of Roberts (in which
he shall resign as a director and as an officer of the Company and its Affiliates (as defined below)) shall become effective, and
the members of the Board at that time shall appoint ______________ and ______________, each qualifying as an “Independent
Director” as defined below as of the Closing Date (each a “New Independent Director”), to fill the two
newly created vacancies in the class of 2015. If either such person is unable or unwilling to serve, another person designated
in writing by the Purchaser and qualifying as an “Independent Director” as defined below shall be appointed to the
class of 2015. The two (2) New Independent Directors in the class of 2015, together with the two (2) New Independent Directors
in the class of 2016, shall, collectively, be the “New Independent Directors.”

(f)               
Immediately after the events described in the preceding Sections 1(c), 1(d) and 1(e) above, Roberts shall immediately thereafter
be re-appointed as a director of the Company (but not as the Chairman of the Board) in the Class of 2016 and re-appointed and employed
as an officer of the Company in accordance with that certain Employment Agreement between the Company and Roberts dated as of the
Closing Date (the “Employment Agreement”).

(g)              
For purposes of this Agreement, a Person shall be deemed to be an “Independent Director” if he or she satisfies
the independence standards of both (1) the Company’s articles of incorporation and bylaws, as in effect on the date hereof
and as of the Closing Date, and (2) the NYSE MKT or such other national securities exchange or quotation system on which the Company’s
securities may become listed for trading or quotation (each an “Independent Director”). Each New Independent
Director must qualify as an Independent Director throughout his or her term as a director. If at any time, the Board determines
that any Company director (other than Roberts and the Purchaser Directors), does not qualify as an Independent Director, the Company
shall give prompt written notice to the Parties of such determination and the basis therefor. Upon making such determination, or
receiving notice thereof, the Purchaser shall designate a replacement director, and the Company shall take such actions as are
necessary to cause such existing director to resign from the Board, and the qualifying replacement director to be appointed or
elected to the Board, as soon as reasonably practical. To effectuate such requirement, each of the New Independent Directors shall
execute and deliver to the Company on the Closing Date, and any replacement director therefor shall execute and deliver to the
Company on the date of his or her designation, a letter of resignation, in the form attached as Exhibit A hereto,
which resignation shall automatically take effect upon a determination by the Board that such director has ceased to qualify as
an “Independent Director.”

 

    	2

    	 

    (h)              
For purposes of this Agreement, “Necessary Actions” shall mean, with respect to a specified result, all
actions that are permitted by applicable law and applicable stock exchange rules as shall be necessary to cause such result. Such
actions shall include, but are not limited to: (i) adoption by the Board of resolutions or other similar action by the Board as
shall be required in order to increase the number of directors on the Board as described in this Agreement, including but not limited
to approving an amendment to the Company’s bylaws; (ii) appointment by the Board of the individuals identified under this
Agreement to fill vacancies on the Board; (iii) including individuals identified under this Agreement in the slate of nominees
to the Board recommended to the shareholders of the Company for election as directors; (iv) soliciting proxies or consents
in favor of the election of individuals nominated for election to the Board; (v) voting (whether at an annual or special meeting)
or providing a written consent or proxy with respect to shares of Common Stock; (vi) calling or attending meetings in person
or by proxy for the purposes of obtaining a quorum and causing the adoption of shareholders’ resolutions and amendments to
the organizational documents of the Company; (vii) causing members of the Board to act in a certain manner or causing them to be
removed if they do not act in such a manner; (viii) executing agreements and instruments; and (ix) making or causing to be made,
with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to
achieve such result.

(i)                
For purposes of this Agreement, “Affiliate” shall mean, with respect to any specified person, any other
person who, directly or indirectly, controls, is controlled by, or is under common control with such person, including, without
limitation, any general partner, managing member, officer or director of such person.

2.                 
Continuing Board Composition and Representation.

(a)               
Purchaser Directors. Subject to Section 2(c) below, the Company agrees to take all Necessary Actions to nominate
each of the two Purchaser Directors (or any replacement thereof designated by the Purchaser) for re-election to the Board at each
subsequent meeting of the shareholders of the Company held to consider a vote on the election of directors of the class in which
such Purchaser Director serves, and not to take any action that is designed to interfere with such election or re-election of each
such Purchaser Director to the Board. Only such individuals designated in accordance with Section 1(c) above, or in accordance
with the provisions of this Section 2, shall be eligible for nomination or election as successors to the Purchaser Directors. Subject
to Section 2(c), if at any time a vacancy occurs on the Board with respect to the directorship of either of the Purchaser Directors
(by reason of such director’s death, disability, resignation, removal or otherwise), the Company agrees to take all Necessary
Actions to cause a replacement director, designated by the Purchaser (or its permitted assignees), to be appointed to fill such
vacancy promptly following his or her designation by the Purchaser (or permitted assignees) hereunder. If the Purchaser fails to
designate a replacement director to be appointed to fill such vacancy, the Nominating and Governance Committee shall be permitted
to designate a nominee (who shall qualify as an Independent Director) for election to the Board to fill such vacancy at the next
succeeding annual meeting of shareholders of the Company. If the Purchaser fails to designate a replacement director to be appointed
to fill such vacancy and the Nominating and Governance Committee designates a nominee for election to the Board to fill such vacancy
as provided in the immediately preceding sentence, the Purchaser’s rights under Sections 1 and 2 hereof shall not be terminated
and shall apply at the next succeeding meeting of shareholders of the Company at which an election of directors occurs.

 

    	3

    	 

    (b)              
New Independent Directors. Subject to Sections 2(c) below, the Company agrees to take all Necessary Actions to nominate
each of the four New Independent Directors (or any replacement thereof designated by the Purchaser) for re-election to the Board
at each subsequent meeting of the shareholders of the Company held to consider a vote on the election of the class in which each
such New Independent Director serves, and not to take any action that is designed to interfere with such election or re-election
of each such director to the Board. Only such individuals designated in accordance with Section 1(d) and 1(e) above, or in accordance
with the provisions of this Section 2, shall be eligible for nomination or election as successors to the New Independent Directors.
Subject to Section 2(c), if at any time a vacancy occurs on the Board with respect to the directorship of any of the New Independent
Directors (by reason of such director’s death, disability, resignation, removal or otherwise), the Company and the Purchaser
agree to take all Necessary Actions to cause a replacement director, designated by the Purchaser (or its permitted assignees),
to be appointed to fill such vacancy promptly following his or her designation by the Purchaser (or permitted assignees) hereunder.
If the Purchaser fails to designate a replacement director to be appointed to fill such vacancy, the Nominating and Governance
Committee shall be permitted to designate a nominee (who shall qualify as an Independent Director) for election to the Board to
fill such vacancy at the next succeeding annual meeting of shareholders of the Company. If the Purchaser fails to designate a replacement
director to be appointed to fill such vacancy and the Nominating and Governance Committee designates a nominee for election to
the Board to fill such vacancy as provided in the immediately preceding sentence, the Purchaser’s rights under Sections 1
and 2 hereof shall not be terminated and shall apply at the next succeeding meeting of shareholders of the Company at which an
election of directors occurs.

(c)               
Termination of Purchaser Board Designation Rights. Notwithstanding any other provision in Section 2(a) or Section
2(b) above:

(i)                
The obligations of the Company under this Agreement to take all Necessary Actions to appoint, or to nominate for election,
the Purchaser Directors, or to appoint or nominate replacements thereto, and to take all Necessary Actions to appoint any Purchaser
Director to serve on the Committees (as defined below), in each case as designated by the Purchaser in accordance with this Agreement,
shall only apply if the Purchaser and its members, and their respective Affiliates, collectively maintain continuous beneficial
ownership of an aggregate of at least 100% of the shares of Common Stock initially acquired at the Closing (subject to adjustment
for stock splits, stock dividends and other similar adjustments to the shares of Common Stock). “Beneficial ownership”
shall have the meaning provided in Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended.

 

    	4

    	 

    (ii)              
The obligations of the Company under this Agreement to take all Necessary Actions to nominate the New Independent Directors,
or to take all Necessary Actions to appoint or nominate replacements thereto, and to take all Necessary Actions to appoint any
new Independent Director to serve on the Committees (as defined below), in each case as designated by the Purchaser in accordance
with this Agreement, shall only apply if the Purchaser and its members, and their respective Affiliates, collectively maintain
continuous beneficial ownership of at least 100% of the shares of Common Stock initially acquired at the Closing (subject to adjustment
for stock splits, stock dividends and other similar adjustments to the shares of Common Stock).

(d)              
Designation of Nominees. The Company shall give the Purchaser written notice (the “Company Designation Request”)
(i) requesting that the Purchaser designate directors pursuant to the terms of Sections 2(a) and 2(b), (ii) stating the Company’s
intention to take all Necessary Actions to include such designees in its upcoming proxy statement to shareholders, and (iii) providing
the date on which the proxy statement is to be mailed (the “Mailing Date”), such Company Designation Request
to be delivered not less than 45 days prior to the Mailing Date. To designate a director pursuant to the provisions of Sections
2(a) and 2(b), the Purchaser shall be required to have given the Company written notice of the Purchaser’s designees, together
with all information relating to such designee or designees required to be included by the Company in such proxy statement under
applicable laws, including the federal proxy rules (the “Designation Notice”), on or before the tenth day prior
to the Mailing Date (the “Designation Date”). If the Purchaser shall have failed to designate nominees for election
to fill any of the Purchaser Director or New Independent Director slots on the Board as provided in this Section 2 by the Designation
Date, such director nominees shall instead be designated by the Nominating and Governance Committee not later than two days before
the Mailing Date (the “Final Designation Date”), and such director shall, if elected, (i) serve until the end
of such director’s term and until his or her successor is duly elected and qualifies, (ii) be an Independent Director (if
not an Purchaser Director), (iii) assume all Committee positions previously held by the prior Purchaser Director or New Independent
Director, as applicable, and (iv) otherwise be deemed the Purchaser Director or New Independent Director, as applicable, for purposes
of this Agreement, until the next meeting of Company shareholders at which the shareholders vote for the election of directors
of the class in which such Purchaser Director or New Independent Director serves.

(e)               
Vacancies. If a vacancy shall have occurred in the position of either Purchaser Director or any New Independent Director
during any period during which the Purchaser (or any permitted assignee thereof) has the right to designate a replacement director
to be appointed to fill such vacancy, yet the Purchaser fails to designate a replacement director pursuant to Section 2(a) or 2(b),
as applicable, for a period of more than 45 days after the vacancy in such position has occurred, then and until such replacement
is so named, the replacement director for the Purchaser Director and/or New Independent Director shall be designated by the Nominating
and Governance Committee (i) to serve until the end of such director’s term and until his or her successor is duly elected
and qualifies, (ii) be an Independent Director (if not an Purchaser Director), (iii) assume all Committee positions previously
held by the prior Purchaser Director or New Independent Director, as applicable, and (iv) otherwise be deemed the Purchaser Director
or New Independent Director, as applicable, for purposes of this Agreement.

 

    	5

    	 

    (f)               
Chairman of the Board. At all times during which the Purchaser has the right to designate the Purchaser Directors
for election to the Board, the Company agrees to take all Necessary Actions so that one of the Purchaser Directors identified by
the Purchaser shall be appointed to serve as the Chairman of the Board.

(g)              
Roberts Board Right. So long as Roberts continuously maintains beneficial ownership of at least 1,100,000 shares
of Common Stock (subject to adjustment for stock splits, stock dividends and other similar adjustments to the shares of Common
Stock) during the one year period after the Closing Date, the Company and the Purchaser agree to take all Necessary Actions to
nominate Roberts for re-election to the Board at any meeting of the shareholders of the Company held after the Closing and before
the first anniversary of the Closing Date to consider a vote on the election of directors of the class in which Roberts serves
(or, to the extent the Company has de-classified the Board, which the parties acknowledge is the Company’s intent, to consider
a vote on the election of all directors), and not to take any action that is designed to interfere with the election or re-election
of Roberts to the Board during such one-year period. Roberts agrees to resign from the Board immediately upon the first to occur
of the following two events: (i) in the event he fails to continuously maintain beneficial ownership of at least 1,100,000 shares
of Common Stock (subject to adjustment for stock splits, stock dividends and other similar adjustments to the shares of Common
Stock) and (ii) the first anniversary of the Closing Date. While he serves as a director, Roberts shall be authorized to incur,
and shall be reimbursed for, all reasonable travel expenses incurred in carrying out his duties as a director. “Reasonable”
is defined as that which enables Roberts to perform his duties as a director (including meals and travel) comfortably but not extravagantly.
Roberts shall provide to the Company receipts or other reasonable documentation of such expenses for any individual expenditure
over $25, and the Company shall reimburse Roberts for such expenses promptly and in any event not later than 30 days after Roberts
provides such documentation to the Company.

3.                 
Committee Representation.

(a)               
At or immediately following the Closing, the Company agrees to take all Necessary Actions to set the number of directors
on the Board’s (i) Audit Committee, (ii) Compensation Committee, and (iii) Nominating and Governance Committee (each
a “Committee” and collectively, the “Committees”) at three (3) directors per Committee.

(b)              
At or immediately following the Closing, the Company agrees to take all Necessary Actions to cause three of the New Independent
Directors designated by the Purchaser to be appointed, and thereafter to be re-appointed, to serve on each of the Committees. The
members of each Committee shall designate a Committee Chairman from among such Committee members. If, at any time, the Board determines
that a director serving on a Committee does not qualify as an Independent Director, the Company shall give prompt written notice
of such determination and the basis therefor to the director in question and the Purchaser. Upon making such determination, or
receiving notice thereof, the director whom the Board has determined does not qualify as an Independent Director shall resign from
all Committees as soon as reasonably practical, and the Purchaser shall designate a replacement director who qualifies as an Independent
Director to fill the vacancy created by such resignation.

 

    	6

    	 

    4.                 
Voting. From and after the Closing,

(a)               
The Purchaser agrees to vote all shares of Common Stock (and any other shares of the Company’s capital stock held
by Purchaser and entitled to vote) beneficially owned by it and entitled to vote, and Roberts agrees to vote all shares of Common
Stock beneficially owned by him and entitled to vote, in favor of the election or re-election, as the case may be, of the directors
designated by the Parties as provided in this Agreement at any meeting (or written consent in lieu of a meeting) of the Company’s
shareholders held to consider the election of any such designated director; provided, however, that (i) the Purchaser’s
foregoing obligations with respect to the election of Roberts as a director shall only apply while Roberts has the right to be
nominated for election as a director pursuant to Section 2(g) and (ii) Roberts’ foregoing obligations with respect to the
election of the Purchaser Directors and the New Independent Directors designated by the Purchaser for election as directors shall
terminate upon the first to occur of the termination of Roberts’ right to be nominated for election as a director pursuant
to Section 2(g) and Roberts’ resignation from the Board.

(b)              
Roberts agrees to vote all shares of the Company’s capital stock beneficially owned by him and entitled to vote in
favor of any resolution or proposal approved by a majority of the Independent Directors and recommended by the Board for approval
by shareholders of the Company; provided, however, that Roberts’ voting obligations shall expire upon the first to
occur of the termination of Roberts’ right to be nominated for election as a director pursuant to Section 2(g) and Roberts’
resignation from the Board. Such matters may include, but are not limited to, any of the following matters, which the Company and
the Purchaser have stated that they intend to effectuate as soon as is practicable after the Closing:

(i)                
Any proposal to reincorporate the Company as a Maryland corporation, whether through an affiliated merger or otherwise;

(ii)              
Any proposal to de-classify the Board of Directors of the Company;

(iii)            
Any proposal to effectuate a reverse split of the Company’s common stock;

(iv)            
Any proposal to amend the Company’s charter or bylaws to waive the application of the corporate opportunity doctrine
to the Purchaser Directors with respect to investment opportunities identified by them or their Affiliates for the benefit of the
other investment funds and accounts managed by them or their Affiliates; and

(v)              
Any proposal to adopt an amended or restated charter of the Company in furtherance of any of the foregoing matters that
requires such an amendment or restatement.

 

    	7

    	 

    (c)               
So long as the Purchaser and its members, and their respective Affiliates, collectively maintain continuous beneficial ownership
of an aggregate of at least 100% of the shares of Common Stock initially acquired at the Closing (subject to adjustment for stock
splits, stock dividends and other similar adjustments to the shares of Common Stock), Roberts shall maintain beneficial ownership
of a sufficient number of shares of Common Stock that will allow the Purchaser and Roberts to collectively maintain beneficial
ownership of a majority of the shares of Common Stock outstanding upon completion of the Closing; provided, however, that
Roberts’ obligations under this Section 4(c) (i) shall expire upon the first to occur of the termination of Roberts’
right to be nominated for election as a director pursuant to Section 2(g) and Roberts’ resignation from the Board and (ii)
shall never require that Roberts purchase additional shares of Common Stock.

5.                 
Right of First Offer.

(a)               
Grant. For a period of three (3) years following the Closing (as defined in the Stock Purchase Agreement), subject
to the terms of Section 5(d), Roberts hereby unconditionally and irrevocably grants to the Purchaser and any of its Affiliates,
collectively referred to as the Purchaser for this Section 5, the right (the “Right of First Offer”),
but not the obligation, to purchase some or all of the Common Stock beneficially owned by Roberts (“Transfer Stock”)
with respect to any proposed assignment, sale, offer to sell, disposition of or any other like transfer of the Transfer Stock (a
“Proposed Transfer”), at the price and on the same terms and conditions as those specified in any Proposed Transfer
Notice (as defined below).

(b)              
Notice. In the event of a Proposed Transfer, Roberts must deliver to the Purchaser a written notice setting forth
the terms and conditions of a Proposed Transfer (a “Proposed Transfer Notice”) not later than five (5) business
days prior to the consummation of such Proposed Transfer. Such Proposed Transfer Notice shall contain the material terms and conditions
(including price) of the Proposed Transfer. To exercise its Right of First Offer, the Purchaser must deliver a written notice notifying
Roberts that the Purchaser intends to exercise its Right of First Offer as to some or all of the Transfer Stock with respect to
any Proposed Transfer within five (5) business days after Purchaser’s receipt of the Proposed Transfer Notice (“Purchaser
Notice”).

(c)               
Periods of Sale and Sale Price. If the Purchaser has not delivered a Purchaser Notice and the five (5) business day
period for the Purchaser to deliver the Purchaser Notice has ended (“Refusal Date”), Roberts may consummate
a Proposed Transfer directly related to the Proposed Transfer Notice only if the following conditions have been met: (i) for a
sale price that is 95% or more of the sale price specified in the Proposed Transfer Notice and (ii) (a) within a period of ninety
(90) days from the Refusal Date in the event of a private, unregistered sale of Transfer Stock or (b) within a period of fifteen
(15) business days from the Refusal Date in the event of a publicly registered sale of Transfer Stock. Any Proposed Transfer not
consummated at the price or within the timeframe referenced above will be subject to the requirements referenced in Section
5(b).

 

    	8

    	 

    (d)              
Exempted Transfers. Notwithstanding the foregoing or anything to the contrary herein, the provisions of Section
5(a) and 5(b) shall not apply to: (i) bona fide gifts of Common Stock beneficially owned by Roberts to the immediate
family members of Roberts or (ii) sales of Common Stock beneficially owned by Roberts sold under Roberts’ 10b5-1 plan which
plan currently allows Roberts to sell up to 100,000 shares of Common Stock on a quarterly basis at a price per share of at least
$1.40. Roberts shall have the irrevocable right to continue to have a 10b5-1 plan in accordance with applicable securities laws
and any sales under such 10b5-1 plan shall continue to be Exempted Transfers. The Company shall take all Necessary Actions to enable
Roberts to exercise his right to continue to have a 10b5-1 plan for so long as Roberts is a director or officer of the Company.

(e)               
Closing. The closing of the purchase of Transfer Stock by the Purchaser shall take place, and all payments from the
Purchaser shall have been delivered to Roberts, by the fifteenth (15th) day following the delivery of the Purchaser
Notice. Upon Purchaser’s payment of the purchase price to Roberts as set forth in the Purchase Notice for the applicable
number of shares of Common Stock being purchased by Purchaser, Roberts shall deliver to Purchaser good, valid and marketable title
to such Transfer Stock being purchased, free and clear of any and all liens, encumbrances, charges, claims, restrictions, pledges,
security interests or impositions, and shall execute and deliver to the Purchaser an irrevocable stock power providing for the
sale and assignment of such Transfer Stock. 

(f)               
Effect of Failure to Comply.              (i) Transfer
Void; Equitable Relief. Any Proposed Transfer not made in compliance with the requirements of this Section 5 shall be null
and void ab initio, shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the
Company. Each party hereto acknowledges and agrees that any breach of this Section 5 would result in substantial harm to the other
parties hereto for which monetary damages alone could not adequately compensate. Therefore, the parties hereto unconditionally
and irrevocably agree that any non-breaching party hereto shall be entitled to seek protective orders, injunctive relief and other
remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of sales
and other transfers of Transfer Stock not made in accordance with this Section 5), and the Company acknowledges and agrees to
enforce the provisions of this Section 5(f).

6.                 
Severalty of Obligations. The obligations under this Agreement of each Party and the separate and several obligations
of that Party and are not joint obligations with respect to any other person. No Party shall be responsible or liable for the obligations
of or any action taken or omitted to be taken by any other Party hereunder.

7.                 
Miscellaneous Provisions.

(a)               
Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to each
other Party. Copies of executed counterparts transmitted by telecopy, telefax or other electronic means shall be considered original
executed counterparts for purposes of this Section, provided that receipt of copies of such counterparts is confirmed.

 

    	9

    	 

    (b)              
Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall
be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when
sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then
on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid,
specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective
parties at their address or email address as set forth on the signature page hereof, or to such other address or email address
as subsequently modified by written notice given in accordance with this Section 7(b).

(c)               
Governing Law. This Agreement shall be governed by and construed in accordance with, the laws of the State of Georgia
without regard, to the fullest extent permitted by law, to the conflicts of law provisions thereof which might result in the application
of the laws of any other jurisdiction.

(d)              
Entire Agreement. This Agreement (including its exhibits, appendices and schedules) and the other documents delivered
pursuant to this Agreement constitute a complete and exclusive statement of the agreement between the Parties with respect to its
subject matter, and supersede all other prior agreements, arrangements or understandings by or between the Parties, written or
oral, express or implied, with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any
Person who is not a Party (or their successors and assigns) any rights or remedies hereunder.

(e)               
Specific Performance. The Parties acknowledge and agree that a breach or threatened breach, of any agreement contained
herein will cause irreparable damage, and the other Parties will have no adequate remedy at law or in equity. Accordingly, each
Party agrees that injunctive relief or other equitable remedy, in addition to remedies at law or in damages, is the appropriate
remedy for any such failure and will not oppose the granting of such relief.

(f)               
Assignment and Successors. This Agreement and all of the provisions hereof shall be binding upon and inure to the
benefit of the Parties. This Agreement and all the provisions hereof are personal to each of the Parties, and except as otherwise
provided in the next succeeding sentence, shall not inure to a Party’s respective successors and may not be assigned by a
Party without the prior written consent of the other Parties. Any assignment in violation of the foregoing shall be void and of
no effect. Notwithstanding the foregoing to the contrary, the Purchaser may assign its rights, benefits and obligations under this
Agreement, including but not limited to its rights to designate the Purchaser Directors or New Independent Directors (or replacements
thereto) and its rights, benefits and obligations under Section 4 hereof, to any Qualified Institutional Buyer that purchases
all but not less than all of the shares of Common Stock purchased by the Purchaser at the Closing.

(g)              
Headings. The Section, Article and other headings contained in this Agreement are inserted for convenience of reference
only and will not affect the meaning or interpretation of this Agreement.

 

    	10

    	 

    (h)              
Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or instruments in writing
signed by (i) the Company and (ii) each Party then entitled to designate a director of the Company pursuant to the provisions
hereof (each Party described in this clause (ii) being an “Amending Party,” it being understood, for purposes
of this Section 7(h), that no Party entitled at any time to designate a director hereunder shall cease to be an Amending Party
unless and until such Party shall have expressly and permanently surrendered, forfeited or assigned any and all of such designation
rights). Any Party may, only by an instrument in writing, waive compliance by any other Party with any term or provision hereof
on the part of such other Party to be performed or complied with. The waiver by any Party of a breach of any term or provision
hereof shall not be construed as a waiver of any subsequent breach.

(i)                
Interpretation; Absence of Presumption.

(i)                
For the purposes hereof, (A) words in the singular shall be held to include the plural and vice versa and words of one gender
shall be held to include the other gender as the context requires; (B) the terms “hereof,” “herein,” “hereto”
and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Article, Section and paragraph references are to the Articles,
Sections and paragraphs to this Agreement unless otherwise specified; (C) the word “including” and words of similar
import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires
or unless otherwise specified; (D) the word “or” shall not be exclusive; and (E) provisions shall apply, when appropriate,
to successive events and transactions.

(ii)              
This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against
the Party drafting or causing any instrument to be drafted.

(iii)            
Capitalized terms used herein but not otherwise defined shall have the meanings set forth in the Stock Purchase Agreement.

(j)                
Severability. If any provision of this Agreement or the application of such provision to any Person or circumstances
shall be held invalid or unenforceable by a court of competent jurisdiction, such provision or application shall be unenforceable
only to the extent of such invalidity or unenforceability, and the remainder of the provision held invalid or unenforceable and
the application of such provision to Persons or circumstances, other than the Party as to which it is held invalid, and the remainder
of this Agreement, shall not be affected.

(k)              
Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS OR THE TRANSACTIONS. EACH OF THE PARTIES HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(k).

 

    	11

    	 

    (l)                
Further Assurances. The Parties agree that, from time to time, each of them will, and will cause their respective
Affiliates to, execute and deliver such further instruments and take such other action as may be necessary to carry out the purposes
and intents hereof.

(m)            
Share Adjustments. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect
any stock dividend, split, combination or other recapitalization affecting such shares occurring after the date of this Agreement.

[Signature pages
follow.]

 

    	12

    	 

    IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed the day and year first above written.

 

	 	COMPANY:	 
	 	 	 
	 	ROBERTS REALTY INVESTORS, INC.	 

 

 

	 	By:	 	 
	 	Name:   	 	 
	 	Title: 	 	 

 

 

	 	Address:

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com	 
	 	 	 
	 	THE PURCHASER:	 
	 	 	 
	 	A-III INVESTMENT PARTNERS LLC	 

 

 

	 	By:	 	 
	 	Name:  	 	 
	 	Title:	 	 

 

 

	 	Address:

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com	 
	 	 	 
	 	ROBERTS:	 
	 	 	 
	 	 	 
	 	 	 
	 	Signature	 
	 	 	 
	 	Address:

375 Northridge Road

Suite 330

Atlanta, GA 30350

Attention: Charles S. Roberts

Telephone: 770-394-6000

Email: cr@robertsproperties.com	 

 

 

Signature Page to Governance and Voting Agreement

 

 

    	 

    	 

    Exhibit A

 

[________________]
[__], 20[__]

 

Board of Directors

Roberts Realty Investors,
Inc.

 

 

To the Board of Directors:

 

I hereby tender my conditional
resignation, as a member of the board of directors of Roberts Realty Investors, Inc. (the “Company”), and as a member
of any and all committees thereof, upon the terms set forth herein. I acknowledge that (i) my execution and delivery of this letter
is a condition to my eligibility to serve in such capacity, (ii) this letter shall be deemed reaffirmed, upon each and every subsequent
instance of my election or re-election to the board of directors of the Company, by my acceptance of such position (whether or
not in writing) without the requirement of re-execution or re-delivery of a letter of like tenor, and (iii) other than with respect
to the conditions set forth herein, this letter shall be irrevocable.

