Document:

Fourth
Amended and Restated

 

Sub-advisory
Agreement

 

between

 

American
Realty Capital II Advisors, LLC

 

and

 

Phillips
Edison NTR LLC

 

 

 

 

 

February
4, 2013

 

 

 

Table
of Contents

 

	
   

  	
  Page

  
	
  Article 1 –
  Definitions

  	
  2

  
	
  Article 2 -
  Appointment

  	
  3

  
	
  Article 3 -
  Duties of the Sub-advisor

  	
  4

  
	
  Article 4 -
  Authority and Certain Activities of Sub-advisor

  	
  4

  
	
  Article 5 –
  Assignment of Payments

  	
  4

  
	
  5.1
  Acquisition Fees

  	
  4

  
	
  5.2 Asset
  Management Fee

  	
  5

  
	
  5.3
  Disposition Fees

  	
  5

  
	
  5.4 Financing
  Fee

  	
  5

  
	
  5.5
  Subordinated Participation Interests

  	
  5

  
	
  5.6 Expense
  Reimbursements

  	
  5

  
	
  Article 6 –
  Allocation of Expense Reimbursements

  	
  6

  
	
  6.1
  Organization and Offering Expense Reimbursements

  	
  6

  
	
  6.2 All Other
  Expense Reimbursements

  	
  7

  
	
  Article 7 –
  Voting Agreements

  	
  7

  
	
  7.1 Election
  of Directors

  	
  7

  
	
  7.2 Other
  Voting of Shares

  	
  7

  
	
  7.3 Major
  Decisions

  	
  7

  
	
  Article 8 -
  Relationship Of Advisor And Company; Other Activities Of The Advisor  

  	
  9

  
	
  8.1
  Relationship

  	
  9

  
	
  8.2 Time
  Commitment

  	
  9

  
	
  8.3 Advisor
  and Sub-advisor Meetings

  	
  10

  
	
  8.4
  Investment Opportunities and Allocation

  	
  10

  
	
  8.5
  Prospectus Guidance

  	
  11

  
	
  Article 9 –
  Dealer Manager

  	
  12

  
	
  Article 10 -
  The Phillips Edison and ARC Names

  	
  12

  
	
  Article 11 –
  Other Agreements

  	
  12

  
	
  11.1 Approval
  and Funding of Company Organization and Offering Costs

  	
  12

  
	
  11.2 Property
  Level Agreements

  	
  13

  
	
  11.3 Advisor,
  Advisory Agreement and Dealings with Company

  	
  15

  
	
  11.3 Initial
  Capital Contribution

  	
  15

  
	
  Article 12 –
  Certain Transfers

  	
  15

  
	
  12.1
  Transfers

  	
  15

  
	
  12.2
  Prohibited Transfers

  	
  16

  
	
  Article 13 –
  Representations, Warranties, and Agreements

  	
  16

  
	
  Article 14 -
  Term And Termination of the Agreement

  	
  19

  
	
  14.1 Term

  	
  19

  
	
  14.2
  Termination

  	
  19

  
	
  14.3 Survival
  upon Termination

  	
  20

  
	
  14.4 Payments
  on Termination and Survival of Certain Rights and Obligations

  	
  20

  
	
  Article 15 -
  Assignment

  	
  21

  
	
  Article 16 -
  Indemnification And Limitation Of Liability

  	
  21

  
	
  Article 17 -
  Miscellaneous

  	
  21

  
	
  17.1 Notices

  	
  21

  
	
  17.2
  Modification

  	
  22

  
	
  17.3
  Severability

  	
  22

  

 

 

 

 

 

	
  17.4
  Construction

  	
  22

  
	
  17.5 Entire
  Agreement

  	
  22

  
	
  17.6 Waiver

  	
  23

  
	
  17.7 Gender

  	
  23

  
	
  17.8 Titles
  Not to Affect Interpretation

  	
  23

  
	
  17.9
  Counterparts

  	
  23

  

 

 

 

Fourth Amended and Restated Sub-advisory Agreement

This Fourth Amended and Restated Sub-advisory
Agreement, dated as of February 4, 2013 (this “Agreement”), is between,
American Realty Capital II Advisors, LLC, a Delaware limited liability company
(the “Advisor”) and Phillips Edison NTR LLC (formerly known as Phillips
Edison & Company SubAdvisor LLC), a Delaware limited liability company (the
“Sub-advisor”). 

W
I T N E S S E T H

WHEREAS, the parties entered into that certain
Sub-advisory Agreement dated as of January 11, 2010; 

WHEREAS, the parties entered into that certain First
Amended and Restated Sub-advisory Agreement dated as of July 1, 2010;

WHEREAS, the parties entered into that certain Second
Amended and Restated Sub-advisory Agreement dated as of September 17, 2010;

WHEREAS, the parties entered into that certain Third
Amended and Restated Sub-advisory Agreement dated as of September 20, 2011 (the
“Amended Agreement”); 

WHEREAS, the parties have agreed to make certain
amendments and desire to amend and restate the Amended Agreement; 

WHEREAS, Phillips Edison – ARC Shopping Center REIT
Inc., a Maryland corporation (the “Company”) has appointed the Advisor
as its advisor pursuant to the Amended and Restated Advisory Agreement between
the Company, Phillips Edison – ARC Shopping Center Operating Partnership, L.P.
(the “Partnership”) and the Advisor, dated as of even date herewith (as
the same may be amended, restated or otherwise modified from time to time in
accordance with its terms, the “Advisory Agreement”); 

WHEREAS, the Advisor desires to avail itself of the
knowledge, experience, sources of information, advice, assistance and certain
facilities available to the Sub-advisor and to have the Sub-advisor undertake
the duties and responsibilities hereinafter set forth, on behalf of the
Advisor, and subject to the supervision of, the Board of Directors of the
Company, all as provided herein; and

WHEREAS, the Sub-advisor is willing to undertake such
duties and responsibilities, subject to the supervision of the Board of
Directors of the Company, on the terms and subject to the conditions
hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and
of the mutual covenants and agreements contained herein, the Parties hereto
agree that the Amended Agreement hereby is amended and restated to read in its
entirety as follows:

1 

 

 

 

                                                                                                                                                                      
Article 1 

Definitions

Capitalized and other terms that are defined in the
Advisory Agreement but not otherwise defined in this Agreement have the
respective meanings ascribed to such terms in the Advisory Agreement, a copy of
which is attached hereto as Appendix A.   

The following defined terms used in this Agreement
shall have the meanings specified below:

“Advisor” has the meaning set forth at the head
of this Agreement.

“Advisory Agreement” has the meaning set forth
in the recitals.

“Affiliate” has the meaning set forth in the
Advisory Agreement.  For the avoidance of doubt, none of the Company, the
Sub-advisor, any subsidiary of the Company, any subsidiary of the Sub-advisor
and any other Person controlled by, controlling or under common control with
Phillips Edison Limited Partnership shall be an Affiliate of the Advisor. 

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

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

“Dealer Manager” means Realty Capital Services,
LLC, a Delaware limited liability company, in its capacity as dealer manager
pursuant to the Dealer Manager Agreement.

“Dealer Manager Agreement” means that dealer
manager agreement, dated as of even date herewith, between the Company and the
Dealer Manager, providing for the distribution of the Shares.

“Effective Date” means the initial Effective
Date (as defined in the Dealer Manager Agreement).

“Fund IV” means Phillips Edison Shopping Center
Fund IV, L.P.

“Immediate Family Member” means, with respect
to a Key Person:  (i) any of such Key Person’s parents and siblings, spouse and
descendants and any of the spouses of such descendants (collectively, the “Individual
Group”); (ii) any trust, the beneficiaries of which consist exclusively of
one or more members of the Individual Group (collectively, the “Family
Trusts”); and (iii) any entity which is controlled by, directly or
indirectly, one or more members of the Individual Group and/or one or more of
the Family Trusts.

2 

 

 

 

“Joint Venture”
means any joint venture, limited liability company or other Affiliate of the
Company that owns, in whole or in part, on behalf of the Company any
Properties, Loans or other Permitted Investments.

“Key Person” means (i) with respect to the
Advisor, each of William Kahane and Nicholas Schorsch and his heirs, legal
representatives and executors, and (ii) with respect to the Sub-advisor, each
of Michael C. Phillips and Jeffrey S. Edison and his heirs, legal
representatives and executors.

“Offering Period” has the meaning set forth in
the Dealer Manager Agreement.

“Partnership” means Phillips Edison – ARC
Shopping Center Operating Partnership, L.P., a Delaware limited partnership.

“Partnership Agreement” means the Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
February 4, 2013, among the Company, Phillips Edison Shopping Center OP GP LLC,
the Advisor, and PE – ARC Special Limited Partner LLC, as the same may be
amended from time to time.

“Party” or “Parties” refer to the
Advisor or the Sub-advisor or both, as the case may be.

“Prospectus” has the meaning set forth in the
Dealer Manager Agreement.

“Reference Date” means the first date the
Company breaks escrow on stockholder subscriptions in the Initial Public
Offering.

“Sub-advisor” has the meaning set forth at the
head of this Agreement.

“Transfer Restriction Period” means, with
respect to the Sub-advisor, the Offering Period plus 12 months, and with
respect to the Advisor, the Offering Period plus six months.

                                                                                                                                                              
Article 2 

Appointment

The Advisor, pursuant to its authority to delegate all
of its rights and powers to manage and control the business and affairs of the
Company to the Sub-advisor pursuant to Section 4.1 of the Advisory Agreement,
hereby appoints the Sub-advisor to serve as the Sub-advisor for the Company. 
The Sub-advisor hereby accepts such appointment.  The Advisor delegates, and
the Sub-advisor agrees to perform, all the duties of the Advisor set forth in
the Advisory Agreement, all on the terms and subject to the conditions set
forth in this Agreement.  

3 

 

 

 

                                                                                                                                                                        
Article 3 

Duties of the Sub-advisor

Under the Advisory Agreement, the Advisor is
responsible for managing, operating, directing and supervising the operations
and administration of the Company and its assets.  Consistent with Article 2 hereof,
the Sub-advisor undertakes to use commercially reasonable efforts to present to
the Company potential investment opportunities and to provide the Company with
a continuing and suitable investment program consistent with the investment
objectives and policies of the Company as determined and adopted from time to
time by the Board.  Subject to the limitations set forth in this Agreement and
the Advisory Agreement, including Article 4 of the Advisory Agreement,
consistent with the provisions of the Articles of Incorporation and Bylaws and
the continuing and exclusive authority of the Board over the supervision of the
Company, the Sub-advisor shall, either directly or by engaging an Affiliate or
third party, perform the duties set forth in Article 3 of the Advisory
Agreement (a copy of which is attached hereto as Appendix A), which
duties are incorporated herein by reference as if fully set forth herein.

                                                                                                                                                                        
Article 4 

Authority
and Certain Activities of Sub-advisor

The Sub-advisor shall have
the authority set forth in Article 4 of the Advisory Agreement, shall have the
authority to establish and maintain bank accounts as set forth in Article 5 of
the Advisory Agreement, shall maintain books and records for the Company as set
forth in Article 6 of the Advisory Agreement, and shall abide by the
limitations of Article 7 of the Advisory Agreement, all of which (i.e.,
Articles 4 through 7 of the Advisory Agreement) are incorporated herein by
reference as if fully set forth herein.

                                                                                                                                                                        
Article 5 

Assignment of Payments

As compensation for the
services provided pursuant to this Agreement, Advisor hereby assigns payments
as follows: 

5.1             
Acquisition Fees.  The Advisor
hereby assigns its right to receive direct payment from the Company or from any
Joint Venture of 85% of all Acquisition Fees payable pursuant to the applicable
advisory agreement between the Advisor and the Company or the Joint Venture. 
The Advisor will submit an invoice to the Company or the Joint Venture, which
the Sub-advisor shall prepare, following the closing or closings of each
acquisition or origination, accompanied by a computation of the Acquisition
Fee.  The portion of the Acquisition Fee payable to each of the Advisor and
Sub-advisor then will be paid by the Company or the Joint Venture at the
closing of the applicable transaction upon receipt of the 

 

 

invoice
by the Company or the Joint Venture as provided in the applicable advisory
agreement.  

5.2             
Asset Management Fee.  The Advisor hereby assigns its right to receive
direct payment from the Company or from any Joint Venture of 85% of all Asset
Management Fees payable pursuant to the applicable advisory agreement between
the Advisor and the Company or the Joint Venture.  The Advisor will submit a
quarterly invoice to the Company or the Joint Venture, which the Sub-advisor shall
prepare and which shall include a computation of the Asset Management Fee for
the applicable period.  The Asset Management Fee shall be payable by the
Company or Joint Venture as provided in the applicable advisory agreement.  

5.3             
Disposition Fees.  The Advisor hereby assigns its right to receive
direct payment from the Company or from any Joint Venture of 85% of all
Disposition Fees payable pursuant to the applicable advisory agreement between
the Advisor and the Company or the Joint Venture; provided, however,
that if the receipt by the Advisor of all or any part of a Disposition Fee for
any particular transaction would violate applicable law, and if applicable law
would permit payment thereof to the Sub-advisor, then the assignment shall be
deemed to be for the Disposition Fee (or part thereof) associated with that
particular transaction that would violate applicable law if received by the
Advisor.  The portion of the Disposition Fee payable to each of the Advisor and
the Sub-advisor shall be paid by the Company or the Joint Venture as provided
in the applicable advisory agreement.  

5.4             
Financing Fee.  The Advisor
hereby assigns its right to receive direct payment from the Company or from any
Joint Venture of 85% of all Financing Fees payable to the Advisor pursuant to
the applicable advisory agreement between the Advisor and the Company or the
Joint Venture; provided, however, that if the receipt by the
Advisor of a Financing Fee for any particular transaction would violate
applicable law, and if applicable law would permit payment thereof to the
Sub-advisor, then the assignment shall be deemed to be for the Financing Fee
(or part thereof) associated with that particular transaction that would
violate applicable law if received by the Advisor.

5.5             
Subordinated Participation
Interests.  The Advisor
hereby agrees to assign to the Sub-advisor 85% of the Subordinated
Participation Interests it periodically receives from the Partnership pursuant
to the Advisory Agreement and pursuant to the terms and conditions contained in
the Partnership Agreement.

5.6             
Expense Reimbursements.  Subject
to Article 6 of
this Agreement and Article 9 of the Advisory Agreement, the Advisor hereby
assigns its right to receive direct payment from the Company or any Joint
Venture of expense reimbursements the Sub-advisor incurs on behalf of the
Company or in connection with the services the Sub-advisor provides to the
Company pursuant to this Agreement.

5 

 

 

 

                                                                                                                                                                        
Article 6 

Allocation of Expense
Reimbursements

6.1             
Organization and Offering
Expense Reimbursements.  All Organization and Offering Expense
reimbursements will be apportioned between the Advisor and Sub-advisor pro
rata based on the amount of such Organization and Offering Expenses
reimbursements due each as of the date of the reimbursement.

(A)            
It is understood and agreed that
the Company shall be under no obligation to reimburse the Advisor or
Sub-advisor to the extent such reimbursement would cause the total amount spent
by the Company on Organization and Offering Expenses (excluding underwriting
and brokerage discounts and commissions, but including third-party due
diligence fees as set forth in detailed and itemized invoices) to exceed 1.5%
of Gross Proceeds raised in a Public Offering as of the termination of such
Public Offering; and

(B)             
Within 60 days after the end of
the month in which a Public Offering terminates, the Sub-advisor shall
reimburse the Advisor, to the extent the Advisor was not reimbursed or had an
obligation to reimburse the Company (and did so reimburse the Company), for
Organization and Offering Expenses (excluding underwriting and brokerage
discounts and commissions, but including third-party due diligence fees as set
forth in detailed and itemized invoices) exceeding 1.5% of Gross Proceeds
raised in a Public Offering.

(C)             
The Company shall not reimburse
the Advisor or Sub-advisor for any Organization and Offering Expenses that the
Conflicts Committee determines are not fair and commercially reasonable to the
Company.

(D)            
The Company shall not make any
reimbursement for any of the following Organization and Offering Expenses
incurred by the Dealer Manager that are to be paid out of the Dealer Manager’s
fee:

(1)              
participating broker-dealer
expense reimbursements (including meals with financial advisors and
participating broker-dealer client seminars);

(2)              
sales seminars sponsored by
participating broker-dealers;

(3)              
promotional items;

(4)              
marketing support;

6 

 

 

 

(5)              
expenses in connection with bona
fide training and educational meetings;

(6)              
wholesaling commissions,
wholesaling salaries and wholesaling expense reimbursements (including travel,
meals and lodging in connection with the Offering); 

(7)              
occasional meals and entertainment
expenses of participating broker-dealers; and

(8)              
legal fees and expenses of the
Dealer Manager associated with FINRA-related filings or the drafting and review
of any dealer manager agreements, participating broker-dealer agreements and
due diligence agreements.

6.2             
All Other Expense
Reimbursements.  All other expense reimbursements will be
apportioned between the Advisor and Sub-advisor pro rata based on the
amount of such expense reimbursements due each as of the date of the
reimbursement. 

                                                                                                                                                                        
Article 7 

Voting Agreements

7.1             
Election of Directors.  The Advisor and Sub-advisor each agrees, with
respect to any Shares now or hereinafter owned by it, to vote such Shares in
favor of the Advisor’s nominee for the Board and the Sub-advisor’s nominees for
the Board.  As of the date hereof, the Advisor’s nominee for the Board is
William M. Kahane, and the Sub-advisor’s nominees are Jeffrey S. Edison and
Michael C. Phillips.

7.2             
Other Voting of Shares.  The Advisor and Sub-advisor each agrees that, with
respect to any Shares now or hereinafter owned by it, neither will vote or
consent on matters submitted to the stockholders of the Company regarding (i)
the removal of the Advisor or any Affiliate of the Advisor; (ii) the removal of
the Sub-advisor or any Affiliate of the Sub-advisor; (iii) any transaction
between the Company and the Advisor or any of its Affiliates; or (iv) any transaction
between the Company and the Sub-advisor or any of its Affiliates.  This voting
restriction shall survive until such time that the Advisor is no longer serving
as such. 

7.3             
Major Decisions. 

(A)            
Subject to Sections 7.3(C)
and 7.3(D)  with
respect to the Company, all major decisions of the Company set forth below in clauses
(A)(1) through (A)(6)  (“Major Decisions”) shall be subject to
the Company’s Articles of Incorporation and joint approval by the Advisor and
Sub-advisor.  For the avoidance of doubt, Major Decisions specifically exclude
any decisions regarding the day-to-day operations of the Company, the
decision-making authority for which has been delegated to the Sub-advisor
pursuant to this Agreement.  Major Decisions shall consist of the following:

7 

 

 

 

(1)              
Decisions to recommend to the
Board of Directors that the Company acquire or sell Properties, Loans and other
Permitted Investments;

(2)              
Retention of investment banks for
the Company;

(3)              
Marketing methods for the
Company’s sale of Shares;

(4)              
Extending, initiating or
terminating the Initial Public Offering or any subsequent Offering of the
Shares;

(5)              
Issuing press releases involving
the major decisions of the Company or the Advisor or Sub-advisor or their
Affiliates with respect to the business or operations of the Company; provided,
that the Sub-advisor need not obtain consent to any press releases regarding
acquisitions or dispositions of Properties, Loans or other Permitted
Investments; and provided  further, however, that
notwithstanding the immediately preceding proviso, any mention of the Advisor
or its Affiliates in such press releases regarding acquisitions or dispositions
shall be pre-approved by the Advisor; and

(6)              
Merging or otherwise engaging in
any change of control transaction for the Company.

(B)             
Notwithstanding anything in this
Agreement to the contrary, if the Parties do not agree to any action
constituting a Major Decision that is described in any of clauses (A)(2)
through (A)(6)  above and that has been proposed by either Party, the
Parties shall meet (in person or by phone) to discuss the issue in dispute in
good faith over the five-business day period beginning with the delivery of
notice of the proposed action to the other Party.  

(C)             
Notwithstanding anything in this
Agreement to the contrary, with respect to Major Decisions described in clause
(A)(1) above (but subject to Section 7.3(D)), (1) joint approval
shall not be required, (2) the Sub-advisor and the Advisor shall discuss the
proposed transaction (either in person or by phone) prior to either Party
making any recommendation of the proposed transaction to the Board of
Directors, and (3) the Sub-advisor and the Advisor shall each give due
consideration to the opinions of the other Party.  Ordinarily, such discussions
shall begin at least five business days before a recommendation is made to the
Board of Directors; however, if in the sole discretion of the Sub-advisor it is
in the best interest of the Company to make a recommendation to the Board of
Directors more promptly, then the Sub-advisor may do so.  In the event the
Parties do not agree as to whether to recommend the proposed 

8 

 

 

 

transaction to the Board of Directors, the Sub-advisor’s
decision shall govern.

(D)            
Notwithstanding the provisions of
this Section 7.3 or
any other provision in this Agreement to the contrary, in all events, including
Major Decisions, the Company will be managed under the direction of the Board
of Directors.

(E)             
Notwithstanding anything in this
Agreement to the contrary (but subject to Section 7.3(D)), the
Sub-advisor shall have sole authority to act on behalf of the Company regarding
amending the Advisory Agreement.

                                                                                                                                                                        
Article 8 

Relationship of
Sub-advisor and Advisor and their Affiliates;

Other Activities of the Advisor and Sub-advisor

8.1             
Relationship.  The Advisor and the Sub-advisor are not partners or
joint venturers with each other, and nothing in this Agreement shall be
construed to make them such partners or joint venturers. Except as set forth in
Section 8.4,
nothing herein contained shall prevent the Advisor or Sub-advisor from engaging
in or earning fees from other activities, including, without limitation, the
rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Advisor or
Sub-advisor, respectively, or any of their Affiliates.  Nor shall this
Agreement limit or restrict the right of any manager, director, officer,
member, partner, employee or equityholder of the Advisor or Sub-advisor or
their Affiliates to engage in or earn fees from any other business or to render
services of any kind to any other Person.  The Sub-advisor may, with respect to
any investment in which the Company is a participant, also render advice and
service to each and every other participant therein, and earn fees for
rendering such advice and service.  Specifically, it is contemplated that the
Company may enter into Joint Ventures or other similar co-investment arrangements
with certain Persons, and pursuant to the agreements governing such Joint
Ventures or other similar co-investment arrangements, the Advisor or the
Sub-advisor may be engaged to provide advice and service to such Persons, in
which case, the Advisor or the Sub-advisor, as applicable, will earn fees for
rendering such advice and service.  Each of the Advisor and the Sub-advisor
shall promptly disclose to the Board the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, that creates
or which would reasonably result in a conflict of interest between its
obligations to the Company and its obligations to or its interest in any other
Persons (it being understood and agreed that the conditions and circumstances
referred to in the second paragraph of Section 8.4(A) are deemed to have
been disclosed to the Board for purposes of this Section 8.1). 

8.2             
Time Commitment.  The Sub-advisor shall, and shall cause its Affiliates
and their respective employees, officers and agents to, devote to the Company
such 

9 

 

 

 

time as shall be reasonably necessary to conduct
the business and affairs of the Company in an appropriate manner consistent
with the terms of this Agreement.  Each Party acknowledges that the other Party
and its Affiliates and their respective employees, officers and agents may also
engage in activities unrelated to the Company and may provide services to
Persons other than the Company or any of its Affiliates.

8.3             
Advisor and Sub-advisor
Meetings.  The Parties shall meet on a regular basis
(frequency to be determined) to discuss and consult with one another regarding
the Company and its assets and opportunities.  Advisor and Sub-advisor shall
cause their respective principals to meet (in person or by phone) with
representatives of each other upon the request of either Party.  The Parties
will provide each other information regarding the operations and acquisitions
of the Company as reasonably requested by the other.  Each of Advisor and
Sub-advisor shall have direct access to the books and records of the Company
and of each attorney, accountant, servicer and other contracting party of the Company
(except to the extent such attorney represents either Party with respect to
this Agreement). 

8.4             
Investment Opportunities and
Allocation.   

(A)            
The Sub-advisor shall be required
to use commercially reasonable efforts to present a continuing and suitable
investment program to the Company that is consistent with the investment
policies and objectives of the Company.  So long as the Advisor is acting in
its capacity as advisor under the Advisory Agreement, each of the Advisor and
the Sub-advisor will not (and will cause its Affiliates to not) (i) pursue any
opportunity to acquire any Property, Loan or other Permitted Investment that
fits within the Company’s strategy, or (ii) offer such Property, Loan or other
Permitted Investment to a third party, in each case unless and until such
opportunity is first presented to the Company.  The Company shall have 30 days
from the date of its receipt of a complete written offering package relating to
such opportunity, customary in scope and content, to notify the Advisor or the
Sub-advisor, as the case may be, of the Company’s decision as to whether or not
to pursue such opportunity.  If the Company fails so to notify the Advisor or
the Sub-advisor, as the case may be, within such 30-day period, the Company
shall be deemed to have passed on such opportunity.  If the Company passes on
such opportunity, then the Advisor, Sub-advisor or such Affiliate, as the case
may be, may acquire the subject investment or offer the subject investment to a
third party for a period of 180 days, in each case on terms and conditions
(including price) that are not materially different from the terms and
conditions set forth in the offering package to the Company.  If at the
expiration of such 180-day period, such opportunity remains available, then the
provisions of this Section 8.4(A) shall once again apply to such
opportunity.  

Notwithstanding the preceding, however, the Advisor or
any Affiliate of the Advisor shall be permitted to pursue any opportunity or to
offer any 

 

opportunity to a third party in respect of
(1) any net leased retail, office and industrial properties or other property
consistent with the investment policies of American Reality Capital Trust,
Inc., (2) any commercial real estate or other real estate investments that
relate to office, retail, multi-family residential, industrial and hotel
property types, located primarily in the New York metropolitan area or other
property consistent with the investment policies of American Realty Capital New
York Recovery REIT, Inc., or (3) any investments to be made by a contemplated
non-traded REIT (the “Identified REIT”) that the Advisor or any of its
Affiliates has described as (a) intending to invest primarily in “power center”
real estate developments, (b) being sponsored or co-sponsored by ARC (or one of
its Affiliates), the acquisition services for which will be provided by an
international commercial and residential real estate developer and manager (or
one of its Affiliates), and (c) being the subject of an executed letter of
intent or term sheet between the Advisor (or one of its Affiliates) and such
international commercial and residential real estate developer and manager (or
one of its Affiliates), and which has or will have as its publicly disclosed
(and not subsequently revised or required to be revised under applicable
securities laws) investment objectives to have less than 20% of its assets
(measured by purchase price) in anchored shopping centers with purchase prices
of less than $20,000,000 per property (determined once the proceeds of the
offering have been fully invested).  