 

My resignation herein tendered
shall be effective upon, and only upon, a determination by the board of directors of the Company that I do not satisfy the independence
standards of both (1) the Company’s charter and bylaws, as in effect on the date hereof, and (2) the NYSE MKT or such other
exchange as the Company’s shares of Common Stock are then listed.

 

Sincerely,

 

 

 

[INSERT NAME OF DIRECTOR]

 

 

    	 

    	 

    

EXHIBIT
D

FORM
OF MANAGEMENT AGREEMENT

MANAGEMENT
AGREEMENT

by and among

Roberts Realty Investors, Inc., Roberts Properties
Residential, L.P.

and

A-III Manager LLC

Dated as of             
, 20___

MANAGEMENT AGREEMENT,
dated as of ____________, 20___ (the “Effective Date”),
by and between Roberts Realty Investors, Inc., a Georgia corporation (the “Company”),
Roberts Properties Residential, L.P. (the “Operating Partnership”)
and A-III Manager LLC, a Delaware limited liability company (the “Manager”).

W I T N E S S E T H:

WHEREAS, through
the Operating Partnership and its other direct and indirect subsidiaries, the Company invests and intends to continue to invest
in Target Assets (as defined below), and the Company intends to operate its business in a manner that will allow the Company to
qualify as a real estate investment trust for federal income tax purposes within the meaning of Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the “Code”)
beginning in 2016, or such other year in which the Company first becomes eligible to qualify as a real estate investment trust
under the Code; and

WHEREAS, the Company
and the Operating Partnership, for themselves and on behalf of any current or future subsidiaries, desire to retain the Manager
to manage and administer their business activities and day-to-day operations and to perform services for them in the manner and
on the terms set forth herein, and the Manager wishes to be retained to provide such services.

NOW THEREFORE, in
consideration of the promises and agreements hereinafter set forth, the parties hereto hereby agree as follows:

Section
1. Definitions.

(a)          
The following terms shall have the meanings set forth in this Section 1(a):

“Acquisition
Fee” means an acquisition fee, calculated and payable
in cash within five Business Days after the closing of any Property or other investment acquired by the Company or any Subsidiary
after the date hereof, in an amount equal to 1% of the gross purchase price paid for each such Property or other investment, including
the total equity invested by the Company or any Subsidiary, and any debt assumed or incurred to fund all or a portion of the gross
purchase price paid for such Property or other investment; provided, however, that the Acquisition Fee shall not be applicable
to (i) short-term temporary investments in money market funds, bank accounts and other money market instruments pending deployment
of such capital in the Company’s operations or in other investments,
(ii) investments in marketable securities purchased in an active secondary trading market and (iii) for any investment made through
a joint venture with one or more partners that are not Affiliates of the Company, the pro rata portion of the gross purchase price
for such investment attributable to any such joint venture partner’s
equity investment based on the partner’s percentage equity
interest in the joint venture; provided, however, that the Manager shall be entitled to be paid an acquisition fee and/or
other economic benefit from such joint venture partner in respect of the partner’s
pro rata share of the investment pursuant to the terms of a separate agreement between the Manager and the joint venture partner.
 That arrangement shall be outside the scope of the joint venture agreement between the Company and the joint venture partner. 
By way of example only, with respect to payments of an Acquisition Fee by the Company to the Manager, if the Company makes an investment
through a joint venture with a partner where the Company and the joint venture partner each invests 50% of the equity in such investment,
then the Manager will be entitled to receive a fee from the Company equal to 1% of one-half of the gross purchase price for such
investment.

“Administration
Agreement” has the meaning set forth in Section 2(d) hereof.

“Affiliate”
means, with respect to any Person, (i) any other Person directly or indirectly controlling, controlled by, or under common control
with such Person, (ii) any executive officer, general partner or managing member of such Person, (iii) any member of the board
of directors or board of managers (or bodies performing similar functions) of such Person, and (iv) any legal entity for which
such Person acts as an executive officer, general partner or managing member. Notwithstanding the foregoing, the Company and its
Subsidiaries shall not be deemed to be Affiliates of the Manager or its Affiliates for purposes of this Agreement.

 

    	 

    	 

    “Agreement”
means this Management Agreement, as amended, supplemented or otherwise modified from time to time.

“Automatic
Renewal Term” has the meaning set forth in Section 11(a)
hereof.

“Bankruptcy”
means, with respect to any Person, (a) the filing by such Person of a voluntary petition seeking liquidation, reorganization, arrangement
or readjustment, in any form, of its debts under Title 11 of the United States Code or any other U.S. federal or state or foreign
insolvency law, or such Person’s filing an answer consenting
to or acquiescing in any such petition, (b) the making by such Person of any assignment for the benefit of its creditors, (c) the
expiration of 90 days after the filing of an involuntary petition under Title 11 of the Unites States Code, an application for
the appointment of a receiver for a material portion of the assets of such Person, or an involuntary petition seeking liquidation,
reorganization, arrangement or readjustment of its debts under any other U.S. federal or state or foreign insolvency law, provided
that the same shall not have been vacated, set aside or stayed within such 90-day period or (d) the entry against such Person
of a final and non-appealable order for relief under any bankruptcy, insolvency or similar law now or hereinafter in effect.

“Base
Management Fee” means the base management fee, calculated
and payable quarterly in arrears, in an amount in cash equal to the product of: (i) the Equity of the Company as of the end of
such fiscal quarter, and (ii) one-fourth of 1.50%. The Base Management Fee shall be pro rated for partial quarterly periods based
on the number of days in such partial period compared to a 90 day quarter.

“Board”
means the board of directors of the Company.

“Business
Day” means any day except a Saturday, a Sunday or a day
on which banking institutions in New York, New York are not required to be open.

“Claim”
has the meaning set forth in Section 9(c) hereof.

“Code”
has the meaning set forth in the Recitals.

“Common
Stock” means the common stock, par value $0.01, of the
Company.

“Company”
has the meaning set forth in the Recitals. When used in this Agreement with reference to the Company’s
business, assets, Properties, investment activities and operations, the Company shall be deemed to mean the Company and the Subsidiaries
taken as a consolidated group, unless the context requires otherwise.

“Company
Indemnified Party” has meaning set forth in Section 9(b)
hereof.

“Conduct
Policies” has the meaning set forth in Section 2(l) hereof.

“Confidential
Information” has the meaning set forth in Section 6 hereof.

“Disposition
Fee” means a disposition fee, calculated and payable
in cash within five Business Days after the closing of any sale or other disposition by the Company or any Subsidiary of any Property
or other investment after the date hereof, in an amount equal to the lesser of (i) 50% of a market brokerage commission for such
disposition and (ii) 1% of the sale price with respect to such disposition; provided, however, that no Disposition Fee shall
be payable with respect to (a) the disposition of any Legacy Property, (b) any disposition of a Property investment to an Affiliate
of the Manager or (c) any disposition of an investment (or a portion of an investment) with respect to which the Manager was not
entitled to receive an Acquisition Fee from the Company when such investment was acquired.

“Effective
Termination Date” has the meaning set forth in Section
11(b) hereof.

 

    	2

    	 

    “Equity”
means (a) the sum of (1) the net proceeds from all issuances of the Company’s
Common Stock and OP Units (without double counting) and other equity securities from the date hereof, which shall include the issuance
of Common Stock pursuant to the terms of the Stock Purchase Agreement on the date hereof (allocated on a pro rata basis for such
issuances during the fiscal quarter of any such issuance) and any issuances of Common Stock or OP Units in exchange for Property
investments and other investments, plus (2) the product of (x) the sum of the (i) the number of shares of Common Stock issued and
outstanding immediately prior to the date hereof and (ii) the number of shares of Common Stock for which the number of OP Units
issued and outstanding immediately prior to the date hereof (excluding any OP Units held by the Company) may be redeemed in accordance
with the terms of the Partnership Agreement and (y) the Purchase Price Per Share (as defined in the Stock Purchase Agreement) paid
by the Purchaser for the shares of Common Stock issued by the Company to the Purchaser under the Stock Purchase Agreement, as such
Purchase Price Per Share may be adjusted pursuant to the terms thereof, plus (3) the Company’s
and the Operating Partnership’s (without double counting)
retained earnings calculated in accordance with GAAP at the end of the most recently completed fiscal quarter (without taking into
account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount in cash that the Company
or the Operating Partnership has paid to repurchase Common Stock, OP Units or other equity securities of the Company as of the
date hereof. Equity excludes (1) any unrealized gains, losses or non-cash equity compensation expenses that have impacted stockholders’
equity as reported in the Company’s financial statements
prepared in accordance with GAAP, regardless of whether such items are included in other comprehensive income or loss, or in net
income, (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above in each case,
after discussions between the Manager and the Company’s Independent
Directors and approval by a majority of the Independent Directors and (3) the Company’s
accumulated deficit as of the date hereof.

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

“GAAP”
means generally accepted accounting principles in effect in the United States on the date such principles are applied.

“Good
Reason” means (a) a material breach or default by the
Company of its obligations under this Agreement or (b) any material amendment, modification or supplement to the Investment Guidelines
by the Board, or any material modification or revocation by the Board of the Manager’s
authority set forth in the Investment Guidelines, that is not approved, or is rejected, by the Manager.

“Governing
Instruments” means, with regard to any entity, the articles
of incorporation or certificate of incorporation and bylaws in the case of a corporation, the partnership agreement in the case
of a general or limited partnership, the certificate of formation and operating agreement in the case of a limited liability company,
the trust instrument or declaration of trust in the case of a trust, or similar governing documents in each case as amended.

“Incentive
Fee” means an incentive fee, calculated and payable after
each fiscal quarter, in an amount equal to the excess, if any, of (i) the product of (A) 20% and (B) the excess of (1) the Company’s
Adjusted Net Income (described below) for such fiscal quarter and the immediately preceding three fiscal quarters over (2) the
Hurdle Amount (described below) for such four fiscal quarters, less (ii) the sum of the Incentive Fees already paid or payable
for each of the three fiscal quarters preceding such fiscal quarter. Any adjustment to the Incentive Fee calculation proposed by
the Manager shall be subject to the approval of a majority of the Independent Directors.

For purposes of
calculating the Incentive Fee, “Adjusted Net Income” for the preceding four fiscal quarters means the net income calculated
in accordance with GAAP after all base management fees but before any acquisition expenses, expensed costs related to equity issuances,
incentive fees, depreciation and amortization and any non-cash equity compensation expenses for such period. Adjusted Net Income
will be adjusted to exclude one-time events pursuant to changes in U.S. GAAP, as well as other non-cash charges after discussion
between the Manager and the Independent Directors and approval by a majority of the Independent Directors in the case of non-cash
charges. For the avoidance of doubt, Adjusted Net Income includes net realized gains and losses, including realized gains and losses
resulting from dispositions of Properties and other investments during the applicable measurement period.

For purposes of
calculating the Incentive Fee, the “Hurdle Amount” is, with respect to any four fiscal quarter period, the product
of (i) 7% and (ii) the weighted average gross proceeds per share of Common Stock or OP Unit of all of the Common Stock and OP Unit
issuances (excluding issuances of Common Stock and OP Units, or equivalents thereof, as equity incentive awards), with each such
issuance weighted by both the number of shares of Common Stock and OP Units issued in such issuance and the number of days that
such issued shares of Common Stock and OP Units were outstanding during such four fiscal quarter period.

 

    	3

    	 

    The first Incentive
Fee calculation will not occur until after completion of four fiscal quarters (including the fiscal quarter in which the date of
this Agreement falls) following the date hereof. The Incentive Fee shall be pro rated for partial quarterly periods based on the
number of days in such partial period compared to a 90 day quarter.

“Indemnified
Party” has the meaning set forth in Section 9(b) hereof.

“Independent
Director” means a member of the Board who is “independent”
in accordance with the rules of the NYSE MKT or such other securities exchange on which the shares of Common Stock are listed.

“Initial
Term” has the meaning set forth in Section 11(a) hereof.

“Intellectual
Property” means all work product, documents, code, works
of authorship, programs, manuals, developments, processes, formulae, data, specifications, fixtures, tooling, equipment, supplies,
processes, inventions, discoveries, improvements, trade secrets and know-how or similar rights.

“Intellectual
Property Rights” means the worldwide right, title, and
interest in any Intellectual Property and any goodwill appurtenant thereto, including, without limitation, all copyrights, copyright
renewals or reversions, trademarks, trade names, trade dress rights, inventions, priority rights, patent rights, patents, and any
other rights or protections in connection therewith or related thereto.

“Investment
Advisors Act” means the Investment Advisers Act of 1940,
as amended.

“Investment
Company Act” means the Investment Company Act of 1940,
as amended.

“Investment
Guidelines” means the investment guidelines approved
by the Board, a copy of which is attached hereto as Exhibit A, as the same may amended, restated, modified, supplemented
or waived pursuant to the approval of a majority of the entire Board (which must include a majority of the Independent Directors)
and the Manager Investment Committee.

“Legacy
Property” means the real properties that are owned by
the Company on the date of this Agreement as described on Exhibit A.

“Losses”
has the meaning set forth in Section 9(a) hereof.

“Manager”
has the meaning set forth in the Recitals.

“Manager
Indemnified Party” has the meaning set forth in Section
9(a) hereof.

“Manager
Investment Committee” means the investment committee
formed by the Manager, the members of which shall consist of employees of the Manager and its Affiliates and may change from time
to time.

“Manager
Permitted Disclosure Parties” has the meaning set forth
in Section 6 hereof.

“Notice
of Proposal to Negotiate” has the meaning set forth in
Section 11(c) hereof.

“NYSE
MKT” means The NYSE MKT stock exchange.

“Operating
Partnership” has the meaning set forth in the Recitals.

“Person”
means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any federal,
state, county or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting
in such capacity on behalf of the foregoing.

 

    	4

    	 

    “Property”
or “Properties”
means any real property which is owned or leased, directly or indirectly, by the Company or any of the Subsidiaries.

“Property
Management Fee” means a property management fee for services
rendered in connection with the rental, leasing, operation and management of the Company’s
real estate assets and the supervision of any non-Affiliates that are engaged by the Manager to provide such services, equal to
4% of the gross rental receipts received each month at the Company’s
and its Subsidiaries’ Properties.

“Regulation
FD” means Regulation FD as promulgated by the SEC.

“REIT”
means a “real estate investment trust”
as defined under the Code.

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

“Securities
Act” means the Securities Act of 1933, as amended.

“Sponsor”
means A-III Investment Partners LLC, a Delaware limited liability company.

“Stock
Purchase Agreement” means that certain Stock
Purchase Agreement, dated as of November 19, 2014, by and among the Company, the Operating Partnership and A-III Investment
Partners LLC.

“Subsidiary”
means (i) the Operating Partnership, (ii) any subsidiary of the Company, (iii) any partnership the general partner of which is
the Company or any subsidiary of the Company, and (iv) any limited liability company the managing member of which is the Company
or any subsidiary of the Company.

“Target
Assets” means the types of assets identified as Target
Assets within the parameters set forth in the Investment Guidelines.

“Termination
Fee” means four (4) times the sum of (i) the average
annual Base Management Fee, (ii) the average annual Incentive Fee, and (iii) the average annual Acquisition Fees and Disposition
Fees, in each case earned by the Manager in the most recently completed eight calendar quarters prior to the Effective Termination
Date.

“Termination
Notice” has the meaning set forth in Section 11(b) hereof.

“Termination
Without Cause” has the meaning set forth in Section 11(b)
hereof.

As used herein,
accounting terms relating to the Company and its Subsidiaries, if any, not defined herein and accounting terms partly defined herein,
to the extent not defined, shall have the respective meanings given to them under GAAP. As used herein, “calendar
quarters” shall mean the period from January 1 to March 31,
April 1 to June 30, July 1 to September 30 and October 1 to December 31 of the applicable year.

The words “hereof,”
“herein”
and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision
of this Agreement, and Section references are to this Agreement unless otherwise specified.

The meanings given
to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words include, includes
and including shall be deemed to be followed by the phrase “without
limitation.”

Section
2. Appointment and Duties of the Manager.

(a)          
The Company hereby appoints the Manager to manage the investment activities, Properties and day-to-day operations of the
Company and its Subsidiaries, subject at all times to the further terms and conditions set forth in this Agreement. The Manager
hereby agrees to use its commercially reasonable efforts to perform each of the duties set forth herein, provided that funds
are made available by the Company for such purposes as set forth in Section 8 hereof. The appointment of the Manager shall be exclusive
to the Manager, except to the extent that the Manager elects, in its sole and absolute discretion, subject to the terms of this
Agreement, or is required hereby to cause the duties of the Manager as set forth herein to be provided by third parties.

 

    	5

    	 

    (b)          
The Manager, in the performance of its obligations under this Agreement, at all times will be subject to the supervision
and direction of the Board and will have only such functions and authority as the Board may delegate to it, including, without
limitation, managing the Company’s business affairs and investment activities in conformity with the Investment Guidelines
and other policies that are approved and monitored by the Board. The parties acknowledge that the Board has adopted the Investment
Guidelines. The parties acknowledge that, during the term of this Agreement, any changes to the investment strategy proposed by
the Manager that would require a change in the Investment Guidelines will be subject to approval by the Board, including a majority
of the Independent Directors. The Company shall notify the Manager promptly of any amended, restated, supplemented or waived Investment
Guidelines, including any modification or revocation of the Manager’s authority set forth in the Investment Guidelines; provided, however,
that such modification or revocation shall not be applicable to investment transactions recommended by the Manager in respect of
which the Company, or the Manager acting on its behalf, has, directly or indirectly, made a binding commitment or obligation prior
to the date of receipt by the Manager of such notification. Further, if the Company, directly or indirectly, proposes to enter
into any transaction in which the Manager, any Affiliate of the Manager or any of the Manager’s directors or officers has
a direct or indirect interest, then such transaction shall be approved by a majority of the Board not otherwise interested in such
transaction, including a majority of the Independent Directors.

(c)          
The Manager will be responsible for the day-to-day business activities, investment activities and operations of the Company
and will perform (or cause to be performed) such services and activities relating to the investments and operations of the Company
as may be appropriate, which may include, without limitation:

(i)            
serving as the Company’s and the Subsidiaries’ advisor with respect to the periodic review (no less often than
annually) of the Investment Guidelines and other parameters for the acquisition and disposition of Properties, financing activities
and operations, any modifications to which shall be approved by a majority of the Independent Directors, and other policies for
approval by the Board;

(ii)           
advising the Board on strategic matters, including potential acquisitions, dispositions and financings;

(iii)          
advising and acting on the Company’s behalf with respect to the Company’s and its Subsidiaries’ borrowing,
issuances of securities and other capital raising requirements, including assistance in dealings with banks and other lenders,
investment dealers and investors;

(iv)         
administering the day-to-day operations and performing and supervising the performance of such other administrative functions
necessary to the Company’s and each Subsidiary’s management in accordance with the Investment Guidelines, including,
without limitation, entering into on behalf of the Company leases, service contracts, property management, leasing and development
agreements and other third party agreements as may be necessary or advisable in connection with the operation of the Company’s
business and properties, the collection of revenues and payment of the Company’s and the Subsidiaries’ debts and obligations,
maintenance of appropriate computer services to perform its administrative functions, and maintaining and administering separate
bank accounts and books of account on behalf of the Company and the Subsidiaries as may be directed by the Board and in compliance
in all material respects with applicable securities laws and regulations;

(v)          
upon request by the Board (but not more frequently than quarterly), furnishing reports and statistical and economic research
to the Company regarding the Company’s and the Subsidiaries’ activities and services performed for the Company and
any Subsidiaries by the Manager;

(vi)         
assisting the Company in qualifying to do business in all applicable jurisdictions and to obtain and maintain all appropriate
licenses;

(vii)        
identifying, investigating, evaluating, selecting, conducting due diligence with respect to, and negotiating, structuring
and closing, on the Company’s and its Subsidiaries’ behalf, of acquisitions, dispositions, financings and other transactions
consistent with the Investment Guidelines;

(viii)       
with respect to prospective purchases, sales or exchanges of Properties, conducting negotiations on the Company’s
and the Subsidiaries’ behalf with sellers, purchasers and brokers, financing sources and, if applicable, their respective
agents and representatives and closing such transactions on behalf of the Company and its Subsidiaries;

 

    	6

    	 

    (ix)         
negotiating and causing the Company to enter into, subject to the Investment Guidelines, agreements relating to Company
borrowings and other agreements and instruments required to conduct the business of the Company;

(x)          
investigating, selecting, engaging and supervising, at the expense of the Company, independent contractors that provide
advice to the Company including investment bankers, brokers, underwriters, legal and accounting services and all other services
(including transfer agent and registrar services) as may be required relating to the Company’s operations and investments;

(xi)         
coordinating and managing operations of any joint venture or co-investment interests of the Company and conducting all matters
with the joint venture or co-investment partners;

(xii)        
providing executive and administrative personnel, office space and office services required in rendering services to the
Company;

(xiii)       
providing portfolio management services to the Company;

(xiv)       
arranging marketing materials, advertising, industry group activities and other promotional efforts designed to promote
the Company and its business;

(xv)        
causing the Company to retain qualified accountants to assist in developing appropriate accounting procedures and systems,
internal controls and other compliance procedures and testing systems to enable the Company to comply in all material respects
with its financial reporting obligations and applicable securities laws and regulations;

(xvi)       
developing and implementing business plans and annual budgets and monitoring the Company’s financial performance;

(xvii)      
advising with respect to investor relations strategies and activities, including performing investor relations services
and shareholder communications for the Company;

(xviii)     
advising with respect to regulatory compliance requirements, risk management policies and any litigation matters;

(xix)       
supervising property managers and providing guidance to them with regards to operating expenses, lease negotiation terms
and capital expenditures;

(xx)        
making recommendations with respect to the payment of distributions, including dividends;

(xxi)       
evaluating and recommending to the Board hedging strategies and engaging in hedging activities on the Company’s behalf,
consistent with the Company’s intention to qualify as a REIT beginning in 2016, or such other year in which the Company first
becomes eligible to qualify as a REIT under the Code, and with maintaining the Company’s REIT requirements thereafter and
consistent with the Investment Guidelines;

(xxii)      
supervising the Company’s efforts to qualify as a REIT beginning in 2016, or such other year in which the Company
first becomes eligible to qualify as a REIT under the Code, and, thereafter, the Company’s compliance with the REIT provisions
of the Code and the Company’s qualification and maintenance as a REIT, including soliciting required information from shareholders
and complying with the applicable provisions of Company’s Governing Instruments; assisting the Company in taking all necessary
action to enable the Company to make required tax filings and reports, including soliciting information from shareholders to the
extent required by the Code applicable to REITs;

 

    	7

    	 

    (xxiii)     
assisting the Company with its public financial reporting and disclosure-related responsibilities, including preparing or
causing to be prepared all financial statements and other reports and documentation required by the Securities Act, the Exchange
Act, the NYSE MKT Company Guide (or such rules and guidelines applicable to any securities exchange on which the shares of Common
Stock are listed) and other applicable laws;

(xxiv)     
counseling the Company and the Operating Partnership regarding the maintenance of
their exemptions from the status of an investment company required to register under the Investment Company Act, and monitoring
compliance with the requirements for maintaining such exemptions and causing them to maintain such exemptions from such status;

(xxv)      
reporting directly to the audit committee of the Board with respect to all financial matters;

(xxvi)     
supervising the Company’s disclosure policy and reviewing all news releases and other public announcements;

(xxvii)    
assisting the Company on all strategic and tactical matters as they relate to accounting, budget management, cost benefit
analysis, risk management and forecasting needs;

(xxviii)   
providing guidance on the development of a financial and operational strategy, and the ongoing development and monitoring
of control systems designed to preserve the Company’s Properties and reporting of accurate financial results;

(xxix)     
providing the Company with all necessary cash management services;

(xxx)      
handling and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other
proceedings or negotiations) in which the Company or the Subsidiaries may become subject arising out of the Company’s or
the Subsidiaries’ day-to-day operations (other than with the Manager), subject to such limitations as may be imposed by the
Board;

(xxxi)     
using commercially reasonable efforts to cause expenses incurred by the Company or the Subsidiaries (or on their behalf)
to be commercially reasonable or commercially customary and within any budgeted parameters or guidelines established by the Board
from time to time;

(xxxii)    
using commercially reasonable efforts to cause the Company to comply with all applicable laws;

(xxxiii)   
maintaining the Company’s website;

(xxxiv)  
investigating, selecting and, on behalf of the Company and the Operating Partnership, engaging and conducting business with
and supervising the performance of, such Persons as the Manager deems necessary for the proper performance of its obligations hereunder,
including consultants, accountants, correspondents, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries,
escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, contractors,
property owners, real estate management companies, real estate operating companies, securities investment advisors, mortgagors,
mortgagees, the registrar and the transfer agent and any and all agents for any of the foregoing, including Affiliates of the Manager,
and Persons acting in any other capacity deemed by the Manager necessary or desirable for the performance of any of the foregoing
services, including, entering into contracts in the name of the Company and the Operating Partnership with any of the foregoing;
and

(xxxv)   
any additional services as may from time-to-time be agreed to in writing by Manager and the Company for which the Manager
will be compensated on terms to be agreed upon between the Manager and the Independent Directors of the Company prior to the provision
of such services.

(d)          
The Manager will maintain an administration agreement, dated of even date herewith, by and between the Manager and the Sponsor
(the “Administration Agreement”) pursuant to which the Sponsor will provide the Manager with the personnel,
services and resources as needed by the Manager to enable the Manager to carry out its obligations and responsibilities under this
Agreement, subject to Section 8(a)(xx) of this Agreement. The Company and the Operating Partnership shall be named third party
beneficiaries of the Administration Agreement. If the Administration Agreement is terminated or materially amended, the Manager
shall promptly notify the Board of such termination or provide a copy of such amendment.

 

    	8

    	 

    (e)          
Subject to oversight by the Board, the Manager may retain, for and on behalf, and at the sole cost and expense, of the Company,
such services of the persons and firms referred to in Section 8(c) hereof as the Manager deems necessary or advisable in connection
with the management and operations of the Company and its Properties and other investments. In performing its duties under this
Section 2, the Manager shall be entitled to rely reasonably on qualified experts and professionals (including, without limitation,
accountants, legal counsel and other professional service providers) hired by the Manager at the Company’s sole cost and
expense. In lieu of retaining non-Affiliate third service providers as described in the preceding sentence, the Manager shall have
the right to retain, on behalf of and at the cost and expense of the Company, Affiliates of the Manager, or to direct officers
or employees of the Manager or its Affiliates, to provide any services that the Manager deems necessary or advisable in connection
with the management and operations of the Company and its Properties and other investments, provided that the amounts paid by the
Company for such services do not exceed the fees and expenses that a commercially reasonable third party service provider would
have charged for such services and that any agreement between or among the Company and the Manager, on the one hand, and any Affiliate
of the Manager, on the other hand, must be entered into on an arm’s-length basis with customary and market standard terms.
If the Manager proposes to retain any Affiliate of the Manager, or to direct officers or employees of the Manager or its Affiliates,
to provide any services that the Manager deems necessary or advisable in connection with the management and operations of the Company
and its Properties and other investments pursuant to the preceding sentence, then such arrangement shall be subject to the prior
approval of a majority of the Independent Directors. Further, on a quarterly basis, the Manager shall provide the Board a summary
of any such arrangements with the Manager’s Affiliates describing the terms of the relationship and any fees paid to such
Affiliate.

(f)           
For the period and on the terms and conditions set forth in this Agreement, the Company and each of the Subsidiaries hereby
constitutes, appoints and authorizes the Manager as its true and lawful agent and attorney-in-fact, in its name, place and stead,
to negotiate, execute, deliver and enter into such real estate purchase and sale agreements, joint venture agreements, property
management agreements, leasing and development agreements, title insurance agreements, leases, finance agreements and arrangements,
brokerage agreements, interest rate swap agreements, “to be announced” forward contracts, agreements relating to borrowings
under programs established by the U.S. Government and/or any agencies thereunder and such other agreements, instruments and authorizations
on their behalf, on such terms and conditions as the Manager, acting in its reasonable discretion (but subject to the terms of
this Agreement), deems necessary or appropriate pursuant to the authority otherwise granted to the Manager under this Agreement.
This power of attorney is deemed to be coupled with an interest. If any transaction requires approval by the Independent Directors,
the Manager will deliver to the Independent Directors all documents and other information reasonably required by them to evaluate
properly the proposed transaction.

(g)          
The Manager shall refrain from any action that, in its reasonable judgment made in good faith, (i) is not in compliance
with the Investment Guidelines, (ii) would adversely and materially affect the qualification of the Company as a REIT under the
Code or the Company’s status as an entity excluded from investment company status under the Investment Company Act, or (iii)
would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or of the NYSE
MKT or such other securities exchange on which the securities of the Company may be listed or that would otherwise not be permitted
by the applicable Governing Instruments. If the Manager is ordered to take any action by the Board, the Manager shall promptly
notify the Board if it is the Manager’s judgment that such action would adversely and materially affect such status or violate
any such law, rule or regulation or Governing Instruments. Notwithstanding the foregoing, neither the Manager nor any of its Affiliates
shall be liable to the Company, the Board, or the Company’s stockholders for any act or omission by the Manager or any of
its Affiliates, except as provided in Section 9 of this Agreement.

(h)          
The Company (including the Board) agrees to take all actions reasonably required to permit and enable the Manager to carry
out its duties and obligations under this Agreement, including, without limitation, all steps reasonably necessary to allow the
Manager to file any registration statement or other filing required to be made under the Securities Act, Exchange Act, the NYSE
MKT Company Guide (or such equivalent guidelines applicable to any other securities exchange on which the shares of Common Stock
are listed), Code or other applicable law, rule or regulation on behalf of the Company in a timely manner. The Company further
agrees to use commercially reasonable efforts to make available to the Manager all resources, information and materials reasonably
requested by the Manager to enable the Manager to satisfy its obligations hereunder, including its obligations to deliver financial
statements and any other information or reports with respect to the Company.

 

    	9

    	 

    (i)            
The Manager shall prepare, or, at the sole cost and expense of the Company, cause to be prepared, all reports, financial
or otherwise, with respect to the Company reasonably required by the Board in order for the Company to comply with its Governing
Instruments, or any other materials required to be filed with any governmental body or agency, and shall prepare, or, at the sole
cost and expense of the Company, cause to be prepared, all materials and data necessary to complete such reports and other materials,
including, without limitation, an annual audit of the Company’s books of account by a nationally recognized independent accounting
firm.

(j)            
The Manager shall prepare, or, at the sole cost and expense of the Company, cause to be prepared, reports for the Board
relating to any proposed or consummated investment in accordance with the Investment Guidelines.

(k)          
Officers, employees and agents of the Manager and its Affiliates may serve as directors, officers, agents, nominees or signatories
for the Company or any of its Subsidiaries, to the extent permitted by their Governing Instruments, by any resolutions duly adopted
by the Board. When executing documents or otherwise acting in such capacities for the Company or any of its Subsidiaries, such
Persons shall indicate in what capacity they are executing on behalf of the Company or any of its Subsidiaries. Without limiting
the foregoing and subject to the provisions of Section 3(a), Section 8(a)(xx) and Section 8(b) hereof, while this Agreement is
in effect, the Manager will provide the Company with a management team, including a Chief Executive Officer, President, Chief Financial
Officer, Secretary, and other appropriate officers of the Company to be approved and appointed by the Board, along with appropriate
support personnel, to provide the services to be provided by the Manager to the Company hereunder, who shall devote such of their
time to the management of the Company as necessary and appropriate, commensurate with the level of activity of the Company from
time to time.

(l)            
The Manager shall provide personnel for service on the Manager Investment Committee.

(m)         
The Manager shall obtain, for the benefit of Company and its officers and directors, at the Company’s expense pursuant
to Section 8 hereof, customary directors’ and officers’ liability insurance, commercial general liability insurance,
property and casualty liability insurance, and such other insurance coverages as are customary and appropriate for the Company
and its assets, and the Manager and its personnel shall be named as additional named insureds under such policies to the extent
feasible and appropriate in the Manager’s reasonable discretion; provided, that the Manager will obtain its own employer
liability insurance or will be added as an additional insured under the employer liability insurance of one of its Affiliates.

(n)          
The Manager, at the sole cost and expense of the Company, shall provide such internal audit, compliance and control services
as may be required for the Company to comply with applicable law (including the Securities Act and Exchange Act), regulation (including
SEC regulations) and the rules and requirements of the NYSE MKT or such other securities exchange on which the shares of Common
Stock are listed and as otherwise reasonably requested by the Company or its Board from time to time.

(o)          
The Manager acknowledges receipt of the Company’s Code of Business Conduct and Ethics and Policy on Insider Trading
(collectively, the “Conduct Policies”) and agrees to require the persons who provide services to the Company
to comply with such Conduct Policies in the performance of such services hereunder or such comparable policies as shall in substance
hold such persons to at least the standards of conduct set forth in the Conduct Policies.

(p)          
The Manager shall use its commercially reasonable efforts to cause the Company to comply with its covenants and obligations
under the Transaction Agreements, as such term is defined in the Stock Purchase Agreement.

Section
3. Additional Activities of the Manager; Non-Solicitation; Restrictions; Other Agreements.

(a)          
Devotion of Time.  The Manager, through the Sponsor and its Affiliates, will provide a management team
(including a chief executive officer, president, chief financial officer, secretary and such officers as the Manager deems appropriate,
subject to approval and appointment of such officers by the Board) along with appropriate support personnel, to deliver the management
services to the Company hereunder. The members of such management team shall devote such of their working time and efforts to the
management of the Company as the Manager deems reasonably necessary and appropriate for the proper performance of all of the Manager’s
duties hereunder, commensurate with the level of activity of the Company from time to time; provided, however, that the
Manager shall have the right, but not the obligation, to provide a dedicated or partially dedicated chief financial officer, chief
operating officer, controller, investor relations professional, or internal legal counsel. To the extent the Manager elects to
provide the Company with any dedicated or partially dedicated chief financial officer, chief operating officer, controller, investor
relations professional or internal legal counsel, each of whom will be an employee of the Manager or one of its Affiliates, such
personnel are referred to herein as “Dedicated Employees.” The Company shall have the benefit
of the Manager’s reasonable judgment and effort in rendering services and, in furtherance of the foregoing, the Manager shall
not undertake activities which, in its reasonable judgment, will materially adversely affect the performance of its obligations
under this Agreement.

 

    	10

    	 

    (b)          
Other Activities. Except as provided in the last sentence of this Section 3(b), or the Investment Guidelines, nothing
in this Agreement shall (i) prevent the Sponsor, the Manager or any of their Affiliates, members, officers, directors or employees,
from engaging in other businesses or from rendering services of any kind to any other Person or entity, whether or not the investment
objectives or policies of any such other Person or entity are similar to, or directly competitive with, those of the Company, (ii)
in any way bind or restrict the Manager, the Sponsor or any of their Affiliates, members, officers, directors or employees from
buying, selling or owning any real estate or real estate-related investments (equity or debt) or securities for their own accounts
or for the account of others for whom the Manager, the Sponsor or any of their Affiliates, members, officers, directors or employees
may be acting, or (iii) in any way prevent the Manager, the Sponsor or any of their Affiliates, members, officers, directors or
employees from managing any other investment funds, accounts or other investment vehicles or complying with their obligations in
connection therewith. While information and recommendations supplied to the Company shall, in the Manager’s reasonable and
good faith judgment, be appropriate under the circumstances and in light of the investment objectives and policies of the Company,
they may be different from the information and recommendations supplied by the Manager, the Sponsor or any Affiliate, member officer,
director or employee of the Manager or the Sponsor to others. The Company shall have the benefit of the Manager’s judgment
and commercially reasonable effort in rendering services hereunder and, in furtherance of the foregoing, the Manager shall not
undertake activities that, in its sole judgment made in good faith, will adversely affect the performance of its obligations under
this Agreement.

(c)          
In the event of a Termination Without Cause of this Agreement by the Company pursuant to Section 11(b) hereof or a Termination
for Good Reason of this Agreement by the Manager pursuant to Section 13(b) hereof, for two (2) years after such termination of
this Agreement, the Company shall not, without the consent of the Manager, employ or otherwise retain any employee of the Manager
or any of its Affiliates or any person who was employed by the Manager or any of its Affiliates on the date of termination. The
Company acknowledges and agrees that, in addition to any damages, the Manager shall be entitled to equitable relief for any violation
of this Section 3(c) by the Company, including injunctive relief.

(d)          
The Manager shall use such names, trademarks and logos as may be adopted and designated by the Manager with respect to and
in conjunction with the operation and management of the Company and other Properties managed by the Manager; provided, however,
such names, trademarks and logos shall remain the exclusive property of the Manager. In the event this Agreement is terminated
for any reason, or expires, all rights of the Company to use such names and such trademarks and logos shall be immediately terminated.

(e)          
All Intellectual Property created or developed in connection with the Manager’s performance of this Agreement or otherwise
and the Intellectual Property Rights associated therewith shall be the sole and exclusive property of the Manager. For the term
of this Agreement, the Manager does hereby grant the Company a non-exclusive, worldwide, fully paid up, royalty free, non-sub-licensable,
non-transferable license and right to use the Intellectual Property made or used in connection with the Manager’s performance
of this Agreement for its business purposes. The Company will, upon request of the Manager, do execute, acknowledge and deliver
or cause to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers, conveyances, powers
of attorney and assurances as may be requested by the Manager to carry out the intent of this Agreement or to otherwise perfect,
record, confirm, or enforce the Manager’s rights in and to the Intellectual Property.

(f)           
The Company, for itself and its Subsidiaries, shall take, and shall use its commercially reasonable efforts to cause the
Board to take, all Necessary Actions reasonably required to enable the Manager to carry out its duties and obligations under, and
as permitted by, this Agreement. For purposes of this Agreement, “Necessary Actions” shall mean, with respect
to a specified result, all actions that are permitted by applicable law and applicable stock exchange rules as shall be necessary
to cause such result. Such actions shall include, but not be limited to, adoption by the Board or committees of the Board of resolutions
or other similar action by the Board or committees of the Board that are required to achieve such result.

 

    	11

    	 

    Section
4. Agency.

The Manager shall
act as agent of the Company and the Subsidiaries in making, acquiring, financing and disposing of investments of the Company, disbursing
and collecting the funds of the Company and the Subsidiaries, paying the debts and fulfilling the obligations of the Company and
the Subsidiaries, supervising the performance of professionals engaged by or on behalf of the Company and the Subsidiaries and
handling, prosecuting and settling any claims of or against the Company and the Subsidiaries, the Board, holders of the Company’s
securities or representatives or assets of the Company and the Subsidiaries.

Section
5. Bank Accounts.

At the direction
of the Board, the Manager may establish and maintain one or more bank accounts in the name of the Company or any Subsidiary, and
may collect and deposit into any such account or accounts, and disburse funds from any such account or accounts, under such terms
and conditions as the Board may approve; and the Manager shall from time to time render appropriate accountings of such collections
and payments to the Board and, upon request, to the auditors of the Company or any Subsidiary.

Section
6. Records; Confidentiality.

The Manager shall
maintain appropriate books of accounts and records relating to services performed hereunder, and such books of account and records
shall be accessible for inspection by representatives of the Company (including the Board) or any Subsidiary at any time during
normal business hours. The Manager shall keep confidential any and all non-public information, written or oral, obtained by it
in connection with the services rendered hereunder (“Confidential
Information”) and shall not disclose Confidential Information,
in whole or in part, to any Person other than (i) to its Affiliates, members, officers, directors, employees, agents, representatives,
legal counsel, accountants, or advisors who need to know such Confidential Information for the purpose of rendering services hereunder,
(ii) to appraisers, financing sources and others in the ordinary course of the Company’s
business ((i) and (ii) collectively, “Manager Permitted
Disclosure Parties”), (iii) in connection with any governmental
or regulatory filings of the Company or disclosure or presentations to Company investors (subject to compliance with Regulation
FD), (iv) to governmental officials having jurisdiction over the Company, (v) as required by law or legal process, or (vi) with
the consent of the Company upon approval of a majority of the Independent Directors. The Manager agrees to inform each of its Manager
Permitted Disclosure Parties of the non-public nature of the Confidential Information and to use commercially reasonable efforts
to obtain agreement from such Persons to treat such Confidential Information in accordance with the terms hereof. Nothing herein
shall prevent the Manager from disclosing Confidential Information (i) upon the order of any court or administrative agency, (ii)
upon the request or demand of, or pursuant to any law or regulation to, any regulatory agency or authority, (iii) to the extent
reasonably required in connection with the exercise of any remedy hereunder, or (iv) to its legal counsel or independent auditors;
provided, however that with respect to clauses (i) and (ii), it is agreed that, so long as not legally prohibited,
the Manager will provide the Company with prompt written notice of such order, request or demand so that the Company may seek,
at its sole expense, an appropriate protective order and/or waive the Manager’s
compliance with the provisions of this Agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder,
the Manager is required to disclose Confidential Information, the Manager may disclose only that portion of such information that
is legally required without liability hereunder; provided, that the Manager agrees to exercise its reasonable best efforts
to obtain reliable assurance that confidential treatment will be accorded such information. Notwithstanding anything herein to
the contrary, each of the following shall be deemed to be excluded from the provisions hereof: any Confidential Information that
(A) is available to the public from a source other than the Manager, (B) is released in writing by the Company to the public, (C)
is obtained by the Manager from a third-party which, to the best of the Manager’s
knowledge, does not constitute a breach by such third-party of an obligation of confidence with respect to the Confidential Information
disclosed or (D) is disclosed in the ordinary course of business, which the Manager, acting prudently, deems in its reasonable
discretion to be necessary or appropriate in connection with carrying out its duties and obligations under this Agreement, subject
to compliance with the Company’s Regulation FD disclosure
obligations. The provisions of this Section 6 shall survive the expiration or earlier termination of this Agreement for a period
of two years.

 

    	12

    	 

    Section
7. Compensation.

(a)          
For the services rendered under this Agreement, the Company shall pay the Base Management Fee, Acquisition Fees, Disposition
Fees, the Incentive Fee, and the Property Management Fee to the Manager. The Manager will not receive any compensation for the
period prior to the date hereof.

(b)          
The Base Management Fee shall be payable in arrears in cash, in quarterly installments commencing with the quarter in which
this Agreement is executed. If applicable, the initial and final installments of the Base Management Fee shall be calculated and
pro-rated based on the number of days during the initial and final quarter, respectively, that this Agreement is in effect. The
Manager shall calculate each quarterly installment of the Base Management Fee, and deliver such calculation to the Company, together
with reasonable supporting materials, within 30 days following the last day of each calendar quarter. The Company shall pay the
Manager each installment of the Base Management Fee within five Business Days after the date of delivery to the Company of such
calculations.

(c)          
The Property Management Fee shall be payable in arrears in cash, in monthly installments commencing with the month in which
this Agreement is executed. The Manager shall calculate each monthly installment of the Property Management Fee, and deliver such
calculation to the Company promptly at the end of the month. The Company shall pay the Manager each installment of the Property
Management Fee within five Business Days after the date of delivery to the Company of such calculations. The Manager may subcontract
the performance of its property management and leasing services duties to third parties (including Affiliates) and pay all (or
a portion) of the Property Management Fee to such persons with whom it contracts for these services. The Manager will be responsible
for all fees payable to third parties (including Affiliates) in connection with subcontracted property management and leasing responsibilities.

(d)          
The Acquisition Fees and Disposition Fees shall be payable in arrears in cash with respect to all acquisitions and dispositions
of Property or other investments occurring after the date of this Agreement. The Manager shall calculate each Acquisition Fee and
Disposition Fee, and deliver such calculation to the Company, within 10 days following each closing of an acquisition or disposition,
as the case may be. The Company shall pay the Manager each Acquisition Fee and Disposition Fee within five Business Days after
the date of delivery to the Company of such calculations.

(e)          
The Incentive Fee will be calculated and payable in arrears in cash on a quarterly basis. The Manager shall calculate each
quarterly Incentive Fee, and deliver such calculation to the Company, within 30 days following the last day of each calendar quarter;
provided, that the first Incentive Fee calculation will not occur until after completion of four fiscal quarters (including
the fiscal quarter in which the date of this Agreement falls) following the date hereof. The Incentive Fee shall be pro rated for
partial quarterly periods based on the number of days in such partial period compared to a 90 day quarter. The Company shall pay
the Manager each installment of the Incentive Fee within five Business Days after the date of delivery to the Company of such calculation.

Section
8. Expenses of the Company.

(a)          
The Company shall bear all of its operating expenses, except those specifically required to be borne by the Manager under
this Agreement. The Company shall pay directly all such expenses or, if and to the extent paid by the Manager or any of its Affiliates,
shall reimburse the Manager or such Affiliate in accordance with this Section 8. The expenses required to be borne by the Company
include, but are not limited to:

(i)            
issuance and transaction costs incident to the acquisition, disposition and financing of Properties and other investments;

(ii)           
legal, regulatory, compliance, tax, accounting, consulting, auditing, administrative fees and expenses and fees and expenses
for other similar services rendered to the Company by third-party service providers retained by the Manager;

(iii)          
the fees and other compensation payable to the Independent Directors and the cost of liability insurance to indemnify the
Company’s directors and officers;

 

    	13

    	 

    (iv)         
the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of the Company
(including commitment fees, accounting fees, legal fees, closing costs, etc.);

(v)          
expenses associated with securities offerings of the Company;

(vi)         
expenses relating to the payment of distributions;

(vii)        
expenses connected with communications to holders of the Company’s securities and in complying with the continuous
reporting and other requirements of the Exchange Act, the SEC and other governmental bodies;

(viii)       
transfer agent, registrar and exchange listing fees;

(ix)         
the costs of printing and mailing proxies, reports and other materials to the Company’s shareholders;

(x)          
costs associated with any computer software or hardware, electronic equipment, or purchased information technology services
from third party vendors that is used solely for the Company;

(xi)         
reasonable costs and out of pocket expenses incurred by directors, officers, employees or other agents of the Company and
the Manager for travel on the Company’s behalf;

(xii)        
the portion of any costs and expenses incurred by the Manager or its Affiliates with respect to market information systems
and publications, research publications and materials that are allocable to the Company in accordance with the expense allocation
policies of the Manager or such Affiliates;

(xiii)       
settlement, clearing, and custodial fees and expenses;

(xiv)       
all taxes and license fees;

(xv)        
all insurance costs incurred with respect to insurance policies obtained in connection with the operation of the Company’s
business, including but not limited to errors and omissions insurance covering activities of the Manager, the Sponsor, their respective
Affiliates and any of their employees relating to the performance of the Manager’s duties and obligations under this Agreement
or of the Sponsor’s duties under the Administration Agreement, except that, for the avoidance of doubt, the Company shall
not be required to reimburse the insurance premiums incurred by the Manager for employer liability insurance;

(xvi)       
all other actual out of pocket costs and expenses relating to the Company’s business and investment operations, including,
without limitation, the costs and expenses of originating, acquiring, owning, financing, operating, rehabilitating, protecting,
maintaining, developing and disposing of investments, including appraisal, reporting, audit and legal fees;

(xvii)      
any judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company
or any Subsidiary, or against any trustee, director, officer, member, general partner, manager or employee of the Company or of
any Subsidiary in his capacity as such for which the Company or any Subsidiary is required to indemnify such trustee, director,
officer, member, general partner, manager or employee by any court or governmental agency, or settlement of pending or threatened
proceedings;

(xviii)     
the costs of maintaining compliance with all federal, state and local rules and regulations, including securities regulations,
or any other regulatory agency, the cost of obtaining tax advice and the preparation of any tax returns, all taxes and license
fees and all insurance costs incurred on the Company’s behalf;

(xix)       
expenses relating to any office or office facilities, including disaster backup recovery sites and facilities, maintained
expressly for the Company and separate from offices of the Manager;

 

    	14

    	 

    (xx)        
the costs of the wages, salaries and benefits incurred by the Manager with respect to any Dedicated Employees that the Manager
elects to provide to the Company pursuant to Section 3(a) above; provided that (A) if any Dedicated Employee devotes
less than 100% of his or her working time and efforts to matters related to the Company and its business, the Company shall be
required to bear only a pro rata portion of the costs of the wages, salaries and benefits incurred by the Manager with respect
to such Dedicated Employee based on the percentage of such employee’s working time and efforts spent on matters related to
the Company, (B) the amount of such wages, salaries and benefits paid or reimbursed with respect to the Dedicated Employees shall
be subject to the approval of the Compensation Committee of the Board and, if required by the Board, of the Board and (C) during
the one (1) year period following the date of this Agreement, the aggregate amount of cash compensation paid to Dedicated Employees
by the Company, or reimbursed by the Company to the Manager in respect thereof, shall not exceed $500,000;

(xxi)       
any equity-based compensation that the Company, upon the approval of the Board or the Compensation Committee of the Board,
elects to pay to any director, officer or employee of the Company or the Manager or any of the Manager’s Affiliates who provides
services to the Company or any of the Subsidiaries; and

(xxii)      
all other costs and expenses approved by the Board.

(b)          
Other than as expressly provided above, the Company will not be required to pay any portion of the rent, telephone, utilities,
office furniture, equipment, machinery and other office, internal and overhead expenses of the Manager and its Affiliates. In particular,
the Manager is not entitled to be reimbursed for wages, salaries and benefits of its officers and employees, other than as described
in Section 8(a)(xx) and Section 8(a)(xxi) above.

(c)          
Subject to any required Board approval, the Manager may retain, for and on behalf, and at the sole cost and expense, of
the Company, such services of non-Affiliate third party accountants, legal counsel, appraisers, insurers, brokers, transfer agents,
registrars, developers, contractors, investment banks, financial advisors, banks and other lenders and others as the Manager deems
necessary or advisable in connection with the management and operations of the Company. In lieu of retaining non-Affiliate third
service providers as described in the preceding sentence, the Manager shall have the right to retain, on behalf of and at the cost
and expense of the Company, Affiliates of the Manager, or to direct officers or employees of the Manager or its Affiliates, to
provide any services that the Manager deems necessary or advisable in connection with the management and operations of the Company
and its Properties and other investments, provided that the amounts paid by the Company for such services do not exceed the fees
and expenses that a commercially reasonable third party service provider would have charged for such services. If the Manager proposes
to retain any Affiliate of the Manager, or to direct officers or employees of the Manager or its Affiliates, to provide any services
that the Manager deems necessary or advisable in connection with the management and operations of the Company and its Properties
and other investments pursuant to the preceding sentence, then such arrangement shall be subject to the prior approval of a majority
of the Independent Directors. The provisions of this Section 8(c) shall survive the expiration or earlier termination of this
Agreement to the extent such expenses have previously been incurred or are incurred in connection with such expiration or termination.

(d)          
Costs and expenses incurred by the Manager on behalf of the Company shall be reimbursed monthly to the Manager. The Manager
shall prepare a written statement in reasonable detail documenting the costs and expenses of the Company and those incurred by
the Manager on behalf of the Company during each month, and shall deliver such written statement to the Company within thirty (30)
days after the end of each month. The Company shall pay all amounts payable to the Manager pursuant to this Section 8(d) within
five (5) Business Days after the receipt of the written statement without demand, deduction, offset or delay. Cost and expense
reimbursement to the Manager shall be subject to adjustment in connection with the annual audit of the Company. The provisions
of this Section 8 shall survive the expiration or earlier termination of this Agreement to the extent such expenses have previously
been incurred or are incurred in connection with such expiration or termination.

Section
9. Limits of the Manager’s Responsibility.

(a)          
The Manager assumes no responsibility under this Agreement other than to render the services called for hereunder in good
faith and shall not be responsible for any action of the Board in following or declining to follow any advice or recommendations
of the Manager or, if applicable, the Sponsor, including as set forth in the Investment Guidelines. The Manager and its Affiliates
and their respective controlling Persons, members, directors, officers, managers, employees, partners, owners and stockholders,
will not be liable to the Company, any Subsidiary, the Board, the Company’s stockholders or any Subsidiary’s stockholders
or any of their respective controlling Persons, directors, trustees, managers, officers, members, employees, partners or security
holders for any acts or omissions by the Manager or any such Person performed in accordance with and pursuant to this Agreement,
except by reason of acts or omissions found by a court of competent jurisdiction in a final, non-appealable judgment to be attributable
to bad faith, willful misconduct or gross negligence of their respective duties under this Agreement. The Company shall, to the
full extent lawful, reimburse, indemnify and hold harmless the Manager, its Affiliates and their respective controlling Persons,
members, directors, officers, employees, managers, owners and stockholders (each, a “Manager Indemnified Party”),
of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including
reasonable attorneys’ fees) (collectively “Losses”) in respect of or arising from any acts or omissions
of such Manager Indemnified Party performed in good faith under this Agreement and not constituting fraud, bad faith, willful misconduct
or gross negligence of duties of such Manager Indemnified Party under this Agreement. In addition, the Manager Indemnified Parties
will not be liable for trade errors that may result from ordinary negligence, including, without limitation, errors in the investment
decision making process or in the trade process.

 

    	15

    	 

    (b)          
The Manager shall, to the full extent lawful, reimburse, indemnify and hold harmless the Company, and the directors, officers
and stockholders of the Company and each Person, if any, controlling the Company (each, a “Company Indemnified Party”;
a Manager Indemnified Party and a Company Indemnified Party are each sometimes hereinafter referred to as an “Indemnified
Party”) of and from any and all Losses in respect of or arising from (i) any acts
or omissions of the Manager found by a court of competent jurisdiction in a final, non-appealable judgment to be attributable to
the gross negligence, willful misconduct, fraud or bad faith on the part of any such Person, and (ii) any claims by any of the
Manager’s or its Affiliates’ employees relating to the terms and conditions of their employment by the Manager or any
of its Affiliates, as applicable.