(B)             
If Fund IV, Phillips Edison
Shopping Center Fund III, L.P., Phillips Edison Strategic Investment Fund or
Phillips Edison Limited Partnership presents an investment opportunity to the
Company and discloses in writing that such entity is attempting to seek
properties to qualify for tax deferred treatment under Section 1031 of the
Code, then if the Company does not respond within 21 days, the Company shall be
deemed to have passed on such investment opportunity.  For clarification,
developing single tenant retail or commercial properties shall not be
considered to fit within the Company’s strategy.  

(C)             
Notwithstanding the preceding, the
restrictions in clauses (A) and (B)  will cease to be effective
upon termination of the Offering Period or, if later, the time when all equity
raised during the Offering Period has been substantially invested or committed
to investment.

(D)            
Except as provided in this Section
8.4, none of
the Advisor and the Sub-advisor nor any of their respective Affiliates shall be
obligated generally to present any particular investment opportunity to the
Company.  

8.5             
Prospectus Guidance.  Sub-advisor
has read and will abide by the Prospectus with respect to the Company’s
investment objectives, targeted assets and investment restrictions, targeted
markets, leverage, distribution policy, and investor profile except to the
extent directed by the Board.

11 

 

 

 

                                                                                                                                                                        
Article 9 

Dealer Manager

            The Parties
agree to use their best efforts to cause the Company, subject to approval by
the Company’s Board of Directors, to enter into the Dealer Manager Agreement
with the Dealer Manager on terms consistent with the “Plan of Distribution”
section of the Prospectus.

                                                                                                                                                                     
Article 10 

The
Phillips Edison and ARC Names

            The Parties
acknowledge and reaffirm the rights and obligations set forth with respect to
their proprietary interests in their respective names as set forth in Article
12 of the Advisory Agreement.

                                                                                                                                                                     
Article 11 

Other
Agreements

11.1         
Approval and Funding of Certain
Organization and Offering Costs.  

(A)            
On or prior to the date hereof,
the Advisor has prepared an initial Organization and Offering Expense budget
for the Advisor and its Affiliates (including Realty Capital Services, LLC in its
capacity as Dealer Manager) for the period ending on the Effective Date, a copy
of which is attached as Schedule I hereto (the “Initial O&O
Budget”) and the Sub-advisor has reviewed and approved the Initial O&O
Budget.  On or before the Effective Date, the Advisor or its Affiliates will
prepare and present to the Sub-advisor for its review and approval the proposed
Organization and Offering Expense budget for the one-year period following the
Effective Date for the Advisor and its Affiliates (including Realty Capital
Services, LLC in its capacity as Dealer Manager).  Thereafter, on or before the
30th day preceding the annual anniversary of the Effective Date, the Advisor or
its Affiliates will prepare and present to the Sub-advisor for its review and
approval the proposed Organization and Offering Expense budget for the
following one-year period for the Advisor and its Affiliates (including Realty
Capital Services, LLC in its capacity as Dealer Manager).  Each of (1) the
Initial O&O Budget, and (2) each such other Organization and Offering
Expense budget for the time period specified therein once approved by the
Sub-advisor, shall be referred to herein as an “Approved O&O Budget”.  
It is understood and agreed that neither the Initial O&O Budget nor any
other Approved O&O Budget shall cover or refer to selling commissions or
the Dealer Manager Fee payable pursuant to the Dealer Manager Agreement.

12 

 

 

 

(B)             
Each Approved O&O Budget may
contain contingencies for expenditure items anticipated in good faith by the
Advisor and its Affiliates, but the precise amounts of which are unknown at the
time of preparation and submission thereof to the Sub-advisor for approval. 
Within 30 days after each proposed Organization and Offering Expense budget is
submitted to it, the Sub-advisor shall notify the Advisor in writing (1) that
it approves the proposed budget or (2) of the revisions it reasonably believes
should be made to such proposed budget.  If the Sub-advisor fails to respond
within such 30-day period, the Sub-advisor shall be deemed to have approved the
proposed budget and such proposed budget shall become the Approved O&O
Budget for the time periods specified therein.  If the Sub-advisor withholds
its approval of any proposed budget, then the Parties shall negotiate a mutually
acceptable Organization and Offering Expense budget for the Advisor and its
Affiliates (including Realty Capital Services, LLC in its capacity as Dealer
Manager).  For the avoidance of doubt,
this Section 11.1(B) shall not apply to the Initial O&O Budget.

(C)             
Notwithstanding anything to the
contrary contained herein or in any other agreement, the Advisor shall ensure
that it and its Affiliates shall not make any expenditure of Company funds or
of funds for which reimbursement is sought from the Company or Sub-advisor, or
commit to make any such expenditure, except as provided for in an Approved
O&O Budget; provided, however, with respect to any line item
in an Approved O&O Budget, the Advisor and its Affiliates may incur up to
115% of the amount budgeted therefor; provided  further, however,
with respect to any line item in an Approved O&O Budget, the Advisor and
its Affiliates may incur in excess of 115% of the amount budgeted therefor with
the approval of the Sub-advisor.

(D)            
The Advisor and Sub-advisor have
caused their Affiliates to fund $75,000 and $425,000, respectively, into their
respective bank accounts, and Advisor and Sub-advisor will bear the initial
$500,000 of Organization and Offering Expenses (excluding underwriting and
brokerage discounts and commissions) in the ratio of 15% to 85%, respectively. 
After such initial $500,000 of Organization and Offering Expenses have been
borne as aforesaid, Sub-advisor will fund 100% of all Organization and Offering
Expenses (excluding underwriting and brokerage discounts and commissions, but
including third-party due diligence fees set forth in detailed and itemized
invoices). 

11.2         
Property Level Agreements.  The Parties agree to use their best efforts to
cause the Company, subject to approval by the Company’s Board of Directors, to
enter into a Master Property Management, Leasing, and Construction Management
Agreement with an Affiliate of the Sub-advisor consistent with the description
of the same in the Prospectus.  Advisor shall have the right to review and
comment upon such master agreement, and to approve such master agreement (such
approval not to be unreasonably withheld), prior to submission to the Board.  

13 

 

 

 

Advisor agrees that it shall have no right in the fees
generated pursuant to such master agreement.

14 

 

 

11.3         
Advisor, Advisory Agreement and
Dealings with Company.  

(A)            
Advisor agrees to inform and make
Sub-advisor a party to all negotiations between Advisor and the Company
regarding any proposed amendment of the Advisory Agreement.  No amendment to
the Advisory Agreement will be agreed upon or permitted if such amendment would
impact the rights or obligations of the Sub-advisor without the Sub-advisor’s
consent and signature. 

(B)             
Advisor agrees to allow
Sub-advisor to present and recommend to the Company all investment
opportunities recommended by Sub-advisor.

 

11.4         
Initial Capital Contribution.  Sub-advisor acknowledges that it contributed an
amount equal to $200,000 to the capital of the Company on December 3, 2009. 
Sub-advisor agrees to purchase or to cause an Affiliate to purchase, on a
monthly basis, sufficient Shares sold in the Initial Public Offering during
each month following the Reference Date such that the total Shares owned by
Sub-advisor and its Affiliates is at least equal to 0.1% of the Shares
outstanding at the end of the immediately preceding month (ignoring for
purposes of calculating the outstanding number of Shares at the end of a month
any Shares issued after the Reference Date but outside of the Initial Public
Offering, such as Shares issued pursuant to an executive compensation plan or
upon exchange of Partnership securities).  The Shares to be purchased pursuant
to this obligation shall be at a purchase price of $9.00 per Share.

                                                                                                                                                                     
Article 12 

Certain Transfers

12.1         
Transfers.  The Parties
have selected one another based on the experience and personnel of each other
and their Affiliates.  Accordingly, each Party agrees that it is mutually desirable
to restrict changes in ownership of each Party.  Each Party agrees to amend, to
the extent necessary, its governing documents to restrict transferability of
any direct or indirect interest in such Party by such Party’s Key Persons
unless both Parties jointly agree as otherwise permitted by this Article 12; provided,
however, that any transfer of an interest in either Party by any of such
Party’s Key Persons, by any entity controlled by a Key Person of such Party or
by any Immediate Family Member of a Key Person of such Party shall be permitted
without any approval so long as (i) the transferee of such interest is an
Immediate Family Member of a Key Person of such Party, and (ii) one or more of
the Key Persons of such Party retain management and voting control over such
interest held by such transferee at all times after the applicable transfer
occurs.

15 

 

 

 

12.2         
Prohibited Transfers.   

(A)            
Except for Permitted Transfers and
other transfers made in accordance with, and as permitted by, this Agreement,
neither Party (1) will allow any direct or indirect transfer of interests
therein by its applicable Key Persons, and (2) will directly or indirectly
transfer any part of its direct or indirect ownership interest in the Company
(if any), whether in each such case voluntarily or by foreclosure, assignment
in lieu thereof or other enforcement of a pledge, hypothecation or collateral
assignment without the prior approval of the other Party.  

(B)             
“Permitted Transfer” (for
which no approval by the other Party shall be required) means either of the
following:

(1)              
any transfer of all or any portion
of the direct or indirect interest in the Company held by a Party (if any) to any
Affiliate of such Party; provided, however, that in each such
case the transferee executes an instrument agreeing to be bound by the
provisions of this Agreement to the extent applicable to the transferor; and

(2)              
any transfer of all or any portion
of the direct or indirect interest in a Party held, directly or indirectly, by
such Party’s Key Persons or Immediate Family Members; provided, however,
that either (a) either or both of such Party’s Key Persons remain involved
with the material decision-making and actions of such Party for the applicable
Transfer Restriction Period (for the sake of clarity, after  the
applicable Transfer Restriction Period, each Party is permitted to allow the
effecting of a transfer of all or any portion of the direct or indirect interest
in such Party without regard to the continued involvement of such Party’s Key
Persons) or (b) in the case of the Advisor, the transfer occurs after the
Offering Period and the applicable transferee agrees to cede any
decision-making and governance authority relating to the Company (including
making Major Decisions) to the Sub-advisor.

                                                                                                                                                                     
Article 13 

Representations,
Warranties, and Agreements

13.1         
The Advisor and the Sub-advisor
each hereby represents and warrants to, and agrees with, the other as follows:

(A)            
Such Party is duly formed and
validly existing under the laws of the jurisdiction of its organization;

(B)             
Such Party has full power and
authority to enter into this Agreement and to conduct its business to the
extent contemplated in this Agreement;

 

 

(C)             
This Agreement has been duly
authorized, executed and delivered by such Party and constitutes the valid and
legally binding agreement of such Party, enforceable in accordance with its
terms against such Party, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws relating to
creditors’ rights generally, and by general equitable principles.

(D)            
The execution and delivery of this
Agreement by such Party and the performance of its duties and obligations
hereunder do not result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, credit agreement, note or other evidence of indebtedness, or any lease
or other agreement, or any license, permit, franchise or certificate to which
such Party is a party or by which it is bound or to which its properties are
subject or require any authorization or approval under or pursuant to any of
the foregoing, or violate any statute, regulation, law, order, writ,
injunction, judgment or decree to which such Party is subject;

(E)             
Such Party is not aware of any
facts pertaining to such Party or its Affiliates that would cause such Party,
or any of such Party’s Affiliates, to be unable to discharge timely the
obligations of such Party or its Affiliates under this Agreement or the
obligations of the Company under any agreement to which any of them is a party;

(F)              
To the knowledge of such Party, no
consent, approval or authorization of, or filing, registration or qualification
with, any court or governmental authority on the part of such Party is required
for the execution and delivery of this Agreement by such Party and the
performance of its obligations and duties hereunder and such execution,
delivery and performance shall not violate any other agreement to which such
Party is bound;

(G)            
Such Party recognizes that DLA
Piper LLP (US) is representing and in the future may represent the Sub-advisor,
its Affiliates and the Company with respect to matters in this Agreement and on
other unrelated matters, and acknowledges that it has been notified of this
representation and that it has been suggested that it retain independent
counsel in reviewing this Agreement and the terms agreed to herein.  The
Advisor hereby waives all conflicts of interest regarding DLA Piper with
respect thereto and hereby waives all rights to disqualify DLA Piper from
representing the Sub-advisor, its Affiliates, and the Company in any matter at
any time;   

(H)            
Such Party recognizes that
Proskauer Rose LLP is representing and in the future may represent the Advisor,
the Dealer Manager, their Affiliates and the Company with respect to matters in
this Agreement and on other unrelated matters, and acknowledges that it has
been notified of this representation and that it has been suggested that it
retain independent 

17 

 

 

 

counsel in reviewing this Agreement
and the terms agreed to herein.  The Sub-advisor hereby waives all conflicts of
interest regarding Proskauer Rose LLP with respect thereto and hereby waives
all rights to disqualify Proskauer Rose LLP from representing the Advisor, the
Dealer Manager, their Affiliates and the Company in any matter at any time; 

(I)               
Except as specifically provided in
this Agreement, such Party is not relying upon the other Party, the Company or
their respective Affiliates or advisors, in connection with any of the matters
referred to in this Agreement, including any projections, information, due
diligence, representations or warranties (express or implied, oral or written),
statements or other matters concerning the Company, the other Party, or
otherwise, and each Party hereby confirms that it has conducted an independent
investigation of the facts regarding the same (or has chosen not to do so at
such Party’s peril); 

(J)               
The Party is not acting as the
representative or agent or in any other capacity, fiduciary or otherwise, on
behalf of another Person in connection with the Company or the other matters
referred to in this Agreement;

(K)            
Such Party is aware that the other
Party and/or Affiliates of such other Party now and in the future shall be, and
in the past have been, engaged in businesses which are competitive with that of
the Company.  Each of the Parties hereby acknowledges and agrees that the
Parties’ obligations with respect to all future activities which are in
competition with the Company are as set forth in Article 8; 

(L)             
Such Party is aware that
compensation and reimbursements may be payable to Affiliates of the Parties by
the Company, as addressed in this Agreement, the Advisory Agreement and the
Dealer Manager Agreement;

(M)           
No Party is required to cause the
controlling persons of such Party to devote any specific portion of their time
to Company business other than as necessary to fulfill such Parties’
obligations under this Agreement and the Advisory Agreement, as the case may
be, and such controlling persons are expected to spend substantial amounts of
their time on activities that are unrelated to the Company;

(N)            
Such Party understands that the
other Party is relying on the accuracy of the representations set forth in this
Article 13
in entering into this Agreement;

(O)            
Such Party has not granted to any
third party rights that would be inconsistent with the rights granted to the
other Party by this Agreement; 

(P)              
Such Party has all requisite
licenses to do and perform all acts and receive all fees as contemplated by
this Agreement and the Advisory Agreement; and 

18 

 

 

 

(Q)            
None of its principals has been
convicted of any felony, or convicted of any misdemeanor involving moral
turpitude (including fraud), or entered a plea of nolo contendere in connection
with any felony or any such misdemeanor.

13.2         
The Sub-advisor hereby represents
and warrants to, and agrees with, the Advisor as follows:

(A)            
The staff and employees of the
Sub-advisor and its Affiliates have the skills, knowledge of and expertise in
property selection, acquisitions/development, financing, asset and property
management, and dispositions as to perform their respective duties and
obligations hereunder; and 

(B)             
The Sub-advisor is sophisticated
in real estate and securities transactions, has been granted access to such
financial and other material information concerning the Company, the other
Party and the other Party’s Affiliates, and their respective current and
anticipated operations and such due diligence materials as it deems necessary
or advisable, as it has requested or may require in connection with its
investment (including an advance of expenses that may be reimbursed) in the
Company, is able, either directly or through its agents and representatives, to
evaluate such information and any due diligence materials provided or made
available to it from time to time hereunder, and is able to bear the financial
risk of loss presented by an investment in the Company, particularly in light
of the risks that would be disclosed by a detailed analysis thereof (its access
to which, to the full extent any Party has requested, hereby is confirmed by
each Party); 

                                                                                                                                                                     
Article 14 

Term And Termination of
the Agreement

14.1         
Term.  This Agreement shall have an initial term of one
year from the date hereof and shall be renewed for an unlimited number of
successive one-year terms upon renewal of the Advisory Agreement.  This
Agreement shall be co-terminus with the Advisory Agreement.  

14.2         
Termination.  Subject to last sentence of Section 14.1:   

(A)            
This Agreement may be terminated
(1) by the Advisor upon 60 days’ prior written notice by the Advisor to the
Sub-advisor with approval of a majority of the Conflicts Committee, or (2) by
the Sub-advisor upon 60 days’ prior written notice by the Sub-advisor to the
Advisor;  

(B)             
This Agreement may be terminated
by the Advisor, if the Sub-advisor materially breaches this Agreement; provided,
however, that the Sub-

19 

 

 

 

advisor shall have 30
calendar days after the receipt of notice of such breach from the Advisor to
cure such breach; 

(C)             
This Agreement may be terminated
by the Advisor, as a result of any fraud, criminal conduct, gross negligence or
willful misconduct by Sub-advisor or any Affiliate thereof in any action or
failure to act undertaken by such Person pertaining to or having a detrimental
effect upon the ability of the Advisor or the Sub-advisor to perform their
respective duties hereunder; provided, however, that the
Sub-advisor does not cure any such act within 30 calendar days after the
receipt of notice of such act (or at such later time as may be stated in the
notice) from the Advisor; or

(D)            
This Agreement may be terminated
by either Party, if the other Party (1) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (2)  consents to the entry of an order for relief in an involuntary
case under any such law, (3) consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the other Party or for any substantial
part of its property, or (4) makes any general assignment for the benefit of
creditors under applicable state law;

(E)             
This Agreement may be terminated
by either Party, if:  (1) an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect has been commenced
against the other Party, and such case has not been dismissed within 60 days
after the commencement thereof; or (2) a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) has been appointed for
the other Party or has taken possession of the other Party or any substantial
part of its property, and such appointment has not been rescinded or such
possession has not been relinquished within 60 days after the occurrence
thereof; or

(F)              
This Agreement may be terminated
at any time within five years after the date hereof by the Advisor if both
Michael C. Phillips and Jeffrey S. Edison cease to be actively involved in the
management of the Sub-advisor.

14.3         
Survival upon Termination.  Notwithstanding anything else that may be to the
contrary herein, the expiration or earlier termination of this Agreement shall
not relieve a party for liability for any breach occurring prior to such
expiration or earlier termination.  The provisions of Articles 1, 5,
6, 10, 13, 14, 16, and 17  shall
survive termination of this Agreement. 

14.4         
Payments on Termination and
Survival of Certain Rights and Obligations.  After termination of this Agreement, the
Sub-advisor shall have the rights to payment and the responsibilities as set
forth in Section 13.3 of the Advisory Agreement. 

20 

 

 

 

                                                                                                                                                                     
Article 15 

Assignment

This Agreement may be
assigned by the Sub-advisor (a) to an Affiliate with the consent of the
Advisor, such consent not to be unreasonably withheld or delayed, provided that
such Affiliate remains at all times thereafter an Affiliate of Phillips Edison
Limited Partnership or (b) in a manner meeting the conditions of Section 12.2(B)(2). 
This Agreement shall not be assigned by the Advisor without the consent of the
Sub-advisor, except in the case of (i) an assignment by the Advisor to the
Company whereby the Sub-advisor becomes the advisor to the Company or (ii) an
assignment by the Advisor meeting the conditions of Section 12.2(B)(2). 

                                                                                                                                                                     
Article 16 

Indemnification And
Limitation Of Liability

The indemnification and
limitation of liability provisions contained in the Advisory Agreement apply to
both the Advisor and Sub-advisor.  Both Parties agree that neither will take
any action inconsistent with such limitation of liability or indemnification
provisions.

                                                                                                                                                                     
Article 17 

Miscellaneous

17.1         
Notices.  Any notice, request, demand, approval, consent,
waiver or other communication required or permitted to be given hereunder or to
be served upon any of the Parties hereto (each a “Notice”) shall be in
writing and shall be (a) delivered in person, (b) sent by facsimile
transmission (with the original thereof also contemporaneously given by another
method specified in this Section 17.1),
(c) sent by a nationally-recognized overnight courier service, or (d) sent by
certified or registered mail (postage prepaid, return receipt requested), to
the address of such Party set forth herein.

To the Advisor:

American Realty Capital II Advisors, LLC

405 Park Avenue

New York, New York 10022

Attention:  Nicholas S. Schorsch

                   Jesse Galloway

with a copy to (which shall not constitute Notice):

Proskauer Rose LLP

Eleven Times Square

21 

 

 

 

New York, New York 10036

Attention: Peter M. Fass, Esq.

                  James P. Gerkis, Esq.

Telephone:  (212) 969-3000

Facsimile:  (212) 969-2900

To the Sub-advisor:

Phillips Edison NTR LLC

11501 Northlake Drive

Cincinnati, OH 45249

with a copy to (which shall not constitute Notice):

DLA Piper LLP (US)

4141 Parklake Drive , Suite 300

Raleigh, North Carolina 27612

Attention: Robert Bergdolt

Telephone: (919) 786-2002

Facsimile: (919) 786-2202

Either Party may at any time give Notice in writing to the other Party of a
change in its address for the purposes of this Section 17.1.  Each Notice shall be deemed given and effective upon
receipt (or refusal of receipt).

17.2         
Modification.  This Agreement shall not be amended, supplemented,
changed, modified, terminated or discharged, in whole or in part, except by an
instrument in writing signed by both Parties hereto, or their respective
successors or permitted assigns.  

17.3         
Severability.  The provisions of this Agreement are independent of
and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

17.4         
Construction.  The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of New York as at the
time in effect, without regard to the principles of conflicts of laws thereof.

17.5         
Entire Agreement.  This Agreement contains the entire agreement and
understanding between 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.  In all events, nothing contained herein shall be
read, construed, interpreted or applied in any manner that prevents or 

 

 

hinders the Company from qualifying as a real estate
investment trust under Section 856(c) of the Code.

17.6         
Waiver.  Neither the failure nor any delay on the part of a
Party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence.  No waiver shall be effective unless it is in writing
and is signed by the Party asserted to have granted such waiver.

17.7         
Gender.  Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires.

17.8         
Titles Not to Affect
Interpretation.  The titles of Articles and Sections contained in
this Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.

17.9         
Counterparts.  This Agreement may be executed with counterpart
signature pages or in any number of counterparts, each of which shall be deemed
to be an original as against any Party whose signature appears thereon, and all
of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterpart signature pages or
counterparts hereof, individually or taken together, shall bear the signatures
of all of the Parties reflected hereon as the signatories. 

 

[The
remainder of this page is intentionally left blank.

Signature
page follows.]

23 

 

 

 

           IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
and year first above written.

 

	
   

  	
   

  	
   

   

  
	
   

  	
   

  	
  American Realty Capital II Advisors,
  LLC

   

   

   

     By:    /s/ William Kahane______________ 

           William Kahane, President

   

  

 

	

   

  	
  Phillips Edison NTR LLC

   

   

   

     By:   /s/ R. Mark Addy________________ 

           R. Mark Addy, President

   

   

   

  

 

 

24 

 

 

 

Schedule I

Initial
O&O Budget

 

 

Phillips Edison –
ARC Shopping Center REIT, Inc. 

Estimated Issuer Costs 

(Based on $1.5 billion offering) 

Pre-Effective Period 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
    

  	
  Pre-Effective

  
	
   

  	
    

  	
  Period

  
	
  SEC Registration Fee

  	
    

  	
   

  	
  97,000

  
	
  FINRA Filing Fee

  	
    

  	
   

  	
  75,500

  
	
  Legal – Issuer

  	
    

  	
   

  	
  900,000

  
	
  Legal – Managing BD (including FINRA)

  	
    

  	
   

  	
  200,000

  
	
  Printing

  	
    

  	
   

  	
  150,000

  
	
  Accounting

  	
    

  	
   

  	
  115,000

  
	
  Blue Sky Expenses

  	
    

  	
   

  	
  50,000

  
	
  Advertising and Sales Literature

  	
    

  	
   

  	
  500,000

  
	
  Miscellaneous – Fulfillment

  	
    

  	
   

  	
   

  
	
  Seminars

  	
    

  	
   

  	
  250,000

  
	
  Other 1 – Investor Relations and Transfer Agent and Fulfillment

  	
    

  	
   

  	
  175,500

  
	
  Other 2 – Other Overhead Costs

  	
    

  	
   

  	
  202,000

  
	
  Other 3 – Due Diligence

  	
    

  	
   

  	
  200,000

  
	
   

  	
    

  	
   

  	
   

  
	
  Total Issuer Costs for the Period

  	
    

  	
  $

  	
  2,915,000

  

 

 

 

Appendix A

Form of
Advisory Agreement 

 

26REVOLVING LOAN AGREEMENT

among

PHILLIPS EDISON – ARC
SHOPPING CENTER OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership,

and

KEYBANK NATIONAL ASSOCIATION 

together with those
assignees or other lenders

becoming parties hereto pursuant

to Section 12.13, as Lenders, 

and

KEYBANK NATIONAL ASSOCIATION,

as Administrative
Agent,

and

KEYBANC CAPITAL MARKETS,

as Sole Book Runner and Lead Arranger

Entered Into as of December 21, 2012

 

 

 

REVOLVING LOAN
AGREEMENT

THIS REVOLVING LOAN AGREEMENT (“Agreement”) dated as of December 21,
2012 by and among (i) PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (the “Borrower”);
(ii) KEYBANK NATIONAL ASSOCIATION, the other lenders now or hereafter a
party hereof, together with their assignees under Section 13.13  (“Lenders”);
and (iii) KEYBANK  NATIONAL ASSOCIATION (“KeyBank”) as
contractual representative of the Lenders to the extent and in the manner
provided in Article 11  (in such capacity, the “Administrative
Agent”). 