(c)          
In case any such claim, suit, action or proceeding (a “Claim”) is brought against any Indemnified Party
in respect of which indemnification may be sought by such Indemnified Party pursuant hereto, the Indemnified Party shall give prompt
written notice thereof to the indemnifying party, which notice shall include all documents and information in the possession of
or under the control of such Indemnified Party reasonably necessary for the evaluation and/or defense of such Claim and shall specifically
state that indemnification for such Claim is being sought under this Section; provided, however, that the failure
of the Indemnified Party to so notify the indemnifying party shall not limit or affect such Indemnified Party’s rights other
than pursuant to this Section. Upon receipt of such notice of Claim (together with such documents and information from such Indemnified
Party), the indemnifying party shall, at its sole cost and expense, in good faith defend any such Claim with counsel reasonably
satisfactory to such Indemnified Party, which counsel may, without limiting the rights of such Indemnified Party pursuant to the
next succeeding sentence of this Section, also represent the indemnifying party in such investigation, action or proceeding. In
the alternative, such Indemnified Party may elect to conduct the defense of the Claim, if (i) such Indemnified Party reasonably
determines that the conduct of its defense by the indemnifying party could be materially prejudicial to its interests, (ii) the
indemnifying party refuses to assume such defense (or fails to give written notice to the Indemnified Party within ten (10) days
of receipt of a notice of Claim that the indemnifying party assumes such defense), or (iii) the indemnifying party shall have failed,
in such Indemnified Party’s reasonable judgment, to defend the Claim in good faith. The indemnifying party may settle any
Claim against such Indemnified Party without such Indemnified Party’s consent, provided (i) such settlement is without any
Losses whatsoever to such Indemnified Party, (ii) the settlement does not include or require any admission of liability or culpability
by such Indemnified Party and (iii) the indemnifying party obtains an effective written release of liability for such Indemnified
Party from the party to the Claim with whom such settlement is being made, which release must be reasonably acceptable to such
Indemnified Party, and a dismissal with prejudice with respect to all claims made by the party against such Indemnified Party in
connection with such Claim. The applicable Indemnified Party shall reasonably cooperate with the indemnifying party, at the indemnifying
party’s sole cost and expense, in connection with the defense or settlement of any Claim in accordance with the terms hereof.
If such Indemnified Party is entitled pursuant to this Section to elect to defend such Claim by counsel of its own choosing and
so elects, then the indemnifying party shall be responsible for any good faith settlement of such Claim entered into by such Indemnified
Party. Except as provided in the immediately preceding sentence, no Indemnified Party may pay or settle any Claim and seek reimbursement
therefor under this Section.

(d)          
Reasonable expenses (including attorney’s fees) incurred by an Indemnitee in defense or settlement of a claim that
may be subject to a right of indemnification hereunder may be advanced by the Company to such Indemnitee as such expenses are incurred
prior to the final disposition of such claim; provided that, Indemnitee undertakes to repay such amounts if it shall be
determined by a court of competent jurisdiction that Indemnitee was not entitled to be indemnified hereunder.

(e)          
The provisions of this Section 9 shall survive the expiration or earlier termination of this Agreement.

 

    	16

    	 

    Section
10. No Joint Venture; Independent Contractor.

The Company and
any Subsidiary on the one hand and the Manager or its Affiliates and members on the other hand are not partners or joint venturers
with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as
such on either of them. The parties hereto expressly acknowledge and agree that the Manager is at all times acting and performing
under this Agreement as an independent contractor, retaining control over and responsibility for its own operations and personnel,
and that no act or omission by either the Company or the Manager shall be construed to make or constitute the other its partner,
member, principal, agent, joint venturer or associate and the parties agree to report the foregoing treatment of the Manager for
tax purposes in any applicable tax filing.

Section
11. Term; Renewal; Termination Without Cause.

(a)          
This Agreement shall become effective on the date hereof and shall continue in operation, unless terminated in accordance
with the terms hereof, until the fifth anniversary of the date hereof (the “Initial Term”). After the Initial
Term, this Agreement shall be deemed renewed automatically each year for an additional one-year period (an “Automatic
Renewal Term”) unless the Company or the Manager elects not to renew this Agreement in accordance with Section 11(b)
or Section 11(d), respectively.

(b)          
Notwithstanding any other provision of this Agreement to the contrary, upon the expiration of the Initial Term or any Automatic
Renewal Term and upon 180 days’ prior written notice to the Manager (the “Termination Notice”), upon the
affirmative vote of at least two-thirds of the Independent Directors that (1) there has been unsatisfactory performance by the
Manager that is materially detrimental to the Company and its Subsidiaries taken as a whole or (2) the Base Management Fee, Incentive
Fees, Acquisition Fees, Disposition Fees and Property Management Fees, taken as a whole, payable to the Manager are unfair (determined
after reasonable inquiry by the Independent Directors as to the market rates charged by similarly situated managers), subject to
Section 11(c) below, the Company may, without cause, in connection with the expiration of the Initial Term or the then current
Automatic Renewal Term, decline to renew this Agreement (any such nonrenewal, a “Termination Without Cause”).
In the event of a Termination Without Cause, the Company shall pay the Manager the Termination Fee before or on the last day of
the Initial Term or such Automatic Renewal Term, as the case may be (the “Effective Termination Date”). The
Company may terminate this Agreement for cause pursuant to Section 13 hereof even after a Termination Notice and, in such case,
no Termination Fee shall be payable.

(c)          
Notwithstanding the provisions of subsection (b) above, if the reason for nonrenewal specified in the Company’s Termination
Notice is that at least two-thirds of the Independent Directors have determined that the Base Management Fee, Incentive Fees, Acquisition
Fees, Disposition Fees and Property Management Fees, taken as a whole, payable to the Manager are unfair in accordance with the
paragraph above, the Company shall not have the foregoing nonrenewal right in the event the Manager agrees that it will continue
to perform its duties hereunder during the Automatic Renewal Term that would commence upon the expiration of the Initial Term or
then current Automatic Renewal Term under a fee arrangement that at least two-thirds of the Independent Directors determine to
be fair; provided, however, the Manager shall have the right to renegotiate the Base Management Fee, Incentive Fees,
Acquisition Fees, Disposition Fees and Property Management Fees, taken as a whole, payable to the Manager by delivering to the
Company, not less than 120 days prior to the pending Effective Termination Date, written notice (a “Notice of Proposal
to Negotiate”) of its intention to renegotiate such fees. Thereupon, the Company and the Manager shall endeavor to negotiate
such fees in good faith. Provided that the Company and the Manager agree to a revised fee arrangement or other compensation structure
within sixty (60) days following the Company’s receipt of the Notice of Proposal to Negotiate, the Termination Notice from
the Company shall be deemed of no force and effect, and this Agreement shall continue in full force and effect on the terms stated
herein, except that the Base Management Fee, Incentive Fees, Acquisition Fees, Disposition Fees and Property Management Fees payable
to the Manager or other compensation structure shall reflect the revised fee arrangement or other compensation structure as then
agreed upon by the Company and the Manager. The Company and the Manager agree to execute and deliver an amendment to this Agreement
setting forth such revised fee arrangement or other compensation structure promptly upon reaching an agreement regarding same.
In the event that the Company and the Manager are unable to agree to a revised fee arrangement or other compensation structure
during such sixty (60) day period, this Agreement shall terminate on the Effective Termination Date and the Company shall be obligated
to pay the Manager the Termination Fee upon the Effective Termination Date.

 

    	17

    	 

    (d)          
No later than 180 days prior to the expiration of the Initial Term or the then current Automatic Renewal Term, the Manager
may deliver written notice to the Company informing it of the Manager’s intention to decline to renew this Agreement, whereupon
this Agreement shall not be renewed and extended and this Agreement shall terminate effective on the anniversary date of this Agreement
next following the delivery of such notice. The Company is not required to pay to the Manager the Termination Fee if the Manager
terminates this Agreement pursuant to this Section 11(d).

(e)          
Except as set forth in this Section 11, a termination or nonrenewal of this Agreement pursuant to this Section 11 shall
be without any further liability or obligation of either party to the other, except as provided in Section 6, Section 8, Section
9 and Section 15 of this Agreement.

(f)           
The Manager shall cooperate with the Company in executing an orderly transition of the management of the Company’s
consolidated assets to a new manager.

Section
12. Assignments.

(a)          
Assignments by the Manager. This Agreement shall terminate automatically without payment of the Termination Fee in
the event of its assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company
with the consent of a majority of the Independent Directors. Any such permitted assignment shall bind the assignee under this Agreement
in the same manner as the Manager is bound, and the Manager shall be liable to the Company for all acts or omissions of the assignee
under any such assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming
such assignee as the Manager. Notwithstanding the foregoing, the Manager may, without the approval of the Company’s Independent
Directors, (i) assign this Agreement to an Affiliate of the Manager, conditioned on such Affiliate becoming a party to, or becoming
subject to the rights and obligations of and the Services Agreement, (ii) delegate to one or more of its Affiliates the performance
of any of its responsibilities hereunder so long as it remains liable for any such Affiliate’s performance, in each case
so long as assignment or delegation does not require the Company’s approval under the Investment Advisors Act (but if such
approval is required, the Company shall not unreasonably withhold, condition or delay its consent). Nothing contained in this Agreement
shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement.

Notwithstanding the foregoing, any change in
control of any direct or indirect owner of equity interest in the Manager, or of any Affiliate thereof, shall not be deemed to
constitute an assignment of this Agreement by the Manager and shall not be subject to the consent of the Company or the Board.

 

(b)          
Assignments by the Company. This Agreement shall not be assigned by the Company without the prior written consent
of the Manager, except in the case of assignment by the Company to another REIT or other organization which is a successor (by
merger, consolidation, purchase of assets, or other transaction) to the Company, in which case such successor organization shall
be bound under this Agreement and by the terms of such assignment in the same manner as the Company is bound under this Agreement.

Section
13. Termination for Cause; Termination for Good Reason.

(a)          
The Company may terminate this Agreement effective upon at least 30 days’ prior written notice of termination from
the Company to the Manager, without payment of any Termination Fee, if (i) the Manager, its agents or its assignees breaches any
material provision of this Agreement and such breach shall continue for a period of 30 days after written notice thereof specifying
such breach and requesting that the same be remedied in such 30-day period (or 45 days after written notice of such breach if the
Manager takes steps to cure such breach within 30 days of the written notice), (ii) there is a commencement of any proceeding relating
to the Manager’s Bankruptcy or insolvency, including an order for relief in an involuntary bankruptcy case or the Manager
authorizing or filing a voluntary bankruptcy petition, (iii) the dissolution of the Manager, or (iv) the Manager commits fraud
against the Company, misappropriates or embezzles funds of the Company, or acts, or fails to act, in a manner constituting bad
faith, willful misconduct, gross negligence or reckless disregard in the performance of its duties under this Agreement; provided,
however, that if any of the actions or omissions described in this clause (iv) are caused by an employee and/or officer
of the Manager or one of its Affiliates and the Manager takes all necessary and appropriate action against such person and cures
the damage caused by such actions or omissions within 30 days of the Manager actual knowledge of its commission or omission, the
Company shall not have the right to terminate this Agreement pursuant to this Section 13(a)(iv).

 

    	18

    	 

    (b)          
The Manager may terminate this Agreement effective upon 60 days’ prior written notice of termination to the Company
in the event that the Manager determines that an event or circumstances constituting “Good Reason” shall have occurred,
and the Company shall not have remedied such event or circumstances to the reasonable satisfaction of the Manager within 30 days
after written notice thereof. The Company is required to pay to the Manager the Termination Fee if the termination of this Agreement
is made pursuant to this Section 13(b).

(c)          
The Manager may terminate this Agreement if the Company becomes required to register as an investment company under the
Investment Company Act, with such termination deemed to occur immediately before such event, in which case the Company shall not
be required to pay the Termination Fee.

Section
14. Action Upon Termination.

From and after the
effective date of termination of this Agreement pursuant to Sections 11, 12, or 13 of this Agreement, the Manager shall not be
entitled to compensation for further services hereunder, but shall be paid all compensation accruing to the date of termination
and, if terminated pursuant to Section 13(b) hereof or not renewed pursuant to Section 11(b) hereof (subject to Section 11(c) hereof),
the Termination Fee. Upon any such termination, the Manager shall forthwith:

(a)          
after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled, pay over to the
Company or a Subsidiary all money collected and held for the account of the Company or a Subsidiary pursuant to this Agreement;

(b)          
deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all
money held by it, covering the period following the date of the last accounting furnished to the Board with respect to the Company
and any Subsidiaries;

(c)          
deliver to the Board all property and documents of the Company and any Subsidiaries then in the custody of the Manager;
and

(d)          
use commercially reasonable efforts to cooperate with the Company or any persons or entity designated by the Board to succeed
the Manager as the manager of the Company (a “Successor Manager”) to accomplish an orderly transfer of the operation
and management of the Company and its investment activities to such Successor Manager. For a period of thirty (30) days after the
effective date of any termination of this Agreement, the Manager shall make its officers reasonably available during normal business
hours to answer questions from and consult with the Company or designated representatives of any Successor Manager with respect
to the Company’s business, operations and investment activities during the period prior to the termination.

Section
15. Release of Money or Other Property Upon Written Request.

The Manager agrees
that any money or other property of the Company (which such term, for the purposes of this Section 15, shall be deemed to include
any and all of its Subsidiaries, if any) held by the Manager shall be held by the Manager as custodian for the Company, and the
Manager’s records shall be appropriately and clearly marked
to reflect the ownership of such money or other property by the Company. Upon the receipt by the Manager of a written request signed
by a duly authorized officer of the Company requesting the Manager to release to the Company any money or other property then held
by the Manager for the account of the Company under this Agreement, the Manager shall release such money or other property to the
Company within a reasonable period of time, but in no event later than 60 days following such request. Upon delivery of such money
or other property to the Company, the Manager shall not be liable to the Company, the Board, or the Company’s
stockholders or partners for any acts or omissions by the Company in connection with the money or other property released to the
Company in accordance with this Section. The Company shall indemnify the Manager, its Affiliates, members, directors, officers,
stockholders, employees and agents against any and all Losses which arise in connection with the Manager’s
proper release of such money or other property to the Company in accordance with the terms of this Section 15. Indemnification
pursuant to this provision shall be in addition to any right of the Manager to indemnification under Section 9 of this Agreement.

 

    	19

    	 

    Section
16. Representations and Warranties.

(a)          
The Company hereby represents and warrants to the Manager as follows:

(i)            
The Company and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the
applicable jurisdiction, has the corporate power and authority and the legal right to own and operate its assets, to lease any
Property it may operate as lessee and to conduct the business in which it is now engaged and is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where its ownership or lease of Property or the conduct of its business
requires such qualification, except for failures to be so qualified, authorized or licensed that could not in the aggregate have
a material adverse effect on the business operations, assets or financial condition of the Company and its Subsidiaries, if any,
taken as a whole.

(ii)           
The Company has the corporate power and authority and the legal right to make, deliver and perform this Agreement and all
obligations required hereunder and has taken all necessary corporate action to authorize this Agreement on the terms and conditions
hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder. No consent of any
other Person, including stockholders and creditors of the Company, and no license, permit, approval or authorization of, exemption
by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Company in
connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement and all obligations
required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed and delivered
by a duly authorized officer of the Company, and this Agreement constitutes, and each instrument or document required hereunder
when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.

(iii)          
The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate
any provision of any existing law or regulation binding on the Company or any of the Subsidiaries, or any order, judgment, award
or decree of any court, arbitrator or governmental authority binding on the Company or any Subsidiary, or the Governing Instruments
of, or any securities issued by the Company or any Subsidiary or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of
their assets may be bound, the violation of which would have a material adverse effect on the business operations, assets or financial
condition of the Company and its Subsidiaries, if any, taken as a whole, and will not result in, or require, the creation or imposition
of any lien on any of its Property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract
or other agreement, instrument or undertaking.

(b)          
The Manager hereby represents and warrants to the Company as follows:

(i)            
The Manager is duly organized, validly existing and in good standing under the laws of the State of Delaware, has the limited
liability company power and authority and the legal right to own and operate its assets, to lease the Property it operates as lessee
and to conduct the business in which it is now engaged and is duly qualified as a foreign corporation and in good standing under
the laws of each jurisdiction where its ownership or lease of Property or the conduct of its business requires such qualification,
except for failures to be so qualified, authorized or licensed that could not in the aggregate have a material adverse effect on
the business operations, assets or financial condition of the Manager.

(ii)           
The Manager has the limited liability company power and authority and the legal right to make, deliver and perform this
Agreement and all obligations required hereunder and has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this Agreement and all obligations required hereunder.
No consent of any other Person, including members and creditors of the Manager, and no license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the
Manager in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement
and all obligations required hereunder. This Agreement has been, and each instrument or document required hereunder will be, executed
and delivered by a duly authorized officer of the Manager, and this Agreement constitutes, and each instrument or document required
hereunder when executed and delivered hereunder will constitute, the legally valid and binding obligation of the Manager enforceable
against the Manager in accordance with its terms.

 

    	20

    	 

    (iii)          
The execution, delivery and performance of this Agreement and the documents or instruments required hereunder will not violate
any provision of any existing law or regulation binding on the Manager, or any order, judgment, award or decree of any court, arbitrator
or governmental authority binding on the Manager, or the Governing Instruments of, or any securities issued by the Manager or of
any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Manager is a party or by which
the Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business operations,
assets or financial condition of the Manager, and will not result in, or require, the creation or imposition of any lien or any
of its Property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement,
instrument or undertaking.

Section
17. Miscellaneous.

(a)          
Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing
(including by email), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered
against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by
email transmission or (iv) delivery by registered or certified mail, postage prepaid, return receipt requested, addressed as set
forth below (or to such other address as may be hereafter notified by the respective parties hereto in accordance with this Section
17):

	 	If to the Company and	 
	 	the Operating Partnership:  	Roberts Realty Investors, Inc.
	 	 	c/o Avenue Capital Group
	 	 	399 Park Avenue
	 	 	New York, New York 10022
	 	 	Attention:  Edward Gellert
	 	 	Telephone:  212-850-7534
	 	 	Email:  egellert@avenuecapital.com
	 	 	 
	 	With a copy to:	Hunton & Williams LLP
	 	 	River Front Plaza, East Tower
	 	 	951 East Byrd Street
	 	 	Richmond, Virginia 23219
	 	 	Attention:  Daniel M. LeBey, Esq.
	 	 	Telephone:  (804) 788-7366
	 	 	Email:  dlebey@hunton.com
	 	 	 
	 	 	 
	 	If to the Manager:	c/o Avenue Capital Group
	 	 	399 Park Avenue
	 	 	New York, New York 10022
	 	 	Attention:  Edward Gellert
	 	 	Telephone:  212-850-7534
	 	 	Email:  egellert@avenuecapital.com
	 	 	 
	 	With a copy to:	[                                                            ]
	 	 	[                                                            ]
	 	 	Attention:
	 	 	Telephone:
	 	 	Email:

 

(b)          
Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives, successors and assigns as provided herein.

(c)          
Integration. This Agreement contains the entire agreement and understanding among the parties hereto with respect
to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions,
express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

    	21

    	 

    (d)          
Amendments. This Agreement and any terms hereof may not be amended, supplemented or modified except in an instrument
in writing executed by the parties hereto.

(e)          
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR THE PURPOSE OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF VENUE IN SUCH COURT.

(f)           
WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT
IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

(g)          
Survival of Representations and Warranties. All representations and warranties made hereunder, and in any document,
certificate or statement delivered pursuant hereto or in connection herewith, shall survive the execution and delivery of this
Agreement.

(h)          
No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of a party hereto,
any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

(i)            
Costs and Expenses. Each party hereto shall bear its own costs and expenses (including the fees and disbursements
of counsel and accountants) incurred in connection with the negotiations and preparation of and the closing under this Agreement,
and all matter incident thereto.

(j)            
Section Headings. The section and subsection headings in this Agreement are for convenience in reference only and
shall not be deemed to alter or affect the interpretation of any provisions hereof.

(k)          
Counterparts. This Agreement may be executed by the parties to this Agreement on any number of separate counterparts
(including by email in .pdf form), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

(l)            
Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

    	22

    	 

    IN WITNESS WHEREOF, each of the parties
hereto has executed this Management Agreement as of the date first written above.

Roberts
Realty Investors, Inc.

	 	By:	 	 
	 	Name:  	 	 
	 	Title:	 	 

 

 

Roberts
Properties Residential, L.P.

By:  Roberts Realty Investors, Inc.,
its general partner

 

 

	 	By:	 	 
	 	Name:  	 	 
	 	Title:	 	 

 

 

A-III MANAGER LLC

 

 

	 	By:	 	 
	 	Name:  	 	 
	 	Title:	 	 

 

 

    	23

    	 

    Exhibit A

Investment
Guidelines

(a)          
No investment shall be made that would cause the Company to fail to qualify as a REIT under the Code following the requalification
of the Company as a REIT (which is anticipated to be January 1, 2015 or 2016).

(b)          
A priority of the Company initially will be to dispose of the four legacy properties.

	(c)           Target Assets:	Multifamily, office, mixed use office (i.e., properties that are primarily office, including commercial office properties with a retail, parking, self-storage or other component), retail, industrial, healthcare and lodging properties, as well as preferred equity or debt instruments secured by mortgages on these types of properties, B pieces or mezzanine loans secured by pledges of equity interests in entities that own these types of properties or other forms of subordinate debt in connection with these types of properties.
	 	 
	(d)           Excluded Assets:	For-sale condominium conversion or condominium development projects.  
	 	 
	(e)           Investment Policy:	The Company will generally target wholly-owned Target Assets; however, the Company may make majority or minority investments alongside partners, so long as the Company maintains full or shared control over day-to-day management and major decisions.  While the Company is not prohibited from engaging in development of Target Assets, it is not anticipated that the Company would undertake significant ground-up development projects until later in its lifecycle.
	 	 
	(f)            Investment Structures:  	
        Acquisitions may take the form of simple purchase
        contracts but may also take the form of forward purchase contracts and purchase option agreements for properties and as such transactions
        may involve structured investments, including mezzanine or preferred structures.

         

 

(g)          
Prior to completion of the disposition of the Company’s legacy assets and completion of one or more capital raising
transactions in which the Company raises an aggregate of at least $100 million of new equity capital, the Manager will not be subject
to any specific quantitative investment parameters, but the Manager will obtain the approval of the Board of Directors with respect
to any single investment in which more than 25% of the Company’s total equity is invested.

(h)          
Following completion of the disposition of the Company’s legacy assets and completion of one or more capital raising
transactions in which the Company raises an aggregate of at least $100 million of new equity capital, the quantitative investment
parameters for capital deployment shall be as follows:

	 	·	No more than 33% of the Company’s total assets can be invested in any one single asset, except as approved by the Board of Directors;

	 	·	No more than 33% of the Company’s total assets may be invested in any one MSA, except as approved by the Board of Directors; and

	 	·	The Company’s aggregate borrowings (for the Company’s assets as a whole) cannot exceed 75% of the aggregate cost of its tangible assets at the time of the next new borrowing, except as approved by the Board of Directors.

(h)          
Target unleveraged IRRs of 9% or greater or leveraged IRRs of 12% or greater.

(i)           
Pending investment of the Company’s capital in the Target Assets or other assets permitted under these guidelines,
as described above, the Manager may invest any cash or excess cash reserves of the Company, including cash from operations, capital
transactions and the proceeds of any future offerings of the Company’s securities, in short-term investments, subject to
the requirements for the Company’s qualification as a REIT under the Code following the requalification of the Company as
a REIT.

 

These Investment
Guidelines may be amended, restated, modified, supplemented or waived by the Board (which must include a majority of the Independent
Directors) without the approval of the Company’s stockholders.

 

    	24

    	 

    

EXHIBIT
E

FORM
OF REGISTRATION RIGHTS AGREEMENT

 

 

REGISTRATION RIGHTS
AGREEMENT, dated as of                , 20__
(this “Agreement”), between ROBERTS REALTY INVESTORS, INC., a Georgia corporation (the “Company”)
and A-III Investment Partners LLC, a Delaware limited liability company (the “Purchaser”).

WHEREAS, the Purchaser
has acquired on the date hereof an aggregate of              shares
(the “Initial Shares”) of the Company’s common stock, $0.01 par value per share (“Common Stock”)
pursuant to the terms of a Stock Purchase Agreement dated as of November 19, 2014 between the Company and the Purchaser (the “Purchase
Agreement”); and

WHEREAS, pursuant
to Section 1.3 of the Purchase Agreement, the Company has agreed, under certain circumstances, to issue additional shares of Common
Stock (the “True-Up Shares”) to Purchaser in a Post-Closing Issuance (as defined in the Purchase Agreement);
and

WHEREAS, pursuant
to the Purchase Agreement, the Company has granted to the Purchaser a warrant to purchase additional shares of Common Stock (the
“Warrant Shares” and, together with the Initial Shares and the True-Up Shares, the “Shares”)
pursuant to a Warrant Agreement dated as of the date hereof between the Company and the Purchaser (the “Warrant Agreement”);
and

WHEREAS, pursuant
to the Purchase Agreement, the Company has agreed to grant certain registration rights, subject to the terms and conditions set
forth in this Agreement, with respect to the Shares;

WHEREAS, the Company
and the Purchaser wish to set forth their agreement with respect to certain rights and obligations regarding the registration of
the Shares.

In consideration
of the foregoing and of the mutual agreements contained herein and in the Purchase Agreement, the Company and the Purchaser hereby
agree as follows:

	 	1.	DEFINITIONS.

As used in this
Agreement, the following capitalized defined terms shall have the following meanings:

“Affiliate”
means, with respect to any Person, (i) each Person that, directly or indirectly, owns or controls, whether beneficially or
as a trustee, guardian or other fiduciary, 25% or more of the capital stock having ordinary voting power in the election of directors
of such Person, (ii) each Person that controls, is controlled by or is under common control with such Person or any Affiliate
of such Person, or (iii) each of such Person’s executive officers and directors. For the purpose of this definition,
“control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction
of its management or policies, whether through the ownership of voting securities, by contract or otherwise.

 

    	 

    	 

    “Board
of Directors” means the board of directors of the Company from time to time.

“Commission”
means the United States Securities and Exchange Commission.

“Common
Stock” means the shares of the Company’s common stock, $0.01 par value per share.

“Company”
has the meaning specified in the recitals to this Agreement.

“Controlling
Person” has the meaning specified in Section 7(a).

“End of
Suspension Notice” has the meaning specified in Section 6(b).

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder.

“Fully
Diluted Basis” means at any date as of which the number of shares of Common Stock is to be determined, on a basis including
all shares of Common Stock outstanding at such date and the maximum shares of Common Stock issuable in respect of Common Stock
Equivalents (giving effect to the then current respective conversion prices) and other rights to purchase (directly or indirectly)
shares of Common Stock or Common Stock Equivalents, outstanding on such date, to the extent such rights to convert, exchange or
exercise thereunder are presently exercisable. For purposes of this definition, “Common Stock Equivalents” means any
security or obligation which is by its terms convertible into or redeemable for shares of Common Stock (including any units of
limited partnership interest in Roberts Properties Residential, L.P.) and any option, warrant or other subscription or purchase
right with respect to Common Stock.

“Holder”
shall mean each owner of any Registrable Securities from time to time.

“Indemnified
Party” has the meaning specified in Section 7(c).

“Indemnifying
Party” has the meaning specified in Section 7(c).

“Liabilities”
has the meaning specified in Section 7(a).

“Material
Adverse Change” or “Material Adverse Effect” shall mean any event, circumstance, change or effect that would
reasonably be likely, individually or in the aggregate, to have a material adverse effect on the assets, business, operations,
earnings, properties or condition (financial or otherwise), of the Company and its subsidiaries taken as a whole; provided, however,
that none of the following shall be deemed to constitute or shall be taken into account in determining whether there has been a
Material Adverse Effect: any event, circumstance, change or effect arising out of or attributable to (a) changes in the economy
or financial markets, including, prevailing interest rates and market conditions, generally in the United States or that are the
result of acts of war or terrorism, or (b) changes that are caused by factors generally affecting the industry in which the Company
and its subsidiaries operate.

 

    	2

    	 

    “Person”
means any individual, corporation, partnership, joint venture, association, joint stock company, trust, fund, unincorporated association
or organization or government or other agency or political subdivision thereof.

“Piggyback
Registrations” has the meaning specified in Section 2.2(a).

“Purchase
Agreement” has the meaning specified in the recitals.

“Purchaser
Indemnitee” has the meaning specified in Section 7(a).

“Registrable
Securities” means the Initial Shares purchased by the Purchaser in connection with the Purchase Agreement, any True-Up
Shares issued by the Company to the Purchaser pursuant to the Purchase Agreement and the Warrant Shares issued or issuable to the
Purchaser pursuant to the Warrant Agreement, in each case including upon the transfer thereof by the original Holder or any subsequent
Holder, and any shares or other securities issued in respect of such shares of Common Stock by reason of or in connection with
any stock dividend, stock distribution, stock split, purchase in any rights offering or in connection with any exchange for or
replacement of such shares of Common Stock or any combination of shares, recapitalization, merger or consolidation, or any other
equity securities issued pursuant to any other pro rata distribution with respect to such shares of Common Stock. Any Registrable
Security will cease to be a Registrable Security when: (a) a registration statement covering such Registrable Security has been
declared effective by the Commission and the Registrable Security has been disposed of pursuant to such effective registration
statement, (b) the Registrable Security is sold under circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or (c) the Registrable Security has been otherwise transferred,
the Company has delivered a new certificate or other evidence of ownership for the Registrable Security not bearing a legend restricting
further transfer, and the Registrable Security may be resold without subsequent registration under the Securities Act.

“Registration
Expenses” means all expenses incident to the Company’s performance of or compliance with this Agreement, including
without limitation all Commission and stock exchange or NYSE registration and filing fees and expenses, fees and expenses of compliance
with securities or blue sky laws (including without limitation reasonable fees and disbursements of one counsel for all underwriters
or holders as a group in connection with blue sky qualifications of the Registrable Securities), rating agency fees, printing expenses,
messenger, telephone and delivery expenses, the fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange or national market system on which similar securities issued by the Company are then
listed, fees and disbursements of counsel for the Company and all independent certified public accountants (including the expenses
of any annual audit, special audit and “cold comfort” letters required by or incident to such performance and compliance),
securities laws liability insurance (if the Company so desires), the fees and expenses of any “qualified independent underwriter”
that is required to be retained by any holder of Registrable Securities pursuant to the rules and regulations of the Financial
Industry Regulatory Authority (“FINRA”) customarily paid by issuers or sellers of securities (but not including
any underwriting discounts or commissions attributable to the sale of Registrable Securities by the sellers of Registrable Securities)
and the reasonable fees of counsel selected pursuant to Section 6 hereof by the Holders in connection with each such registration.

 

    	3

    	 

    “Registration
Statement” means a registration statement of the Company that covers the resale of Registrable Securities pursuant to
the provisions of this Agreement, including any prospectus included in such registration statement, amendments and supplements
to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto and all material
incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.

“Securities
Act” means the Securities Act of 1933, as amended.

“Shelf
Registration Statement” has the meaning specified in Section 2.1(a).

“Suspension
Event” has the meaning specified in Section 6(b).

“Suspension
Notice” has the meaning specified in Section 6(b).

“Underwritten
Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.

	 	2.	REGISTRATION RIGHTS.

2.1             
MANDATORY REGISTRATION RIGHTS.

(a)   
As set forth in Section 5 hereof, the Company agrees to file on or before the 180th day after the date of
this Agreement a shelf Registration Statement on Form S-11 or such other form under the Securities Act then available to the Company
providing for the resale of any Registrable Securities pursuant to Rule 415 from time to time by the Holders (a “Shelf
Registration Statement”). The Company shall use its commercially reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission as soon as practicable thereafter, and, for this purpose, the Company shall
be entitled to consider the advice of the managing underwriter(s) of a public offering of the Company’s Common Stock which
is then pending as to the effect that the effectiveness of the Shelf Registration Statement could reasonably be expected to have
on the marketing of the public offering. Any Shelf Registration Statement shall provide for the resale from time to time, and pursuant
to any method or combination of methods legally available (including, without limitation, an Underwritten Offering, a direct sale
to purchasers or a sale through brokers or agents, which may include sales over the internet) by the Holders of any and all Registrable
Securities.

(b)  
PRIORITY ON SHELF REGISTRATION STATEMENT. The Company will not include in any Shelf Registration Statement any securities
that are not Registrable Securities without the prior written consent of the Holders of at least 66.66% of the Registrable Securities.
If the managing underwriters of an underwritten offering under the Shelf Registration Statement advise the Company in writing that
in their opinion the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in
such offering exceeds the number of Registrable Securities and other securities, if any, which can be sold therein without adversely
affecting the marketability of the offering, the Company will include in such registration, (i) first, the Registrable Securities;
and (ii) second, other securities, if any, requested to be included in such registration, pro rata among the holders of such
other securities, on the basis of the number of shares of other securities owned by each such holder and requested to be included
therein.

 

    	4

    	 

    (c)   
SELECTION OF UNDERWRITERS. Subject to an engagement agreement to which the Company is a party, the Company shall
have the right to select the investment banker or bankers, underwriters and managers to administer any Underwritten Offering under
a Shelf Registration Statement; PROVIDED, HOWEVER, that such investment banker or bankers, underwriters and managers shall be reasonably
satisfactory to the Holders of at least 66.66% of the Registrable Securities. All Holders proposing to distribute their Registrable
Securities through such Underwritten Offering shall enter into an underwriting agreement in customary form with the managing underwriters
selected for such underwriting and furnish to the Company such information in writing as the Company may reasonably request for
inclusion in the Shelf Registration Statement; provided, however, that no Holder
shall be required to make any representations or warranties to or agreements with the Company or the managing underwriters other
than representations, warranties or agreements as are customary and reasonably requested by the managing underwriters. If any Holder
disapproves of the terms of such Underwritten Offering, such Holder may elect to withdraw therefrom by written notice to the Company
and the managing underwriter delivered at least ten (10) business days prior to the effective date of the Shelf Registration Statement.
Any Registrable Securities excluded or withdrawn from such Underwritten Offering shall be excluded and withdrawn from the Shelf
Registration Statement.

2.2             
DEMAND REGISTRATION ON FORM S-3

(a)   
If (i) the Company shall receive a written request (specifying that it is being made pursuant to this subsection) from one
or more Holders that the Company file a registration statement on Form S-3 (or any successor form to Form S-3 regardless of its
designation) for a public offering of Registrable Securities the reasonably anticipated aggregate price to the public of which
would equal or exceed $5,000,000, and (ii) the Company is a registrant entitled to use Form S-3 (or any successor form to Form
S-3) to register such securities, then the Company shall promptly notify all other Holders of such request and shall use its commercially
reasonable best efforts to cause all Registrable Securities that Holders have requested be registered to be registered on Form
S-3 (or any successor form to Form S-3).

 

    	5

    	 

    (b)  
Notwithstanding the foregoing, (i) the Company shall not be obligated to effect a registration pursuant to this subsection
during the period starting with the date sixty (60) days prior to the Company’s estimated date of filing of, and ending on
a date six (6) months following the effective date of, a registration statement pertaining to an underwritten public offering of
securities for the account of the Company; provided, that the Company is actively employing in good faith its best efforts to cause
such registration statement to become effective and that the Company’s estimate of the date of filing such registration statement
is made in good faith; (ii) the Company shall not be obligated to effect a registration pursuant to this subsection within six
(6) months after the effective date of a prior registration under this Section; and (iii) if the Company shall furnish to the Holders
a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors it would
be seriously detrimental to the Company or its shareholders for a registration statement to be filed in the near future, then the
Company’s obligation to use its best efforts to file a registration statement shall be deferred for a period not to exceed
90 days; provided, however, that the Company shall not be permitted to so defer its obligation more than once in any 12-month period.

(c)   
The Holders’ rights to registration under this Section 2.2 are in addition to, and not in lieu of, their rights to
registration under any other section of this Agreement.

2.3             
RIGHT TO PIGGYBACK REGISTRATION.

(a)   
If at any time following the date of this Agreement and prior to the registration of Registrable Securities pursuant to
Section 2.1, the Company proposes for any reason to register any shares of Common Stock under the Securities Act (other than pursuant
to a registration statement on Form S-4 or Form S-8 (or a similar or successor form)) with respect to an offering of Common Stock
by the Company for its own account or for the account of any of its stockholders, it shall at each such time promptly give written
notice to the Holders of its intention to do so (but in no event less than 30 days before the anticipated filing date) and include
in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein
within 15 days after receipt of the Company’s notice (a “Piggyback Registration”). Such notice shall offer
the Holders the opportunity to register such number of shares of Registrable Securities as each Holder may request and shall indicate
the intended method of distribution of such Registrable Securities.

(b)  
The Company shall use its commercially reasonable best efforts to cause the managing underwriter or underwriters of a proposed
Underwritten Offering to permit the shares of Registrable Securities requested to be included in the Registration Statement for
such offering to be included (on the same terms and conditions as the Common Stock of the Company included therein to the extent
appropriate). Notwithstanding the foregoing, if in the reasonable judgment of the managing underwriter or underwriters due to the
size of the offering which the Company or such other persons or entities intends to make, the success of the offering would be
adversely affected by inclusion of the Registrable Securities requested to be included, then, if the offering is by the Company
for its own account or is an offering by other holders registering shares of Common Stock of the Company pursuant to demand registration
rights, then the number of shares of Common Stock to be offered for the accounts of Holders and other holders registering shares
of Common Stock of the Company pursuant to similar piggyback registration rights shall be reduced pro rata based on the relative
percentage ownership of all shares of Common Stock then outstanding owned by the Holders and such other holders to the extent necessary
to reduce the total number of shares of Common Stock to be included in such offering to the amount recommended by such managing
underwriter or underwriters.

 

    	6

    	 

     

	 	3.	HOLDBACK AGREEMENTS.

(a)   
The Holders agree not to effect any public sale or distribution (including sales pursuant to Rule 144 under the Securities
Act) of equity securities, including, without limitation, the Shares, of the Company, or any securities convertible into or exchangeable
or exercisable for such securities, during the seven days prior to and the 90-day period beginning on the effective date of any
Shelf Registration Statement or Piggyback Registration for a public offering to be underwritten on a firm commitment basis (except
as part of such underwritten registration), unless the investment bankers or underwriters managing the public offering otherwise
agree.

(b)  
The Company agrees to use its commercially reasonable best efforts to cause each of its directors and executive officers
and each holder of at least 5% (on a Fully Diluted Basis) of the Company’s equity securities, including, without limitation,
Common Stock, or any securities convertible into or exchangeable or exercisable for such securities, purchased from the Company
at any time after the date of this Agreement (other than in a registered public offering or distribution or securities issued pursuant
to the Company’s 2006 Restricted Stock Plan, as amended) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144 under the Securities Act) of any such securities during the period described in clause (a) above
(except as part of such underwritten registration), unless the underwriters managing the public offering or distribution otherwise
agree.

	 	4.	Rule 144 and 144a reporting.

With a view to making
available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities
to the public without registration, the Company agrees to, so long as any Holder owns any Registrable Securities:

(a)   
use its commercially reasonable best efforts to make and keep public information available, as those terms are understood
and defined in Rule 144(c) under the Securities Act;

(b)  
use its commercially reasonable best efforts to file with the Commission in a timely manner all reports and other documents
required to be filed by the Company under the Securities Act and the Exchange Act; and

(c)   
furnish to any Holder promptly upon request (i) a written statement by the Company that it has complied with the reporting
requirements of Rule 144 or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents
of the Company and (iii) such other information as a Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such Registrable Securities without registration or pursuant to such form.

 

    	7

    	 

    5.                 
REGISTRATION PROCEDURES.

Whenever the Holders
have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its commercially
reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company will as expeditiously as reasonably practicable:

(a)   
Prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use its commercially
reasonable best efforts to cause such Registration Statement to become effective (provided that before filing a Registration Statement
or prospectus or any amendments or supplements thereto, the Company will furnish to counsel selected by the Holders copies of all
such documents proposed to be filed);

(b)  
Subject to Section 7, prepare and file with the Commission such amendments and supplements to such Registration Statement
and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period
of not less than one year and comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement;

(c)   
Furnish to the Holders such number of copies of such Registration Statement, each amendment and supplement thereto, the
prospectus included in such Registration Statement (including each preliminary prospectus) and such other documents as such seller
may reasonably request in order to facilitate the disposition of the Registrable Securities;

(d)  
Use its commercially reasonable best efforts to register or qualify such Registrable Securities under such other securities
or blue sky laws of such jurisdictions of the United States of America as the Holders reasonably request and shall maintain such
qualification in effect so long as required; (provided that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of process (i.e., service of process which
is not limited solely to securities law violations) in any such jurisdiction);

(e)   
notify each Holder promptly and, if requested by any Holder, confirm such advice in writing (i) when a Registration
Statement registering the Registrable Securities has become effective and when any post-effective amendments and supplements thereto
become effective, (ii) of the issuance by the Commission or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iii) of any request by the
Commission or any other federal, state or foreign governmental authority for amendments or supplements to a Registration Statement
or related prospectus or for additional information, and (iv) of the happening of any event during the period a Registration
Statement is effective as a result of which such Registration Statement covering the Registrable Securities or the related prospectus
or any document incorporated by reference therein contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein not misleading (which information shall be accompanied
by an instruction to suspend the use of the prospectus until the requisite changes have been made);

 

    	8

    	 

    (f)   
Use its commercially reasonable best efforts to cause all such Registrable Securities to be listed on the same securities
exchange on which securities of the same class are then listed;

(g)  
Provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration
Statement;

(h)  
Enter into such customary agreements (including underwriting agreements in customary form) and take all such other reasonable
actions as the Holders or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities;

(i)    
Use its commercially reasonable best efforts to make available, subject to any confidentiality agreements reasonably requested
by the Company, for inspection by one representative appointed by the Holders any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other agent retained by such representative of the Holders
or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors, employees and independent accountants to supply all information reasonably requested by any Holder, such underwriter,
attorney, accountant or agent in connection with such Registration Statement;

(j)    
Otherwise use its commercially reasonable best efforts to comply with all applicable rules and regulations of the Commission,
and, if required, make available to its security holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months beginning with the first day of the Company’s first full calendar quarter after the effective
date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;

(k)  
use its commercially reasonable best efforts to avoid the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any equity
securities, including, without limitation, the Common Stock, included in such Registration Statement for sale in any jurisdiction;
in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending
or preventing the use of any related prospectus or suspending the qualification of any equity securities, including, without limitation,
the Common Stock, included in such Registration Statement for sale in any jurisdiction, the Company will use its commercially reasonable
best efforts promptly to obtain the withdrawal of such order;

 

    	9

    	 

    (l)    
Use its commercially reasonable best efforts to cause such Registrable Securities covered by such Registration Statement
to be registered with or approved by such other governmental agencies or authorities as may be reasonably necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities;

(m)
Except as provided in Section 7, upon the occurrence of any event contemplated by Section 5(e)(iv) of this Agreement, use
its commercially reasonable best efforts to promptly prepare a supplement or post-effective amendment to a Registration Statement
or the related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and, upon request, promptly furnish to each requesting Holder a reasonable
number of copies each such supplement or post-effective amendment;

(n)  
if requested by the managing underwriter(s), if any, or any Holders of Registrable Securities (i) as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment relating to the Registrable Securities such material information
as the managing underwriter(s), if any, or such Holders indicate in writing relates to them or that they reasonably request be
included therein and (ii) use its commercially reasonable best efforts to make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Company has received written notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;

(o)  
in the case of an Underwritten Offering, use its commercially reasonable best efforts to furnish to each Holder of Registrable
Securities covered by such Registration Statement and the underwriters a signed counterpart, addressed to each such Holder and
the underwriters, of: (i) an opinion of counsel for the Company, dated the date of each closing under the underwriting agreement,
reasonably satisfactory to such Holder and the underwriters; and (ii) a “comfort” letter, dated the effective
date of such Registration Statement and the date of each closing under the underwriting agreement, signed by the independent public
accountants who have certified the Company’s financial statements included in such Registration Statement, covering substantially
the same matters with respect to such Registration Statement (and the prospectus included therein) and with respect to events subsequent
to the date of such financial statements, as are customarily covered in accountants’ letters delivered to underwriters in
underwritten public offerings of securities and such other financial matters as such Holder and the underwriters may reasonably
request;

(p)  
provide a CUSIP number, if necessary, for all Registrable Securities, not later than the effective date of the Registration
Statement; and

(q)  
if requested by any holder of Registrable Securities, obtain a “cold comfort” letter from the Company’s
independent registered public accounting firm in customary form and covering such matters of the type customarily covered by “cold
comfort” letters as the Purchaser reasonably requests.

 

    	10

    	 

    It shall be a condition
precedent to the obligation of the Company to take any action pursuant to this Agreement in respect of the securities which are
to be registered at the request of the Holders that the Holders shall furnish to the Company such information regarding the Registrable
Securities held by the Holders and the intended method of disposition thereof as the Company shall reasonably request in connection
with such registration.

	 	6.	REGISTRATION EXPENSES.

(a)   
Except as otherwise expressly provided in this Agreement, all Registration Expenses will be borne by the Company. To the
extent Registration Expenses are not required to be paid by the Company pursuant to this Agreement, each holder of securities included
in any registration or qualification hereunder will pay those Registration Expenses allocable to the registration or qualification
of such holders’ securities so included, and any Registration Expenses not so allocable will be borne by all sellers of securities
included in such registration in proportion to the aggregate selling price of the securities to be so registered or qualified.

(b)  
Except as otherwise expressly provided in this Agreement, in connection with each Shelf Registration Statement and any Piggyback
Registration, the Company will reimburse the Holders covered by such Registration Statement for the reasonable fees and disbursements
of one United States legal counsel, which counsel shall be selected (i) in the case of a Shelf Registration Statement by the Holders
holding a majority of the Registrable Securities, and (ii) in all other cases, by the Holders of a majority of the Registrable
Securities, and in each case in consultation with the Company.

	 	7.	Black out period.

(a)   
Subject to the provisions of this Section 7, the Company shall have the right, but not the obligation, from time to
time to suspend the use of the Registration Statement, following the effectiveness of a Registration Statement (and the filings
with any international, federal or state securities commissions), the Company, by written notice to the Holders, may direct the
Holders to suspend sales of the Registrable Securities pursuant to a Registration Statement for such times as the Company reasonably
may determine is necessary and advisable if a majority of the independent members of the Board of Directors of the Company
shall have determined in good faith, after the advice of counsel, that the Company is required by law, rule or regulation, or that
it is in the best interests of the Company, to (i) supplement the prospectus or (ii) file a post-effective amendment to the Registration
Statement in the case of (i) or (ii) to incorporate information into the Registration Statement for the purpose of (1) including
in the Registration Statement any prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting in the
prospectus any facts or events arising after the effective date of the Registration Statement (or of the most-recent post-effective
amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth therein; or (3) including
in the prospectus any material information with respect to the plan of distribution not disclosed in the Registration Statement
or any material change to such information. In no event may a suspension in the case of (i) last for more than five (5) business
days in any singular instance and in the case of (i) and (ii) cumulatively last for more than an aggregate of ninety (90) days
in any rolling twelve (12) month period commencing on the Closing Date or for more than an aggregate of sixty (60) days in any
rolling ninety (90) day period, except as a result of a refusal by the Commission to declare any post-effective amendment to the
Registration Statement effective after the Company shall have used all commercially reasonable best efforts to cause such post-effective
amendment to be declared effective, in which case the suspension shall be terminated immediately following the effective date of
the post-effective amendment to the Registration Statement. Upon the occurrence of any such suspension, the Company shall use its
commercially reasonable best efforts to cause the Registration Statement to become effective or to promptly amend or supplement
the Registration Statement on a post-effective basis or to take such action as is necessary to make resumed use of the Registration
Statement compatible with the Company’s best interests, as applicable, so as to permit the Holders to resume sales of the
Registrable Securities as soon as possible.

 

    	11

    	 

    (b)  
In the case of an event that causes the Company to suspend the use of a Registration Statement (a “Suspension Event”),
the Company shall give written notice (a “Suspension Notice”) to the Holders to suspend sales of the Registrable
Securities pursuant to the Registration Statement and such notice shall state generally the basis for the notice and that such
suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is using its commercially
reasonable best efforts and taking all reasonable steps to terminate suspension of the use of the Registration Statement as promptly
as possible. No Holder shall effect any sales of the Registrable Securities pursuant to such Registration Statement (or such filings)
at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as
defined below). Each Holder agrees to keep confidential the fact that the Company has issued a Suspension Notice and the contents
thereof. If so directed by the Company, each Holder will deliver to the Company all copies, other than permanent file copies then
in such Holder’s possession, of the prospectus covering the Registrable Securities at the time of receipt of the Suspension
Notice. The Holders may recommence effecting sales of the Registrable Securities pursuant to the Registration Statement (or such
filings) following further notice to such effect (an “End of Suspension Notice”) from the Company, which End
of Suspension Notice shall be given by the Company to the Holders in the manner described above promptly following the conclusion
of any Suspension Event.

(c)   
Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice pursuant to this Section 7,
the Company agrees that it shall extend the period of time during which the applicable Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension
Notice to and including the date of receipt by the Holders of the End of Suspension Notice and copies of the supplemented or amended
prospectus necessary to resume sales; PROVIDED that such period of time shall not be extended beyond the date that securities
are no longer Registrable Securities.

 

    	12

    	 

     

	 	8.	INDEMNIFICATION and contribution.

(a)   
The Company agrees to indemnify and hold harmless (i) each Holder and any underwriter (as determined in the Securities
Act) for such Holder, (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act), any such Person described in clause (i) (any of the Persons referred to in this clause
(ii) being hereinafter referred to as a “Controlling Person”), and (iii) the respective officers, directors,
partners, employees, representatives, affiliates and agents of any such Person or any Controlling Person (any Person referred to
in clause (i), (ii) or (iii) may hereinafter be referred to as a “Purchaser Indemnitee”), to the fullest extent
lawful, from and against any and all losses, claims, damages, judgments, actions, out-of-pocket expenses, and other liabilities
(the “Liabilities”), including without limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Purchaser Indemnitee, joint or several,
directly or indirectly related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or prospectus included in such Registration Statement (as amended or
supplemented if the Company shall have furnished to such Purchaser Indemnitee any amendments or supplements thereto), or any preliminary
prospectus or any other document used to sell the Registrable Securities, or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except insofar as such Liabilities arise out of or are based upon (i) any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Purchaser
Indemnitee furnished to the Company or any underwriter in writing by such Purchaser Indemnitee expressly for use therein, or (ii) any
untrue statement contained in or omission from a preliminary prospectus if a copy of the prospectus (as then amended or supplemented,
if the Company shall have furnished to or on behalf of the Holder participating in the distribution relating to the relevant Registration
Statement any amendments or supplements thereto) was not sent or given by or on behalf of such Holder to the Person asserting any
such Liabilities who purchased Registrable Securities, if such prospectus (or prospectus as amended or supplemented) is required
by law to be sent or given at or prior to the written confirmation of the sale of such Registrable Securities to such Person and
the untrue statement contained in or omission from such preliminary prospectus was corrected in the prospectus (or the prospectus
as amended or supplemented), or (iii) any use of any Registration Statement or prospectus included therein during a period when
a stop order has been issued in respect thereof or any action or proceedings for that purpose have been initiated, or use of a
Registration Statement or a prospectus included therein (including any preliminary prospectus) that has been suspended pursuant
to Sections 5(e)(ii), 5(e)(iii), or 5(e)(iv) of this Agreement; provided that, with respect to this subsection (iii), the Holder
using such Registration Statement or prospectus (including any preliminary Prospectus) received the notice required by Section
5(e) hereof in advance of such use. The Company shall notify the Holders promptly of the institution, threat or assertion of any
claim, proceeding (including any governmental investigation), or litigation of which it shall have become aware in connection with
the matters addressed by this Agreement which involves the Company or a Purchaser Indemnitee. The indemnity provided for herein
shall remain in full force and effect regardless of any investigation made by or on behalf of any Purchaser Indemnitee.

 

    	13

    	 

    (b)  
In connection with any Registration Statement in which a Holder of Registrable Securities participating, and as a condition
to such participation, such Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, each Person who
signs the Registration Statement, each Person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and the respective partners, directors, officers, members, representatives, employees
and agents of the Company, such Person or Controlling Person to the same extent as the foregoing indemnity from the Company to
each Purchaser Indemnitee, but only with reference to untrue statements or omissions or alleged untrue statements or omissions
made in reliance upon and in strict conformity with information relating to such Purchaser Indemnitee furnished to the Company
in writing by such Purchaser Indemnitee expressly for use in any Registration Statement or related prospectus, any amendment or
supplement thereto or any related preliminary prospectus. The liability of any Purchaser Indemnitee pursuant to this paragraph
shall in no event exceed the net proceeds received by such Purchaser Indemnitee from sales of Registrable Securities giving rise
to such obligations.

(c)   
If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any Person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) above, such Person
(the “Indemnified Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”), in writing, of the commencement thereof (but the failure to so notify an Indemnifying Party shall not relieve
it from any liability which it may have under this Section 8, except to the extent the Indemnifying Party is materially prejudiced
by the failure to give notice), and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may reasonably designate
in such proceeding and shall assume the defense of such proceeding and shall pay the reasonable fees and expenses actually incurred
by such counsel related to such proceeding. Notwithstanding the foregoing, in any such proceeding, any Indemnified Party shall
have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Party, unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed in writing to the contrary,
(ii) the Indemnifying Party failed within a reasonable time after notice of commencement of the action to assume the defense
and employ counsel reasonably satisfactory to the Indemnified Party, (iii) the Indemnifying Party and its counsel do not actively
and vigorously pursue the defense of such action or (iv) the named parties to any such action (including any impleaded parties),
include both such Indemnified Party and the Indemnifying Party, or any Affiliate of the Indemnifying Party, and such Indemnified
Party shall have been reasonably advised by counsel that, either (x) there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnifying Party or such Affiliate of the Indemnifying Party
or (y) a conflict may exist between such Indemnified Party and the Indemnifying Party or such Affiliate of the Indemnifying
Party (in which case the Indemnifying Party shall not have the right to assume nor direct the defense of such action on behalf
of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel),
for all such Indemnified Parties, which firm shall be designated in writing by those Indemnified Parties who sold a majority of
the Registrable Securities sold by all such Indemnified Parties and any such separate firm for the Company, the directors, the
officers and such control Persons of the Company as shall be designated in writing by the Company). The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably
withheld, but if settled with such consent or if there is a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify any Indemnified Party from and against any loss or liability by reason of such settlement or judgment. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.