R
E C I T A L S

WHEREAS, the Lenders are willing to make available to the
Borrower a $40,000,000 revolving loan facility, increasable as provided in
Section 2.14 below (the “Facility”), on the terms and conditions
contained herein.

NOW, THEREFORE, Borrower, Administrative Agent and Lenders agree as
follows:

ARTICLE 1.  DEFINITIONS

1.1    DEFINED TERMS.   The following capitalized terms
generally used in this Agreement shall have the meanings defined or referenced
below.  Certain other capitalized terms used only in specific sections of this
Agreement are defined in such sections.

“Acknowledgments”
means collectively, each of the Acknowledgments executed by a Subsidiary
Guarantor in favor of the Agent, acknowledging the pledge of Equity Interests
in such Subsidiary Guarantor to the Agent, such Acknowledgment to be
substantially in the form of Exhibit M  hereto, as the same may be
modified, amended or restated.

“Acquisition
Property” means any Real Estate Asset owned for a period of four (4) fiscal
quarters or less unless Borrower has designated such Real Estate Asset to be a
Stabilized Property (it being understood that once the Real Estate Asset is
designated as a Stabilized Property, such Real Estate Asset cannot thereafter
be re-designated as an Acquisition Property).  For all purposes of this
Agreement, an Acquisition Property shall not cease to be an Acquisition
Property until the beginning of the first fiscal quarter immediately following
the expiration of such four (4) quarter period, unless Borrower sooner
designates such Real Estate Asset as a Stabilized Property.  

“Acquisition Value”
means the purchase price of a Mortgaged Property that was acquired by a
Subsidiary Guarantor within ninety (90) days of the date of determination, the
equity interests in such Subsidiary Guarantor have been pledged to
Administrative Agent as Collateral, and with respect to which Mortgaged
Property the Borrower is not yet required pursuant to the provisions of
subsection (y) of Schedule 12.3 to deliver to Administrative Agent a
Mortgage and the other items described in subsection (y) of Schedule 12.3. 

“ADA” means the
Americans with Disabilities Act, of July 26, 1990, Pub. L. No. 101-336, 104
Stat. 327, 42 U.S.C. § 12101, et. seq., as amended from time to time.

“Additional Commitment
Request Notice” shall have the meaning set forth in Section 2.14(a). 

1 

 

 

 

“Additional
Guarantor” shall mean each additional Wholly Owned Subsidiary of Borrower
which becomes a Subsidiary Guarantor pursuant to Section 12.5. 

“Adjusted EBITDA”
shall mean EBITDA, annualized, net of a capital expenditure reserve equal to
$0.15 per square foot for Real Estate Assets (other than Construction in
Process).  For purposes of the calculation of Adjusted EBITDA, when calculating
EBITDA for any Real Estate Asset not owned and operated by the Borrower, any
Guarantor or by a Subsidiary of Borrower or any Guarantor for two (2) full
fiscal quarters, the EBITDA attributable to such Real Estate Asset shall be
calculated using the actual historical results for the period that the Real
Estate Asset was owned and operated by the Borrower, any Guarantor or by a
Subsidiary of Borrower or any Guarantor adjusted to equate to two (2) full
fiscal quarters.

“Adjusted Mortgaged
Property NOI” shall mean Property NOI for the immediately preceding four
(4) fiscal quarters, net of capital expenditure reserves of $0.15 per square
foot, for Real Estate Assets which are Mortgaged Properties.  For the purposes
of calculation of Adjusted Mortgaged Property NOI for any Mortgaged Property
not owned and operated by the Borrower or a Subsidiary Guarantor for four (4)
full fiscal quarters, the Adjusted Mortgaged Property NOI shall be calculated
using the net operating income for the first (1st) four (4) fiscal
quarters of Borrower’s or such Subsidiary Guarantor’s ownership of such asset
as set forth in the Appraisal for such Mortgaged Property approved by
Administrative Agent, net of capital expenditure reserves of $0.15 per square
foot for such Mortgaged Property.

“Adjusted NOI” shall mean Property NOI for the
immediately preceding two (2) fiscal quarters, annualized, net of capital
expenditure reserves of $0.15 per square foot for Real Estate Assets (other
than Construction in Process).  For purposes of the calculation of Adjusted
NOI, when calculating Property NOI for any Real Estate Asset not owned and
operated by the Borrower, any Guarantor or by a Subsidiary of Borrower or any
Guarantor for two (2) full fiscal quarters, the Property NOI attributable to
such Real Estate Asset shall be calculated using the actual historical results
for the period that the Real Estate Asset was owned and operated by the
Borrower, any Guarantor or by a Subsidiary of Borrower or any Guarantor
adjusted to equate to two (2) full fiscal quarters.  

“Administrative
Agent” means KeyBank National Association, or any successor Administrative
Agent appointed pursuant to Section 11.14. 

“Advisor” means
American Realty Capital II Advisors, LLC, a Delaware limited liability company.

“Affiliate”
means, with respect to any Person, (a) in the case of any such Person which is
a partnership or limited liability company, any partner or member in such
partnership or limited liability company, respectively holding fifty percent
(50%) or more of the voting interests therein, (b) any other Person which is
directly or indirectly controlled by, controls or is under common control with
such Person or one or more of the Persons referred to in the preceding clause
(a), (c) any other Person who is an officer, director, trustee or employee of,
or partner in, such Person or any Person referred to in the preceding clauses
(a) and (b), and (d) any other Person that is a trust solely for the benefit of
one or more Persons referred to in clause (d) and of which such Person is sole
trustee; provided, however, in no event shall Administrative
Agent, any Lender or any of their respective Affiliates be an Affiliate of
Borrower.  For purposes of this definition, “control” (including with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power 

2 

 

 

 

to direct or cause the direction of the management and
policies of a Person, through the ownership of voting securities. 

“Agreement”
shall have the meaning given to such term in the preamble hereto.

“Alternate Rate”
is a rate of interest per annum four percent (4%) in excess of the applicable
Effective Rate in effect from time to time.

“Applicable LIBO
Rate” is the rate of interest, rounded to the nearest whole multiple of
one-one hundredth of one percent (0.01%), equal to the  sum  of:
(a) the LIBO Margin plus  (b) the LIBO Rate.

“Applicable Margin”
for an advance of the Facility bearing interest by reference to the LIBO Rate
or the Base Rate shall for any date be as set forth below based on the ratio of
the Total Indebtedness of Borrower to the Gross Asset Value of Borrower:

	
   Pricing Level

   	
   Ratio

   	
   LIBO Margin for LIBO Rate Advances

   	
   Base Rate Margin for Base Rate Advances

   
	
  Pricing Level 1

  	
  Less than or equal to 50%

  	
  2.00%

  	
  1.00%

  
	
  Pricing Level 2

  	
  Greater than 50% but less than or equal to 60%

  	
  2.25%

  	
  1.25%

  
	
  Pricing Level 3

  	
  Greater than 60% but less than or equal to 65%

  	
  2.50%

  	
  1.50%

  
	
  Pricing Level 4

  	
  Greater than 65% 

  	
  3.00%

  	
  2.00%

  

 

The initial Applicable
Margin shall be at Pricing Level 2.  The Applicable Margin shall not be
adjusted based upon such ratio, if at all, until the first (1st) day of the
first (1st) month following the delivery by Borrower to the Administrative
Agent of the Compliance Certificate after the end of a calendar quarter.  In the
event that Borrower shall fail to deliver to the Administrative Agent a
quarterly Compliance Certificate on or before the date required by Section
9.10, then without limiting any other rights of the Administrative
Agent and the Lenders under this Agreement, the Applicable Margin for Loans
shall be at Pricing Level 4 until such failure is cured within any applicable
cure period, or waived in writing by the Requisite Lenders, in which event the
Applicable Margin shall adjust, if necessary, on the first (1st) day of the
first (1st) month following receipt of such Compliance Certificate.

In the event that the
Administrative Agent or the Borrower determines that any financial statements
previously delivered were incorrect or inaccurate (regardless of whether this
Agreement or the Commitments are in effect when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a
higher Applicable Margin for any period (an “Applicable Period”) than
the Applicable Margin applied for such Applicable Period, then (i) the
Borrower shall as soon as practicable deliver to the Administrative Agent the
corrected financial statements for such Applicable Period, (ii) the Applicable
Margin shall be determined as if the Pricing Level for such higher Applicable
Margin were applicable for such Applicable Period, and (iii) the Borrower shall
within three (3) Business Days of demand thereof by the Administrative Agent
pay to the Administrative Agent the accrued additional amount owing as a result
of such increased Applicable Margin for such Applicable Period, which 

3 

 

 

 

payment shall be promptly applied by the Administrative
Agent in accordance with this Agreement.

“Application for
Payment” shall have the meaning given to such term in Exhibit C
attached hereto.

“Appraisal”
means an MAI appraisal of the value of a Real Estate Asset, determined on an
“as-is” value basis, performed by an independent appraiser selected by the
Administrative Agent who is not an employee of any Guarantor, Borrower or any
of their Subsidiaries, the Administrative Agent or a Lender, the form and
substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Lenders and otherwise acceptable to the Administrative Agent.

“Appraised Value”
means the “as-is” value of a Real Estate Asset determined by the most recent
Appraisal of such Real Estate Asset, obtained pursuant to Section 2.7, Section
12.2, Section 12.3, or otherwise pursuant to this Agreement, subject,
however, to such changes or adjustments to the value determined thereby as may
be required by the appraisal department of the Administrative Agent in its good
faith business judgment.

“Arranger” means
KeyBank Capital Markets or any successor.

“Assignment of
Leases and Rents” means each of the assignments of leases and rents from Borrower
or a Subsidiary Guarantor that is an owner of a Mortgaged Property to the
Administrative Agent, as it may be modified or amended, pursuant to which there
shall be assigned to the Administrative Agent for the benefit of the Lenders a
security interest in the interest of the Borrower or such Subsidiary Guarantor,
as the case may be, as lessor with respect to all Leases of all or any part of
each Mortgaged Property, each such assignment to be substantially in the form
of Exhibit P, with such changes thereto as Administrative Agent may
reasonably require as a result of state law or practice or type of asset.

“Assignee” shall
have the meaning given in Section 13.13(c). 

“Assignment and
Assumption Agreement” means an Assignment and Assumption Agreement among a
Lender, an Assignee and the Administrative Agent, substantially in the form of Exhibit D. 

“Authorized Officer”
shall have the meaning set forth in Section 2.8(f). 

“Bankruptcy Code”
means the Bankruptcy Reform Act of 1978 (11 USC § 101-1330) as now or hereafter
amended or recodified.

“Base Rate”
means the greater of (a) the fluctuating annual rate of interest announced from
time to time by the KeyBank at KeyBank’s Head Office as its “prime rate” or (b)
one half of one percent (0.5%) above the Federal Funds Effective Rate.  The
Base Rate is a reference rate and does not necessarily represent the lowest or
best rate being charged to any customer.  Any change in the rate of interest
payable hereunder resulting from a change in the Base Rate shall become effective
as of the opening of business on the day on which such change in the Base Rate
becomes effective, without notice or demand of any kind.  Notwithstanding the
foregoing, the Base Rate plus the Base Rate Margin may not be less than the
then current 30-day LIBO Rate plus the LIBO Margin.

4 

 

 

“Base Rate Margin”
shall be the applicable margin for advances of the Facility bearing interest by
reference to the Base Rate as set forth in the definition of Applicable Margin.

“Borrower” shall
have the meaning given in the preamble hereto.

“Borrower’s  Partnership
Agreement” means that certain Limited Partnership Agreement of Phillips
Edison - ARC Shopping Center Operating Partnership, L.P., entered into as of
December 3, 2009, together with such additional amendments as may be
permitted hereunder or approved by Administrative Agent or Requisite Lenders
(as applicable) in the future in accordance with the terms of this Agreement.

“Borrowing Base”
means the Initial Mortgaged Properties plus any Real Estate Assets subsequently
added as Mortgaged Properties pursuant to Section 12.3 of this Agreement
and minus any Mortgaged Properties subsequently released pursuant to Section
12.4 of this Agreement.

“Borrowing Base
Acquisition Value Limit” means for Eligible Real Estate owned by a
Subsidiary Guarantor included in the Borrowing Base, which Eligible Real Estate
is not subject to a Mortgage but as to which all of the Equity Interests of
Borrower, directly or indirectly, in such Subsidiary Guarantor have been
pledged pursuant to the Pledge Agreement and as to which the Borrower or such
Subsidiary Guarantor is not yet required pursuant to subsection (y) of Schedule
12.3 to deliver to Administrative Agent a Mortgage and the other items
described in subsection (y) of Schedule 12.3, the amount which is
fifty-five percent (55%) of the sum of the Acquisition Value of each such
Mortgaged Property.

“Borrowing Base
Appraised Value Limit” means for Eligible Real Estate owned by the Borrower
or any Subsidiary Guarantor included in the Borrowing Base subject to a
Mortgage, the amount which is sixty-five percent (65%) of the sum of the
Appraised Values of each such Mortgaged Property subject to a Mortgage as most
recently determined under Section 2.7, Section 12.2, Section
12.3, or otherwise pursuant to this Agreement, as applicable.

“Borrowing Base
Availability” means the amount which is the lowest of (i) the sum of the
Borrowing Base Appraised Value Limit plus the Borrowing Base Acquisition Value
Limit, and (ii) the Debt Service Coverage Amount.  Notwithstanding anything in
this Agreement to the contrary, in the event that Borrower shall fail to comply
with the provisions of clause (y) of Schedule 12.3 hereto, the Borrowing
Base Availability attributable to the applicable Mortgaged Property commencing
as of the date of such non-compliance shall be zero.

“Building” shall
mean with respect to each Real Estate Asset, all of the buildings, structures
and improvements now or hereafter located thereon.

“Business Day”
means a day of the week (but not a Saturday, Sunday or holiday) on which the
offices of Administrative Agent in Cleveland, Ohio are open to the public for
carrying on substantially all of Administrative Agent’s business functions. 
Unless specifically referenced in this Agreement as a Business Day, all
references to “days” shall be to calendar days.

“Cash and Cash
Equivalents” means (i) unrestricted cash, (ii) securities issued or
directly or fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof); (iii) unrestricted
domestic and LIBOR certificates of deposit and time deposits, bankers’
acceptances and floating rate certificates of deposit issued by any commercial
bank organized under the laws of the United States, any state thereof, the
District of Columbia, any foreign bank, or its branches or agencies (fully
protected against currency 

5 

 

 

 

fluctuations), which, at the
time of acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by
Moody’s (any such bank an “Approved Bank”), maturing within one year
from the date of acquisition, (iv) commercial paper issued by any Approved Bank
or by the parent company of any Approved Bank and commercial paper issued by,
or guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent thereof by S&P or
at least P-1 or the equivalent thereof by Moody’s, or guaranteed by any
industrial company with a long term unsecured debt rating of at least A or A2,
or the equivalent of each thereof, from S&P or Moody’s, as the case may be,
and in each case maturing within one year after the date of acquisition, (v)
marketable direct obligations issued by the District of Columbia or any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody’s and (vi) investments
in money market funds substantially all the assets of which are comprised of
securities of the type described in any one or more of clauses (i) through (vi)
above, but without regard to the maturity date of the underlying assets of any
such money market fund.

“Cash Collateral
Agreement” means, that certain Cash Collateral Account and Control
Agreement, dated of even date herewith, by and among Borrower, the Subsidiary
Guarantors, the Additional Guarantors hereafter a party thereto and
Administrative Agent, in its capacity as administrative agent and in its
capacity as depository bank.

“Change
of Control” means the occurrence of any of the following:  

(a)               
Borrower or any Guarantor
consolidates with, is acquired by, or merges into or with any Person, except
(i) the merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower where the Borrower is the surviving entity
and (ii) the merger or consolidation of two or more Subsidiaries of the
Borrower; or 

(b)              
any Person (including a Person’s
Affiliates and associates) or group (as that term is understood under Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the rules and regulations thereunder) (other than any current holder of any
of the foregoing interests) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based on
voting power, in the event different classes of stock or interests shall have
different voting powers) of the voting stock or voting interests of PE-ARC
equal to at least twenty percent (20.0%);

(c)               
as of any date a majority of the
Board of Directors or Trustees or similar body (the “Board”) of PE-ARC
consists of individuals who were not either (i) directors or trustees of PE-ARC
as of the corresponding date of the previous year, or (ii) selected or
nominated to become directors or trustees by the Board of PE-ARC of which a
majority consisted of individuals described in clause (c)(i) above, or (iii)
selected or nominated to become directors or trustees by the Board of PE-ARC,
which majority consisted of individuals described in clause (c)(i) above and
individuals described in clause (c)(ii) above (excluding, in the case of both
clause (ii) and (iii) above, any individual whose initial nomination for, or
assumption of office as, a member of the Board occurs as a result of an actual
or threatened solicitation of proxies or consents for the election or removal
of one or more directors or trustees by any Person or group other than a
solicitation for the election of one or more directors or trustees by or on
behalf of the Board); or

6 

 

 

 

(d)              
PE-ARC (i)
fails to own directly or indirectly, free of any lien, encumbrance or other
adverse claim, at least ninety percent (90%) of the economic, voting and
beneficial interests of Borrower, (ii) fails to be the sole owner of General
Partner, or (iii) shall fail to control the management and policies of General Partner;
or

(e)               
The General Partner (i) fails to own directly or indirectly, free of any lien,
encumbrance or other adverse claim, at least .01% of the economic, voting and
beneficial interests of Borrower, (ii) fails to be the sole general partner of
Borrower, or (iii) shall fail to control the management and policies of
Borrower; or

(f)               
The Borrower shall no longer be
managed and advised by Advisor, or (ii) the Advisor shall no longer be directly
or indirectly majority owned and controlled by American Realty Capital II LLC,
or (iii) both of William M. Kahane and Nicholas Schorsch shall cease to be
active on a daily basis in the management of the Advisor and a competent and
experienced executive shall not be approved by the Administrative Agent within
six (6) months of such event, which approval the Administrative Agent shall not
unreasonably withhold, condition or delay; or

(g)              
The Borrower shall no longer be
managed and advised by Sub-Advisor, or (ii) the Sub-Advisor shall no longer be
directly or indirectly majority owned and controlled by Phillips Edison Limited
Partnership, or (iii) both of Michael C. Phillips and Jeffrey S. Edison shall
cease to be active on a daily basis in the management of the Sub-Advisor and a
competent and experienced executive shall not be approved by the Administrative
Agent within six (6) months of such event, which approval the Administrative
Agent shall not unreasonably withhold, condition or delay; or

(h)              
Borrower (i) fails to own directly
or indirectly, free of any lien, encumbrance or other adverse claim, at least
one hundred percent (100%) of the economic, voting and beneficial interest of
each Subsidiary Guarantor, or (ii) shall fail to control the management and
policies of each Subsidiary Guarantor.

(i)                
Both of Michael C. Phillips and
Jeffrey S. Edison shall cease to be CEO, President or Chairman, of PE-ARC and a
competent and experienced director or officer, as applicable, shall not be
approved by the Requisite Lenders within six (6) months of such event, which
approval the Requisite Lenders shall not unreasonably withhold, condition or
delay.

“Collateral”
means all of the property, rights and interests of Borrower and the Subsidiary
Guarantors which are or are intended to be subject to the security interests
and liens created by the Security Documents.

“Collateral Account”
means a special deposit account established by the Administrative Agent
pursuant to Section 10.8 and under its sole dominion and control.

“Commitment”
means, as to any Lender, such Lender’s obligation to make advances pursuant to Section 2.1,
in an amount up to, but not exceeding the amount set forth for such Lender on Schedule 1.1 
attached hereto as such Lender’s “Commitment Amount”, as the same may be
changed from time to time in accordance with this Agreement, or as set forth in
the applicable Assignment and Assumption Agreement, as the same may be changed
as appropriate to reflect any assignments to or by such Lender effected in
accordance with Section 13.13  hereof.

7 

 

 

 

“Commitment
Amount” means the amount set forth as such for each Lender on Schedule 1.1 
hereof, which in the aggregate as of the date of this Agreement equals
$40,000,000.00.  The Commitment Amount may be increased as provided in Section 2.14. 

“Commitment
Increase” means an increase in the Commitment Amount to not more than
$250,000,000.00 pursuant to Section 2.14. 

“Commitment Increase
Date” shall have the meaning set forth in Section 2.14(a). 

“Compliance
Certificate” shall have the meaning set forth in Section 9.10. 

“Condemnation
Proceeds” means all compensation, awards, damages, judgments and proceeds
awarded to the Borrower or a Subsidiary Guarantor by reason of any Taking, net
of all reasonable and customary amounts actually expended to collect the same,
including, without limitation, reasonable and customary amounts expended in
negotiating, litigating, if appropriate, or investigating the amount of such
compensation, awards, damages, judgments and proceeds.

“Construction in
Process” means any Real Estate Asset owned by Borrower or a Subsidiary
which is raw land, vacant out-parcels, or other property on which construction
of material improvements has commenced and is continuing to be performed (such
commencement evidenced by foundation excavation) without undue delay from
permit denial, construction delays or otherwise, but has not yet been completed
(as evidenced by a certificate of occupancy permitting use of such property by
the general public), including, without limitation, Property Under Development
and Redevelopment Property.  Notwithstanding the foregoing, tenant improvements
to previously constructed and/or leased Real Estate Assets shall not be
considered Construction in Process.

“Contribution
Agreement” means that certain Contribution Agreement dated of even date
herewith among the Borrower, the Guarantors and each Additional Guarantor which
may hereafter become a party thereto, as the same may be modified, amended or
ratified from time to time.

“Debt Service
Coverage Amount” means at any time determined by Administrative Agent, an
amount equal to the maximum principal loan amount amortized over a thirty (30)
year period which, when bearing interest at a rate per annum equal to the
greatest of (i) the average annual yield on ten (10) year obligations issued by
the United States Treasury for the most recently ended four (4) calendar
quarter period prior to the date of determination plus two hundred fifty (250)
basis points (2.5%), (ii) seven percent (7.0%), and (iii) the then effective
blended interest rate applicable to the Loans would be payable by the monthly
principal and interest payment amount resulting from dividing (a) Adjusted
Mortgaged Property NOI divided by 1.30, by (b) 12 (and on December 21, 2013 the
figure 1.30 shall be replaced with the figure 1.35).  Attached hereto as Schedule
1.2 is an example of the calculation of Debt Service Coverage Amount (such
example is meant only as an illustration based upon the assumptions set forth
in such example, and shall not be interpreted so as to limit the Administrative
Agent in its good faith determination of the Debt Service Coverage Amount
hereunder).  The determination of the Debt Service Coverage Amount and the
components thereof by the Administrative Agent shall, so long as the same shall
be determined in good faith, be conclusive and binding absent demonstrable
error.

“Default” shall
have the meaning given to such term in Section 10.1. 

“Defaulting Lender”
means any Lender that, as reasonably determined by the Administrative Agent,
(a) has failed to perform any of its funding obligations hereunder, 

8 

 

 

 

including in respect of its Loans or participations in
respect of Letters of Credit or Swing Loans, within two (2) Business Days of
the date required to be funded by it hereunder and such failure is continuing,
unless such failure arises out of a good faith dispute between such Lender and
either the Borrower or the Administrative Agent as to whether one or more
conditions precedent to funding has been satisfied (each of which conditions
precedent together with any applicable default shall be specifically identified
in writing by such Lender), (b) has notified the Borrower, the Administrative
Agent or any Lender that it does not intend to comply with its funding
obligations hereunder or such failure is subject to a good faith dispute as to
whether one or more conditions precedent to funding has been satisfied (each of
which conditions precedent together with any applicable default shall be
specifically identified in writing by such Lender), (c) has failed, within two
(2) Business Days after request by the Administrative Agent, to confirm in a
manner reasonably satisfactory to the Administrative Agent that it will comply
with its funding obligations; provided that, notwithstanding the provisions of Section
2.13, such Lender shall cease to be a Defaulting Lender upon the
Administrative Agent’s receipt of confirmation that such Defaulting Lender will
comply with its funding obligations, or (d) has, or has a direct or indirect
parent company that has, (i) become the subject of a proceeding under any
bankruptcy, insolvency, reorganization, liquidation, conservatorship,
assignment for the benefit of creditors, moratorium, receivership,
rearrangement or similar debtor relief law of the United States or other
applicable jurisdictions from time to time in effect, including any law for the
appointment of the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority as receiver, conservator, trustee, administrator
or any similar capacity, (ii) had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person,
including the Federal Deposit Insurance Corporation or any other state or
federal regulatory authority acting in such capacity, charged with
reorganization or liquidation of its business or a custodian appointed for it,
or (iii) taken any action in furtherance of, or indicated its consent to,
approval of or acquiescence in any such proceeding or appointment; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a governmental authority (including any
agency, instrumentality, regulatory body, central bank or other authority) so
long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts of the United States or from the
enforcement of judgments or writs of attachment of its assets or permit such
Lender (or such governmental authority or instrumentality) to reject,
repudiate, disavow, or disaffirm any contracts or agreements made with such
Person).  Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to Section 2.13(g)) upon
delivery of written notice of such determination to the Borrower and each
Lender.

“Derivatives
Contract” means any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement.  Not in 

 

limitation
of the foregoing, the term “Derivatives Contract” includes any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement,
including any such obligations or liabilities under any such master agreement.

“Disqualifying
Environmental Event” means any release or threatened release of Hazardous
Materials, any violation of Hazardous Materials Laws or any other similar
environmental event with respect to a Real Estate Asset which is not cured
within sixty (60) days or that would cause, in Administrative Agent’s
determination, such Real Estate Asset to no longer be financeable on a
non-recourse (with customary exceptions) debt basis under the then generally
accepted underwriting standards of national insurance company or pension fund
real estate institutional lenders.

“Dividend
Reinvestment Proceeds” means dividends or other distributions, direct or
indirect, on account of any Equity Interest of any Person which any holder(s)
of such Equity Interests direct to be used, concurrently with the making of
such dividend or distribution, for the purposes of purchasing for the account
of such holder(s) additional Equity Interests in such Person or any of its
Subsidiaries.  