 

    	14

    	 

    (d)  
If the indemnification provided for in paragraphs (a) and (b) of this Section 8 is for any reason held to be unavailable
to an Indemnified Party in respect of any Liabilities referred to therein (other than by reason of the exceptions provided therein)
or is insufficient to hold harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in lieu
of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as
a result of such Liabilities (i) in such proportion as is appropriate to reflect the relative benefits of the Indemnified
Party on the one hand and the Indemnifying Party(ies) on the other in connection with the statements or omissions that resulted
in such Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the
Indemnifying Party(ies) and the Indemnified Party, as well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and any Purchaser Indemnitees on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Purchaser Indemnitees and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

(e)   
The parties agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if such Indemnified Parties were treated as one entity for such purpose), or by any other method
of allocation that does not take account of the equitable considerations referred to in paragraph 8(d) above. The amount paid or
payable by an Indemnified Party as a result of any Liabilities referred to in paragraph 8(d) shall be deemed to include, subject
to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall
a Purchaser Indemnitee be required to contribute any amount in excess of the amount by which proceeds received by such Purchaser
Indemnitee from sales of Registrable Securities exceeds the amount of any damages that such Purchaser Indemnitee has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this
Section 8, each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act) a Holder shall have the same rights to contribution as such Holder and each Person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) the Company, and each officer, director, partner,
employee, representative, agent or manager of the Company shall have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from
whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from
whom contribution may be sought from any obligation it or they may have under this Section 8 or otherwise, except to the extent
that any party is materially prejudiced by the failure to give notice. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act), shall be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation.

 

    	15

    	 

    (f)   
The indemnity and contribution agreements contained in this Section 8 will be in addition to any liability which the
Indemnifying Parties may otherwise have to the Indemnified Parties referred to above. The Purchaser Indemnitee’s obligations
to contribute pursuant to this Section 8 are several in proportion to the respective number of Registrable Securities sold
by each of the Purchaser Indemnitees hereunder and not joint.

9.                 
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No
Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such underwriting arrangements. 

	 	10.	MISCELLANEOUS.

(a)   
NOTICES. All notices or other communication required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given
when so delivered personally, telecopied or sent by certified, registered or express mail or, if mailed, five days after the date
of deposit in the United States mail, as follows:

 

    	16

    	 

    If to the Company:

Roberts Realty Investors,
Inc.

375 Northridge Road

Suite 330

Atlanta, GA 30350

Attention:Chief
Executive Officer

 

With a copy
to:

A-III Manager LLC

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com

 

If to the Purchaser:

A-III Investment Partners

c/o Avenue Capital Group

399 Park Avenue

New York, New York 10022

Attention: Edward Gellert

Telephone: 212-850-7534

Email: egellert@avenuecapital.com

 

With a copy
to:

Hunton & Williams LLP

951 East Byrd Street, Riverfront
Plaza

Richmond, Virginia 23219

Attention: Daniel M. LeBey, Esq.

 

Any party may
by notice given in accordance with this Section 9(a) designate another address or person for receipt of notices hereunder.

(b)  
AMENDMENT AND WAIVER.

(i)                
No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the parties hereto at law, in equity or otherwise.

 

    	17

    	 

    (ii)              
Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any party from the terms of any provision of this Agreement, shall be effective,
(a) only if it is made or given in writing and signed by the Company and by the holders of at least 66-2/3% of the Registrable
Securities and (b) only in the specific instance and for the specific purpose for which made or given.

(c)   
SPECIFIC PERFORMANCE. The parties hereto intend that each of the parties have the right to seek damages or specific
performance in the event that any other party hereto fails to perform such party’s obligations hereunder. Therefore, if any
party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party has an adequate remedy at law.

(d)  
HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.

(e)   
SEVERABILITY. If any one or more of the provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions
held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

(f)   
ENTIRE AGREEMENT. This Agreement is intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred
to herein or therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such
subject matter.

(g)  
TERM OF AGREEMENT. The provisions of this Agreement shall become effective upon the execution hereof and shall terminate
as provided herein.

(h)  
VARIATIONS IN PRONOUNS. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular
or plural, as the context may require.

(i)    
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAW THEREOF.

 

    	18

    	 

    (j)    
FURTHER ASSURANCES. Each of the parties shall, and shall cause their respective Affiliates to, execute such instruments
and take such action as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated
hereby.

(k)  
SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors, heirs, legatees and legal representatives. This Agreement is not assignable except in connection with a transfer of
Shares in accordance with this Agreement.

(l)    
COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original,
and all of which taken together shall constitute one and the same instrument.

[Signatures on next
page]

 

    	19

    	 

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

 

	COMPANY:	ROBERTS REALTY INVESTORS, INC.	 
	 	 	 
	 	 	 
	 	 	 
	 	Name:	 
	 	Title:	 
	 	 	 
	PURCHASER:	A-III Investment Partners LLC	 
	 	 	 
	 	 	 
	 	 	 
	 	Name:	 
	 	Title:	 

 

 

    	 

    	 

    

EXHIBIT
F

form
of tax protection agreement

 

 

THIS TAX PROTECTION
AGREEMENT (this “Agreement”) is made as of the ___ day of _________, 20__ by and between Roberts Realty Investors,
Inc., a Georgia corporation (the “Company”), and Roberts Properties Residential, L.P, a Georgia limited partnership
(the “Operating Partnership,” and, together with the Company, the “Seller Parties”), A-III
Investment Partners LLC, a Delaware limited liability company (the “Purchaser”) and A-III Manager LLC, a Delaware
limited liability company (the “Manager” and, together with the Purchaser, the “Purchaser Parties”
and, together with the Purchaser and the Seller Parties, the “Parties” and each a “Party”),
for the benefit of the Eligible Investors (as defined in this Agreement below) who shall be designated third party beneficiaries
of this Agreement.

WHEREAS, the Seller
Parties and the Purchaser have entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”), dated
as of November 19, 2014, pursuant to which, among other things, (i) on the date hereof (the “Closing Date”)
the Purchaser has purchased from the Company, and the Company has issued and sold to the Purchaser, ____________ shares
of common stock, $.01 par value per share, of the Company (the “Common Stock”), (ii) the Company has agreed,
subject to the terms and conditions of the Stock Purchase Agreement, to issue additional shares of Common Stock to the Purchaser
in a Post-Closing Issuance (as defined in the Stock Purchase Agreement), and (iii) the Company has granted to the Purchaser a warrant
to purchase additional shares of Common Stock pursuant to a Warrant Agreement dated as of the date hereof between the Company and
the Purchaser; and

WHEREAS, pursuant
to the Stock Purchase Agreement, on the date hereof, the Seller Parties and the Manager have entered into that certain Management
Agreement pursuant to which, among other things, the Seller Parties have engaged the Manager, and the Manager has agreed, to provide
certain management services for the Seller Parties; and

WHEREAS, under the
Stock Purchase Agreement, the Parties and the Purchaser have agreed that the Parties shall enter into this Agreement on the Closing
Date.

NOW, THEREFORE,
in consideration of the respective representations, warranties, covenants and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

1.      Definitions.

“Eligible
Investors” means persons who own both units and shares.

“Offering”
means the offering by the Operating Partnership pursuant to the Memorandum to Eligible Investors.

“Memorandum”
means that certain Confidential Private Offering Memorandum dated July 8, 2013, a copy of which has been provided to the Purchaser.

“Necessary
Actions” means, with respect to a specified result, all actions (to the extent such actions are permitted by applicable
law and applicable stock exchange rules and, in the case of any action by the Company that requires a vote or other action on the
part of the Board, to the extent such action is consistent with the fiduciary duties that the Company’s directors may have
in such capacity) necessary to cause such result, including: (i) causing members of the Board to act in a certain manner; (ii)
executing agreements and instruments; and (iii) making or causing to be made, with governmental, administrative or regulatory authorities,
all filings, registrations or similar actions that are required to achieve such result.

 

    	 

    	 

    “Partnership
Agreement” means the First Amended and Restated Partnership Agreement of the Operating Partnership, as amended.

“shares”
means shares of Common Stock, including shares of Common Stock purchased in the future on the NYSE MKT stock exchange (or other
exchange on which the shares of Common Stock are then listed).

“units”
means units of limited partnership interest in the Operating Partnership.

2.      Agreement
by the Parties.

Each Party agrees
to take all Necessary Actions within its reasonable control (a) to cause the Offering to continue to be available to Eligible Investors
and (b) to cause the Operating Partnership to retain the shares it has previously acquired in the Offering and any shares it acquires
in the future in the Offering.

3.      Term
of Agreement.

(a)      This
Agreement shall continue in effect until the earlier of:

(i)      the
date on which the Company has purchased, pursuant to Section 6.7(f) of the Partnership Agreement, all (but not less than all) outstanding
units held by limited partners (other than the Company as the general partner of the Operating Partnership);

(ii)      the
dissolution of the Operating Partnership;

(iii)      the
date on which all of the units issued in the Offering have been exchanged for shares or otherwise sold or transferred by the Eligible
Investor who participated in the Offering, including via bankruptcy or death;

(iv)      the
date on which this Agreement is terminated in accordance with Section 4(g);

(v)      the
date on which all of the shares held by the Operating Partnership are converted into or exchanged for cash in connection with a
merger, sale of assets, or other extraordinary transaction involving the Company; or

(vi)      the
dissolution of the Company.

(b)      Notwithstanding
the foregoing, in the event the Board designation rights (the “Board Designation Rights”) granted to the Purchaser
under Section 2 of that certain Governance and Voting Agreement, dated as of the Closing Date, by and among the Company, the Purchaser
and Charles S. Roberts, (the “Governance and Voting Agreement”) are terminated in accordance with the terms
thereof sooner than the date on which this Agreement is terminated under Section 3(a) above, the obligations of the Purchaser and
the Manager under this Agreement shall automatically terminate on the date that the Purchaser’s Board Designation Rights
terminate under the Governance and Voting Agreement.

 

    	2

    	 

    4.      Miscellaneous.

(a)               
Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the Parties. Nothing in this Agreement, express or implied, is intended to confer upon
any Party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement.

(b)              
Governing Law. This Agreement shall be governed by the laws of the State of Georgia.

(c)               
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic
mail (including pdf) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly
delivered and be valid and effective for all purposes.

(d)              
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

(e)               
Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall
be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the Party to be notified, (ii) one
(1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery,
with written verification of receipt, or (iii) delivery via email. All communications shall be sent to the respective Parties at
their address or email address, as applicable, as set forth on the signature page hereto, or to such address as subsequently modified
by written notice given in accordance with this Section 4(e). Notices and other communications to Eligible Investors shall
be delivered, using any of the same means described above, to the attention of Charles S. Roberts c/o Roberts Properties, Inc.,
375 Northridge Road, Suite 330 Atlanta, GA 30350; Email: cr@robertsproperties.com.

(f)               
Attorneys’ Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret
the terms of this Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements
in addition to any other relief to which such Party may be entitled.

 

    	3

    	 

    (g)              
Amendments and Waivers. It is expressly agreed that the purchasers of units in the Offering, but not their successors
and assigns, shall be third party beneficiaries of this Agreement for as long as they hold the units they purchased in the Offering
and that each of them may enforce the provisions of this Agreement. Accordingly, any term of this Agreement may be amended, terminated
or waived only with the written consent of (i) each of the Parties hereto and (ii) each of the original purchasers of units in
the Offering if and only if they hold at the time of such amendment, termination or waiver any of the units they purchased in the
Offering. Any amendment or waiver effected in accordance with this Section 4(g) shall be binding upon the Parties.

(h)              
Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability
of any other provision.

(i)                
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this
Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of
such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed
a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind
or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of
any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth
in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Party, shall be cumulative and
not alternative.

(j)                
Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were
not performed in accordance with the terms hereof and that the Parties (including the purchasers of units in the Offering) shall
be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in
equity.

[Signatures are on the following page.]

 

 

    	4

    	 

    IN WITNESS WHEREOF, the Parties have
executed this Tax Protection Agreement as of the date first written above.

	
        ROBERTS REALTY INVESTORS, INC.

         

        By:                                                                    

        Name:

        Title:

         
	
        Address:

        399 Park Avenue

        New York, New York 10022

        Attention: Edward Gellert

        Telephone: 212-850-7534

        Email: egellert@avenuecapital.com

         

	
        ROBERTS PROPERTIES RESIDENTIAL, L.P.

        By: Roberts Realty Investors, Inc.,
        its general partner

         

         

         

        By:                                                                    

        Name:

        Title:

         
	
        Address:

        399 Park Avenue

        New York, New York 10022

        Attention: Edward Gellert

        Telephone: 212-850-7534

        Email: egellert@avenuecapital.com

         

	
        A-III INVESTMENT PARTNERS LLC

         

         

         

        By:                                                                    

        Name:

        Title:

         

         
	
        Address:

        c/o Avenue Capital Group

        399 Park Avenue

        New York, New York 10022

        Attention: Edward Gellert

        Telephone: 212-850-7534

        Email: egellert@avenuecapital.com

         

	
        A-III MANAGER LLC

         

         

         

        By:                                                                    

        Name:

        Title:

         

         
	
        Address:

        c/o Avenue Capital Group

        399 Park Avenue

        New York, New York 10022

        Attention: Edward Gellert

        Telephone: 212-850-7534

        Email: egellert@avenuecapital.com

         

 

 

    	5

    	 

    

EXHIBIT
G

 

 

 

DISCLOSURE SCHEDULE

 

TO THE

 

STOCK PURCHASE AGREEMENT

 

DATED NOVEMBER 19, 2014

 

BY AND AMONG

 

ROBERTS REALTY INVESTORS, INC.,

 

ROBERTS PROPERTIES RESIDENTIAL, L.P.

 

AND

 

A-III INVESTMENT PARTNERS LLC

 

 

 

 

 

    	 

    	 

    This disclosure schedule
(this “Disclosure Schedule”) has been prepared and delivered to A-III Investment Partners LLC (the “Purchaser”)
by Roberts Realty Investors, Inc. (the “Company”) and Roberts Properties Residential, L.P. (the “Operating
Partnership” as of the Effective Date of that certain Stock Purchase Agreement (the “Agreement”),
by and among the Company, the Operating Partnership and the Purchaser. Capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to such terms in the Agreement.

 

This Disclosure Schedule
has been arranged in a manner that corresponds to the numbered and lettered sections and subsections of the Agreement. The disclosures
in any section or subsection of the Disclosure Schedule shall constitute disclosure for purposes of each section or subsection
of the Agreement where such information is relevant.

 

Headings and introductory
language have been included in this Disclosure Schedule for convenience only, and such headings and introductory language shall
not have the effect of amending, and shall not be used to construe, the representations and warranties regarding the Company and
Operating Partnership set forth in the Agreement.

 

 

    	 

    	 

    Schedule 1.4

 

The Company’s Properties

 

	 	1.	North Springs is a 10-acre transit-oriented site located in Sandy Springs that is zoned for a mixed-use development.

	 	2.	Bradley Park is a 22-acre site located in Forsyth County near the GA-400 and Highway 20 interchange, zoned for 154 multifamily units.

	 	3.	Northridge is an 11-acre site located in Sandy Springs near the GA-400 and Northridge interchange, zoned for 220 multifamily units.

	 	4.	Highway 20 is a 38-acre site located in the City of Cumming in Forsyth County, zoned for 210 multifamily units.

 

 

    	 

    	 

    Schedule 2.2

 

The Company’s Ownership Percentage
in the Operating Partnership

 

The aggregate percentage ownership interest
of the Company in the Operating Partnership is 80.23%.

 

 

    	 

    	 

    Schedule 2.8

 

Governmental Consents and Filings

 

 

None.

 

 

    	 

    	 

    Schedule 2.9

 

Legal Actions

 

 

None.

 

 

    	 

    	 

    Schedule 2.11

 

Certain Transactions

 

 

	 	(a)	Letter of Intent by and between Roberts Properties Residential, L.P. and Bradley Park Apartments, LLC dated October 27, 2014 (Bradley Park).

 

 

    	 

    	 

    Schedule 2.13

 

Absence of Violation, Defaults and Conflicts

 

(b) The inability to provide
current financial statements to the Lenders of the Loans listed in Schedule 2.36 due to the matters described in Schedule 2.33
could result in a Default. Each Loan listed in Schedule 2.36 has a cure period for such Default.

 

 

    	 

    	 

    Schedule 2.17

 

Employee Matters

 

Schedule of Compensation of

Each Officer, Employee, Consultant and Independent
Contractor

for 2013 and 2014

 

 

	(a)	2013 Form 10-K - Item 11. Executive Compensation. - Page 43-44
	 	Consultant – {Individual Name Redacted} - $32,748.22
	 	2013 Form 10-K - Item 15. Exhibits, Financial Statement Schedules. - Page F-18-
	 	F-19 - Footnote 5 - Shareholders’ Equity - Restricted Stock – Paragraph 3
	 	 
	 	2014 – Charles S. Roberts – President – Salary - $225,000
	 	2014 – Charles R. Elliott – CFO - $3,000 per month – Total of $30,000
	 	Mr. Elliott also receives the standard Director Fees of $18,000 per year for his service as a Director
	 	2014 – Anthony W. Shurtz – Chief Financial Officer – Salary - $140,000
	 	Severance Compensation - $70,000
	 	 
	(d)	Anthony W. Shurtz – Chief Financial Officer - Severance Compensation - $70,000

 

 

    	 

    	 

    Schedule 2.21

 

Mortgages, Pledges, Liens, Security Interests,
Claims, Restrictions or Encumbrances

 

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	10.4.1	Restrictive Covenant by Roberts Properties Peachtree Dunwoody, LLC, assumed by Roberts Properties Residential, L.P. on January 20, 2005.  [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated January 21, 2005.]
	 	 
	10.9.27	Deed to Secure Debt, Assignment of Rents, and Security Agreement dated July 18, 2013 by and between Roberts Properties Residential, L.P. and North Springs Financial, LLC (North Springs).  [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	N/A	Deed to Secure Debt, and Assignment of Lessor’s Interest in Leases dated September 29, 2005 between Roberts Properties Residential, L.P. and Bank of North Georgia, as amended and modified (Bradley Park).  
	 	 
	N/A	Declaration of Covenants and Conditions by Roberts Properties Residential, L.P. and Manchester Park Homeowners Association, Inc. dated November 1, 2013 (Bradley Park).  
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).  
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated as of September 27, 2013 by and between Roberts Properties Residential, L.P. and Touchmark National Bank (Highway 20).
	 	 
	N/A	Amended and Restated Declaration of Reciprocal Easements dated August 12, 1994 as amended and modified (Northridge).
	 	 
	N/A	The Company and the Operating Partnership hereby list and incorporate by reference all Properties listed in Schedule 1.4.
	 	 
	N/A	Reciprocal Easements Agreement by and between Highway Nine Investors, LLC and Roberts Properties Residential, L.P. dated November 3, 2014 (Bradley Park).
	 	 
	N/A	Any matters shown on Purchaser’s title reports for the Company and Operating Partnership’s real property.  

 

 

    	 

    	 

    Schedule 2.27

 

Environmental and Safety Laws

 

 

	(a)	Bradley Park contains wet lands as delineated on the survey.
	 	 
	(b)	A house with asbestos containing materials was located on the property adjacent to Bradley Park.  The house was demolished by a licensed asbestos abatement company and in accordance with applicable Environmental Laws.

 

 

    	 

    	 

    Schedule 2.33

 

SEC Reports

 

	 	1.	During the course of Purchaser’s due diligence, an error was discovered in the calculation of the 95% gross income test for purposes of the Company’s qualification as a REIT in the tax year ended December 31, 2009. As a result, the Company failed to qualify to be taxed as a REIT for federal and state income tax purposes in the tax year ended December 31, 2009, and the Code prohibits the Company from qualifying as a REIT for its taxable years ended December 31, 2010 through December 31, 2013. The Company Exchange Act Reports filed since December 31, 2009 have incorrectly stated that the Company qualified to be taxed as a REIT for federal and state income tax purposes and the Company’s financial statements for all such periods were prepared accordingly. However, due to the Company’s net operating losses for such years, the Company will have no Liability for federal and state income taxes for its taxable years ended December 31, 2009 through December 31, 2013.

 

	 	2.	The Current Report on Form 8-K filed by the Company on October 11, 2011 was filed after the required filing date.

 

	 	3.	The Current Report on Form 8-K filed by the Company on November 14, 2014 was filed after the required filing date.

 

	 	4.	As described in Form 12b-25 filed by the Company on November 17, 2014, the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 was not filed by the required filing date.

 

 

    	 

    	 

    Schedule 2.35

 

Material Contracts

 

	 	(a)	Obligations to Make an Investment or Loan

 

None.

 

	 	(b)	Leases

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	10.8.4	Office Lease by and between Roberts Capital Partners, LLC, as Landlord, and Roberts Properties Residential, L.P., as Tenant, dated as of February 19, 2014.  [Incorporated by reference to our current report on Form 8-K dated February 19, 2014.]

 

	 	(c)	Performance of Services, Delivery of Goods or Materials

 

	 	1.	The Company engages and pays law firms, accounting firms, other professionals and temporary staffing firms in the ordinary course of business.

 

	 	2.	Architectural Contract with Pieper O’Brien Herr Architects dated July 24, 2014 (Northridge/Artisan Apartments)

 

	 	3.	Contract with Paradigm Engineering Services, Inc. dated May 14, 2014 (Northridge/Artisan Apartments)

 

	 	4.	Architectural Contract with Pieper O’Brien Herr Architects dated July 21, 2014 (Bradley Park)

 

	 	5.	Waterproofing Contract with Williamson & Associates, Inc. dated August 20, 2014 (Bradley Park)

 

 

    	 

    	 

     

	 	(d)	Out of the Ordinary Course

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	
        10.9.30

         

         

         

         

         
	Purchase and Sale Agreement dated October 15, 2013 by and between Roberts Properties Residential, L.P. and the Fulton County Board of Education (Northridge Office Building). [Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K dated October 15, 2013.]

 

	 	(e)	Affecting Interest in Property

 

	 	1.	The Company and the Operating Partnership hereby list and incorporate by reference all Contracts listed in Schedule 2.21 and Schedule 2.36.

 

	 	2.	Letter of Intent by and between Roberts Properties Residential, L.P. and Bradley Park Apartments, LLC dated October 27, 2014 (Bradley Park).

 

	 	(f)	Contracts with Respect to Company Intellectual Property

 

None.

 

	 	(g)	Capital Asset Agreements

 

Letter of Intent by and between Roberts Properties Residential,
L.P. and Bradley Park Apartments, LLC dated October 27, 2014 (Bradley Park).

 

	 	(h)	Contracts with Directors, Officers or Other Employees

 

	 	1.	Agreement with Charles R. Elliott to provide CFO services for $3,000 per month – Total of $30,000 for 2014.

 

	 	2.	Agreement for Severance with Anthony W. Shurtz – Chief Financial Officer - $70,000.

 

	 	3.	Indemnification Agreements, dated as of the Effective Date, by and between the Company and each of its Officers and Directors.

 

	 	4.	Reimbursement arrangements with the Roberts Companies as described in the Company Exchange Act Reports and in Exhibits 10.8.1, 10.8.2 and 10.8.3 to the Company’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2013, which exhibits are hereby incorporated by reference into this Disclosure Schedule.

 

	 	5.	For the avoidance of doubt, the Company and the Operating Partnership list the following agreements with Affiliates of Mr. Roberts:

 

 

    	 

    	 

     

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	10.2.1	Construction Agreement between Roberts Properties Residential, L.P. and Roberts Properties Construction, Inc.  (Northridge) [Incorporated by reference to Exhibit 10.1.18 in our quarterly report on Form 10-Q for the quarter ended March 31, 2003.]
	 	 
	10.4.1	Restrictive Covenant by Roberts Properties Peachtree Dunwoody, LLC, assumed by Roberts Properties Residential, L.P. on January 20, 2005.  (North Springs) [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated January 21, 2005.]
	 	 
	10.4.2	Design and Development Agreement between Roberts Properties Residential, L.P. and Roberts Properties, Inc., dated as of April 14, 2005.  (North Springs) [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated April 12, 2005.]
	 	 
	10.4.3	Construction Contract between Roberts Properties Residential, L.P. and Roberts Properties Construction, Inc., dated as of April 14, 2005.  (North Springs)  [Incorporated by reference to Exhibit 10.4 in our current report on Form 8-K dated April 12, 2005.]
	 	 
	10.5.1	Design and Development Agreement between Roberts Properties Residential, L.P. and Roberts Properties, Inc., dated as of August 4, 2005.  (Bradley Park) [Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K dated August 9, 2005.]
	 	 
	10.5.2	Construction Contract between Roberts Properties Residential, L.P. and Roberts Properties Construction, Inc., dated as of August 4, 2005.  (Bradley Park)  [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated August 9, 2005.]
	 	 
	10.6.1	Design and Development Agreement between Roberts Properties Residential, L.P. and Roberts Properties, Inc., dated as of February 21, 2006.  (Highway 20) [Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K dated February 21, 2006.]
	 	 
	10.6.2	Construction Contract between Roberts Properties Residential, L.P. and Roberts Properties Construction, Inc., dated as of February 21, 2006.  (Highway 20) [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated February 21, 2006.]
	 	 
	10.8.4	Office Lease by and between Roberts Capital Partners, LLC, as Landlord, and Roberts Properties Residential, L.P., as Tenant, dated as of February 19, 2014.  [Incorporated by reference to our current report on Form 8-K dated February 19, 2014.]

 

 

    	 

    	 

     

	 	(i)	Powers of Attorney

 

	 	1.	The Partnership Agreement.

 

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	10.9.27	Deed to Secure Debt, Assignment of Rents, and Security Agreement dated July 18, 2013 by and between Roberts Properties Residential, L.P. and North Springs Financial, LLC (North Springs).  [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	10.9.28	Unconditional Guaranty of Payment and Performance dated July 18, 2013 by Roberts Realty Investors, Inc. in favor of North Springs Financial, LLC (North Springs). [Incorporated by reference to Exhibit 10.3 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).  
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated as of September 27, 2013 by and between Roberts Properties Residential, L.P. and Touchmark National Bank (Highway 20).
	 	 
	N/A	Guaranty of Payment and Performance dated April 8, 2009 by Roberts Realty Investors, Inc. in favor of Touchmark National Bank (Highway 20). 
	 	 
	N/A	Deed to Secure Debt, and Assignment of Lessor’s Interest in Leases dated September 29, 2005 between Roberts Properties Residential, L.P. and Bank of North Georgia, as amended and modified (Bradley Park).     
	 	 
	N/A	Guaranty by Corporation dated February 9, 2010 by Roberts Realty Investors, Inc. in favor of Bank of North Georgia, as amended and modified (Bradley Park). 

 

	 	(j)	Labor Union Contracts

 

None.

 

	 	(k)	Deferred Compensation

 

ADP 401(k) Plan

 

 

    	 

    	 

     

 

	 	(l)	Limiting Agreements

 

	 	1.	No Contract prohibits the Company or the Operating Partnership from freely engaging in business anywhere in the world.

 

	 	2.	The Company has entered into approximately 91 mutual non-disclosure agreements with Persons that previously expressed interest in a strategic transaction with the Company and has provided copies of those agreements to the Purchaser.

 

	 	(m)	Sharing of profits, losses, costs, taxes or other liabilities

 

	 	1.	The Partnership Agreement.

 

	 	2.	The Northridge Parkway, LLC Operating Agreement.

 

	 	(n)	Debt Obligations

 

The Company and the Operating Partnership hereby list and
incorporate by reference all Contracts listed in Schedule 2.36.

 

	 	(o)	Brokers and Finders

 

	 	Description
	 	 
	 	Commission Agreement by and between Roberts Properties Residential, L.P. and Gary J. Lee, Marcus & Millichap for 5 Registered Parties dated September 4, 2014 (North Springs).

 

	 	(p)	Contracts with any Governmental Entity

 

None.

 

	 	(q)	Indemnification

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	N/A	
        The Company and the Operating Partnership hereby
        list and incorporate by reference all Contracts listed in Schedule 2.36 and in the Exhibits to the Company Exchange
        Act Reports if and to the extent that such documents include obligations to indemnify another Person.

         

 

	 	(r)	Surety Bonds or Letters of Credit

 

None.

 

 

    	 

    	 

    Schedule 2.36

 

Loans and Guarantees

 

(a)

 

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	10.9.26	Promissory Note in the principal amount of $5,500,000 dated July 18, 2013 by Roberts Properties Residential, L.P. to the order of North Springs Financial, LLC (North Springs).  [Incorporated by reference to Exhibit 10.1 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	10.9.27	Deed to Secure Debt, Assignment of Rents, and Security Agreement dated July 18, 2013 by and between Roberts Properties Residential, L.P. and North Springs Financial, LLC (North Springs).  [Incorporated by reference to Exhibit 10.2 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	10.9.28	Unconditional Guaranty of Payment and Performance dated July 18, 2013 by Roberts Realty Investors, Inc. in favor of North Springs Financial, LLC (North Springs). [Incorporated by reference to Exhibit 10.3 in our current report on Form 8-K dated July 18, 2013.]
	 	 
	N/A	Collateral Assignment of Contracts, Licenses, Permits, Warranties and Certificates dated July 18, 2013 by and between Roberts Properties Residential, L.P. and North Springs Financial, LLC (North Springs).
	 	 
	N/A	Indemnity Agreement Regarding Hazardous Substances dated July 18, 2013 by and between Roberts Properties Residential, L.P., Roberts Realty Investors, Inc. and North Springs Financial, LLC (North Springs).
	 	 
	N/A	Promissory Note in the original principal amount of $3,335,000 dated September 29, 2005 by Roberts Properties Residential, L.P. to the order of Bank of North Georgia, as amended and modified (Bradley Park).  
	 	 
	N/A	Deed to Secure Debt, and Assignment of Lessor’s Interest in Leases dated September 29, 2005 between Roberts Properties Residential, L.P. and Bank of North Georgia, as amended and modified (Bradley Park).     
	 	 
	N/A	Guaranty by Corporation dated February 9, 2010 by Roberts Realty Investors, Inc. in favor of Bank of North Georgia, as amended and modified (Bradley Park). 
	 	 
	N/A	Environmental Indemnity Agreement dated September 29, 2005 by and between Roberts Properties Residential, L.P., Roberts Realty Investors, Inc. and Bank of North Georgia, as amended and modified (Bradley Park).

 

 

    	 

    	 

     

	
        Exhibit No.

        In Company’s 

Form 10-K for 2013
	Description
	 	 
	N/A	Note in the original principal amount of $3,500,000 dated April 8, 2009 by Roberts Properties Residential, L.P. to the order of Touchmark National Bank, as amended and modified (Highway 20).  
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).     
	 	 
	N/A	Guaranty of Payment and Performance dated April 8, 2009 by Roberts Realty Investors, Inc. in favor of Touchmark National Bank (Highway 20). 
	 	 
	N/A	Loan Agreement dated as of April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).
	 	 
	N/A	UCC Financing Statements filed on April 9, 2009 by Touchmark National Bank, as amended and modified (Highway 20).
	 	 
	N/A	Assignment of Contracts, Warranties, Licenses, Permits and Plans dated as of April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).
	 	 
	N/A	Environmental Indemnity Agreement dated as of April 8, 2009 by and between Roberts Properties Residential, L.P. and Touchmark National Bank, as amended and modified (Highway 20).
	 	 
	N/A	Deed to Secure Debt and Security Agreement, Assignment of Leases and Rents, and Security Agreement dated as of September 27, 2013 by and between Roberts Properties Residential, L.P. and Touchmark National Bank (Highway 20).
	 	 
	N/A	Environmental Indemnity Agreement dated as of September 27, 2013 by and between Roberts Properties Residential, L.P. and Touchmark National Bank (Highway 20).
	 	 

 

	 	(b)	None.

 

	 	(c)	The Company and the Operating Partnership hereby list and incorporate by reference all Contracts listed in subsection (a) above and Schedule 2.21, if and to the extent that such Contracts constitute a guarantee, mortgage, pledge, lien, assignment or other security agreement or arrangement by the Company, the Operating Partnership or the Subsidiary or is an agreement or arrangement whereby the Company, the Operating Partnership or the Subsidiary is responsible for the indebtedness, or for the default in the performance of any obligation, of any other Person.

 

	 	(d)	The Company and the Operating Partnership hereby list and incorporate by reference all Contracts listed in subsection (a) above if and to the extent that such Contracts constitute bonds, guarantees or other forms of credit support or similar arrangements provided by any Affiliates of the Company for the benefit of any of the Company, the Operating Partnership or the Subsidiary.

 

    	 

    	 

    

EXHIBIT
H

FORM
OF COMPLIANCE CERTIFICATE

 

This Compliance Certificate
(this “Certificate”) is being delivered as of __________, 20___, pursuant to Section 4.4 of that certain Stock
Purchase Agreement, dated as of November 19, 2014, (the “Agreement”), by and among Roberts Realty Investors,
Inc., a Georgia corporation (the “Company”), Roberts Properties Residential, L.P., a Georgia limited partnership
(the “Operating Partnership”) and A-III Investment Partners LLC, a Delaware limited liability company (the “Purchaser”).
Capitalized terms not otherwise defined in this Certificate shall have the meaning set forth in the Agreement. The undersigned
President and Chief Financial Officer of the Company, acting as officers of the Company on behalf of both the Company itself and
the Operating Partnership for which the Company is the General Partner, each hereby certifies to the Purchaser as follows:

 

1.                 
That, subsequent to the Effective Date, there has not been (A) any change, or any development or event that reasonably could
be expected to result in a change, that has or reasonably could be expected to have a Material Adverse Effect, (B) any increase
in the aggregate outstanding consolidated indebtedness of the Company and the Subsidiaries to which the Purchaser has not consented
in accordance with Section 6 of the Agreement, (C) any dividend or distribution of any kind declared, paid or made
on the capital stock or other equity interests of the Company or any of the Subsidiaries (other than OP Redemptions and OP Exchanges),
or (D) any loss or damage (whether or not insured) to any of the current properties of the Company or any of the Subsidiaries that
has been sustained or is expected to be sustained that has or could reasonably be expected to have a Material Adverse Effect.

 

2.                 
Each of the representations and warranties of the Company and the Operating Partnership contained in the Agreement (or in
any of the other documents or instruments to be delivered in connection therewith), to the extent qualified by Material Adverse
Effect or other materiality qualification contained in any such representation or warranty, is (except for representations and
warranties made as of a specific date, which were complete and accurate as of such date) complete and accurate as of the date hereof
as if made as of the date hereof, and, to the extent not qualified by any Material Adverse Effect or other materiality (or equivalent)
qualification contained in any such representation or warranty, is (except for representations and warranties made as of a specific
date, which were complete and accurate in all material respects as of such date) complete and accurate in all material respects
as of the date hereof as if made as of the date hereof; provided that the representations and warranties set forth in Sections 2.1,
2.2, 2.3, 2.4 (other than any de minimis discrepancy in the aggregate number of issued and outstanding
shares of Common Stock and OP Units), 2.5 and 2.6 of the Agreement are complete and accurate in all respects.

 

3.                 
The Company and the Operating Partnership have (A) delivered all documents and other items required of the Company
or the Operating Partnership, as applicable, pursuant to Section 4 of the Agreement and (B) performed and complied
in all material respects with all covenants, agreements, obligations and conditions contained in the Agreement that were required
to be performed or complied with by the Company or the Operating Partnership on or before the date hereof.

 

 

    	 

    	 

    4.                 
No investigation, suit, action or other proceeding is (i) threatened in writing or pending by a Governmental Entity that
seeks restraint, prohibition, damages, monetary relief or other relief in connection with the Agreement or the consummation of
the transactions contemplated hereby, (ii) pending before any Governmental Entity by a non-Governmental Entity that seeks restraint
or prohibition in connection with the Agreement and that the Purchaser reasonably determines to be reasonably likely to result
in the incurrence by the Company or the Purchaser of any Liability in excess of $100,000, and there is no effective injunction,
writ or restraint in place concerning any of the foregoing, or (iii) threatened in writing or pending before any Governmental Entity
in which a Governmental Entity is a party that would or is reasonably likely to result in a governmental investigation or material
governmental damages being imposed on the Purchaser or the Company or any of their respective Affiliates. There is no change in
any Law that would prohibit the consummation of the transactions contemplated by the Agreement.

 

5.                 
The Company is not and has not been deemed to be an issuer described in Rule 144(i)(1)(i) under the Securities Act.

 

6.                 
Trading in the Company’s Common Stock on the NYSE MKT exchange is not and has not been suspended nor have the shares
of the Company’s Common Stock been de-listed from such exchange, under applicable SEC or NYSE MKT rules and regulations.

 

7.                 
The Requisite Company Vote has been obtained.

 

8.                 
The Company has received duly executed resignation and release letters of each member of the Board of Directors in the form
of Exhibit L-1 attached to the Agreement, as well as all officers and employees of the Company in the form set forth
in Exhibit L-2 attached to the Agreement.

 

9.                 
The Company has received a written waiver from the Roberts Companies in form and substance reasonably acceptable to the
Purchaser, and in recordable form if deemed necessary by the Purchaser in its reasonable discretion, pursuant to which the Roberts
Companies have waived (a) any covenant on any of the Company’s properties and any special rights that entitle the Roberts
Companies to receive any compensation or provide any right to participate in the development or construction of any property and
any related reimbursement, and (b) any other Contract to participate in the development or construction of any property and any
related reimbursement.

 

[Signature page follows]

 

 

    	 

    	 

    IN WITNESS WHEREOF, each of the undersigned
have executed this Company and Operating Partnership Compliance Certificate as of the date first written above.

 

 

COMPANY:

 

ROBERTS REALTY INVESTORS, INC.

 

 

	By:	 	 
	 	Name:  Charles S. Roberts	 
	 	Title:    Chief Executive Officer and President	 
	 	 	 
	 	 	 
	 	 	 
	By:	 	 
	 	Name:  Charles R. Elliott	 
	 	Title:    Chief Financial Officer	 

 

 

OPERATING PARTNERSHIP:

 

ROBERTS PROPERTIES RESIDENTIAL, L.P.

 

By: Roberts Realty Investors, Inc., its general partner

 

	By:	 	 
	 	Name:  Charles S. Roberts	 
	 	Title:    Chief Executive Officer and President	 
	 	 	 
	 	 	 
	 	 	 
	By:	 	 
	 	Name:  Charles R. Elliott	 
	 	Title:    Chief Financial Officer	 

 

 

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

 

 

    	 

    	 

    

EXHIBIT
i

FORM
OF WARRANT AGREEMENT

 

THIS WARRANT AGREEMENT AND THE SHARES
ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
THE SECURITIES LAWS OF ANY STATE, AND EXCEPT AS PROVIDED IN SECTION 5 OF THIS WARRANT AGREEMENT, THIS WARRANT AND THE SHARES ISSUABLE
HEREUNDER MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF THE COMPANY’S SECURITIES LAW COUNSEL, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

WARRANT
AGREEMENT

This Warrant Agreement
(“Agreement”) is executed as of this _____ day of __________, 20__, by Roberts Realty Investors, Inc., a Georgia
corporation (“Company”), in favor of A-III Investment Partners LLC, a Delaware limited liability company (the
“Initial Holder”), in accordance with the terms and subject to the conditions set forth in this Agreement.

WHEREAS, the Initial
Holder has undertaken substantial financial risk in connection with the investment (“Share Purchase”) in the
Company pursuant to that certain Stock Purchase Agreement between Initial Holder and the Company, dated November 19, 2014 (the
“Stock Purchase Agreement”);

WHEREAS, in connection
with the Share Purchase by the Initial Holder, the Company desires to grant to Initial Holder warrants (each, a “Warrant”
and, collectively, the “Warrants”) to purchase shares of common stock, $0.01 par value per share, of the Company
(“Common Stock”); and

WHEREAS, the execution
of this Agreement is a condition to the closing of the transactions contemplated by the Stock Purchase Agreement.

NOW, THEREFORE,
in consideration of the foregoing and the agreements hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged,
the Company and, by acceptance of a Warrant, the Initial Holder, on its behalf and on behalf of all subsequent registered holders
of the Warrants (each, a “Holder” and, collectively, the “Holders”), agrees as follows:

1.                 
Definitions. All capitalized terms that are not defined in this Agreement shall have the meaning ascribed to such
terms in the Stock Purchase Agreement.

2.                 
Grant of Warrants. Subject to the terms, restrictions, limitations and conditions stated in this Agreement, the receipt
and sufficiency of which are hereby acknowledged, the Company hereby grants to the Initial Holder the number of Warrants set forth
on Exhibit A. Each Warrant initially shall be exercisable for one fully paid and non-assessable share of Common Stock
(a “Warrant Share” and, collectively, the “Warrant Shares”), subject to adjustment
as provided in Section 13 of this Agreement. The Initial Holder and all subsequent Holders shall have the rights and obligations
set forth in this Agreement. The Warrants issued hereby are being issued to the Initial Holder in recognition of the financial
risk undertaken by the Initial Holder in connection with the Stock Purchase Agreement and the other terms and conditions thereof.

3.                 
Warrant Certificates. The Warrants shall be evidenced by one or more warrant certificates, which shall be substantially
in the form attached to this Agreement as Exhibit B (“Warrant Certificates”). The Warrant Certificates
shall have such marks of identification or designation and such legends or endorsements thereon as the Company deems appropriate,
so long as they are not inconsistent with the provisions of this Agreement, or as are required to comply with any law, rule or
regulation applicable to the Company, the Warrants or the Warrant Shares. The Warrant Certificates shall be executed on behalf
of the Company by the manual, facsimile or imprinted signature of its Chief Executive Officer, President or any Senior Vice President
and shall be attested by the manual, facsimile or imprinted signature of its Secretary or any Assistant Secretary.

 

    	 

    	 

    4.                 
Term of Warrants. The term for the exercise of the Warrants shall begin at the closing of the Share Purchase (the
“Issue Date”) and expire at 5:00 p.m. New York, New York time on the third (3rd) anniversary of the
Issue Date (the “Expiration Time”).

5.                 
Securities Law Representations and Related Provisions.

(a)               
Purchase Entirely for Own Account. This Agreement is made with the Initial Holder in reliance upon the Initial Holder’s
representation to the Company, which by the Initial Holder’s execution of this Agreement, the Initial Holder hereby confirms,
that the Warrants to be acquired by the Initial Holder will be acquired for investment for the Initial Holder’s own account,
not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Initial Holder has
no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement,
the Initial Holder further represents that the Initial Holder does not presently have any Contract or undertaking with any Person
to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Warrants or Warrant
Shares.

(b)              
Initial Holder Is an Accredited Investor. The Initial Holder is, or each beneficial owner of equity interests in
the Purchaser is, an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

(c)               
Conditions to Transfer and Exercise of the Warrants and Warrant Shares. Notwithstanding anything in this Agreement
to the contrary, no Warrants may be transferred unless at the time a Holder seeks to transfer such Warrants, either (a) a prospectus
or registration statement relating to the Warrants is in effect under applicable laws and rules of the U.S. Securities and Exchange
Commission (the “SEC”) and applicable state blue sky laws, or (b) the transfer of Warrants is made pursuant
to an available exemption from registration or qualification under the securities laws of the United States and applicable state
blue sky laws in the reasonable judgment of the Company’s securities counsel. Further, notwithstanding anything in this Agreement
to the contrary, no Warrants will be exercisable and the Company will not be obligated to issue Warrant Shares upon the exercise
of Warrants unless at the time a Holder seeks to exercise such Warrants, either (a) a prospectus or registration statement relating
to the Warrant Shares is in effect under applicable laws and rules of the SEC and applicable state blue sky laws, or (b) the issuance
of the Warrant Shares is made pursuant to an available exemption from registration or qualification under the securities laws of
the United States and applicable state blue sky laws in the reasonable judgment of the Company’s securities counsel. Except
as provided in the Registration Rights Agreement between the Company and the Initial Holder dated             ,
20   , the Initial Holder acknowledges that the Company has no obligation to register or qualify the Warrants
or the Warrant Shares and has no obligation to register or qualify the Warrants or the Warrant Shares for resale. The Initial Holder
further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements
that include the time and manner of sale, the holding period for the Warrants and the Warrant Shares, whether the Holder is an
accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and on requirements relating
to the Company that are outside the Holder’s control, and which the Company is under no obligation and may not be
able to satisfy.

 

    	2

    	 

    (d)              
Legends. This Agreement has the legend set forth on page one above. Certificates evidencing the Warrant Shares shall
be imprinted with a legend in substantially the following form unless a prospectus or registration statement relating to the Warrant
Shares is in effect under applicable laws and rules of the SEC and applicable state blue sky laws:

THESE SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND EXCEPT
AS PROVIDED IN SECTION 5 OF THE WARRANT UNDER WHICH THESE SHARES WERE ISSUED (A COPY OF WHICH IS ON FILE WITH THE COMPANY), THESE
SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF THE COMPANY’S SECURITIES LAW COUNSEL, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

6.                 
Exercise of Warrants.

(a)               
The purchase price per Warrant Share to be paid by a Holder for Warrant Shares subject to the Warrants shall be equal (a)
initially, to the Purchase Price Per Share in cash, as adjusted pursuant to Section 6.2(c) of the Stock Purchase Agreement
and (b) after the post-Closing adjustment pursuant to Section 1.3 of the Stock Purchase Agreement, the Adjustment Date Purchase
Price Per Share, subject in each case to further adjustment as set forth in Section 13 of this Agreement (the “Exercise
Price”). In no event shall this Agreement be amended to provide for the payment of the Exercise Price other than in cash
(including by exchange of securities, including Warrants, or by other forms of “cashless exercise”), and the parties
hereby acknowledge that the Company would not have otherwise entered into this Agreement.

(b)              
Subject to Section 5, a Holder may exercise Warrants evidenced by a Warrant Certificate in whole or in part at any time
prior to the Expiration Time by delivering to the secretary of the Company (i) the Warrant Certificate; (ii) a written notice
to the Company specifying the number of Warrant Shares with respect to which Warrants are being exercised; and (iii) payment either
by wire transfer of immediately available funds to an account designated by the Company or by certified or official bank check
or bank cashier’s check payable to the order of the Company, in each case for the full amount of the aggregate Exercise Price
of the Warrant Shares being acquired.

7.                 
Delivery of Warrant Shares; Partial Exercise. Upon receipt of the items set forth in Section 6(b), and subject to
the terms of this Agreement, the Company shall promptly deliver to, and register in the name of, the Holder a certificate or certificates
representing the number of Warrant Shares acquired by exercise of a Warrant. In the event of a partial exercise of Warrant(s),
a new Warrant Certificate evidencing the number of Warrant Shares that remain subject to the Warrant shall be issued by the Company
to such Holder or to his duly authorized assigns.

 

    	3

    	 

    8.                 
Registration of Transfer and Exchange. Subject to Section 5:

(a)               
The Company shall keep, or cause to be kept, at its principal place of business or at such other location designated by
the Company, a register or registers in which, subject to such reasonable regulations as the Company may prescribe, the registrar
and transfer agent (the “Securities Registrar”) shall register the Warrant Certificates and the transfers thereof
as provided herein (“Securities Register”). The initial Securities Registrar shall be the secretary or assistant
secretary of the Company, and thereafter, the Securities Registrar may be removed and/or appointed as authorized by the Company.

(b)              
Upon surrender for registration of transfer of any Warrant Certificate, the Company shall issue and deliver to the Holder
or his duly authorized assigns, one or more new Warrant Certificates of like tenor and in like aggregate amount.

(c)               
At the option of the Holder, Warrant Certificates may be exchanged for other Warrant Certificates of like tenor and in like
aggregate amount upon surrender of the Warrant Certificates to be exchanged. Upon such surrender, the Company shall issue and deliver
to the Holder or his duly authorized assigns, one or more new Warrant Certificates of like tenor and in like aggregate amount.

(d)              
Every Warrant Certificate presented or surrendered for registration of transfer or exchange shall be accompanied (if so
required by the Company or the Securities Registrar) by a written instrument or instruments of transfer, in form satisfactory to
the Company or the Securities Registrar, duly executed by the registered Holder or by such Holder’s duly authorized attorney
in writing.

9.                 
Replacement of Warrant Certificates.

(a)               
Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of a Warrant
Certificate and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company or, in the case of mutilation, surrender and cancellation of such Warrant Certificate, the Company shall
issue and deliver to the Holder or his duly authorized assigns after compliance with Section 5, one or more new Warrant Certificates
of like tenor and in like aggregate amount. In the case of loss, theft or destruction of a Warrant Certificate, prior to the issuance
of a replacement Warrant Certificate, the Company may also require that a bond be posted in such amount as the Company may determine
is necessary as indemnity against any claim that may be made against it with respect to such Warrant Certificate.

(b)              
All Warrants shall be held and owned under the express condition that the provisions of this Section are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or stolen Warrant Certificates and shall preclude (to
the extent lawful) all other rights and remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

    	4

    	 

    (c)               
Upon the issuance of any new Warrant Certificate under this Section, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Company and its agents and counsel) connected therewith.

(d)              
Every new Warrant Certificate issued pursuant to this Section shall constitute an additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Warrant
Certificates duly issued hereunder.

10.             
Persons Deemed Holders. Prior to the due presentment of a Warrant Certificate for registration of transfer or exchange,
the Company, any Securities Registrar and any other agent of the Company may treat the person in whose name such Warrant Certificate
is registered in the Securities Register as the sole Holder of such Warrant Certificate and of the Warrant represented by such
Warrant Certificate for all purposes whatsoever, and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant Certificate or in the Warrant represented by such Warrant Certificate on the part of any person and shall be unaffected
by any notice to the contrary.

11.             
Cancellation. All Warrant Certificates surrendered for the purpose of exercise, exchange or registration of transfer
shall be cancelled by the Securities Registrar, and no Warrant Certificates shall be issued in lieu thereof, except as expressly
permitted by the provisions of this Agreement.

12.             
Fractional Warrant Shares. A Warrant Certificate exercisable for fractional Warrant Shares shall receive, upon surrender
of the Warrant Certificate, a check in the amount equal to any cash in lieu of any fractional share of Common Stock to which such
Holder may be otherwise entitled.

13.             
Stock Dividends, Splits, Etc.

(a)               
If, prior to the Expiration Time, the Company shall subdivide its outstanding shares of Common Stock into a greater number
of shares of Common Stock, or declare and pay a dividend on its outstanding shares of Common Stock payable in additional shares
of Common Stock, the Exercise Price, as then in effect, shall be proportionately reduced, and the Company shall proportionately
increase the number of Warrant Shares then subject to exercise under this Warrant (and not previously exercised.)

(b)              
If, prior to the Expiration Time, the Company shall combine its outstanding shares of Common Stock into a lesser number
of shares of Common Stock, the Exercise Price, as then in effect, shall be proportionately increased, and the Company shall proportionately
reduce the number of Warrant Shares then subject to exercise under this Warrant (and not previously exercised.)

 

    	5

    	 

    14.             
Reorganization, Reclassifications, Consolidation or Merger. If, prior to the Expiration Time, there shall be a reorganization
or reclassification of the outstanding shares of Common Stock (other than as provided in Section 13 of this Agreement), or any
consolidation or merger of the Company with another entity, the Holder shall be entitled to receive, during the remainder of the
term of this Agreement and upon payment of the Exercise Price, the number of shares of stock or other securities or property of
the Company or of the successor entity (or its parent company) resulting from such consolidation or merger, as the case may be,
to which a holder of Warrant Shares, deliverable upon the exercise of a Warrant, would have been entitled upon such reorganization,
reclassification, consolidation or merger; and, in any case, the Company shall make appropriate adjustments (as determined by the
board of directors of the Company in its sole discretion) in the application of the provisions with respect to the rights and interests
of the Holders so that the provisions set forth in this Agreement (including the adjustment to the Exercise Price and the number
of Warrant Shares issuable upon exercise of the Warrants) shall be applicable, as nearly as may be practicable, to any shares or
other property thereafter deliverable upon the exercise of this Warrant.

15.             
Certificate as to Adjustments; Issuance of New Warrant Certificates. Within thirty (30) days following any adjustment
provided for in Section 13 or 14 of this Agreement, the Company shall give written notice of the adjustment to the Holders. The
notice shall state the Exercise Price as adjusted and the increased or decreased number of shares of Common Stock purchasable upon
the exercise of the Warrants and shall set forth in reasonable detail the method of calculation for each. Notwithstanding anything
to the contrary set forth herein or in the Warrant Certificates, the Company may, at its option, issue new Warrant Certificates
evidencing the Warrants, in such form as may be approved by the Company, to reflect any adjustment or change in the Exercise Price
and the number or kind of stock or other securities or property purchasable upon exercise of the Warrants.

16.             
Miscellaneous.

(a)               
Any notice or other communication required or permitted to be made hereunder shall be in writing, duly signed by the party
giving such notice or communication and shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid as follows (or at such other address for a party as shall be specified by like notice):
(i) if given to the Company, at its principal place of business; and (ii) if given to a Holder, at the address set forth for the
Holder on the books and records of the Company. A notice given to the Company by a Holder with respect to the exercise of a Warrant
shall not be effective until received by the Company.

(b)              
The Company shall, at all times, reserve and keep available out of its authorized and unissued shares of Common Stock or
out of any shares of Common Stock held in treasury that number of shares of Common Stock that will from time to time be sufficient
to permit the exercise in full of all outstanding Warrants. The Company shall take all such action as may be necessary to ensure
that all Warrant Shares delivered upon exercise of any Warrants shall, at the time of delivery of the Warrant Certificates for
such Warrant Shares, be duly authorized, validly issued, fully paid and nonassessable.

(c)               
The Company shall pay when due and payable any and all federal and state transfer taxes and charges (other than any applicable
income taxes) that may be payable in respect of the issuance and delivery of Warrant Certificates (excluding the Warrant Certificate
issued to the Initial Holder) or of certificates for Warrant Shares receivable upon the exercise of any Warrants; provided, however,
that the Company shall not be required to pay any tax that may be payable in respect of the issuance and delivery (i) of any Warrant
Certificate or stock certificate registered in a name other than that of the Holder of the Warrant Certificate that has been surrendered,
or (ii) of any Warrant Certificate under Section 9.

 

    	6

    	 

    (d)              
No Holder, in his capacity as such, shall be entitled to vote or receive dividends or shall be deemed for any other purpose
the holder of the Warrant Shares or other securities which may at any time be issuable upon the exercise of such Warrant. Nothing
contained herein or in any Warrant Certificate shall be construed to confer upon any Holder, in his capacity as such, any of the
rights of a shareholder of the Company, including any right to vote for the election of directors or upon any matter submitted
to shareholders of the Company at any meeting thereof, to give or withhold consent to any corporate action, or to receive notices
of meeting or other actions affecting shareholders.

(e)               
Each Holder, by accepting a Warrant Certificate, accepts and agrees to the terms of this Agreement. The terms of this Agreement
shall be binding upon the Company, the Initial Holder and the subsequent Holders and their respective heirs, successors, representatives
and permitted assigns. Nothing expressed or referred to herein is intended or will be construed to give any person other than the
Company or the Holders any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provision herein
contained, it being the intention of the Company and the Holders that this Agreement, the assumption of obligations and statements
of responsibilities hereunder, and all other conditions and provisions hereof are for the sole benefit of the Company and the Holders
and for the benefit of no other person.