“Dollars” and “$”
means the lawful money of the United States of America.

“EBITDA” shall
mean the sum for the immediately preceding two (2) fiscal quarters of (a)
Borrower’s pro rata share (direct or indirect) of Net Income generated from
Real Estate Assets for each of the two preceding fiscal quarters (excluding
extraordinary gains or losses), after adjusting for straight-lining of rents,
and without reduction for preferred dividend payments, and (b) GAAP interest
expense, income taxes, depreciation and amortization, and other non-cash
charges.  EBITDA of Borrower shall only include Borrower’s Equity Percentage of
the foregoing items of its Subsidiaries that are not Wholly Owned Subsidiaries
and of Joint Ventures of Borrower.  Notwithstanding the foregoing, acquisition
costs incurred by the Borrower in connection with the acquisition of Real Estate
Assets shall be excluded from the calculation of EBITDA.

“Effective Date”
means the date of this Agreement.

“Effective Rate”
shall have the meaning given in Section 2.8(e). 

“Eligible Assignee”
means any Person that is: (a) an existing Lender; (b) a commercial bank, trust
company, savings and loan association, savings bank, insurance company,
investment bank or pension fund organized under the laws of the United States
of America, any state thereof or the District of Columbia, and having total
assets in excess of $5,000,000,000; or (c) a commercial bank organized under
the laws of any other country which is a member of the Organization for
Economic Co-operation and Development, or a political subdivision of any such
country, and having total assets in excess of $10,000,000,000, provided that
such bank is acting through a branch or agency located in the United States of
America.  If such entity is not currently a Lender, such entity’s (or in the
case of a bank which is a subsidiary, such bank’s parent’s) senior unsecured
long term indebtedness must be rated BBB or higher by S&P, Baa2 or
higher by Moody’s or the equivalent or higher of either such rating by another
rating agency acceptable to the Administrative Agent.

10 

 

 

“Eligible
Real Estate” means a Real Estate Asset which at all times satisfies the
following requirements:

(i)      which is
wholly-owned in fee (or leased under a Ground Lease) by the Borrower or a
Subsidiary Guarantor;

(ii)      which is
located within the contiguous 48 States of the continental United States or the
District of Columbia;

(iii)   which is
improved by an income-producing necessity-based neighborhood or community
shopping center;

(iv)    as to which all
of the representations set forth in Article 6 of this Agreement
concerning Mortgaged Property are true and correct;

(v)      as to which
the Administrative Agent has received and approved all Eligible Real Estate
Qualification Documents, or will receive and approve them prior to inclusion of
such Real Estate Asset in the Borrowing Base; and

(vi)   as to which,
notwithstanding anything to the contrary contained herein, the Requisite
Lenders have approved for inclusion in the Borrowing Base.

“Eligible Real
Estate Qualification Documents” shall refer to the items set forth on Schedule
12.3 attached hereto.

“Equity Interests”
with respect to any Person, any share of capital stock of (or other ownership
or profit interests in) such Person, any warrant, option or other right for the
purchase or other acquisition from such Person of any share of capital stock of
(or other ownership or profit interests in) such Person, any security
convertible into or exchangeable for any share of capital stock of (or other
ownership or profit interests in) such Person or warrant, right or option for
the purchase or other acquisition from such Person of such shares (or such
other interests), and any other ownership or profit interest in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such share, warrant,
option, right or other interest is authorized or otherwise existing on any date
of determination.

“Equity Offering”
means the issuance and sale after the Effective Date by PE-ARC of any Equity
Interests of PE-ARC.

“Equity Percentage”
means the aggregate ownership percentage of the Borrower, a Guarantor or their
respective Subsidiaries in each Subsidiary or Joint Venture, as the case may
be.

“ERISA” means
the Employee Retirement Income Security Act of 1974, as in effect from time to
time.

“ERISA Group”
means all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control that are treated
as a single employer under Section 414 of the Internal Revenue Code.

“ERISA Plan”
means any employee benefit plan subject to Title I of ERISA. 

“Excluded FATCA Tax”
shall mean any tax, assessment or other governmental charge imposed on a Lender
under FATCA, to the extent applicable to the transactions contemplated by this
Agreement, that would not have been imposed but for a failure by a Lender (or
any financial 

11 

 

 

 

institution through which any payment is
made to such Lender) to comply with the requirements of FATCA.

“Excluded Subsidiary”
means any Subsidiary of the Borrower which is prohibited from guaranteeing the
indebtedness of any other Person pursuant to (a) any document, instrument or
agreement evidencing Secured Indebtedness, (b) a provision of such Subsidiary’s
organizational documents included therein as a condition to the extension of
such Secured Indebtedness, or (c) pursuant to the joint venture agreement
of such Subsidiary if it is a joint venture.  For the purposes of this
Agreement, all Minority Holdings and subsidiaries of Minority Holdings are
Excluded Subsidiaries.

“Existing Credit
Agreement” means that certain Revolving Loan Agreement dated as of July 2,
2012, among Borrower and KeyBank, individually and as administrative agent, as
amended or modified from time to time.

“Extension Option”
shall have the meaning ascribed thereto in Section 2.7(b)  hereof.  

“Extended Maturity
Date” means the then applicable Extended Maturity Date as provided in Section 2.7(b). 
 

“Facility” shall
have the meaning given to such term in recitals hereto.

“FATCA” means
Sections 1471 through 1474 of the Internal Revenue Code.

“Federal Funds
Effective Rate” means, for any day,
the rate per annum (rounded upward to the nearest one-hundredth of one percent
(1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day
as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank in substantially the same
manner as such Federal Reserve Bank computes and announces the weighted average
it refers to as the “Federal Funds Effective Rate.”

“Fee Letter”
means that certain Agreement Regarding Fees of even date herewith between
Borrower and KeyBank.

“Fee Owner”
shall have the meaning set forth in Section 6.34(a). 

“Fixed Charges”
means, for any Person, for the immediately preceding two (2) prior fiscal
quarters, annualized, the sum of (a) Interest Expense and (b) the aggregate of
all scheduled principal payments on Total Indebtedness (but excluding (i)
balloon payments of principal due upon the stated maturity of any Total
Indebtedness, (ii) payments of principal outstanding under this facility or
(iii) payments of principal outstanding as a result of the reduction of any
advance rate pursuant to the terms of the loan documents evidencing such Total
Indebtedness) of such Person according to GAAP made or required to be made
during such fiscal period, measured on a consolidated basis, and (c) the
aggregate of all dividends payable on the preferred stock of Borrower.  When
calculating Fixed Charges for any Real Estate Asset not owned and operated by
the Borrower, any Guarantor or by a Subsidiary of Borrower or any Guarantor for
two (2) full fiscal quarters, the Fixed Charges related to debt and/or
preferred equity used to finance the acquisition of such Real Estate Assets
shall be calculated using the actual historical results for the period that the
Real Estate Asset was owned and operated by the Borrower, any Guarantor or by a
Subsidiary of Borrower or any Guarantor adjusted to equate to two (2) full
fiscal quarters.  Further, Fixed Charges of Borrower shall also include
Borrower’s Equity Percentage of Fixed 

12 

 

 

 

Charges of any
Subsidiary of Borrower that is not a Wholly Owned Subsidiary and of any Joint
Venture of Borrower.

“Fixed Rate” is
the Applicable LIBO Rate as accepted by Borrower as an Effective Rate for a
particular Fixed Rate Period and Fixed Rate Portion.

“Fixed Rate
Commencement Date” means the date upon which the Fixed Rate Period
commences.

“Fixed Rate Notice”
is a written notice in the form shown on Exhibit F  hereto which
requests a Fixed Rate for a particular Fixed Rate Period and Fixed Rate
Portion.  

“Fixed Rate Period”
is the period or periods of (a) one (1), two (2) or three (3) months; or (b)
subject to the consent of all of the Lenders, any other shorter period which
ends at the Maturity Date, which periods are selected by Borrower and confirmed
in a Fixed Rate Notice; provided that no Fixed Rate Period shall extend beyond
the Maturity Date.

“Fixed Rate Portion”
is the portion or portions of the principal balance of the Facility which
Borrower selects to have subject to a Fixed Rate, each of which is an amount
not less than the lesser of: (a) the unpaid principal balance of the Facility
not subject to a Fixed Rate; or (b) One Hundred Thousand Dollars
($100,000.00), and is an even multiple of Ten Thousand Dollars ($10,000.00) in
excess thereof.  

“Fixed Rate Price
Adjustment” shall have the meaning set forth in Section 2.8(h). 

“Fixed Rate Taxes”
are, collectively, all withholdings, interest equalization taxes, stamp taxes
or other taxes (except income and franchise taxes) imposed by any domestic or
foreign governmental authority and related in any manner to a Fixed Rate.

“Fronting Exposure” means at any time there is a Defaulting Lender, (a)
with respect to the Issuing Lender, such Defaulting Lender’s Pro Rata Share of
the outstanding Letter of Credit Liabilities other than Letter of Credit
Liabilities as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or cash collateral or other credit support
acceptable to the Issuing Lender shall have been provided in accordance with
the terms hereof and (b) with respect to the Swing Loan Lender, such Defaulting
Lender’s Pro Rata Share of Swing Loans other than Swing Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders, repaid by the Borrower or for which cash collateral or other credit
support acceptable to the Swing Loan Lender shall have been provided in
accordance with the terms hereof.

“Funding Date”
shall have the meaning given to such term in Exhibit C attached hereto.

“Funds from
Operations” means, with respect to any Person for any period, an amount
equal to the Net Income (or Loss) of such Person for such period, computed in
accordance with GAAP, excluding gains and losses from sales of depreciated
property other than out lot sales, non-cash impairment charges, and other
non-cash charges, and gains from Derivatives Contracts, plus 
depreciation and amortization and non-cash amortization of transaction expenses
arising from the creation of new investment funds, and after adjustments for
unconsolidated partnerships and joint ventures.  Adjustments for unconsolidated
partnerships and joint ventures will be recalculated to reflect funds from
operations on the same basis.  Funds from Operations shall be reported in
accordance with NAREIT policies unless otherwise agreed to above in this
definition.  Notwithstanding the foregoing, acquisition costs incurred by the
Borrower in connection with the 

13 

 

 

 

acquisition of Real
Estate Assets shall be excluded from the calculation of Funds from Operations.

“GAAP” means, as
of any date of determination, accounting principles (a) set forth as generally
accepted in the currently effective Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board, or (c) that are then approved by such other entity
as may be approved by a significant segment of the accounting profession in the
United States of America.  The term “consistently applied” as used in
connection therewith, means that the accounting principles applied are
consistent in all material respects with those applied at prior dates or for
prior periods.

“General Partner”
means Phillips Edison Shopping Center OP GP LLC, a Delaware limited liability
company, or any successor general partner of Borrower approved by
Administrative Agent in accordance with this Agreement.

“Governmental
Authority” means any nation or government, any federal, state, local,
municipal or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

“Gross Asset Value”
will be defined as the sum of the following of Borrower, without duplication:

i)       
     Operating Property Value;

ii)       the aggregate sums expended on the
construction of Construction in Process, including land acquisition costs;
provided that for purposes of making any calculation under this Agreement, the
amount attributable to Construction in Process held by Minority Holdings that
are not consolidated with Borrower in accordance with GAAP will be equal to
(without duplication) the sum of (a) the Borrower contributed equity,
(b) the Borrower’s pro rata share of debt from items that are not
consolidated in accordance with GAAP, (c) the Borrower’s Contingent Obligations
related to items that are not consolidated in accordance with GAAP (to the
extent not redundant with clause (b) above), plus  (d) any non-Affiliated
co-venturer’s equity in such items that are not so consolidated to the extent
that such co-venturer’s share of debt was included in the calculation of the
Borrower’s Total Indebtedness;

iii)     The cost of unimproved entitled land holdings
held for development (carried at cost), not to exceed five percent (5.0%) of
Gross Asset Value; 

iv)    The contractual purchase price of properties
subject to purchase obligations, repurchase obligations, and forward
commitments to the extent such obligations are accounted for under Total
Indebtedness;

(v)   The book value of Mortgage Notes, not to exceed
ten percent (10%) of Gross Asset Value; and

(vi)    Unrestricted Cash and Cash Equivalents.

For purposes of this
definition, Joint Ventures and non-Wholly Owned Subsidiaries are measured at
the greater of Borrower’s Equity Percentage in such entity or the percentage of
Total Indebtedness guaranteed by Borrower relating to such entity.

 

 

“Ground
Lease” means any ground lease approved by Administrative Agent pursuant to
which a Borrower or a Subsidiary Guarantor leases a Mortgaged Property.

“Guarantor”
means PE-ARC, General Partner, the Subsidiary Guarantors, the Additional
Guarantors and any other person or entity who, or which, in any manner, is or
becomes obligated to Lenders under any guaranty now or hereafter executed in
connection with respect to the Facility (collectively or severally as the
context thereof may suggest or require).

“Guaranty” means
that certain Guaranty of Payment and Performance given by PE-ARC, General
Partner and each Subsidiary (and, at the option of Administrative Agent, any
individual Guaranty of Payment and Performance given by an individual
Subsidiary) which has executed or hereafter executes the same to and for the
benefit of Administrative Agent and the Lenders as the same may be modified,
amended, restated or ratified.

“Hazardous Materials”
shall have the meaning given to such term in Section 7.1(a).  

“Hazardous Materials
Claims” shall have the meaning given to such term in Section 7.1(c).
 

“Hazardous Materials
Laws” shall have the meaning given to such term in Section 7.1(b). 

“Increase Notice” shall have the meaning set forth in Section
2.14(a). 

“Indemnity
Agreement” shall mean the Indemnity
Agreement Regarding Hazardous Materials made by the Borrower and Guarantors, in
favor of the Administrative Agent and the Lenders, as the same may be modified,
amended or ratified.

“Initial Maturity
Date” shall mean December 21, 2015.

“Initial Mortgaged
Properties” shall mean the Initial
Mortgaged Properties described on Schedule 1.3 hereto. 

“Insurance Proceeds” shall mean all insurance proceeds, damages and claims
and the right thereto under any insurance policies relating to any portion of
any Collateral, net of all reasonable and customary amounts actually expended
to collect the same, including, without limitation, reasonable and customary
amounts expended in negotiating, litigating, if appropriate, or investigating
the amount of such insurance, proceeds, damages and claims.

“Interest Expense”
means all paid, accrued or capitalized
interest expense on such Person’s Total Indebtedness (whether direct, indirect
or contingent, and including, without limitation, interest on all convertible
debt but excluding amortization of financing costs).  

“Investments” means with respect to any Person, all shares of
capital stock, evidences of Indebtedness and other securities issued by any
other Person and owned by such Person, all loans, advances, or extensions of
credit to, or contributions to the capital of, any other Person, all purchases
of the securities or business or integral part of the business of any other
Person and commitments and options to make such purchases, all interests in
real property, and all other investments; provided, however, that
the term “Investment” shall not include (i) equipment, inventory and other
tangible personal property acquired in the ordinary course of business,
(ii) current trade and customer accounts receivable for services rendered
in the ordinary course of business and payable in accordance with customary
trade terms, or (iii) operating Leases (of real or personal property) entered
into by such Person in the ordinary course of business as a lessee.  In
determining the aggregate amount of Investments outstanding at any particular
time:  (a) there 

15 

 

 

 

shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (b) there shall be
deducted in respect of each Investment any amount received as a return of
capital; (c) there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as dividends, interest
or otherwise, except that accrued interest included as provided in the
foregoing clause (a) shall be deducted when paid; and (d) there shall
not be deducted in respect of any Investment any decrease in the value thereof.

“Issuing Lender” shall be KeyBank, in its capacity as the Lender
issuing the Letters of Credit and any successor thereto.

“Joinder Agreement” shall mean the Joinder Agreement with respect to the
Guaranty, the Contribution Agreement, the Cash Collateral Agreement, and the
Indemnity Agreement to be executed and delivered pursuant to Section 12.5
by any Additional Guarantor, such Joinder Agreement to be substantially in the
form of Exhibit J  hereto.

“Joint Venture”
means any Person in which the Borrower or any of its Subsidiaries has a direct
or indirect ownership interest which is not a Subsidiary of the first person
and the accounts of which are not consolidated with Borrower or such Subsidiary
in accordance with GAAP.  As of the Effective Date, the only Joint Venture is
PECO-ARC Joint Venture.

“KeyBank” shall
have the meaning given to such term in the preamble hereto.

“Leases” means leases, licenses and agreements, whether
written or oral, relating to the use or occupation of space in any Building or
of any Real Estate Asset.

“Lender” means
each financial institution from time to time party hereto as a “Lender”,
together with its respective successors and permitted assigns.  With respect to
matters requiring the consent or approval of all Lenders at any given time, all
then existing Defaulting Lenders will be disregarded and excluded, and, for
voting purposes only, “all Lenders” shall be deemed to mean “all Lenders other
than Defaulting Lenders”.  The Issuing Lender and the Swing Loan Lender shall
each be a Lender.

“Letter of Credit” means any standby letter of credit issued at the
request of the Borrower and for the account of the Borrower in accordance with Section
2.6. 

“Letter of Credit
Liabilities” means at any time and in
respect of any Letter of Credit, the sum of (a) the maximum undrawn face
amount of such Letter of Credit plus (b) the aggregate unpaid principal
amount of all drawings made under such Letter of Credit which have not been
repaid (including repayment by a Loan).  For purposes of this Agreement, a
Lender (other than the Lender acting as the Issuing Lender) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation
interest in the related Letter of Credit under Section 2.6, and the
Lender acting as the Issuing Lender shall be deemed to hold a Letter of Credit
Liability in an amount equal to its retained interest in the related Letter of
Credit after giving effect to the acquisition by the Lenders other than the
Lender acting as the Issuing Lender of their participation interests under such
Section.

“Letter of Credit
Request” shall have the meaning set
forth in Section 2.6(a). 

“Letter of Credit
Sublimit” means the sum of $4,000,000.00, as the same may be changed from
time to time in accordance with the terms of this Agreement.

“Leverage Ratio”
means Total Indebtedness of Borrower and its Subsidiaries divided by Gross
Asset Value of Borrower.  

 

 

“LIBO
Margin” means the applicable margin for advances of the Facility bearing
interest by reference to the LIBO Rate as set forth in the definition of
Applicable Margin.  

“LIBO Rate” is the average rate as shown in Reuters Screen
LIBOR01 Page (or any successor service, or if such Person no longer reports
such rate as determined by KeyBank, by another commercially available source
providing such quotations approved by KeyBank) at which deposits in U.S.
dollars are offered by first class banks in the London Interbank Market at
approximately 11:00 a.m. (London time) on the day that is two (2) LIBOR
Business Days prior to the first day of such Fixed Rate Period with a maturity
approximately equal to such Fixed Rate Period and in an amount approximately
equal to the amount to which such Fixed Rate Period relates, adjusted for
reserves and taxes if required by future regulations.  If such service or such
other Person approved by KeyBank described above no longer reports such rate or
KeyBank determines in good faith that the rate so reported no longer accurately
reflects the rate available to KeyBank in the London Interbank Market, the Loan
shall accrue interest at the Base Rate plus the Base Rate Margin for the Loan. 
For any period during which a Reserve Percentage shall apply the LIBO Rate with
respect to such Fixed Rate Portion shall be equal to the amount determined
above divided by an amount equal to 1 minus the Reserve Percentage.

“LIBOR Business Day” means any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London,
England.

“Lien” means any
mortgage, deed of trust, security deed, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance (including, but not limited
to, easements, rights-of-way, zoning restrictions and the like), lien
(statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including without
limitation any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, any restriction
of sale or encumbrance, any pledge of equity interests in the owner of the
property, and the filing of any financing statement or document having similar
effect (other than a financing statement filed by a “true” lessor pursuant to
Section 9408 (or a successor section) of the Uniform Commercial Code)
naming the owner of the asset to which such Lien relates as debtor, under the
Uniform Commercial Code or other comparable law of any jurisdiction.

“Loan” and “Loans”  mean the Revolving Credit Loans
and the Swing Loan (or Loans), as the case may be.

“Loan Account”
shall have the meaning ascribed thereto in Section 2.11. 

“Loan Documents”
means those documents, as hereafter amended, restated, supplemented, replaced
or modified, properly executed and in recordable form, if necessary, now or
hereafter executed or delivered by Borrower or a Guarantor in connection with
the Facility, including, without limitation, this Agreement, the Notes, the
Security Documents and the Indemnity Agreement.

“Loan Party”
means Borrower or any Guarantor.

“Major Tenant” means a tenant of the Borrower or any Subsidiary
Guarantor which is an anchor tenant or which leases space in a Mortgaged
Property pursuant to a Lease which entitles it to occupy 10,000 square feet or
more of the net rentable area of such Mortgaged Property.

17 

 

 

 

“Management Agreements” means
agreements to which any Person that owns a Mortgaged Property is a party,
whether written or oral, providing for the management of the Mortgaged
Properties or any of them.

“Material
Acquisition” means an acquisition by Borrower in a single transaction of
Real Estate Assets permitted under this Agreement having a purchase price that
exceeds the greater of (a) $50,000,000 and (b) an amount equal to ten percent
(10%) of Gross Asset Value prior to such acquisition.

“Material Adverse
Effect” means a material adverse effect on (a) the business, properties,
assets (including, without limitation, the Real Estate Assets), condition
(financial or otherwise) and results of operations of Borrower, Guarantor and
their Subsidiaries considered as a whole; (b) the ability of Borrower or any
Guarantor to perform any of its material obligations under the Loan Documents;
or (c) the validity or enforceability of any of the Loan Documents or the
rights or remedies of Administrative Agent or the Lenders thereunder; or (d)
the creation, perfection or priority of any security interest of Administrative
Agent in any Collateral.

“Material Subsidiary”
means any Subsidiary of the Borrower which has assets that constitute five
percent (5%) or more of Gross Asset Value and is not an Excluded Subsidiary.

“Maturity Date”
means the Initial Maturity Date, as same may be extended to the Extended
Maturity Date, in accordance with the provisions of this Agreement.

“Minimum Net Worth”
means Borrower’s Gross Asset Value minus Total Indebtedness, measured quarterly
on a consolidated basis.

“Minority Holdings”
means partnerships, joint ventures (including any Joint Venture), corporations,
limited liability companies or other business associations held or owned
directly or indirectly by a Person which are not directly or indirectly
wholly-owned by such Person.

“Moody’s” means
Moody’s Investor Services, Inc.

“Mortgage Note”
means a promissory note or other evidence of indebtedness for a loan secured by
a mortgage or deed of trust on a necessity-based neighborhood or community
shopping center located in the 48 states of the continental United States or
the District of Columbia, and which Mortgage Note includes, without limitation,
the indebtedness secured by a related first priority security instrument.

“Mortgaged Property”
or “Mortgaged Properties” means at the time of determination, the
Eligible Real Estate owned or leased pursuant to a Ground Lease approved by the
Administrative Agent, by Borrower or a Subsidiary Guarantor that is security
for the Obligations pursuant to the Mortgages (or as provided in this
Agreement, pursuant to the Pledge Agreement) (including, without limitation, as
of the Effective Date, the Initial Mortgaged Properties).

“Mortgages”
means the Mortgages, Deeds to Secure Debt and/or Deeds of Trust from the
Borrower or a Subsidiary Guarantor to the Administrative Agent for the benefit
of the Lenders (or to trustees named therein acting on behalf of the
Administrative Agent for the benefit of the Lenders), as the same may be
modified or amended, pursuant to which the Borrower or a Subsidiary Guarantor
has conveyed or granted a mortgage lien upon or a conveyance in fee simple (or
of a leasehold, if applicable) of an Initial Mortgaged Property or any other
Mortgaged Property, as security for the Obligations, each such Mortgage to be
substantially in the form of Exhibit O attached hereto, with such
changes thereto as Administrative Agent may reasonably require as a result of
state law or practice or type of asset.

18 

 

 

“Net
Equity Proceeds” shall mean the proceeds of (a) the sale after the date
hereof of an equity interest in PE-ARC, (b) the issuance of additional
interests in PE-ARC or (c) additional direct investment in PE-ARC, in each
instance net of usual and customary closing costs and expenses. 

“Net Income (or
Loss)” means, with respect to any Person (or any asset of any Person) for
any period, the net income (or loss) of such Person (or attributable to such
asset), determined in accordance with GAAP.

“Non-Defaulting
Lender” means at any time, any Lender
that is not a Defaulting Lender at such time.

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

“Non-Recourse
Indebtedness” means, with respect to
a Person, that portion of such Person’s Total Indebtedness for borrowed money
in respect of which recourse for payment (except for customary exceptions for
fraud, misapplication of funds, environmental indemnities, and other similar
exceptions to recourse liability until a claim is made with respect thereto) is
contractually limited to specific assets of such Person encumbered by a Lien
securing such Total Indebtedness.

“Non-Stabilized
Property” means a Real Estate Asset which is not a Stabilized Property
within the terms of clause (a) of the definition of Stabilized Property.  A
Real Estate Asset shall cease to be a Non-Stabilized Property upon the earlier
of (i) Borrower’s request, (ii) achievement of eighty percent (80%)
occupancy and commencement of rent payments with respect to such occupancy for
two (2) consecutive fiscal quarters, or (iii) eight (8) fiscal quarters
following the earlier of (a) its initial designation as a Non-Stabilized
Property and (b) its acquisition date.  A Real Estate Asset that ceases to be a
Non-Stabilized Property shall be valued at zero until such Real Estate Asset
generates positive Property NOI.

“Notes” means
collectively, the Revolving Credit Notes and the Swing Loan Note.

“Obligations”
means all indebtedness, obligations and liabilities of the Borrower and the
Guarantors to any of the Lenders or the Administrative Agent, individually or
collectively, under this Agreement or any of the other Loan Documents or in
respect of the Facility, the Notes, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or arising
or incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.  Notwithstanding
the foregoing, the Obligations with respect to a Mortgaged Property located in
California shall be the obligations under the Guaranty of the related
Subsidiary Guarantor which owns such Mortgaged Property and the other secured obligations
under the Security Documents relating to such Mortgaged Property.

“Operating Property
Value” means the sum of (a) the aggregate Adjusted NOI for all Stabilized
Properties (excluding Adjusted NOI from Non-Stabilized Properties and
Stabilized Properties acquired during the prior twelve (12) months) and divided
by 7.5%, plus  (b) for each Non-Stabilized Property, the undepreciated
cost basis of such Real Estate Asset, plus  (c) for each Stabilized
Property acquired during the prior twelve (12) months, the acquisition cost of
such Stabilized Property.

19 

 

 

 

“Option
to Extend” means Borrower’s option, subject to the terms and conditions of Section 2.7(b),
to extend the term of the Facility from the Initial Maturity Date to the
Extended Maturity Date.

“Outstanding” means with respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination and with respect to Letters
of Credit, the aggregate undrawn face amount of issued Letters of Credit.

“PAI” means PAI
GP LLC, a Delaware limited liability company.

“Participant”
shall have the meaning given to such term in Section 13.13(b). 

“PE-ARC”  means
Phillips Edison-ARC Shopping Center REIT Inc., a Maryland corporation. 

“PECO-ARC Joint
Venture” means PECO-ARC Institutional Joint Venture I, L.P., a Delaware
limited partnership.

“Permit” means
any permit, approval, authorization, license, variance or permission required
from a Governmental Authority under an applicable Requirement of Law.

“Permitted
Liens” means:

(a)   
  Liens (other than environmental
Liens and any Lien imposed under ERISA) for taxes, assessments or charges of
any Governmental Authority for claims not yet due;

(b)     
  Any laws, ordinances or
regulations affecting the Real Estate Asset;

(c)    
  Liens imposed by laws, such
as mechanics’ liens and other similar liens, arising in the ordinary course of
business which secure payment of obligations not more than thirty (30) days
past due, unless the same are being contested in good faith; 

(d)   
  Deeds of trust, security
deeds or mortgages to an unaffiliated third party lender encumbering a Real
Estate Asset other than a Mortgaged Property to provide acquisition,
development, construction or permanent financing for the benefit of such Real
Estate Asset;

(e)     
Pledges of ownership or
equity interests in subsidiaries pursuant to or to the extent permitted by this
Agreement;

(f)    
Liens in favor of
Administrative Agent for the benefit of the Lenders under the Loan Documents to
secure the Obligations; and

(g)     
Liens on Mortgaged Properties
permitted by the terms of the applicable Mortgage (or if the Borrower or the
applicable Subsidiary Guarantor has not yet executed a Mortgage, such Liens as
are approved by Administrative Agent in writing).

“Person” means
any natural person, corporation, limited partnership, general partnership,
joint stock company, limited liability company, limited liability partnership,
joint venture, association, company, trust, bank, trust company, land trust,
business trust or other organization, whether or not a legal entity, or any
other nongovernmental entity, or any Governmental Authority.

20 

 

 

“Pledge
Agreement” means the Pledge Agreement from Borrower to the Administrative
Agent in the form of Exhibit N attached hereto, as the same may be
modified, amended or restated, pursuant to which there shall be collaterally
assigned to Administrative Agent a security interest in the interest of
Borrower in the Subsidiary Guarantors, as more particularly described therein,
such assignment to be in form and substance satisfactory to Administrative
Agent.

“Potential
Collateral” means any Real Property Asset of the Borrower or a Wholly Owned
Subsidiary which is not at the time included in the Collateral and which
consists of (i) Eligible Real Estate, or (ii) a Real Estate Asset
which is capable of becoming Eligible Real Estate through the approval of the
Requisite Lenders, as applicable, and the completion and delivery of Eligible
Real Estate Qualification Documents.

“Potential Default”
means an event, circumstance or condition which, with the giving of notice or
the lapse of time, or both, would constitute a Default.

“Price Adjustment
Date” shall have the meaning set forth in Section 2.8(h). 

“Prime Rate”
means a base rate of interest which Administrative Agent establishes from time
to time and which serves as the basis upon which the effective rates of
interest are calculated for those loans making reference thereto.  Any change
in an effective rate due to a change in the Prime Rate shall become effective
on the day each such change is announced by Administrative Agent at its
principal office in Cleveland, Ohio.

“Property NOI”
shall mean, with respect to any Real Estate Asset for any period, “property
rental and other income” (as determined by GAAP) attributable to such Real Estate
Asset accruing for such period, but excluding (i) any accrued revenues
attributable to so called “straight-line rent accounting” and (ii) all rents,
common area reimbursements and other income for such Real Estate Asset received
from tenants in default of obligations (excluding disputes over the calculation
of CAM reimbursements) under their Lease or with respect to Leases as to which
the tenant or any guarantor thereunder is subject to any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution,
liquidation or similar debtor relief proceeding (and that, with respect to
tenants in bankruptcy, have not unconditionally and finally affirmed or assumed
their lease in such bankruptcy proceeding) and not excluding such amount to the
extent included in bad debt expense for such period, minus  the amount of
all expenses (as determined in accordance with GAAP) incurred in connection
with and directly attributable to the ownership and operation of such Real
Estate Asset for such period, including, without limitation, Property
Management Fees and amounts accrued for the payment of real estate taxes and
insurance premiums, but excluding interest expense or other debt service
charges and any non-cash charges such as depreciation or amortization of
financing costs plus acquisition costs for consummated acquisitions.  As used
herein “Property Management Fees”, means, with respect to each Real Estate
Asset for any period, an assumed amount equal to three percent (3%) of the
aggregate base rent and percentage rent due and payable under leases with
tenants at such Real Estate Asset.

“Pro Rata Share”
means, as to each Lender, the ratio, expressed as a percentage, of (a) the
amount of such Lender’s Commitment to (b) the aggregate amount of the Commitments
of all Lenders hereunder; provided, however, that if at the time
of determination the Commitments have terminated or been reduced to zero, the
“Pro Rata Share” of each Lender shall be the Pro Rata Share of such Lender in
effect immediately prior to such termination or reduction.

 

 

“Property
Owner” shall mean collectively, the owners of all of the Real Estate Assets
from time to time, a true and correct list of which as of the date hereof is
attached hereto as Exhibit A  hereto.

“Property(ies) under
Development” means any ground-up construction property and/or properties
which will be substantially demolished and reconstructed.  Properties under
Development shall be measured based on the total budgeted costs (“Total
Budgeted Costs”), which shall be comprised of all soft and hard costs to
complete the development, including but not limited to, land, an interest
reserve during construction, an operating deficit reserve, tenant improvements,
leasing costs, and infrastructure costs.  Real Estate Assets will no longer be
considered Properties under Development upon the sooner of (a) achievement of
80% occupancy pursuant to executed leases in full force and effect or (b) 12
months after completion.  If a Property under Development is owned by an
unconsolidated Affiliate of the Borrower, its Subsidiaries or Affiliates, the
greater of (1) the product of (a) its ownership share of such Affiliate and (b)
the amount of the Total Budgeted Costs for such property or (2) the recourse
obligations of the Borrower or its Subsidiaries or Affiliates relating to the
debt of the unconsolidated Affiliate (including as general partner) shall be
used in calculating the investment limit.

“Real Estate Assets”
means the fixed and tangible real estate properties consisting of land, buildings
and/or other improvements owned in fee simple or as a leasehold estate by the
Borrower, any Guarantor or by a Subsidiary of the Borrower or any Guarantor at
the relevant time of reference thereto, together with any Minority Holdings
owned by any of the foregoing Persons.

“Recourse
Indebtedness” means the Total
Indebtedness of the Borrower, or any Subsidiary of the Borrower which does not
constitute Non-Recourse Indebtedness.

“Redevelopment
Property” means any Real Estate Asset (other than Acquisition Property)
that is being redeveloped if more than forty percent (40%) of the square
footage of the improvements on such Real Estate Asset is undergoing renovation
or the expected cost of redevelopment improvements exceeds 25% of the Operating
Property Value attributable to such Real Estate Asset immediately prior to such
redevelopment.  A Redevelopment Property shall cease to be a Redevelopment
Property at the beginning of the fiscal quarter immediately following the
earliest to occur of (i) twelve (12) months from the date of substantial
completion (as evidenced by receipt by Borrower (or Subsidiary) of a
certificate of occupancy or other regulatory approval, if any, permitting use
of such Real Estate Asset by the general public), (ii) such Real Estate Asset
achieving an 80% occupancy rate (determined on the basis of square footage
after redevelopment of improvements leased to tenants paying rent) and (iii)
the Borrower notifying the Administrative Agent of its election to no longer
treat such Real Estate Asset as a Redevelopment Property.

“Regulatory Costs”
are, collectively, future, supplemental, emergency or other changes in Reserve
Percentages, assessment rates imposed by the Federal Deposit Insurance
Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority and related in any manner to a Fixed Rate,
including, without limitation, the Dodd Frank Wall Street Reform and Consumer
Protection Act.

“REIT” means a
Person qualifying for treatment as a “real estate investment trust” under the
Internal Revenue Code.

“Related Party”
means Borrower and Guarantors.

22 

 

 

 

“Rent Roll” means a report
prepared by the Borrower showing for all Real Estate Assets, including, without
limitation, each Mortgaged Property, owned or leased by the Borrower or its
Subsidiaries, its occupancy, lease expiration dates, lease rent and other
information in substantially the form presented to Administrative Agent prior
to the date hereof or in such other form as may be reasonably acceptable to the
Administrative Agent.

“Requirements of Law”
mean, as to any entity, the charter and by-laws, partnership agreement or other
organizational or governing documents of such entity, and any law, rule or
regulation, Permit, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such entity
or any of its property or to which such entity or any of its property is
subject, including without limitation, applicable securities laws and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.

“Requisite Lenders”
means, as of any date, Lenders having at least 51% of the aggregate amount of
the Commitments, or, if the Commitments have been terminated or reduced to
zero, Lenders holding at least 51% of the principal amount outstanding under
the Loan, provided that (a) in determining such percentage at any given time,
all then existing Defaulting Lenders will be disregarded and excluded and the
Pro Rata Shares of the Loan of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of the Loan of such Defaulting
Lenders, and (b) at all times when two or more Lenders are party to this
Agreement, the term “Requisite Lenders” shall in no event mean less than two
Lenders; provided further that until the sum of the Borrowing Base Appraised
Value Limit plus the Borrowing Base Acquisition Value Limit first exceeds
$150,000,000.00, Requisite Lenders shall mean all Lenders that are not
Defaulting Lenders.

“Reserve Percentage” means for any Fixed Rate Period, that percentage
which is specified three (3) Business Days before the first day of such Fixed
Rate Period by the Board of Governors of the Federal Reserve System (or any
successor) or any other governmental or quasi-governmental authority with
jurisdiction over Administrative Agent or any Lender for determining the
maximum reserve requirement (including, but not limited to, any marginal
reserve requirement) for Administrative Agent or any Lender with respect to
liabilities constituting of or including (among other liabilities) Eurocurrency
liabilities in an amount equal to that portion of the Loan affected by such
Fixed Rate Period and with a maturity equal to such Fixed Rate Period.

“Restricted Payment”
means (a) any dividend or other distribution, direct or indirect, on account of
any shares of any class of the equity interests in a Person permitted hereunder
and now or hereafter outstanding, except a dividend payable solely in Equity
Interests of identical class to the holders of that class; (b) redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Equity Interest of such
Person now or hereafter outstanding; and (c) payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire any Equity Interests of such Person now or hereafter outstanding.

“Revolving Credit
Loan or Loans” means an individual
Revolving Credit Loan or the aggregate Revolving Credit Loans, as the case may
be, in the maximum principal amount of $40,000,000.00 (subject to increase as
provided in Section 2.14) to be made by the Lenders hereunder as more
particularly described in Section 2.1.  Without limiting the foregoing, 

23 

 

 

 

Revolving Credit Loans shall also include Revolving
Credit Loans made pursuant to Section 2.6(f). 

“Revolving Credit
Note” or “Revolving Credit Notes” means the promissory note(s) of
the Borrower substantially in the form of Exhibit E-1, payable to
the order of a Lender in a principal amount equal to such Lender’s Commitment
Amount and, collectively in the aggregate principal amount of the Facility,
together with such other replacement notes as may be issued from time to time
pursuant to Section 13.13, as hereafter amended, restated,
supplemented, replaced or modified.

“Secured
Indebtedness” means as of any given
date the amount of the Total Indebtedness that is secured in any manner by any
Lien on a Real Estate Asset or on any ownership interests in any other Person
or on any other assets (other than the Facility evidenced by this Agreement).

“Secured Recourse
Indebtedness” means as of any given
date the amount of the Secured Indebtedness less the amount of Secured
Non-Recourse Indebtedness.

“Secured
Non-Recourse Indebtedness” means as of any given date the amount of the
Non-Recourse Indebtedness that is secured in any manner by any Lien on a Real
Estate Asset or on any ownership interests in any other Person or on any other
assets.

“Security Documents”
means the Mortgages, the Assignments of Leases and Rents, the Guaranty, the
Pledge Agreement, the Acknowledgements, the Cash Collateral Agreement and any
further collateral assignments to the Administrative Agent for the benefit of
the Lenders, including, without limitation, UCC-1 financing statements executed
and delivered in connection therewith.

“Stabilized Property”
means a Real Estate Asset (a) which is a commercial property operating as a
retail center that is completed with tenants in occupancy and open for
business, or (b) which has ceased to be a “Non-Stabilized Property” in
accordance with the definition thereof. 

“Sub-Advisor”
means Phillips Edison NTR LLC, a Delaware limited liability company.

“Subordination,
Attornment and Non-Disturbance Agreement” means an agreement among the Administrative Agent, the Borrower or a
Subsidiary Guarantor and a tenant under a Lease pursuant to which such tenant
agrees to subordinate its rights under the Lease to the lien or security title
of the applicable Mortgage and agrees to recognize the Administrative Agent or
its successor in interest as landlord under the Lease in the event of a
foreclosure under such Mortgage, and the Administrative Agent agrees to not
disturb the possession of such tenant, such agreement to be in form and
substance reasonably satisfactory to Administrative Agent.

“Subordination of
Management Agreement” means an
agreement pursuant to which a manager of a Mortgaged Property subordinates its
rights under a Management Agreement to the Loan Documents, such agreement to be
in the form of the initial Subordination of Management Agreement delivered by
the Borrower or a Subsidiary Guarantor on the Effective Date, with such changes
thereto as Administrative Agent may reasonably require as a result of state law
or practice or type of asset.

“Subsidiary”
means for any Person, any corporation, partnership, limited liability company
or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions of such corporation, partnership, limited liability 

24 

 

 

 

company or other entity (without regard to the occurrence
of any contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person, and shall include
all Persons the accounts of which are consolidated with those of such Person
pursuant to GAAP.

“Subsidiary
Guarantors” means initially, those
Persons described on Schedule 1.4  hereto and each Additional
Guarantor.  Upon any Additional Guarantor becoming a Subsidiary Guarantor or
upon the release of a Subsidiary Guarantor in accordance with the terms of this
Agreement, Administrative Agent may unilaterally amend Schedule 1.4 
to reflect such occurrence.

“Survey” means an instrument survey of each parcel of
Mortgaged Property prepared by a registered land surveyor which shall show the
location of all buildings, structures, easements and utility lines on such
property, shall be sufficient to remove the standard survey exception from the
Title Policy, shall show that all buildings and structures are within the lot
lines of the Mortgaged Property and shall not show any encroachments by others
(or to the extent any encroachments are shown, such encroachments shall be
acceptable to the Administrative Agent in its reasonable discretion), shall
show rights of way, adjoining sites, establish building lines and street lines,
the distance to and names of the nearest intersecting streets and such other
details as the Administrative Agent may reasonably require; and shall show
whether or not the Mortgaged Property is located in a flood hazard district as
established by the Federal Emergency Management Agency or any successor agency
or is located in any flood plain, flood hazard or wetland protection district
established under federal, state or local law and shall otherwise be in form
and substance reasonably satisfactory to the Administrative Agent.

“Surveyor
Certification” means with respect to
each parcel of Mortgaged Property, a certificate executed by the surveyor who
prepared the Survey with respect thereto, dated as of a recent date prior to
inclusion of such Mortgaged Property in the Borrowing Base and containing such
information relating to such parcel as the Administrative Agent or the Title
Insurance Company may reasonably require, such certificate to be reasonably
satisfactory to the Administrative Agent in form and substance.

“Swing Loan” shall have the meaning set forth in Section 2.2. 

“Swing Loan
Commitment” means the sum of
$4,000,000.00, as the same may be changed from time to time in accordance with
the terms of this Agreement.

“Swing Loan Lender” means KeyBank, in its capacity as Swing Loan Lender
and any successor thereof.

“Swing Loan Note” shall have the meaning set forth in Section 2.2(b). 

“Taking” means the taking or appropriation (including by deed
in lieu of condemnation) of any Mortgaged Property, or any part thereof or
interest therein, whether permanently or temporarily, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner or any damage or
injury or diminution in value through condemnation, inverse condemnation or
other exercise of the power of eminent domain.

“Titled Agents” means the Arranger or any syndication or
documentation agent.

“Title Insurance
Company” means any of First American,
Stewart, Fidelity, Chicago and Old Republic Title Insurance Companies
(including any “family members” or affiliates 

25 

 

 

 

thereof
approved by Administrative Agent) and/or any other title insurance company or
companies approved by the Administrative Agent and the Borrower.

“Title Policy” means with respect to each parcel of Mortgaged
Property, an ALTA standard form title insurance policy (or, if such form is not
available, an equivalent, legally promulgated form of mortgagee title insurance
policy reasonably acceptable to the Administrative Agent) issued by a Title
Insurance Company (with such reinsurance as the Administrative Agent may
reasonably require, any such reinsurance to be with direct access endorsements
to the extent available under applicable law) in an amount as the
Administrative Agent may reasonably require based upon the fair market value of
the applicable Mortgaged Property insuring the priority of the Mortgage thereon
and that the Borrower or a Subsidiary Guarantor, as applicable, holds
marketable or indefeasible (with respect to Texas) fee simple title or a valid
and subsisting leasehold interest to such parcel, subject only to the
encumbrances acceptable to Administrative Agent in its reasonable discretion and
which shall not contain standard exceptions for mechanics liens, persons in
occupancy (other than tenants as tenants only under Leases) or matters which
would be shown by a survey, shall not insure over any matter except to the
extent that any such affirmative insurance is acceptable to the Administrative
Agent in its reasonable discretion, and shall contain (a) a revolving credit
endorsement and (b) such other endorsements and affirmative insurance as the
Administrative Agent may reasonably require and is available in the State in
which the Mortgaged Property is located, which may include, without limitation,
(i) a comprehensive endorsement, (ii) a variable rate of interest endorsement,
(iii) a usury endorsement, (iv) a doing business endorsement, (v) an ALTA
form 3.1 zoning endorsement (unless Agent receives satisfactory evidence of
compliance with zoning and parking requirements), (vi) a “tie-in”
endorsement relating to all Title Policies issued by such Title Insurance
Company in respect of other Mortgaged Property, (vii) “first loss” and “last
dollar” endorsements, and (viii) a utility location endorsement.  

“Total Indebtedness”
means, with respect to a Person on a consolidated basis, at the time of
computation thereof, all of the following (without duplication):  (a) all
indebtedness of such Person for borrowed money including, without limitation,
any repurchase obligation or liability of such Person with respect to
securities, accounts or notes receivable sold by such Person that becomes a
liability on the balance sheet of such Person, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liability incurred in the ordinary course of business and payable
in accordance with customary practices), to the extent such obligations
constitutes indebtedness for the purposes of GAAP, (c) any other indebtedness
of such Person which is evidenced by a note, bond, debenture, or similar
instrument, (d) all capitalized lease obligations, (e) all indebtedness of
other Persons which such Person has guaranteed or is otherwise recourse to such
Person (except for guaranties of customary exceptions for fraud, misapplication
of funds, environmental indemnities, violation of “special purpose entity”
covenants, and other similar exceptions to recourse liability until a written
claim is made with respect thereto, and then shall be included only to the
extent of the amount of such claim), including liability of a general partner
in respect of liabilities of a partnership in which it is a general partner
which would constitute “Total Indebtedness” hereunder, any obligation to supply
funds to or in any manner to invest directly or indirectly in a Person, to
maintain working capital or equity capital of a Person or otherwise to maintain
net worth, solvency or other financial condition of a Person, to purchase
indebtedness, or to assure the owner of indebtedness against loss, including,
without limitation, through an agreement to purchase property, securities,
goods, supplies or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise (excluding in any 

 

 

calculation of consolidated Total Indebtedness of
Borrower, any Guarantor and their Subsidiaries, guaranty obligations of
Borrower, any Guarantor or their Subsidiaries in respect of primary obligations
of any of Borrower, any Guarantor or their Subsidiaries which are already
included in Total Indebtedness), (f) all reimbursement obligations of such
Person for letters of credit and other contingent liabilities, (g) any net
mark-to-market exposure under a Derivatives Contract to the extent speculative
in nature, (h) all liabilities secured by any lien (other than liens for taxes
not yet due and payable) on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof, and
(i) such Person’s pro rata share of the foregoing of any Subsidiary of such
Person that is not a Wholly Owned Subsidiary and of any Joint Venture or other
Minority Holding of such Person measured at the greater of such Person’s Equity
Percentage in such other entity or the percentage of Total Indebtedness
guaranteed by such Person relating to such entity.

“Unrestricted Cash
and Cash Equivalents” means, as of any date of determination, the sum of
(a) the aggregate amount of Unrestricted cash, (b) the aggregate amount of
Unrestricted Cash Equivalents (valued at fair market value) and (c) the amount
that is available for borrowing by Borrower under a revolving credit facility
pursuant to the terms thereof as of the date of determination.  As used in this
definition, “Unrestricted” for the purposes hereof and Gross Asset Value means
the specified asset is not subject to any escrow, cash trap, reserves or Liens
(other than the Facility evidenced by this Agreement or reserves for property
taxes or insurance premiums) or claims of any kind in favor of any Person. 
Further, Unrestricted Cash and Cash Equivalents shall not include any
availability under construction facilities or similar debt instruments.

“Unsecured Debt” means as of any given date the amount of the Total
Indebtedness which is not Secured Indebtedness.

“Wholly Owned
Subsidiary” means as to the Borrower,
any Subsidiary of Borrower that is directly or indirectly owned 100% by the
Borrower.

1.2     CHANGES IN GAAP.  The parties hereto acknowledge and
agree that if at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Requisite Lenders shall so request, the Administrative
Agent, the Lenders and the Borrower shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Requisite Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP as in effect prior to such change and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in
GAAP.  Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made (i) without
giving effect to any election under Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting
Standard having a similar result or effect) to value any item included within
Total Indebtedness or other liabilities of Borrower or any of its Subsidiaries
at “fair value”, as defined therein, (ii) without giving effect to any
treatment of any item included in Total 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 Total Indebtedness
shall at all times be valued at the full stated principal amount thereof. 
Notwithstanding anything in this Agreement to the contrary, when determining
compliance by the Borrower with any financial covenant contained in any of the
Loan Documents, only the Equity Percentage of the Borrower of the financial
attributes of a Subsidiary that is not a Wholly Owned Subsidiary and of a Joint
Venture of Borrower shall be included.

1.2    SCHEDULES AND EXHIBITS
INCORPORATED.  Schedules 1.1,
1.2, 1.3, 1.4, 2.9, 6.6, 6.11, 6.25,
6.26  and 12.3  and Exhibits A, B, C, D,
E-1, E-2, F, G, H-1, H-2, I, J,
K, L, M, N, O  and P  all attached
hereto, are hereby incorporated into this Agreement. 

ARTICLE 2.  LOAN

2.1      LOANS. 

(a)                  
Advances.  Subject to the terms and conditions set
forth in this Agreement, each Lender severally and not jointly agrees to make
advances to the Borrower during the period from and including the Effective
Date to but excluding the Maturity Date, in an aggregate principal amount at
any one time outstanding up to, but not exceeding, such Lender’s Commitment
Amount (collectively, the “Revolving Credit Loan”).  The Loan shall be made in Dollars.  The
advances made by each Lender shall, in addition to this Agreement, also be
evidenced by a Revolving Credit Note payable to the order of such Lender.  Each
borrowing hereunder shall be in an aggregate principal amount of not less than
$1,000,000 and integral multiples of $100,000 in excess of that amount.  Within
the foregoing limits and subject to the other terms of this Agreement, the
Borrower may borrow, repay and reborrow advances under the Facility. 
Notwithstanding anything in this Agreement to the contrary, each Lender’s
obligation to advance Revolving Credit Loans shall not at any time exceed the
lesser of (i) the sum of such Lender’s Commitment Amount and (ii) such Lender’s
Pro Rata Share of the sum of (A) the Borrowing Base Availability minus (B) the
sum of (1) the amount of all outstanding Revolving Credit Loans and Swing
Loans, and (2) the aggregate amount of Letter of Credit Liabilities; provided,
that, in all events no Potential Default or Default shall have occurred and be
continuing; and provided, further, that the outstanding principal
amount of the Revolving Credit Loans (after giving effect to all amounts
requested), Swing Loans and Letter of Credit Liabilities shall not at any time
exceed the aggregate Commitment Amount or cause a violation of the covenants
set forth in Section 8.15(d). 

(b)                 
Requests for
Advances.  Not later than
2:00 p.m. Cleveland time at least one (1) Business Day prior to an advance
accruing interest at the Base Rate and not later than 2:00 p.m. Cleveland time
at least two (2) Business Days prior to an advance accruing interest at the
LIBO Rate, the Borrower shall deliver to the Administrative Agent an
Application for Payment which delivery may be by telecopy, provided receipt
thereof is immediately confirmed by telephone.