(f)               
This Agreement constitutes the full understanding of the Company and the Holders, a complete allocation of risks between
them and a complete and exclusive statement of the terms and conditions of their agreement relating to the subject matter hereof
and supersedes any and all prior agreements, whether written or oral, that may exist between the Company and any Holder with respect
thereto. Except as otherwise specifically provided in this Agreement, no conditions, usage of trade, course of dealing or performance,
understanding or agreement purporting to modify, vary, explain or supplement the terms or conditions of this Agreement will be
binding unless hereafter or contemporaneously herewith made in writing and signed by the party to be bound, and no modification
will be effected by the acknowledgment or acceptance of documents containing terms or conditions at variance with or in addition
to those set forth in this Agreement.

(g)               
The headings contained in this Agreement are for convenience of reference only and will not affect in any way the meaning
or interpretation of this Agreement. The words “hereof,” “herein” and “hereunder” and words
of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision in this
Agreement. Each use herein of the masculine, neuter or feminine gender will be deemed to include the other genders. Each use herein
of the plural will include the singular and vice versa, in each case as the context requires or as is otherwise appropriate. The
word “or” is used in the inclusive sense. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” References to a
person are also to its permitted successors or assigns. No provision of this Agreement is to be construed to require, directly
or indirectly, any person to take any action, or omit to take any action, which action or omission would violate applicable law
(whether statutory or common law), rule or regulation.

 

    	7

    	 

    (h)              
THIS AGREEMENT, EACH WARRANT AND EACH WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
IN THE EVENT OF A DISPUTE INVOLVING THIS AGREEMENT, THE PARTIES IRREVOCABLY AGREE THAT VENUE FOR SUCH DISPUTE SHALL LIE EXCLUSIVELY
IN A COURT OF COMPETENT JURISDICTION IN NEW YORK, NEW YORK.

********

 

    	8

    	 

    IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by a duly authorized officer as of the date first above written.

 

	 	ROBERTS REALTY INVESTORS, INC.
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 

Acknowledged and Agreed as of the date first above written:

A-III Investment Partners LLC

 

	By:	 	 
	Name:  	 	 
	Title:	 	 

 

 

    	9

    	 

    EXHIBIT
A

WARRANTS GRANTED

 

	Name	 	Number of Warrants
	A-III Investment Partners LLC	 	The number of Warrants equal to $38,000,000 divided by the Purchase Price Per Share as defined in the Stock Purchase Agreement, as adjusted pursuant to Section 6.2(c) of the Stock Purchase Agreement and the post-closing adjustment pursuant to Section 1.3 of the Stock Purchase Agreement, subject to further adjustment pursuant to Section 13 of the Warrant Agreement

 

 

    	10

    	 

    EXHIBIT
B

FORM
OF WARRANT CERTIFICATE

THIS WARRANT CERTIFICATE
AND THE SHARES ISSUABLE UNDER THAT CERTAIN WARRANT AGREEMENT DATED AS OF __________, 20__ BY ROBERTS REALTY INVESTORS, INC., A
GEORGIA CORPORATION (THE “COMPANY”), IN FAVOR OF THE INITIAL HOLDER, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE
“AGREEMENT”), HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR THE SECURITIES LAWS OF ANY STATE, AND EXCEPT AS PROVIDED IN SECTION 5 OF THE WARRANT AGREEMENT, THIS WARRANT AND THE SHARES
ISSUABLE HEREUNDER MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF THE COMPANY’S SECURITIES LAW COUNSEL, SUCH OFFER, SALE
OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION. A COPY OF THE AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE
PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY DURING NORMAL BUSINESS HOURS. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY THE PROVISIONS OF THE AGREEMENT.

	No. W-001	Number of Warrants: _______

 

 

 

WARRANT
CERTIFICATE

This Warrant Certificate certifies that
A-III Investment Partners LLC, or registered assigns, is the registered holder of a warrant to purchase the number of fully-paid
and non-assessable shares of common stock, $0.01 par value of the Company (“Warrant Shares”) set forth above,
at the Exercise Price set forth in Section 6 of the Agreement (the “Warrant”).

The Warrant evidenced by this Warrant
Certificate is part of a duly authorized issue of Warrants issued pursuant to the Agreement, which is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the Holder. All terms used, but not otherwise defined, in this Warrant Certificate
shall have the meanings assigned to them in the Agreement. If any provision of this Warrant Certificate conflicts with a provision
of the Agreement, the provision of the Agreement shall supersede.

This Warrant may not be exercised after
5:00 p.m., New York, New York time, on the third (3rd) anniversary of the Issue Date, as provided in Section 4
of the Agreement.

The Holder may exercise the Warrant
evidenced by this Warrant Certificate in whole or in part at any time prior to the Expiration Time by delivering to the secretary
or assistant secretary of the Company (i) the Warrant Certificate; (ii) a written notice to the Company specifying the number
of Warrant Shares with respect to which Warrants are being exercised; and (iii) a check for the full amount of the aggregate Exercise
Price of the Warrant Shares being acquired.

 

    	 

    	 

    Notwithstanding the preceding and notwithstanding
anything in the Agreement to the contrary, this Warrant may not be transferred unless at the time the Holder seeks to transfer
such Warrant, either (a) a prospectus or registration statement relating to the Warrant is in effect under applicable laws and
rules of the U.S. Securities and Exchange Commission (the “SEC”) and applicable state blue sky laws, or (b) the
transfer of the Warrant is made pursuant to an available exemption from registration or qualification under the securities laws
of the United States and applicable state blue sky laws in the reasonable judgment of the Company’s securities counsel. Further,
notwithstanding the preceding and anything in the Agreement to the contrary, this Warrant will be exercisable and the Company will
not be obligated to issue Warrant Shares upon the exercise of Warrants unless at the time the Holder seeks to exercise such Warrant,
either (a) a prospectus or registration statement relating to the Warrant Shares is in effect under applicable laws and rules of
the SEC and applicable state blue sky laws, or (b) the issuance of the Warrant Shares is made pursuant to an available exemption
from registration or qualification under the securities laws of the United States and applicable state blue sky laws in the reasonable
judgment of the Company’s securities counsel. Except as provided in the Registration Rights Agreement between the Company
and the Initial Holder dated                ,
20   , the Holder acknowledges that the Company has no obligation to register or qualify this Warrant or
the Warrant Shares and has no obligation to register or qualify this Warrant or the Warrant Shares for resale. The Holder further
acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements
that include the time and manner of sale, the holding period for the Warrant and the Warrant Shares, whether the Holder is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and on requirements relating to the Company
that are outside the Holder’s control, and which the Company is under no obligation and may not be able to satisfy.

Upon receipt of the items set forth
above, and subject to the terms of the Agreement, the Company shall promptly deliver to, and register in the name of, the Holder
a certificate or certificates representing the number of Warrant Shares acquired by exercise of this Warrant. In the event of a
partial exercise of this Warrant, a new Warrant Certificate evidencing the number of Warrant Shares that remain subject to this
Warrant shall be issued by the Company to such Holder or to his duly authorized assigns.

The Agreement provides that upon the
occurrence of certain events the Exercise Price and the type and/or number of the Company’s securities issuable thereupon
may, subject to certain conditions, be adjusted. In such event, the Company may, at its option, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of securities issuable upon the exercise of the Warrants.

Upon surrender for registration of transfer
of this Warrant Certificate, subject to the terms of the Agreement, the Company shall issue and deliver to the Holder or his duly
authorized assigns, one or more new Warrant Certificates of like tenor and in like aggregate amount.

Prior to the due presentment of this
Warrant Certificate for registration of transfer or exchange, the Company, any Securities Registrar and any other agent of the
Company may treat the person in whose name this Warrant Certificate is registered in the Securities Register as the sole Holder
of this Warrant Certificate and of the Warrant represented by this Warrant Certificate for all purposes whatsoever, and shall not
be bound to recognize any equitable or other claim to or interest in this Warrant Certificate or in the Warrant represented by
this Warrant Certificate on the part of any person and shall be unaffected by any notice to the contrary.

The Holder, in his capacity as such,
shall not be entitled to vote or receive dividends or shall be deemed from any other purpose the holder of the Warrant Shares or
other securities which may at any time be issuable upon the exercise of this Warrant. Nothing contained in this Warrant Certificate
shall be construed to confer upon the Holder, in his capacity as such, any of the rights of a shareholder of the Company, including
any right to vote for the election of directors or upon any matter submitted to shareholders of the Company at any meeting thereof,
to give or withhold consent to any corporate action, or to receive notices of meeting or other actions affecting shareholders.

 

    	2

    	 

    Any notice or other communication required
or permitted to be made by the Holder to the Company shall be in writing, duly signed by the Holder and shall be deemed delivered
and effective when given personally or mailed by first-class registered or certified mail, postage prepaid to the Company, at its
principal place of business (or such other address as designated in writing to the Holder by the Company). A notice given to the
Company by a Holder with respect to the exercise of this Warrant shall not be effective until received by the Company.

IN WITNESS WHEREOF, the Company
has caused this Warrant Certificate to be duly executed under its corporate seal.

Dated as of _________, 20__

 

	 	ROBERTS REALTY INVESTORS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	Name:  	 	 
	 	Title:	 	 

 

    	3

    	 

    

EXHIBIT
j-1

FORM
OF director RESIGNATION AND RELEASE

  

Reference is made to that
certain Stock Purchase Agreement (the “Purchase Agreement”), dated as of November 19, 2014, by and among Roberts
Realty Investors, Inc., a Georgia corporation (the “Company”), Roberts Properties Residential, L.P., a Georgia
limited partnership (the “Operating Partnership”) and A-III Investment Partners LLC, a Delaware limited liability
company (the “Purchaser”), a condition of which is the delivery by the Company to the Purchaser of resignations
and releases from each of the directors, officers and employees of the Company. Capitalized terms not otherwise defined in this
Resignation and Release shall have the meaning set forth in the Purchase Agreement. The undersigned acknowledges that delivery
of this Resignation and Release is a material inducement to Purchaser’s willingness to consummate the transactions contemplated
by the Purchase Agreement, and that Purchaser would not do so without the benefit of the provisions of this Resignation and Release.

 

Effective as of the Closing
Date, the undersigned hereby resigns from any and all positions that he may hold as a director, officer or employee of the Company.

 

In exchange for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby releases and forever
discharges, and covenants not to assert or file any claim against, the Company, the Purchaser and each of their respective affiliates,
and the respective shareholders, members, partners, directors, officers, managers, employees, benefit plans, successors and assigns
thereof (the “Released Parties”) from or with respect to any and all promises, liabilities, amounts due or payable,
indebtedness, losses, claims, litigation, demands and causes of action, known or unknown, fixed or contingent, including, but not
limited to, any actions brought in tort or for breach of contract, or under any federal or state statute, law or regulation, which
the undersigned has, had or purports to have against any of the Released Parties as of or prior to the Closing Date; provided however
that the undersigned retains all rights as an Indemnified Party under the Purchase Agreement to indemnification, advancement of
expenses and exculpation by the Company as provided in the Organizational Documents of the Company and its Subsidiaries, and pursuant
to Director and Officer Indemnification Agreements between the Company and the undersigned.

 

 

[Signature page follows.]

 

 

    	 

    	 

    IN WITNESS WHEREOF, the
undersigned has executed this Resignation and Release as of the date first written above.

 

 

	 	 	 
	 	[Director/Officer/Employee]	 

 

 

[Signature page to
Resignation and Release]

 

 

    	 

    	 

    

EXHIBIT
J-2

FORM
OF OFFICER AND EMPLOYEE RESIGNATION AND RELEASE

  

Reference is made to that
certain Stock Purchase Agreement (the “Purchase Agreement”), dated as of November 19, 2014, by and among Roberts
Realty Investors, Inc., a Georgia corporation (the “Company”), Roberts Properties Residential, L.P., a Georgia
limited partnership (the “Operating Partnership”) and A-III Investment Partners LLC, a Delaware limited liability
company (the “Purchaser”), a condition of which is the delivery by the Company to the Purchaser of resignations
and releases from each of the directors, officers and employees of the Company. Capitalized terms not otherwise defined in this
Resignation and Release shall have the meaning set forth in the Purchase Agreement. The undersigned, Charles S. Roberts, acknowledges
that delivery of this Resignation and Release is a material inducement to Purchaser’s willingness to consummate the transactions
contemplated by the Purchase Agreement, and that Purchaser would not do so without the benefit of the provisions of this Resignation
and Release. This Resignation and Release is conditioned upon the execution of the Employment Agreement.

 

Effective as of the Closing
Date, the undersigned, Charles S. Roberts, hereby resigns from his positions as Chief Executive Officer, President and Chairman
of the Board of Directors, as a director of the Company (subject to the right to be appointed as a director pursuant to the Governance
and Voting Agreement), and from any and all positions that he may hold as a director, officer, employee or manager of any Subsidiary
of the Company.

 

In exchange for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby releases and forever
discharges, and covenants not to assert or file any claim against, the Company, the Purchaser and each of their respective affiliates
and the respective shareholders, members, partners, directors, officers, managers, employees, benefit plans, successors and assigns
thereof (the “Released Parties”) from or with respect to any and all promises, liabilities, amounts due or payable,
indebtedness, losses, claims, litigation, demands and causes of action, known or unknown, fixed or contingent, including, but not
limited to, any actions brought in tort or for breach of contract, or under any federal or state statute, law or regulation, which
the undersigned has, had or purports to have against any of the Released Parties, as of or prior to the Closing Date; provided,
however, that the undersigned retains all rights as an Indemnified Party under the Purchase Agreement to indemnification, advancement
of expenses and exculpation by the Company as provided in the Organizational Documents of the Company and its Subsidiaries, and
pursuant to the Director and Officer Indemnification Agreement between the Company and the undersigned. Notwithstanding the foregoing
provisions of this Resignation and Release, the provisions of this Resignation and Release shall not constitute a release by the
undersigned of any rights he has under the Employment Agreement to be executed and delivered by the Company and the undersigned
as of the date hereof.

 

[Signature page follows]

 

 

    	 

    	 

    IN WITNESS WHEREOF, the
undersigned has executed this Resignation and Release as of the date first written above.

 

 

	 	 	 
	 	Charles S. Roberts	 

 

 

 

[Signature page to Resignation and Release]

 

 

 

    	 

    	 

    

EXHIBIT
K

FORM
OF ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this “Escrow
Agreement”) is made as of this 19th day of November, 2014 by and among COMMONWEALTH LAND TITLE INSURANCE COMPANY,
with an address at c/o New York Land Services, 630 3rd Avenue, 12th Floor, New York, NY 10017 (the “Escrow
Agent”), Roberts Realty Investors, Inc., a Georgia corporation with an address at 375 Northridge Road, Suite 330, Atlanta,
GA 30350 (the “Company”), and A-III Investment Partners LLC, a Delaware limited liability company with
an address at c/o Avenue Capital Group, 399 Park Avenue, New York, NY 10022 (the “Purchaser”);

 

WHEREAS, the Purchaser
and the Company are parties to that certain Stock Purchase Agreement, of even date herewith, (the “Stock Purchase Agreement”),
pursuant to which, among other things, the Purchaser has agreed to purchase from the Company, and the Company has agreed to sell
to the Purchaser, newly issued shares of the Company’s common stock for an aggregate purchase price of $12,000,000; and

WHEREAS, the Purchaser
and the Company have requested Escrow Agent to act as escrow agent (i) to hold $750,000 cash (the “Deposit”)
in accordance with the terms and provisions of this Escrow Agreement and (ii) to disburse the Deposit in accordance with the terms
and provisions of the Stock Purchase Agreement and this Escrow Agreement.

NOW, THEREFORE, in
consideration of the promises and undertakings herein made, the parties hereto, intending to be legally bound, agree as follows:

1.                 
The Purchaser and the Company hereby appoint Escrow Agent as escrow agent pursuant to this Escrow Agreement and the Stock
Purchase Agreement. The Deposit is hereby delivered by the Purchaser to Escrow Agent, who by signing below acknowledges receipt
thereof. Such receipt is made subject to the Conditions of Escrow attached to and made a part of this Escrow Agreement.

2.                 
Escrow Agent is to hold the Deposit in escrow and deliver it to the Company or the Purchaser in accordance with the provisions
of the Stock Purchase Agreement and this Escrow Agreement. The Deposit shall be deposited by Escrow Agent in a segregated Premium
Commercial Money Market Deposit account at JPMorgan Chase Bank, N.A., bearing interest at the rate determined by JPMorgan Chase
Bank, N.A. and all interest accruing thereon shall be paid to the Purchaser upon disbursement of the Deposit by Escrow Agent, regardless
of whether the Purchaser or the Company is entitled to receive the Deposit under the terms of the Stock Purchase Agreement. The
Purchaser and the Company understand and acknowledge that said account in which the Deposit
will be held cannot be established until Escrow Agent receives original executed IRS Form W-9’s from the Purchaser. 

3.                 
In the event the Escrow Agent receives at any time a written statement from the Company (“Company’s Notice”)
stating that the Company has terminated the Stock Purchase Agreement pursuant to Section 8.1(d)(i) thereof due to an Intentional
Breach (as defined therein) of any representation or warranty by the Purchaser or pursuant to Section 8.1(d)(ii) thereof, Escrow
Agent shall immediately forward a copy of Company’s Notice to the Purchaser in accordance with Paragraph 8 hereof. If, within
five (5) business days of delivering a copy of Company’s Notice to the Purchaser, Escrow Agent does not receive written notice
from the Purchaser objecting to the release of the Deposit to the Company, then Escrow Agent shall deliver the Deposit (but not
the accrued interest thereon) by wire transfer to the Company pursuant to wire instructions provided by the Company; provided,
however, if Escrow Agent receives written notice from the Purchaser within such five (5) business day period stating that the
Purchaser disputes Company’s right to receive the Deposit and directing Escrow Agent not to deliver the Deposit to the Company
as provided above, Escrow Agent shall not deliver the Deposit to the Company but instead shall retain the Deposit until instructed
otherwise by a court of competent jurisdiction or in writing jointly by the Company and the Purchaser or, if appropriate, interplead
the Deposit in a court of competent jurisdiction.

 

    	 

    	 

    4.                 
In the event that Escrow Agent receives at any time a written statement from the Purchaser (“Purchaser’s
Notice”) stating that (a) the Stock Purchase Agreement has been terminated by mutual consent of the Company and the Purchaser
pursuant to Section 8.1(a) thereof, (b) the Purchaser has terminated the Stock Purchase Agreement pursuant to Section 8.1(b)(i),
Section 8.1(b)(ii) or Section 8.1(b)(iii) thereof, (c) the Purchaser has terminated the Stock Purchase Agreement pursuant to Section
8.1(c)(i), Section 8.1(c)(ii) or Section 8.1(c)(iii) thereof, or (d) the Company has terminated the Stock Purchase Agreement for
any reason other than pursuant to Section 8.1(d)(i) thereof due to an Intentional Breach (as defined therein) of any representation
or warranty by the Purchaser or pursuant to Section 8.1(d)(ii) thereof, Escrow Agent shall immediately forward a copy of Purchaser’s
Notice to Company in accordance with Paragraph 8 hereof. If, within five (5) business days of delivering a copy of Purchaser’s
Notice to Company, Escrow Agent does not receive written notice from the Company objecting to the release of the Deposit to the
Purchaser, then Escrow Agent shall deliver the Deposit by wire transfer to the Purchaser pursuant to wire instructions provided
by the Purchaser; provided, however, if Escrow Agent receives written notice from the Company within such five (5) business
day period stating that the Company disputes the Purchaser’s right to receive the Deposit and directing Escrow Agent not
to deliver the Deposit to the Purchaser as provided above, Escrow Agent shall not deliver the Deposit to the Purchaser but instead
shall retain the Deposit until instructed otherwise by a court of competent jurisdiction or in writing jointly by the Company and
the Purchaser or, if appropriate, interplead the Deposit in a court of competent jurisdiction.

In the event that
the Closing (as defined in the Stock Purchase Agreement) has occurred and upon notice from the Purchaser and the Company that the
Closing has occurred, the Escrow Agent shall immediately deliver the Deposit by wire transfer to the Purchaser pursuant to wire
instructions provided by the Purchaser.

If Escrow Agent is
made a party to any judicial, non-judicial or administrative action, hearing or process based on the acts of the Purchaser and
the Company and not on the malfeasance and/or gross negligence of Escrow Agent in performing its duties hereunder, then the losing
party shall indemnify, save and hold harmless Escrow Agent from the expenses, costs and reasonable attorneys’ fees incurred
by Escrow Agent in responding to such action, hearing or process.

 

    	2

    	 

    5.                 The
Purchaser and the Company acknowledge and agree that the duties of Escrow Agent are purely ministerial in nature, that Escrow Agent
is acting as an accommodation to both the Purchaser and the Company, and that Escrow Agent, in performing its duties, shall not
be liable for: (i) any loss, cost or damage which Escrow Agent may incur as a result of serving as escrow agent hereunder, except
for any loss, costs or damage arising out of its own willful misconduct or gross negligence; (ii) any action taken or omitted to
be taken in reliance upon any document, including any written instructions provided for in this Agreement, which Escrow Agent shall
in good faith believe to be genuine; and (iii) any loss or impairment of the Deposit deposited with a Federally insured financial
institution, resulting from the failure, insolvency, or suspension of the depositary. The Purchaser and the Company acknowledge
that they are aware that the Federal Deposit Insurance Corporation (FDIC) coverage applies only to a cumulative maximum amount
for each individual depositor for all of depositor’s accounts at the same or related institution. The Purchaser and the Company
are further aware that Escrow Agent is not responsible for levies by taxing authorities based upon the taxpayer identification
number used to establish this interest bearing account.

6.                 
If any dispute arises with respect to this Escrow Agreement, whether such dispute arises between the parties hereto or between
the parties hereto and other persons, Escrow Agent is authorized to interplead such dispute in a court of competent jurisdiction.

7.                 
All notices given by any party hereunder shall be in writing and shall be deemed duly given (i) on the day delivered if
delivered in person or by email or (ii) on the first business day after prepaid deposit if delivered by overnight delivery service
such as Federal Express, UPS, Emory Airfreight, Airborne Express, U.S. Postal Service Express Mail or other national overnight
courier service. Any such notice is to be addressed to the appropriate party of the address set forth below (or such other address
as the party might request in writing):

a.                 As
to Escrow Agent:

Commonwealth Land
Title Insurance Company

c/o New York Land
Services

Attn: Kashima A.
Loney/Teresa Hill

630 3rd
Avenue, 12th Floor

New York, NY 10017                 

Email: kashima.loney@fnf.com
or teresa.hill@fnf.com

 

b.                 As
to the Company:

Roberts Realty Investors, Inc.

Attn: Charles S. Roberts

375 Northridge Road, Suite 330

Atlanta, GA 30350

Email: cr@robertsproperties.com

 

 

 

    	3

    	 

    With a copy to:

 

Alston & Bird LLP

Attn: Justin R. Howard

1201 West Peachtreet St. NW

Atlanta, GA 30309

Email: justin.howard@alston.com

 

	 	c.	As to the Purchaser:

 

A-III Investment Partners LLC

c/o Avenue Capital Group

Attn: Edward Gellert

399 Park Avenue

New York, NY 10022

Email: egellert@avenuecapital.com

 

With a copy to:                 

Hunton & Williams LLP

Attn: Daniel M. LeBey, Esq.

Riverfront Plaza, East Tower

951 East Byrd Street

Richmond, VA 23219

Email: dlebey@hunton.com

 

 

8.                 
The instructions and Conditions of Escrow contained herein may not be modified, amended or altered in any way except by
a writing (which may be in counterpart copies) signed by the Company, the Purchaser and Escrow Agent. This Escrow Agreement is
intended solely to supplement and implement the provisions of the Agreement and is not intended to modify, amend or very any of
the rights or obligations of Purchaser or Company under the Stock Purchase Agreement.

9.                 
This Escrow Agreement shall be construed in accordance with the internal laws of the state of New York.

10.             
This Escrow Agreement may be executed in one or more counterparts which when taken together shall constitute one and the
same agreement and such counterparts may be delivered by facsimile, to be followed up with original counterparts.

11.             
This Escrow Agreement shall be binding upon and inure to the benefit of Purchaser, Company and Escrow Agent and each of
their respective successors and assigns.

[Signatures on next
page]

 

    	4

    	 

    AGREED to, as of the
day and year first above written.

	 	THE PURCHASER:	 
	 	 	 
	 	A-III Investment Partners LLC,	 
	 	a Delaware limited liability company	 
	 	 	 
	 	By:  	 	 
	 	 	Name: Edward Gellert	 
	 	 	Title: Authorized Signatory	 
	 	 	 
	 	 	 
	 	THE COMPANY:	 
	 	 	 
	 	Roberts Realty Investors, Inc.,	 
	 	A Georgia corporation	 
	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name: Charles S. Roberts	 
	 	 	Title:   President	 
	 	 	 
	 	ESCROW AGENT:	 
	 	 	 
	 	COMMONWEALTH LAND TITLE 	 
	 	INSURANCE COMPANY,	 
	 	a Nebraska corporation	 
	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name: Kashima A. Loney 	 
	 	 	Title: Counsel 	 

 

 

    	 

    	 

    CONDITIONS OF ESCROW

 

Escrow Agent accepts
its undertaking as escrow agent for the Purchaser and the Company subject to these Conditions of Escrow:

1.                 
The Deposit may be processed for collection in the normal course of business by Escrow Agent.

2.                 
Escrow Agent shall not be liable for loss or damage resulting from:

	 	a.	Any good faith act or forbearance of Escrow Agent;

	 	b.	Any default, error, action or omission of Escrow Agent or any other party other than the gross negligence or willful misconduct of Escrow Agent;

	 	c.	The expiration of any time limit or other delay that is not caused by the failure of Escrow Agent to proceed in its ordinary course of business, and in no event where such time limit is not disclosed in writing to Escrow Agent;

	 	d.	The lack of authenticity of any writing delivered to Escrow Agent or of any signature thereto, or the lack of authority of the signatory to sign such writing;

	 	e.	Escrow Agent’s compliance with all attachments, writs, orders, judgments or other legal process issued by any court of competent jurisdiction;

	 	f.	Escrow Agent’s assertion or failure to assert any cause of action of defense in any judicial or administrative proceeding; and

	 	g.	Any loss or damage that arises after the Deposit has been disbursed in accordance with the terms of this Escrow Agreement and the Stock Purchase Agreement.

 

    	6

    	 

    3.                 
Escrow Agent shall be indemnified fully by the Purchaser and the Company for all its expenses, costs and reasonable attorneys’
fees incurred in connection with any interpleader action that Escrow Agent might file, in its sole discretion, to resolve any dispute
as to the Deposit.

4.                 
If Escrow Agent is made a party to any judicial, non-judicial or administrative action, hearing or process based on the
acts of the Purchaser and the Company and not on the malfeasance and/or negligence of Escrow Agent in performing its duties hereunder,
then the losing party shall indemnify, save and hold harmless Escrow Agent from the expenses, costs and reasonable attorneys’
fees incurred by Escrow Agent in responding to such action, hearing or process.

5.                  Escrow
Agent shall be paid the sum of $750.00, to cover its expenses in opening, maintaining and disbursing the proceeds of the Escrow
Account (“Escrow Service Charge”). The Escrow Service Charge shall be delivered to the Escrow Agent contemporaneously
with the Deposit.

 

    	7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}]]