(c)                  
Funding of Advances.  Promptly after receipt of an
Application for Payment under Section 2.1(b), the Administrative Agent shall
notify each Lender by telex or telecopy, or other similar form of transmission
of the proposed borrowing and the contents of the Application for Payment. 
Each Lender shall deposit an amount equal to the advance to be made by such
Lender to the Borrower with the Administrative Agent, in immediately available
funds 

 

 

not later than 10:00 a.m. Cleveland time on the
date of such proposed advance.  Subject to fulfillment of all applicable
conditions set forth herein, the Administrative Agent shall make available to
the Borrower, not later than 11:00 a.m. Cleveland time on the date of the
requested borrowing, the proceeds of such amounts received by the
Administrative Agent.  No Lender shall be responsible for the failure of any
other Lender to make an advance or to perform any other obligation to be made
or performed by such other Lender hereunder, and the failure of any Lender to
make an advance or to perform any other obligation to be made or performed by
it hereunder shall not relieve the obligation of any other Lender to make any advance
or to perform any other obligation to be made or performed by such other
Lender.

(d)                 
Assumptions
Regarding Funding by Lenders. 
With respect to advances to be made after the Effective Date, unless the
Administrative Agent shall have been notified by any Lender that such Lender
will not make available to the Administrative Agent an advance to be made by
such Lender, the Administrative Agent may assume that such Lender will make the
proceeds of such advance available to the Administrative Agent in accordance
with this Section and the Administrative Agent may (but shall not be obligated
to), in reliance upon such assumption, make available to the Borrower the
amount of such advance to be provided by such Lender.

2.2     
SWING LOAN
COMMITMENT.   

(a)                  
Subject to the terms
and conditions set forth in this Agreement, Swing Loan Lender agrees to lend to
the Borrower (the “Swing Loans”), and the Borrower may borrow (and repay and
reborrow) from time to time between the Effective Date and the date which is
five (5) Business Days prior to the Maturity Date upon notice by the Borrower
to the Swing Loan Lender given in accordance with this Section 2.2,
such sums as are requested by the Borrower for the purposes set forth in Section
8.5 in an aggregate principal amount at any one time outstanding not
exceeding the Swing Loan Commitment; provided  that in all events (i) no
Potential Default or Default shall have occurred and be continuing; and (ii)
the outstanding principal amount of the Revolving Credit Loans and Swing Loans
(after giving effect to all amounts requested) plus Letter of Credit
Liabilities shall not at any time exceed the lesser of (A) the aggregate
Commitment Amount or (B) the Borrowing Base Availability, or cause a violation
of the covenants set forth in Section 8.15(d).  Notwithstanding anything
to the contrary contained in this Section 2.2, the Swing Loan
Lender shall not be obligated to make any Swing Loan at a time when any other
Lender is a Defaulting Lender, unless the Swing Loan Lender is satisfied that
the participation therein will otherwise be fully allocated to the Lenders that
are Non-Defaulting Lenders consistent with Section 2.15(c) and the
Defaulting Lender shall not participate therein, except to the extent the Swing
Loan Lender has entered into arrangements with the Borrower or such Defaulting
Lender that are satisfactory to the Swing Loan Lender in its good faith
determination to eliminate the Swing Loan Lender’s Fronting Exposure with
respect to any such Defaulting Lender, including the delivery of cash
collateral.  Swing Loans shall constitute “Revolving Credit Loans” for all
purposes hereunder.  The funding of a Swing Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set
forth in Section 3.1 have been satisfied on the date of such funding. 
The Swing Loan Lender may assume that the conditions in Section 3.1 have
been satisfied unless Swing Loan Lender has received written notice from a
Lender that such conditions have not been satisfied.  Each Swing Loan shall be
due and payable within five (5) Business Days of the date such Swing Loan was
provided and the Borrower hereby agrees (to the extent not repaid as 

 

 

contemplated by Section 2.2(d)  below) to
repay each Swing Loan on or before the date that is five (5) Business Days from
the date such Swing Loan was provided.  A Swing Loan may not be refinanced with
another Swing Loan.

(b)                 
The Swing Loans shall
be evidenced by a separate promissory note of the Borrower in substantially the
form of Exhibit E-2  hereto (the “Swing Loan Note”), dated the date
of this Agreement and completed with appropriate insertions.  The Swing Loans
shall be made in Dollars.  The Swing Loan Note shall be payable to the order of
the Swing Loan Lender in the principal face amount equal to the Swing Loan
Commitment and shall be payable as set forth below.  The Borrower irrevocably
authorizes the Swing Loan Lender to make or cause to be made, at or about the
time of the funding of any Swing Loan or at the time of receipt of any payment
of principal thereof, an appropriate notation on the Swing Loan Lender’s Loan
Account reflecting the making of such Swing Loan or (as the case may be) the
receipt of such payment.  The outstanding amount of the Swing Loans set forth
on the Swing Loan Lender’s Loan Account shall be prima facie evidence of the
principal amount thereof owing and unpaid to the Swing Loan Lender, but the
failure to record, or any error in so recording, any such amount on the Swing
Loan Lender’s Loan Account shall not limit or otherwise affect the obligations
of the Borrower hereunder or under the Swing Loan Note to make payments of
principal of or interest on any Swing Loan Note when due.

(c)                  
The Borrower shall
request a Swing Loan by delivering to the Swing Loan Lender an Application for
Payment executed by an Authorized Officer no later than 11:00 a.m. (Cleveland
time) on the requested funding date specifying the amount of the requested
Swing Loan (which shall be in the minimum amount of $1,000,000.00) and
providing the wire instructions for the delivery of the Swing Loan proceeds. 
Each such Application for Payment shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept such Swing Loan on the
funding date.  Notwithstanding anything herein to the contrary, a Swing Loan
shall be a Base Rate Loan and shall bear interest at the Base Rate plus the
Applicable Margin.  The proceeds of the Swing Loan will be disbursed by wire by
the Swing Loan Lender to the Borrower no later than 1:00 p.m. (Cleveland time).

(d)                 
The Swing Loan Lender
shall, within two (2) Business Days after the Drawdown Date with respect to
such Swing Loan, request each Lender, including the Swing Loan Lender, to make
a Revolving Credit Loan pursuant to Section 2.1  in an amount equal to
such Lender’s Pro Rata Share of the amount of the Swing Loan outstanding on the
date such notice is given.  In the event that the Borrower does not notify the
Administrative Agent in writing otherwise on or before noon (Cleveland Time) on
the Business Day of the funding date with respect to such Swing Loan,
Administrative Agent shall notify the Lenders that such Loan shall be a Loan
bearing interest by reference to the LIBO Rate with a Fixed Rate Period of one
(1) month, provided that the making of such Loan bearing interest by reference
to the LIBO Rate will not be in contravention of any other provision of this
Agreement, or if the making of a Loan bearing interest by reference to the LIBO
Rate would be in contravention of this Agreement, then such notice shall
indicate that such loan shall be a Loan bearing interest by reference to the
Base Rate.  The Borrower hereby irrevocably authorizes and directs the Swing
Loan Lender to so act on its behalf, and agrees that any amount advanced to the
Administrative Agent for the benefit of the Swing Loan Lender pursuant to this Section
2.2(d) shall be considered a Revolving Credit Loan pursuant to Section
2.1.  Unless any of the events described in paragraph (h), (i) or (j) of Section
10.1 shall have occurred (in which event the procedures of Section
2.2(e) shall apply), 

30 

 

 

 

each Lender shall make the
proceeds of its Revolving Credit Loan available to the Swing Loan Lender for
the account of the Swing Loan Lender at the Administrative Agent’s Head Office
prior to 12:00 noon (Cleveland time) in funds immediately available no later
than the third (3rd) Business Day after the date such notice is given just as
if the Lenders were funding directly to the Borrower, so that thereafter such
Obligations shall be evidenced by the Revolving Credit Notes.  The proceeds of
such Revolving Credit Loan shall be immediately applied to repay the Swing
Loans.

(e)                  
If for any reason a
Swing Loan cannot be refinanced by a Revolving Credit Loan pursuant to Section
2.2(d), each Lender will, on the date such Revolving Credit Loan pursuant
to Section 2.2(d) was to have been made, purchase an undivided
participation interest in the Swing Loan in an amount equal to its Pro Rata
Share of such Swing Loan.  Each Lender will immediately transfer to the Swing
Loan Lender in immediately available funds the amount of its participation and
upon receipt thereof the Swing Loan Lender will deliver to such Lender a Swing
Loan participation certificate dated the date of receipt of such funds and in
such amount.

(f)                  
Whenever at any time
after the Swing Loan Lender has received from any Lender such Lender’s
participation interest in a Swing Loan, the Swing Loan Lender receives any
payment on account thereof, the Swing Loan Lender will distribute to such
Lender its participation interest in such amount (appropriately adjusted in the
case of interest payments to reflect the period of time during which such
Lender’s participating interest was outstanding and funded); provided, however,
that in the event that such payment received by the Swing Loan Lender is
required to be returned, such Lender will return to the Swing Loan Lender any
portion thereof previously distributed by the Swing Loan Lender to it.

(g)                 
Each Lender’s
obligation to fund a Loan as provided in Section 2.2(d) or to purchase
participation interests pursuant to Section 2.2(e) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense or other
right which such Lender or the Borrower may have against the Swing Loan Lender,
the Borrower or anyone else for any reason whatsoever; (ii) the occurrence or
continuance of a Potential Default or a Default; (iii) any adverse change in
the condition (financial or otherwise) of the Borrower, any Guarantor or any of
their respective Subsidiaries; (iv) any breach of this Agreement or any of the
other Loan Documents by the Borrower or any Guarantor or any Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.  Any portions of a Swing Loan not so purchased or
converted may be treated by the Administrative Agent and Swing Loan Lender as
against such Lender as a Revolving Credit Loan which was not funded by the non
purchasing Lender, thereby making such Lender a Defaulting Lender.  Each Swing
Loan, once so sold or converted, shall cease to be a Swing Loan for the
purposes of this Agreement, but shall be a Revolving Credit Loan made by each
Lender under its Commitment.

2.3       LOAN FEES. 

(a)               
Unused Fee.  During the period from the Effective
Date to but excluding the Maturity Date, the Borrower agrees to pay to the
Administrative Agent for the account of the Lenders an unused facility fee. 
The unused facility fee shall be calculated for each day based on the ratio
(expressed as a percentage) of (a) the average daily amount of the outstanding
principal 

31 

 

 

 

amount of the Revolving Credit Loans, Letter
of Credit Liabilities and Swing Loans during such quarter to (b) the total
Commitment Amount, and if such ratio is less than fifty percent (50%), the
unused facility fee shall be payable at the rate of 0.30% multiplied by the
unused portion of the total Commitment Amount, and if such ratio is equal to or
greater than fifty percent (50%), the unused facility fee shall be payable at
the rate of 0.20% multiplied by the unused portion of the total Commitment
Amount.  Such fees shall be computed on the basis of the actual number of days
elapsed in the period during which such fees accrue and a year of three hundred
sixty (360) days and payable quarterly in arrears, commencing March 1, 2013, on
the first day of each June, September, December and March thereafter during the
term of this Agreement and on the Maturity Date.

(b)              
Extension Fee.  If, pursuant to Section 2.7(b)(i),
the Borrower exercises its right to extend the Initial Maturity Date, the
Borrower agrees to pay to the Administrative Agent for the pro rata account of
each Lender in connection with such exercise an extension fee equal to 20 basis
points (0.20%) of the amount of such Lender’s Commitment Amount at the time of
such extension.  If, pursuant to Section 2.7(b)(ii), the Borrower
exercises its right to extend the then effective Extended Maturity Date, the
Borrower agrees to pay to the Administrative Agent for the pro rata account of
each Lender in connection with such exercise an extension fee equal to 30 basis
points (0.30%) of the amount of such Lender’s Commitment Amount at the time of
such extension.  Such fees shall be paid to the Administrative Agent as a
condition to such extension.

(c)               
Agent and
Arranger Fees.   The Borrower agrees to pay to KeyBank,
Administrative Agent and Arranger for their own account certain fees for
services rendered or to be rendered in connection with the Loans as provided in
the Fee Letter.  All such fees shall be fully earned when paid and
nonrefundable under any circumstances.

2.4    LOAN DOCUMENTS.  Borrower and Guarantor shall execute and
deliver to Administrative Agent (or cause to be executed and delivered)
concurrently with this Agreement each of the documents, properly executed and
in recordable form, as applicable, described in Exhibit B  as Loan
Documents.

2.5       INTENTIONALLY OMITTED

2.6       LETTERS OF CREDIT. 
 

(a)               
Subject to the terms
and conditions set forth in this Agreement, at any time and from time to time
from the Closing Date through the day that is ninety (90) days prior to the
Maturity Date, the Issuing Lender shall issue such Letters of Credit as the
Borrower may request upon the delivery of a written request in the form of Exhibit K 
hereto (a “Letter of Credit Request”) to the Issuing Lender, provided 
that (i) no Potential Default or Default shall have occurred and be continuing,
(ii) upon issuance of such Letter of Credit, the Letter of Credit Liabilities
shall not exceed the Letter of Credit Sublimit, (iii) in no event shall the sum
of (A) the Revolving Credit Loans Outstanding, (B) the Swing Loans Outstanding
and (C) the amount of Letter of Credit Liabilities (after giving effect to all
Letters of Credit requested) exceed the total Commitment Amount, (iv) in no
event shall the outstanding principal amount of the Revolving Credit Loans,
Swing Loans and Letter of Credit Liabilities (after giving effect to any
requested Letters of Credit) exceed the lesser of the total Commitment Amount
or the Borrowing Base 

32 

 

 

 

Availability or cause a
violation of the covenants set forth in Sections 8.15(d), (v) the
conditions set forth in Section 3.1 shall have been satisfied, and (vi)
in no event shall any amount drawn under a Letter of Credit be available for
reinstatement or a subsequent drawing under such Letter of Credit. 
Notwithstanding anything to the contrary contained in this Section 2.6,
the Issuing Lender shall not be obligated to issue, amend, extend, renew or increase
any Letter of Credit at a time when any other Lender is a Defaulting Lender,
unless the Issuing Lender is satisfied that the participation therein will
otherwise be fully allocated to the Lenders that are Non-Defaulting Lenders
consistent with Section 2.15(c) and the Defaulting Lender shall have no
participation therein, except to the extent the Issuing Lender has entered into
arrangements with the Borrower or such Defaulting Lender which are satisfactory
to the Issuing Lender in its good faith determination to eliminate the Issuing
Lender’s Fronting Exposure with respect to any such Defaulting Lender,
including the delivery of cash collateral.  The Issuing Lender may assume that
the conditions in Section 3.1 have been satisfied unless it receives written
notice from a Lender that such conditions have not been satisfied.  Each Letter
of Credit Request shall be executed by an Authorized Officer of the Borrower. 
The Issuing Lender shall be entitled to conclusively rely on such Person’s
authority to request a Letter of Credit on behalf of the Borrower.  The Issuing
Lender shall have no duty to verify the authenticity of any signature appearing
on a Letter of Credit Request.  The Borrower assumes all risks with respect to
the use of the Letters of Credit.  Unless the Issuing Lender and the Requisite
Lenders otherwise consent, the term of any Letter of Credit shall not exceed a
period of time commencing on the issuance of the Letter of Credit and ending
one year after the date of issuance thereof, subject to extension pursuant to
an “evergreen” clause acceptable to Administrative Agent and Issuing Lender
(but in any event the term shall not extend beyond five (5) Business Days prior
to the Maturity Date).  The amount available to be drawn under any Letter of
Credit shall reduce on a dollar-for-dollar basis the amount available to be
drawn under the total Commitment Amount as a Revolving Credit Loan.  

(b)              
Each Letter of Credit
Request shall be submitted to the Issuing Lender at least five (5) Business
Days (or such shorter period as the Issuing Lender may approve) prior to the
date upon which the requested Letter of Credit is to be issued.  Each such
Letter of Credit Request shall contain (i) a statement as to the purpose for
which such Letter of Credit shall be used (which purpose shall be in accordance
with the terms of this Agreement), and (ii) a certification by the chief
financial officer or chief accounting officer of the Borrower that the Borrower
and Guarantors are and will be in compliance with all covenants under the Loan
Documents after giving effect to the issuance of such Letter of Credit.  The
Borrower shall further deliver to the Issuing Lender such additional
applications (which application as of the date hereof is in the form of Exhibit L 
attached hereto) and documents as the Issuing Lender may reasonably require, in
conformity with the then standard practices of its letter of credit department,
in connection with the issuance of such Letter of Credit; provided  that
in the event of any conflict, the terms of this Agreement shall control.

(c)               
The Issuing Lender
shall, subject to the conditions set forth in this Agreement, issue the Letter
of Credit on or before five (5) Business Days following receipt of the
documents last due pursuant to Section 2.6(b).  Each Letter of Credit
shall be in form and substance reasonably satisfactory to the Issuing Lender in
its reasonable discretion.

(d)              
Upon the issuance of a
Letter of Credit, each Lender shall be deemed to have purchased a participation
therein from Issuing Lender in an amount equal to its respective 

 

 

Pro Rata Share of the amount of such Letter of Credit. 
No Lender’s obligation to participate in a Letter of Credit shall be affected
by any other Lender’s failure to perform as required herein with respect to
such Letter of Credit or any other Letter of Credit.

(e)               
Upon the issuance of
each Letter of Credit, the Borrower shall pay to the Issuing Lender (i) for its
own account, a Letter of Credit fronting fee calculated at the rate per annum
equal to one-eighth of one percent (0.125%) per annum (which fee shall not be
less than $1,500 in any event) and an administrative charge of $250, and (ii)
for the accounts of the Lenders that are Non-Defaulting Lenders (including the
Issuing Lender) in accordance with their respective percentage shares of
participation in such Letter of Credit, a Letter of Credit fee calculated at
the rate per annum equal to the Applicable Margin for a Loan bearing interest
by reference to the LIBO Rate on the amount available to be drawn under such Letter
of Credit.  Such fees shall be payable in quarterly installments in arrears
with respect to each Letter of Credit on the first day of each calendar quarter
following the date of issuance and continuing on each quarter or portion
thereof thereafter, as applicable, or on any earlier date on which the
Commitments shall terminate and on the expiration or return of any Letter of
Credit.  In addition, the Borrower shall pay to Issuing Lender for its own
account within five (5) days of demand of Issuing Lender the standard issuance,
documentation and service charges for Letters of Credit issued from time to
time by Issuing Lender.

(f)               
In the event that any
amount is drawn under a Letter of Credit by the beneficiary thereof, the
Borrower shall reimburse the Issuing Lender by having such amount drawn treated
as an outstanding Revolving Credit Loan bearing interest by reference to the
Base Rate under this Agreement (the Borrower being deemed to have requested a
Revolving Credit Loan bearing interest by reference to the Base Rate on such
date in an amount equal to the amount of such drawing and such amount drawn
shall be treated as an outstanding Revolving Credit Loan bearing interest by
reference to the Base Rate under this Agreement) and the Administrative Agent
shall promptly notify each Lender by telex, telecopy, telegram, telephone
(confirmed in writing) or other similar means of transmission, and each Lender
shall promptly and unconditionally pay to the Administrative Agent, for the
Issuing Lender’s own account, an amount equal to such Lender’s Pro Rata Share
of such Letter of Credit (to the extent of the amount drawn).  The Borrower
further hereby irrevocably authorizes and directs Administrative Agent to
notify the Lenders of the Borrower’s intent to convert such Loan bearing
interest by reference to the Base Rate to a Loan bearing interest by reference
to the LIBO Rate with a Fixed Rate Period of one (1) month on the third (3rd)
Business Day following the funding by the Lenders of their advance under this Section
2.6(f), provided that the making of such Loan bearing interest by reference
to the LIBO Rate shall not be a contravention of any provision of this
Agreement.  If and to the extent any Lender shall not make such amount
available on the Business Day on which such draw is funded, such Lender agrees
to pay such amount to the Administrative Agent forthwith on demand, together
with interest thereon, for each day from the date on which such draw was funded
until the date on which such amount is paid to the Administrative Agent, at the
Federal Funds Effective Rate until three (3) days after the date on which the
Administrative Agent gives notice of such draw and at the Federal Funds
Effective Rate plus one percent (1.0%) for each day thereafter.  Further, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Revolving Credit Loans, amounts due with respect to its
participations in Letters of Credit and any other amounts due to it hereunder
to the Administrative Agent to fund the amount of any drawn Letter of Credit
which such Lender was required to fund pursuant to this Section 2.6(f) 
until such amount has 

34 

 

 

 

been funded (as a result of such
assignment or otherwise).  In the event of any such failure or refusal, the
Lenders not so failing or refusing shall be entitled to a priority secured
position for such amounts as provided in Section 10.7.  The failure of
any Lender to make funds available to the Administrative Agent in such amount
shall not relieve any other Lender of its obligation hereunder to make funds
available to the Administrative Agent pursuant to this Section 2.6(f). 

(g)              
If after the issuance
of a Letter of Credit pursuant to Section 2.6(c)  by the Issuing
Lender, but prior to the funding of any portion thereof by a Lender, for any
reason a drawing under a Letter of Credit cannot be refinanced as a Revolving
Credit Loan, each Lender will, on the date such Revolving Credit Loan pursuant
to Section 2.6(f)  was to have been made, purchase an undivided
participation interest in the Letter of Credit in an amount equal to its Pro
Rata Share of the amount of such Letter of Credit.  Each Lender will
immediately transfer to the Issuing Lender in immediately available funds the
amount of its participation and upon receipt thereof the Issuing Lender will
deliver to such Lender a Letter of Credit participation certificate dated the
date of receipt of such funds and in such amount.  

(h)              
Whenever at any time
after the Issuing Lender has received from any Lender any such Lender’s payment
of funds under a Letter of Credit and thereafter the Issuing Lender receives
any payment on account thereof, then the Issuing Lender will distribute to such
Lender its participation interest in such amount (appropriately adjusted in the
case of interest payments to reflect the period of time during which such
Lender’s participation interest was outstanding and funded); provided, however,
that in the event that such payment received by the Issuing Lender is required
to be returned, such Lender will return to the Issuing Lender any portion
thereof previously distributed by the Issuing Lender to it.

(i)                
The issuance of any
supplement, modification, amendment, renewal or extension to or of any Letter
of Credit shall be treated in all respects the same as the issuance of a new
Letter of Credit.

(j)                
The Borrower assumes
all risks of the acts, omissions, or misuse of any Letter of Credit by the
beneficiary thereof.  Neither Administrative Agent, Issuing Lender nor any
Lender will be responsible for (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Letter of Credit or any document submitted
by any party in connection with the issuance of any Letter of Credit, even if
such document should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of any
beneficiary of any Letter of Credit to comply fully with the conditions
required in order to demand payment under a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document or draft required by or from a beneficiary in order to make a
disbursement under a Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any Letter of Credit of the proceeds of
any drawing under such Letter of Credit; and (viii) for any consequences
arising from causes beyond the control of Administrative Agent or any Lender. 
None of the foregoing will affect, impair or prevent the vesting of any of the
rights or powers granted to Administrative Agent, Issuing Lender or the Lenders
hereunder.  

35 

 

 

 

In furtherance and extension and not in
limitation or derogation of any of the foregoing, any act taken or omitted to
be taken by Administrative Agent, Issuing Lender or the other Lenders in good
faith will be binding on the Borrower and will not put Administrative Agent,
Issuing Lender or the other Lenders under any resulting liability to the
Borrower; provided nothing contained herein shall relieve Issuing Lender for
liability to the Borrower arising as a result of the gross negligence or
willful misconduct of Issuing Lender as determined by a court of competent
jurisdiction after the exhaustion of all applicable appeal periods.

2.7       MATURITY DATE.  

(a)               
In General.  All sums due and owing under this
Agreement and the other Loan Documents shall be repaid in full on or before the
Maturity Date.  All payments due to Administrative Agent and Lenders under this
Agreement, whether at the Maturity Date or otherwise, shall be paid in Dollars
in immediately available funds.

(b)              
Extension Option.   

(i)                
Borrower shall have
the option (each option pursuant to this Section 2.7(b), the “Extension
Option”) to extend the term of the Facility from the Initial Maturity Date
to December 21, 2016 (the “Extended Maturity Date”)
upon satisfaction of each of the following conditions precedent with respect
thereto:

(A)            
Borrower shall provide
Administrative Agent with written notice of Borrower’s request to exercise the
Extension Option not more than ninety (90) days but not less than thirty (30)
days prior to the Initial Maturity Date;

(B)             
As of the date of
Borrower’s delivery of notice of its request to exercise the Extension Option,
and as of the Initial Maturity Date, all of Borrower’s and Guarantor’s
representations and warranties in the Loan Documents shall be true and correct
in all material respects except to the extent that any such representation or
warranty relates to a specific earlier date and no Default or Potential Default
shall have occurred and be continuing and Borrower and Guarantor shall so certify
in writing;

(C)             
At Requisite Lenders’ option, Administrative Agent shall have obtained at
Borrower’s expense new Appraisals or an update to the existing Appraisals of
the Mortgaged Properties and determined the current Appraised Value of the
Mortgaged Properties;

(D)            
The Borrower and the
Guarantors shall execute and deliver to Administrative Agent and Lenders such
additional consents and affirmations and other documents (including, without
limitation, amendments to the Security Documents) as the Administrative Agent
may reasonably require, and the Borrower shall pay the cost of any title
endorsement or update thereto or any update of UCC searches, recordings costs
and fees, and any and all intangible taxes or other documentary or mortgage
taxes, assessments or charges or any similar fees, taxes or expenses which are
required to be paid in connection with such extension.

36 

 

 

 

(E)             
Borrower and Guarantor
shall execute or cause the execution of all documents reasonably required by
Administrative Agent to exercise the Extension Option; and

(F)              
As a condition to such
extension, Borrower shall pay to Administrative Agent, for the account of the
Lenders, an extension fee pursuant to Section 2.3(b)  hereof,
together with all reasonable costs and expenses incurred by or on behalf of Administrative
Agent in connection with the extension, it being agreed that such payment may
be made pursuant to an advance under the Facility.

(ii)  
Extended
Maturity Date.   In the event that the Initial Maturity
Date shall have been extended as provided in Section 2.7(b)(i),
Borrower shall have the option to extend the term of the Facility from the
Extended Maturity Date of December 21, 2016 to December 21,
2017 (which date shall then become the “Extended Maturity Date”) upon
satisfaction of each of the following conditions precedent with respect
thereto:

(A)            
Borrower shall provide
Administrative Agent with written notice of Borrower’s request to exercise the
Extension Option not more than ninety (90) days but not less than thirty (30)
days prior to the then effective Maturity Date;

(B)             
As of the date of
Borrower’s delivery of notice of its request to exercise the Extension Option,
and as of the then effective Maturity Date, all of Borrower’s and Guarantor’s
representations and warranties in the Loan Documents shall be true and correct
in all material respects except to the extent that any such representation or
warranty relates to a specific earlier date and no Default or Potential Default
shall have occurred and be continuing and Borrower and Guarantor shall so
certify in writing;

(C)             
At Requisite Lenders’ option, Administrative Agent shall have obtained at
Borrower’s expense new Appraisals or an update to the existing Appraisals of
the Mortgaged Properties and determined the current Appraised Value of the
Mortgaged Properties;

(D)            
The Borrower and the
Guarantors shall execute and deliver to Administrative Agent and Lenders such
additional consents and affirmations and other documents (including, without
limitation, amendments to the Security Documents) as the Administrative Agent may
reasonably require, and the Borrower shall pay the cost of any title
endorsement or update thereto or any update of UCC searches, recordings costs
and fees, and any and all intangible taxes or other documentary or mortgage
taxes, assessments or charges or any similar fees, taxes or expenses which are
required to be paid in connection with such extension.

(E)             
Borrower and Guarantor
shall execute or cause the execution of all documents reasonably required by
Administrative Agent to exercise the Extension Option; and

(F)              
As a condition to such
extension, Borrower shall pay to Administrative Agent, for the account of the
Lenders, an extension fee pursuant to Section 2.3(b)  hereof,
together with all reasonable costs and expenses incurred by or on behalf of 

37 

 

 

 

Administrative Agent in connection with the extension, it
being agreed that such payment may be made pursuant to an advance under the
Facility.

(c)               
No Obligation to
Extend. 
Notwithstanding Borrower’s right to extend the Initial Maturity Date of the
Facility as set forth hereinabove, Borrower hereby agrees that Lenders shall
have no commitment or obligation to extend the Initial Maturity Date, unless
each of the conditions set forth in Section 2.7(b)(i)  or (ii),
as applicable, above shall have been satisfied.

2.8       INTEREST ON THE
FACILITY. 

(a)               
Interest
Payments.  Interest
accrued on the outstanding principal balance of the Facility shall be due and
payable, in the manner provided in Section 2.9, on the first day of
each month commencing with the first month after the Effective Date.

(b)              
Default Interest.  Notwithstanding the rates of interest
specified in Section 2.8(e)  below and the payment dates specified
in Section 2.8(a), at Requisite Lenders’ discretion at any time
following the occurrence and during the continuance of any Default, the
principal balance of the Facility then outstanding and, to the extent permitted
by applicable law, any interest payments on the Facility not paid when due,
shall bear interest payable upon demand at the Alternate Rate, and the Letter
of Credit fee payable pursuant to Section 2.6(e) shall be increased to a
rate equal to four percent (4%) above the Letter of Credit fee that would
otherwise be applicable at such time.  All other amounts due Administrative
Agent or Lenders (whether directly or for reimbursement) under this Agreement
or any of the other Loan Documents if not paid when due, or if no time period
is expressed, if not paid within ten (10) days after demand, shall likewise, at
the option of Requisite Lenders, bear interest from and after demand at the
Alternate Rate.

(c)               
Late Fee.  Borrower acknowledges that late payment
to Administrative Agent will cause Administrative Agent and Lenders to incur
costs not contemplated by this Agreement.  Such costs include, without
limitation, processing and accounting charges.  Therefore, if Borrower fails
timely to pay any sum due and payable hereunder through the Maturity Date
(other than payment of the entire outstanding balance of the Facility on the
Maturity Date or on any earlier date pursuant to an acceleration of any of the
Loans), unless waived by Administrative Agent, a late charge of four cents
($.04) for each dollar of any such principal payment, interest or other charge
due hereon and which is not paid within ten (10) days after such payment is due,
shall be charged by Administrative Agent (for the benefit of Lenders) and paid
by Borrower for the purpose of defraying the expense incident to handling such
delinquent payment.  Borrower and Administrative Agent agree that this late
charge represents a reasonable sum considering all of the circumstances
existing on the date hereof and represents a fair and reasonable estimate of
the costs that Administrative Agent and Lenders will incur by reason of late
payment.  Borrower and Administrative Agent further agree that proof of actual
damages would be costly and inconvenient.  Acceptance of any late charge shall
not constitute a waiver of the default with respect to the overdue installment,
and shall not prevent Administrative Agent from exercising any of the other
rights available hereunder or any other Loan Document.  Such late charge shall
be paid without prejudice to any other rights of Administrative Agent.

38 

 

 

(d)              
Computation of
Interest.  Interest
shall be computed on the basis of the actual number of days elapsed in the
period during which interest or fees accrue and a year of three hundred sixty
(360) days on the principal balance of the Facility outstanding from time to
time.  In computing interest on the Facility, the date of the making of a
disbursement under the Facility shall be included and the date of payment shall
be excluded.  Notwithstanding any provision in this Section 2.8,
interest in respect of the Facility shall not exceed the maximum rate permitted
by applicable law.  It is the intention of the parties hereto to conform
strictly to applicable usury laws.  Accordingly, all agreements between
Borrower and Lenders with respect to the Facility are hereby expressly limited
so that in no event, whether by reason of acceleration of maturity or otherwise,
shall the amount paid or agreed to be paid to Lenders or charged by Lenders for
the use, forbearance or detention of the money to be lent hereunder or
otherwise, exceed the maximum amount allowed by law.  If the Facility would be
usurious under applicable law, then, notwithstanding anything to the contrary
in the Loan Documents: (1) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited on the Notes by the holder thereof (or, if the Notes have been paid in
full, refunded to Borrower); and (2) if maturity is accelerated by reason of an
election or deemed election by Lenders, or in the event of any prepayment, then
any consideration which constitutes interest may never include more than the
maximum amount allowed by applicable law.  In such case, excess interest, if any,
provided for in the Loan Documents or otherwise, to the extent permitted by
applicable law, shall be amortized, prorated, allocated and spread from the
date of advance until payment in full so that the actual rate of interest is
uniform through the term hereof.  If such amortization, proration, allocation
and spreading is not permitted under applicable law, then such excess interest
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the Notes (or, if the
Notes have been paid in full, refunded to Borrower).  The terms and provisions
of this Section 2.8(d)  shall control and supersede every other
provision of the Loan Documents.  If at any time the laws of the United States
of America permit Lenders to contract for, take, reserve, charge or receive a
higher rate of interest than is allowed by applicable state law (whether such
federal laws directly so provide or refer to the law of any state), then such
federal laws shall to such extent govern as to the rate of interest which
Lenders may contract for, take, reserve, charge or receive under the Loan
Documents.

(e)               
Effective Rate.  The “Effective Rate” upon which
interest shall be calculated for the Facility shall, from and after the Effective
Date of this Agreement, be one or more of the following:

(i)                
Provided no Default
exists under this Agreement:

(A)            
for those portions of
the principal balance of the Notes (including the Swing Loan Note) which are
not Fixed Rate Portions, the Effective Rate shall be the Base Rate plus the
Base Rate Margin.

(B)             
for those portions of
the principal balance of the Notes which are Fixed Rate Portions, the Effective
Rate for the Fixed Rate Period thereof shall be the Fixed Rate selected by
Borrower and set in accordance with the provisions hereof, provided, however,
if any of the transactions necessary for the calculation of interest at any
Fixed Rate requested or selected by Borrower should be or become prohibited or
unavailable to 

39 

 

 

 

Administrative Agent, or, if in Administrative
Agent’s good faith judgment, it is not possible or practical for Administrative
Agent to set a Fixed Rate for a Fixed Rate Portion and Fixed Rate Period as
requested or selected by Borrower or the Fixed Rate will not accurately and
fairly reflect the cost of the Lender’s making or maintaining Loans at the
Fixed Rate, the Effective Rate for such Fixed Rate Portion shall remain at or
revert to the Base Rate plus the Base Rate Margin.

(ii)              
During such time as a
Default exists under this Agreement; or from and after the date on which all
sums owing under the Notes become due and payable by acceleration or otherwise;
or from and after the date on which any collateral or any portion thereof or
interest therein, is sold, transferred, mortgaged, assigned, or encumbered,
whether voluntarily or involuntarily, or by operation of law or otherwise,
without Administrative Agent’s prior written consent, if required hereunder
(whether or not the sums owing under the Notes become due and payable by
acceleration); or from and after the Maturity Date, then at the option of
Requisite Lenders in each case, the interest rate applicable to the then
outstanding principal balance of the Facility shall be the Alternate Rate.

(f)               
Selection of
Fixed Rate.  Provided
no Default or Potential Default exists under this Agreement, Borrower, at its
option and upon satisfaction of the conditions set forth herein, may request a
Fixed Rate as the Effective Rate for calculating interest on the portion of the
unpaid principal balance and for the period selected in accordance with and
subject to the following procedures and conditions, provided, however,
that Borrower may not have in effect at any one time more than eight (8) Fixed
Rates:

(i)                
Borrower shall deliver
to 4910 Tiedeman Road, Brooklyn, Ohio 44144 or such other addresses as
Administrative Agent shall designate, an original or facsimile Fixed Rate
Notice no later than 12:00 P.M. (Cleveland, Ohio time), and not less than three
(3) nor more than five (5) Business Days prior to the proposed Fixed Rate
Period for each Fixed Rate Portion.  Any Fixed Rate Notice pursuant to this subsection
(i) is irrevocable.

Administrative Agent is authorized to
rely upon the telephonic request and acceptance of any of Rich Smith, Ryan
Moore, Jeff Brown, Francine Glandt or Joseph Fleming, or any of such other
person holding the respective offices of Chief Financial Officer, Chief
Accounting Officer, Vice President of Finance or Director of Finance as
Borrower’s duly authorized agents, or such additional authorized agents as
Borrower shall designate in writing to Administrative Agent (such persons are
collectively referred to as the “Authorized Officers”).  Borrower’s telephonic
notices, requests and acceptances shall be directed to such officers of
Administrative Agent as Administrative Agent may from time to time designate.

(ii)              
Borrower may elect (A)
to convert Base Rate advances to a Fixed Rate Portion, or (B) to convert a
matured Fixed Rate Portion into a new Fixed Rate Portion, or (C) to convert a
matured Fixed Rate Portion into a Base Rate advance, provided, however,
that the aggregate amount of the advance being converted into or continued as a
Fixed Rate Portion shall comply with the definition thereof as to Dollar
amount.  The conversion of a matured Fixed Rate Portion back to a Base Rate or
to a new Fixed Rate Portion shall occur on the last Business Day of the Fixed
Rate Period relating to such Fixed Rate Portion.  Each Fixed Rate Notice shall
specify (X) the amount of the Fixed Rate Portion, (Y) the Fixed Rate Period, and
(Z) the Fixed Rate Commencement Date.

40 

 

 

 

(iii)            
Upon receipt of a
Fixed Rate Notice in the proper form requesting a Fixed Rate Portion advance
under subsections (i) and (ii) above, Administrative Agent shall
determine the Fixed Rate applicable to the Fixed Rate Period for such Fixed
Rate Portion two (2) Business Days prior to the beginning of such Fixed Rate
Period.  Each determination by Administrative Agent of the Fixed Rate shall be
conclusive and binding upon the parties hereto in the absence of manifest error. 
Administrative Agent shall deliver to Borrower and each Lender (by facsimile)
an acknowledgment of receipt and confirmation of the Fixed Rate Notice; provided,
however, that failure to provide such acknowledgment of receipt and
confirmation of the Fixed Rate Notice to Borrower or any Lender shall not
affect the validity of such rate.

(iv)            
If Borrower does not
make a timely election to convert all or a portion of a matured Fixed Rate
Portion into a new Fixed Rate Portion or into a Base Rate advance in accordance
with this Section 2.8(f), such Fixed Rate Portion shall be
automatically converted to a Fixed Rate Portion with a Fixed Rate Period of one
(1) month upon the expiration of the Fixed Rate Period applicable to such Fixed
Rate.

(g)              
Fixed Rate
Taxes, Regulatory Costs and Reserve Percentages.  Upon Administrative Agent’s demand,
Borrower shall pay to Administrative Agent for the account of each Lender, in
addition to all other amounts which may be, or become, due and payable under
this Agreement and the other Loan Documents, any and all Fixed Rate Taxes and
Regulatory Costs, to the extent they are not internalized by calculation of a
Fixed Rate.  Administrative Agent shall give Borrower notice of any Fixed Rate
Taxes and Regulatory Costs as soon as practicable after their occurrence, but
Borrower shall be liable for any Fixed Rate Taxes and Regulatory Costs
regardless of whether or when notice is so given.

(h)              
Fixed Rate Price
Adjustment.  Borrower
acknowledges that prepayment or acceleration of a Fixed Rate Portion during a
Fixed Rate Period shall result in Lenders’ incurring additional costs, expenses
and/or liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities.  Therefore, on
the date a Fixed Rate Portion is prepaid or the date all sums payable hereunder
become due and payable, by acceleration or otherwise prior to the expiration of
the applicable Fixed Rate Period for such Fixed Rate Portion (“Price
Adjustment Date”), Borrower will pay Administrative Agent, for the account
of each Lender (in addition to all other sums then owing to Lenders) an amount
(“Fixed Rate Price Adjustment”) equal to the then present value of (i)
the amount of interest that would have accrued on the Fixed Rate Portion for
the remainder of the Fixed Rate Period at the Fixed Rate set on the Fixed Rate
Commencement Date, less (ii) the amount of interest that would accrue on the
same Fixed Rate Portion for the same period if the Fixed Rate were set on the
Price Adjustment Date at the Applicable LIBO Rate in effect on the Price
Adjustment Date.  The present value shall be calculated by using as a discount
rate the LIBO Rate quoted on the Price Adjustment Date.

(i)                   
Purchase, Sale
and Matching of Funds. 
Borrower understands, agrees and acknowledges the following: (a) Lenders have
no obligation to purchase, sell and/or match funds in connection with the use
of a LIBO Rate as a basis for calculating a Fixed Rate or Fixed Rate Price
Adjustment; (b) a LIBO Rate is used merely as a reference in determining a
Fixed Rate and Fixed Rate Price Adjustment; and (c) Borrower has accepted a
LIBO Rate as a reasonable and fair basis for calculating a Fixed Rate and a
Fixed Rate Price Adjustment.  

41 

 

 

 

Borrower further agrees
to pay the Fixed Rate Price Adjustment, Fixed Rate Taxes and Regulatory Costs,
if any, whether or not any Lender elects to purchase, sell and/or match funds.

2.9       PAYMENTS. 

(a)               
Manner and Time
of Payment.  All
payments of principal, interest and fees hereunder payable to Administrative
Agent or the Lenders shall be made without condition or reservation of right
and free of set-off or counterclaim, in Dollars and by wire transfer (pursuant
to Administrative Agent’s written wire transfer instructions) of immediately
available funds, to Administrative Agent, for the account of each Lender as
applicable, not later than 2:00 P.M. (Cleveland, Ohio time) on the date
due; and funds received by Administrative Agent after that time and date shall
be deemed to have been paid on the next succeeding Business Day.  The Borrower
shall, at the time of making each payment under this Agreement or any other
Loan Document, specify to the Administrative Agent the amounts payable by the
Borrower hereunder to which such payment is to be applied.

(b)              
Payments on
Non-Business Days. 
Whenever any payment to be made by Borrower hereunder shall be stated to be due
on a day which is not a Business Day, payments shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder and of any fees due under this
Agreement, as the case may be.

(c)               
Voluntary
Prepayment.  Borrower
may, upon not less than two (2) Business Days’ prior written notice to
Administrative Agent not later than 2:00 P.M. (Cleveland, Ohio time) on the
date given, at any time and from time to time, prepay all or any portion of the
Facility without penalty, except as otherwise expressly set forth in this Section 2.9(c). 
Each partial prepayment of the Loans shall be in a minimum amount of
$1,000,000.00 or an integral multiple of $100,000.00 in excess thereof, shall
be accompanied by the payment of accrued interest on the principal prepaid to
the date of payment and any amounts due pursuant to Section 2.8(h). 
Each partial payment under Section 2.9 shall be applied first to the
principal of any Outstanding Swing Loans, then, in the absence of instruction
by the Borrower and then to the principal of Revolving Credit Loans (and with
respect to each of Loans, first to the principal of Base Rate advances, and
then to the principal of Fixed Rate advances).  Any notice of prepayment given
to Administrative Agent under this Section 2.9(c)  shall specify the
date of prepayment and the principal amount of the prepayment.  In the event of
a prepayment of any Fixed Rate Portion, Borrower shall concurrently pay any
Fixed Rate Price Adjustment payable in respect thereof.  No prior notice shall
be required for prepayment of any Swing Loan.

(d)              
Mandatory
Prepayments.  If at
any time the aggregate principal amount of all advances outstanding under the
Facility and Letter of Credit Liabilities exceeds the aggregate amount of the
Commitment Amounts or the Borrowing Base Availability, then the Borrower shall
deliver to the Administrative Agent such excess, by repaying an appropriate
amount of the Facility within five (5) Business Days’ of such event.  The
amount of any Swing Loans shall be paid solely to the Swing Loan Lender.  In
the event there shall have occurred a casualty with respect to any Mortgaged Property
and the Borrower is required to repay the Loans pursuant to a Mortgage or Section
5.1 or a Taking and the Borrower is required to repay the Loans pursuant to
a Mortgage or Section 5.1, the Borrower shall prepay the Loans within
one (1) Business Day of the date of receipt by the Borrower or the
Administrative Agent of any 

42 

 

 

 

Insurance Proceeds or
Condemnation Proceeds in respect of such casualty or Taking, as applicable, in
the amount required pursuant to the relevant provisions of Section 5.1
or such Mortgage.

2.10      [INTENTIONALLY OMITTED].   

2.11   LENDERS’ ACCOUNTING.  Administrative Agent shall maintain a
loan account (the “Loan Account”) on its books in which shall be
recorded (a) the names and addresses and the Pro Rata Shares of the commitment
of each of the Lenders, and principal amount of the Facility owing to each
Lender from time to time, and (b) all repayments of principal and payments of
accrued interest, as well as payments of fees required to be paid pursuant to
this Agreement.  All entries in the Loan Account shall be made in accordance
with Administrative Agent’s customary accounting practices as in effect from
time to time.  Monthly or at such other interval as is customary with
Administrative Agent’s practice, Administrative Agent will render a statement
of the Loan Account to Borrower and will deliver a copy thereof to each
Lender.  Each such statement shall be deemed final, binding and conclusive upon
Borrower in all respects as to all matters reflected therein (absent manifest
error).

2.12    
AMOUNT LIMITATIONS.   Notwithstanding any other term of this Agreement or
any other Loan Document, no Lender shall be required to make any advance if,
immediately after the making of such advance the aggregate principal amount of
all outstanding advances under the Facility, and its participation in Swing
Loans or Letters of Credit would exceed the aggregate Commitment Amount.

2.13    
OBLIGATIONS
ABSOLUTE.  The
obligations of the Borrower to the Lenders under this Agreement with respect to
Letters of Credit (and of the Lenders to make payments to the Issuing Lender
with respect to Letters of Credit and to the Swing Loan Lender with respect to
Swing Loans) shall be absolute, unconditional and irrevocable, and shall be
paid and performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including, without limitation, the
following circumstances:  (i) any lack of validity or enforceability of
this Agreement, any Letter of Credit or any of the other Loan Documents;
(ii) any improper use which may be made of any Letter of Credit or any
improper acts or omissions of any beneficiary or transferee of any Letter of
Credit in connection therewith; (iii) the existence of any claim, set-off,
defense or any right which the Borrower or any of its Subsidiaries or
Affiliates may have at any time against any beneficiary or any transferee of
any Letter of Credit (or persons or entities for whom any such beneficiary or
any such transferee may be acting) or the Lenders (other than the defense of
payment to the Lenders in accordance with the terms of this Agreement) or any
other person, whether in connection with any Letter of Credit, this Agreement,
any other Loan Document, or any unrelated transaction; (iv) any draft, demand,
certificate, statement or any other documents presented under any Letter of
Credit proving to be insufficient, forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
(v) any breach of any agreement between the Borrower or any of its
Subsidiaries or Affiliates and any beneficiary or transferee of any Letter of
Credit; (vi) any irregularity in the transaction with respect to which any
Letter of Credit is issued, including any fraud by the beneficiary or any
transferee of such Letter of Credit; (vii) payment by the Issuing Lender
under any Letter of Credit against presentation of a sight draft, demand,
certificate or other document which does not comply with the terms of such
Letter of Credit, provided  that such payment shall not have constituted
gross negligence or willful 

43 

 

 

 

misconduct on the part of
the Issuing Lender as determined by a court of competent jurisdiction after the
exhaustion of all applicable appeal periods; (viii) any non-application or
misapplication by the beneficiary of a Letter of Credit of the proceeds of such
Letter of Credit; (ix) the legality, validity, form, regularity or
enforceability of the Letter of Credit; (x) the failure of any payment by
Issuing Lender to conform to the terms of a Letter of Credit (if, in Issuing
Lender’s good faith judgment, such payment is determined to be appropriate);
(xi) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; (xii) the
occurrence of any Default or Potential Default; and (xiii) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.

2.14     INCREASE IN TOTAL COMMITMENT.  

(a)               
Provided that no
Potential Default or Default has occurred and is continuing, subject to the
terms and conditions set forth in this Section 2.13, the Borrower shall
have the option at any time and from time to time before the Maturity Date to
request an increase in the total Commitment Amount to not more than
$250,000,000.00 by giving written notice to the Administrative Agent (an
“Increase Notice”; and the amount of such requested increase is the “Commitment
Increase”), provided that any such individual increase must be in a minimum
amount of $5,000,000.00 and increments of $1,000,000.00 in excess thereof. 
Upon receipt of any Increase Notice, the Administrative Agent shall consult
with the Arranger and shall notify the Borrower of the amount of the facility
fees to be paid to any Lenders who provide an additional Commitment Amount in
connection with such increase.  If the Borrower agrees to pay the facility fees
so determined, the Administrative Agent shall send a notice to all Lenders (the
“Additional Commitment Request Notice”) informing them of the Borrower’s
request to increase the total Commitment Amount and of the facility fees to be
paid with respect thereto.  Each Lender who desires to provide an additional
Commitment Amount upon such terms shall provide Administrative Agent with a
written commitment letter specifying the amount of the additional Commitment
Amount which it is willing to provide prior to such deadline as may be
specified in the Additional Commitment Request Notice.  If the requested
increase is oversubscribed then the Administrative Agent and the Arranger shall
allocate the Commitment Increase among the Lenders who provide such commitment
letters on such basis as the Administrative Agent and the Arranger shall
determine in their sole discretion.  If the additional Commitment Amounts so
provided are not sufficient to provide the full amount of the Commitment
Increase requested by the Borrower, then the Administrative Agent, Arranger, or
the Borrower may, but shall not be obligated to, invite one or more banks or
lending institutions (which banks or lending institutions shall be acceptable
to Administrative Agent, Arranger, and the Borrower) to become a Lender and
provide an additional Commitment Amount.  The Administrative Agent shall
provide all Lenders with a notice setting forth the amount, if any, of the
additional Commitment Amount to be provided by each Lender and the revised Pro
Rata Shares which shall be applicable after the effective date of the
Commitment Increase specified therein (the “Commitment Increase Date”).  In no
event shall any Lender be obligated to provide an additional Commitment Amount.

(b)              
On any Commitment
Increase Date the outstanding principal balance of the Revolving Credit Loans
shall be reallocated among the Lenders such that after the applicable
Commitment Increase Date the outstanding principal amount of Revolving Credit
Loans owed to each Lender shall be equal to such Lender’s Pro Rata Share (as in
effect after the applicable Commitment Increase Date) of the outstanding
principal amount of all Revolving Credit Loans.  The participation interests of
the Lenders in Swing Loans and Letters of Credit shall be similarly 

44 

 

 

 

adjusted.  On any Commitment Increase Date, those Lenders
whose Pro Rata Share is increasing shall advance the funds to the
Administrative Agent and the funds so advanced shall be distributed among the
Lenders whose Pro Rata Share is decreasing as necessary to accomplish the
required reallocation of the outstanding Revolving Credit Loans.  The funds so
advanced shall be Loans bearing interest by reference to the Base Rate until
converted to Loans bearing interest by reference to the LIBO Rate which are
allocated among all Lenders based on their Pro Rata Shares.

(c)               
Upon the effective
date of each increase in the total Commitment Amount pursuant to this Section
2.13, (i) the Administrative Agent may unilaterally revise Schedule 1.1 
to reflect the name and address, Commitment Amount and Pro Rata Share of each
Lender following such increase and the Borrower shall execute and deliver to
the Administrative Agent new Revolving Credit Notes for each Lender whose
Commitment Amount has changed so that the principal amount of such Lender’s
Revolving Credit Note shall equal its Commitment Amount, (ii) the Swing Loan
Commitment shall automatically increase to the lesser of (A) an amount equal to
ten percent (10%) of the new total Commitment Amount and (B) the Commitment
Amount of the Swing Loan Lender, and the Borrower shall execute and deliver to
the Agent a new Swing Loan Note for the Swing Loan Lender so that the principal
amount of the Swing Loan Note shall equal the Swing Loan Commitment, and (iii)
the Letter of Credit Sublimit shall automatically increase to the lesser of (A)
an amount equal to ten percent (10%) of the new total Commitment Amount and (B)
the Commitment Amount of the Issuing Lender.  The Administrative Agent shall
deliver such replacement Revolving Credit Note to the respective Lenders in
exchange for the Revolving Credit Notes replaced thereby which shall be
surrendered by such Lenders.  Such new Revolving Credit Notes shall provide
that they are replacements for the surrendered Revolving Credit Notes, and that
they do not constitute a novation, shall be dated as of the Commitment Increase
Date and shall otherwise be in substantially the form of the replaced Revolving
Credit Notes.  In connection with the issuance of any new Revolving Credit Note
pursuant to this Section 2.13(c), at the option of Administrative Agent,
the Borrower shall deliver an opinion of counsel, addressed to the Lenders and
the Administrative Agent, relating to the due authorization, execution and
delivery of such new Revolving Credit Notes and the enforceability thereof, in
form and substance substantially similar to the opinion delivered in connection
with the first disbursement under this Agreement.  The surrendered Revolving
Credit Notes shall be canceled and returned to the Borrower. 

(d)              
Notwithstanding
anything to the contrary contained herein, the obligation of the Administrative
Agent and the Lenders to increase the total Commitment Amount pursuant to this Section 2.13 
shall be conditioned upon satisfaction of the following conditions precedent
which must be satisfied prior to the effectiveness of any increase of the total
Commitment Amount:

(i)                
Payment of
Activation Fee.  The Borrower
shall pay (A) to the Administrative Agent and the Arranger those fees described
in and contemplated by the Fee Letter with respect to the applicable Commitment
Increase, and (B) to the Arranger such facility fees as the Lenders who are
providing an additional Commitment Amount may require to increase the aggregate
Commitment Amount, which fees shall, when paid, be fully earned and
non-refundable under any circumstances.  The Arranger shall pay to the Lenders
acquiring the increased Commitment Amount certain fees pursuant to their
separate agreement; and

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(ii)              
No Default.  On the date any Increase Notice is
given and on the date such increase becomes effective, both immediately before
and after the total Commitment Amount is increased, there shall exist no Default
or Potential Default; and

(iii)            
Representations
True.  The
representations and warranties made by the Borrower and Guarantors in the Loan
Documents or otherwise made by or on behalf of the Borrower or the Guarantors
in connection therewith or after the date thereof shall have been true and
correct in all material respects when made and shall also be true and correct
in all material respects on the date of such Increase Notice and on the date
the total Commitment Amount is increased, both immediately before and after the
total Commitment Amount is increased; and  

(iv)            
Additional
Documents and Expenses. 
The Borrower and the Guarantors shall execute and deliver to Administrative
Agent and the Lenders such additional documents (including, without limitation,
amendments to the Security Documents), instruments, certifications and opinions
as the Administrative Agent may reasonably require in its sole and absolute
discretion (including, without limitation, in the case of the Borrower, a
Compliance Certificate, demonstrating compliance with all covenants,
representations and warranties set forth in the Loan Documents after giving
effect to the increase) and the Borrower shall pay the cost of any mortgagee’s
title insurance policy or any endorsement or update thereto or any updated UCC
searches, all recording costs and fees, and any and all intangible taxes or
other documentary or mortgage taxes, assessments or charges or any similar
fees, taxes or expenses which are required to be paid in connection with such
increase;

(v)              
Other.  The Borrower shall satisfy such other
conditions to such increase as Administrative Agent may require in its
reasonable discretion.

2.15     DEFAULTING LENDERS.

(a)               
If for any reason any
Lender shall be a Defaulting Lender, then, in addition to the rights and
remedies that may be available to the Administrative Agent or the Borrower
under this Agreement or applicable law, such Defaulting Lender’s right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Administrative Agent
or to be taken into account in the calculation of the Requisite Lenders or all
of the Lenders, shall be suspended during the pendency of such failure or
refusal.  If a Lender is a Defaulting Lender because it has failed to make
timely payment to the Administrative Agent of any amount required to be paid to
the Administrative Agent hereunder (without giving effect to any notice or cure
periods), in addition to other rights and remedies which the Administrative
Agent or the Borrower may have under the immediately preceding provisions or
otherwise, the Administrative Agent shall be entitled (i) to collect interest
from such Defaulting Lender on such delinquent payment for the period from the
date on which the payment was due until the date on which the payment is made
at the Federal Funds Effective Rate, (ii) to withhold or setoff and to apply in
satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest.  Any amounts received by the Administrative Agent in
respect of a Defaulting Lender’s Loans shall be applied as set forth in Section
2.14(d). 

46 

 

 

 

(b)              
Any Non-Defaulting
Lender may, but shall not be obligated, in its sole discretion, to acquire all
or a portion of a Defaulting Lender’s Commitment.  Any Lender desiring to
exercise such right shall give written notice thereof to the Administrative
Agent and the Borrower no sooner than two (2) Business Days and not later than
five (5) Business Days after such Defaulting Lender became a Defaulting
Lender.  If more than one Lender exercises such right, each such Lender shall
have the right to acquire an amount of such Defaulting Lender’s Commitment in
proportion to the Commitment of the other Lenders exercising such right.  If
after such fifth (5th) Business Day, the Lenders have not elected to
purchase all of the Commitment of such Defaulting Lender, then the Borrower (so
long as no Default or Potential Default exists) or the Requisite Lenders may,
by giving written notice thereof to the Administrative Agent, such Defaulting
Lender and the other Lenders, demand that such Defaulting Lender assign its
Commitment to an Eligible Assignee subject to and in accordance with the
provisions of Section 13.13(c)  for the purchase price provided for
below.  No party hereto shall have any obligation whatsoever to initiate any
such replacement or to assist in finding an Eligible Assignee.  Upon any such
purchase or assignment, and any such demand with respect to which the
conditions specified in Section 13.13(c) have been satisfied, the
Defaulting Lender’s interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser or assignee thereof, including an
appropriate Assignment and Assumption Agreement.  The purchase price for the
Commitment of a Defaulting Lender shall be equal to the amount of the principal
balance of the Loans outstanding and owed by the Borrower to the Defaulting
Lender plus any accrued but unpaid interest thereon and accrued but unpaid
fees.  Prior to payment of such purchase price to a Defaulting Lender, the
Administrative Agent shall apply against such purchase price any amounts
retained by the Administrative Agent pursuant to Section 2.14(d). 

(c)               
During any period in
which there is a Defaulting Lender, all or any part of such Defaulting Lender’s
obligation to acquire, refinance or fund participations in Letters of Credit
pursuant to Section 2.6(g) or Swing Loans pursuant to Section 2.2(e))
shall be reallocated among the Lenders that are Non-Defaulting Lenders in
accordance with their respective Pro Rata Shares (computed without giving
effect to the Commitment of such Defaulting Lender; provided that (i) each such
reallocation shall be given effect only if, at the date the applicable Lender
becomes a Defaulting Lender, no Default or Potential Default exists, (ii) the
conditions set forth in Section 3.1 are satisfied at the time of such
reallocation (and, unless the Borrower shall have notified the Administrative
Agent at such time, the Borrower shall be deemed to have represented and
warranted that such conditions are satisfied at the time), (iii) the
representations and warranties in the Loan Documents shall be true and correct
in all material respects on and as of the date of such reallocation with the
same effect as though made on and as of such date, and (iv) the aggregate
obligation of each Lender that is a Non-Defaulting Lender to acquire, refinance
or fund participations in Letters of Credit and Swing Loans shall not exceed
the positive difference, if any, of (A) the Commitment Amount of that
Non-Defaulting Lender minus (B) the sum of (1) the aggregate outstanding
principal amount of the Revolving Credit Loans of that Lender plus (2) such
Lender’s pro rata portion in accordance with its Pro Rata Share of outstanding
Letter of Credit Liabilities and Swing Loans.  No reallocation hereunder shall
constitute a waiver or release of any claim of any party hereunder against a
Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-

 

 

Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.

(d)              
Any payment of principal,
interest, fees or other amounts received by the Administrative Agent for the
account of such Defaulting Lender (whether voluntary or mandatory, at maturity,
or otherwise, and including any amounts made available to the Administrative
Agent for the account of such Defaulting Lender pursuant to Section 13.7),
shall be applied at such time or times as may be determined by the
Administrative Agent as follows:  first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent (other than with respect to
Letter of Credit Liabilities) hereunder; second, to the payment of any amounts
owing by such Defaulting Lender to the Issuing Lender (with respect to Letter
of Credit Liabilities) and/or the Swing Loan Lender hereunder; third, if so
determined by the Administrative Agent or requested by the Issuing Lender or
the Swing Loan Lender, to be held as cash collateral for future funding
obligations of such Defaulting Lender of any participation in any Letter of
Credit or Swing Loan; fourth, as the Borrower may request (so long as no
Default or Potential Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required
by this Agreement, as determined by the Administrative Agent; fifth, if so
determined by the Administrative Agent and the Borrower, to be held in a
non-interest bearing deposit account and released pro rata in order to (x)
satisfy obligations of such Defaulting Lender to fund Loans or participations
under this Agreement and (y) be held as cash collateral for future funding
obligations of such Defaulting Lender of any participation in any Letter of
Credit or Swing Loan; sixth, to the payment of any amounts owing to the
Administrative Agent or the Lenders (including the Issuing Lender and the Swing
Loan Lender) as a result of any judgment of a court of competent jurisdiction
obtained by the Administrative Agent or any Lender (including the Issuing
Lender and the Swing Loan Lender) against such Defaulting Lender as a result of
such Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default or Potential Default exists, to the payment of
any amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (i) such payment is a payment
of the principal amount of any Revolving Credit Loans or funded participations
in Letters of Credit or Swing Loans in respect of which such Defaulting Lender
has not fully funded its appropriate share and (ii) such Revolving Credit Loans
or funded participations in Letters of Credit or Swing Loans were made at a
time when the conditions set forth in Section 3.1, to the extent
required by this Agreement, were satisfied or waived, such payment shall be
applied solely to pay the Revolving Credit Loans of, and funded participations
in Letters of Credit or Swing Loans owed to, all Non-Defaulting Lenders on a
pro rata basis until such time as all Revolving Credit Loans and funded and
unfunded participations in Letters of Credit and Swing Loans are held by the
Lenders pro rata in accordance with their Pro Rata Shares without regard to Section 2.14(c),
prior to being applied to the payment of any Revolving Credit Loans of, or
funded participations in Letters of Credit or Swing Loans owed to, such
Defaulting Lender.  Any payments, prepayments or other amounts paid or payable
to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender or to post cash collateral pursuant to this Section 2.14(c) 
shall be deemed paid to and redirected by such Defaulting Lender, and each
Lender irrevocably consents hereto, and to the extent allocated to the
repayment of principal of the Loan, shall not be considered outstanding
principal under this Agreement.

48 

 

 

 

(e)               
Within five (5)
Business Days of demand by the Issuing Lender or Swing Loan Lender from time to
time, the Borrower shall deliver to the Administrative Agent for the benefit of
the Issuing Lender and the Swing Loan Lender cash collateral in an amount
sufficient to cover all Fronting Exposure with respect to the Issuing Lender
and Swing Loan Lender (after giving effect to Section 2.2(a), Section
2.6(a) and Section 2.14(c)) on terms satisfactory to the Issuing
Lender and/or Swing Loan Lender in its good faith determination (and such cash
collateral shall be in Dollars).  Any such cash collateral shall be deposited
in the Collateral Account as collateral (solely for the benefit of the Issuing
Lender and/or the Swing Loan Lender) for the payment and performance of each
Defaulting Lender’s Pro Rata Share in accordance with their respective Pro Rata
Share of outstanding Letter of Credit Liabilities and Swing Loans.  Moneys in
the Collateral Account deposited pursuant to this section shall be applied by
the Administrative Agent to reimburse the Issuing Lender and/or the Swing Loan
Lender immediately for each Defaulting Lender’s Pro Rata Share of any funding
obligation with respect to a Letter of Credit or Swing Loan which has not
otherwise been reimbursed by the Borrower or such Defaulting Lender.

(f)               
(i)     Each Lender that is a Defaulting Lender shall not be
entitled to receive any facility unused fee pursuant to Section 2.3(a)
for any period during which that Lender is a Defaulting Lender.

(ii)              
Each Lender that is a
Defaulting Lender shall not be entitled to receive Letter of Credit fees
pursuant to Section 2.6(e) for any period during which that Lender is a
Defaulting Lender.

(iii)            
With respect to any
facility unused fee or Letter of Credit fees not required to be paid to any
Defaulting Lender pursuant to clause (i) or (ii) above, the Borrower shall (x)
pay to each Non-Defaulting Lender that is a Lender that portion of any such fee
otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in Letter of Credit Liabilities or Swing Loans that has
been reallocated to such Non-Defaulting Lender pursuant to Section 2.14(c),
(y) pay to the Issuing Lender and Swing Loan Lender the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to the
Issuing Lender’s or Swing Loan Lender’s Fronting Exposure to such Defaulting
Lender and (z) not be required to pay any remaining amount of any such fee.

(g)              
If the Borrower (so
long as no Default or Potential Default exists) and the Administrative Agent
agree in writing in their sole discretion that a Defaulting Lender should no
longer be deemed to be a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the date specified in such notice and
subject to any conditions set forth therein (which may include arrangements
with respect to any cash collateral), that Lender will, to the extent
applicable, purchase that portion of outstanding Loans of the other Lenders or
take such other actions as the Administrative Agent may determine to be
necessary to cause the Loans and funded and unfunded participations in Letters
of Credit and Swing Loans to be held on a pro rata basis by the Lenders in
accordance with their Commitments (without giving effect to Section 2.14(c)),
whereupon such Lender will cease to be a Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrower while such Lender was a Defaulting Lender;
and provided, further, that except to the extent otherwise expressly agreed by
the affected parties, no change hereunder 

49 

 

 

 

from
Defaulting Lender to Lender will constitute a waiver or release of any claim of
any party hereunder arising from such Lender’s having been a Defaulting Lender.

ARTICLE 3.  DISBURSEMENT

3.1      CONDITIONS PRECEDENT TO
ADVANCES. 
Administrative Agent’s and Lenders’ obligation to make any advances or issue
any Letter of Credit or take any other action under the Loan Documents shall be
subject at all times to satisfaction of each of the following conditions
precedent (in addition to those set forth in Exhibit C and in any other
applicable provision hereof):

(a)               
There shall exist no
Default or Potential Default, as defined in this Agreement, or Default as
defined in any of the other Loan Documents or event, omission or failure of
condition which would constitute a Default after notice, lapse of time, or
both; and

(b)              
Administrative Agent
shall have received all Loan Documents, other documents, instruments, policies,
and forms of evidence or other materials required or reasonably requested by
Administrative Agent or any Lender under the terms of this Agreement or any of
the other Loan Documents, including, without limitation, delivery of the Notes
executed by the Borrower and payable to each Lender, as the case may be;

(c)               
[Reserved];  

(d)              
All representations
and warranties of Borrower and Guarantor under the Loan Documents shall be true
and correct in all material respects;

(e)               
The Borrower shall
have paid to KeyBank the fees payable pursuant to the Fee Letter;

(f)               
There has been no
material adverse change in the financial condition of any Related Party,
Subsidiary or the Real Estate Assets in the aggregate since the dates of the
financial statements furnished to Administrative Agent in connection with the
closing of the Facility and, except as otherwise disclosed to Administrative
Agent in writing, no Related Party has entered into any material transaction
which is not disclosed in such financial statements or in filings with the
Securities and Exchange Commission, if applicable;

(g)              
At such times as
Administrative Agent shall determine in its discretion prior to each funding,
to the extent available under applicable law and to the extent Administrative
Agent determines that the Title Policy may not insure the priority of the
Lenders with respect to such funding, a “date down” endorsement to each Title
Policy indicating no change in the state of title and containing no survey
exceptions not approved by the Administrative Agent, which endorsement shall,
expressly or by virtue of a proper “revolving credit” clause or endorsement in
each Title Policy, increase the coverage of each Title Policy to the aggregate
amount of all Loans advanced and outstanding and Letters of Credit issued and
outstanding (provided  that the amount of coverage under an individual
Title Policy for an individual Mortgaged Property need not equal the aggregate
amount of all Loans), or if such endorsement is not available, such other
evidence and assurances as the Administrative Agent may reasonably require
(which evidence may include, without limitation, an affidavit from the 

50 

 

 

 

Borrower stating that there have been no changes in title
from the date of the last effective date of the Title Policy).

(h)              
As a condition
precedent to any Lender’s obligations to make any Loans available to the
Borrower hereunder, the Borrower will pay to the Administrative Agent for the
account of the applicable recording office any mortgage, recording, intangible,
documentary stamp or other similar taxes and charges which the Administrative
Agent reasonably determines to be payable as a result of such Loan to any state
or any county or municipality thereof in which any of the Mortgaged Properties
are located, and deliver to the Administrative Agent such affidavits or other
information which the Administrative Agent reasonably determines to be
necessary in connection with such payment in order to insure that the Mortgages
on Mortgaged Property located in such state secure the Borrower’s obligation
with respect to the Loans then being requested by the Borrower.  The provisions
of this Section 3.1(h) shall not limit the Borrower’s obligations under
other provisions of the Loan Documents, including without limitation Section
13.1 hereof.

3.2     DISBURSEMENT AUTHORIZATION.  The proceeds of the Facility, when
qualified for disbursement, shall be disbursed to or for the benefit or account
of Borrower under the terms of this Agreement.  Disbursements hereunder may be
made by Administrative Agent upon the written request of any person who has
been authorized by Borrower to request such disbursements until such time as
written notice of Borrower’s revocation of such authority is received by
Administrative Agent.

3.3      LOAN DISBURSEMENTS.  Subject to the conditions set forth in Section 3.1,
the proceeds of the Facility shall be disbursed in accordance with the terms
and conditions of Exhibit C.  All disbursements shall be held by
Borrower in trust and applied by Borrower solely for the purposes for which the
funds have been disbursed.  Administrative Agent and Lenders have no obligation
to monitor or determine Borrower’s use or application of the disbursements.

3.4   FUNDS TRANSFER DISBURSEMENTS.  Borrower hereby authorizes
Administrative Agent to disburse the proceeds of the Facility as requested by
an Authorized Officer of the Borrower to any of the accounts designated in Exhibit G. 
Borrower agrees to be bound by any transfer request: (i) authorized or
transmitted by Borrower; or, (ii) made in Borrower’s name and accepted by
Administrative Agent in good faith and in compliance with these transfer
instructions, even if not properly authorized by Borrower.  Borrower further
agrees and acknowledges that Administrative Agent may rely solely on any bank routing
number or identifying bank account number or name provided by Borrower to
effect a wire or funds transfer even if the information provided by Borrower
identifies a different bank or account holder than named by the Borrower. 
Administrative Agent is not obligated or required in any way to take any
actions to detect errors in information provided by Borrower.  If
Administrative Agent takes any actions in an attempt to detect errors in the
transmission or content of transfer or requests or takes any actions in an
attempt to detect unauthorized funds transfer requests, Borrower agrees that no
matter how many times Administrative Agent takes these actions Administrative
Agent will not in any situation be liable for failing to take or correctly
perform these actions in the future and such actions shall not become any part
of the transfer disbursement procedures authorized under this provision, the
Loan Documents, or any agreement between Administrative Agent and Borrower. 
Borrower agrees to notify Administrative Agent of any errors in the transfer of
any funds or of any unauthorized or improperly authorized 

51 

 

 

 

transfer
requests within fourteen (14) days after Administrative Agent’s confirmation to
Borrower of such transfer.

Administrative Agent
will, in its sole discretion, determine the funds transfer system and the means
by which each transfer will be made.  Administrative Agent may delay or refuse
to accept a funds transfer request if the transfer would:  (i) violate the
terms of this Agreement; (ii) require use of a bank unacceptable on a
reasonable basis to Administrative Agent or prohibited by Governmental
Authority; (iii) cause Administrative Agent to violate any Federal Reserve or
other regulatory risk control program or guideline, or (iii) otherwise cause
Administrative Agent to violate any applicable law or regulation.

Administrative Agent
shall not be liable to Borrower or any other parties for (i) errors, acts
or failures to act of others, including other entities, banks, communications
carriers or clearinghouses, through which Borrower’s transfers may be made or
information received or transmitted, and no such entity shall be deemed an
agent of the Administrative Agent, (ii) any loss, liability or delay caused by
fires, earthquakes, wars, civil disturbances, power surges or failures, acts of
government, labor disputes, failures in communications networks, legal
constraints or other events beyond Administrative Agent’s control, or (iii) any
special, consequential, indirect or punitive damages, whether or not (a) any
claim for these damages is based on tort or contract or (b) Administrative
Agent or Borrower knew or should have known the likelihood of these damages in
any situation.  Administrative Agent makes no representations or warranties
other than those expressly made in this Agreement.

 Article 4. INSPECTIONS

Administrative Agent
shall have the right to enter upon any Real Estate Asset at all reasonable
times and with reasonable prior written notice prior to a Default and with
commercially reasonable steps taken to minimize hindrance or disruption to
tenants or violation of their lease rights to inspect the Real Estate Asset. 
Any such inspection by Administrative Agent is solely to determine whether
Borrower is properly discharging its obligations under the Loan Documents and
may not be relied upon by Borrower, Guarantor or by any third party as a
representation or warranty of compliance with this Agreement or any other
agreement.

Article 5.  INSURANCE;
CONDEMNATION

5.1        INSURANCE; CONDEMNATION

(a)            
The Borrower and each
Subsidiary Guarantor will, at its expense, procure and maintain for the benefit
of the Borrower, each such Subsidiary Guarantor and the Administrative Agent,
insurance policies issued by such insurance companies, in such amounts, in such
form and substance, and with such coverages, endorsements, deductibles and
expiration dates as are acceptable to the Administrative Agent, providing the
following types of insurance covering each Mortgaged Property:

(i)                
“Cause of Loss-Special
Form” property insurance (including broad form flood, broad form earthquake,
coverage from loss or damage arising from acts of terrorism, and comprehensive
boiler and machinery coverages) on each Building and the contents therein of
the Borrower and its Subsidiaries in an amount not less than one hundred
percent (100%) of the full replacement cost of each Building and the contents
therein of the Borrower and its Subsidiaries or such other amount as the
Administrative Agent may approve, with deductibles 

52 

 

 

 

not
to exceed $10,000.00 for any one occurrence, with a replacement cost coverage
endorsement, an agreed amount endorsement, and, if requested by the
Administrative Agent, a contingent liability from operation of building laws
endorsement in such amounts as the Administrative Agent may require.  Full
replacement cost as used herein means the cost of replacing the Building
(exclusive of the cost of excavations, foundations and footings below the
lowest basement floor) and the contents therein of the Borrower and its Subsidiaries
without deduction for physical depreciation thereof;

(ii)              
During the course of
construction or repair of any Building, the insurance required by clause (i)
above shall be written on a builders risk, completed value, non-reporting form,
meeting all of the terms required by clause (i) above, covering the total value
of work performed, materials, equipment, machinery and supplies furnished,
existing structures, and temporary structures being erected on or near the
Mortgaged Property, including coverage against collapse and damage during
transit or while being stored off-site, and containing a soft costs (including
loss of rents) coverage endorsement and a permission to occupy endorsement;

(iii)            
Flood insurance if at
any time any Building is located in any federally designated “special hazard
area” (including any area having special flood, mudslide and/or flood-related
erosion hazards, and shown on a Flood Hazard Boundary Map or a Flood Insurance
Rate Map published by the Federal Emergency Management Agency as Zone A, AO,
Al-30, AE, A99, AH, VO, V1-30, VE, V, M or E) and the broad form flood coverage
required by clause (i) above is not available, in an amount equal to the full
replacement cost or the maximum amount then available under the National Flood
Insurance Program;

(iv)            
Rent loss insurance in
an amount sufficient to recover at least the total estimated gross receipts
from all sources of income, including without limitation, rental income, for
the Mortgaged Property for a twelve (12) month period;

(v)              
Commercial general liability
insurance against claims for personal injury (to include, without limitation,
bodily injury and personal and advertising injury) and property damage
liability, all on an occurrence basis, if commercially available, with such
coverages as the Administrative Agent may reasonably request (including,
without limitation, contractual liability coverage, completed operations
coverage for a period of two (2) years following completion of construction of
any improvements on the Mortgaged Property, and coverages equivalent to an ISO
broad form endorsement), with a general aggregate limit of not less than
$2,000,000.00, a completed operations aggregate limit of not less than
$2,000,000.00, and a combined single “per occurrence” limit of not less than
$1,000,000.00 for bodily injury and property damage and medical payments;

(vi)            
During the course of
construction or repair of any improvements on the Mortgaged Property, the
general contractor selected to oversee such improvements shall provide
commercial general liability insurance (including completed operations
coverage) naming Borrower as an additional insured, or in lieu thereof, may
provide for such coverage by way of an owner’s contingent or protective
liability insurance covering claims not covered by or under the terms or
provisions of the insurance required by clause (v) above;

53 

 

 

 

(vii)          
Employer’s liability
insurance with respect to the Borrower’s employees (or if the Borrower have no
employees, with respect to the employees of the managers under the Management
Agreements);

(viii)        
Umbrella liability
insurance with limits of not less than $25,000,000.00 to be in excess of the
limits of the insurance required by clauses (v), (vi) and (vii) above, with
coverage at least as broad as the primary coverages of the insurance required by
clauses (v), (vi) and (vii) above, with any excess liability insurance to be at
least as broad as the coverages of the lead umbrella policy;  

(ix)            
Workers’ compensation
insurance for all employees of the Borrower or its Subsidiaries engaged on or
with respect to the Mortgaged Property with limits as required by applicable
law (or if Borrower have no employees, for all employees of the managers under
the Management Agreements); and

(x)              
Such other insurance
in such form and in such amounts as may from time to time be reasonably
required by the Administrative Agent against other insurable hazards and
casualties which at the time are commonly insured against in the case of
properties of similar character and location to the Mortgaged Property.

The Borrower shall pay
all premiums on insurance policies.  The insurance policies with respect to all
Mortgaged Property provided for in clauses (v), (vi) and (viii) above shall
name the Administrative Agent and each Lender as an additional insured and
shall contain a severability endorsement.  The insurance policies provided for
in clauses (i), (ii), (iii), (iv) and (vi) above shall name the Administrative
Agent as mortgagee and loss payee, shall be first payable in case of loss to
the Administrative Agent, and shall contain mortgage clauses and lender’s loss
payable endorsements in form and substance acceptable to the Administrative
Agent.  The Borrower shall deliver certificates of insurance evidencing all
such policies to the Administrative Agent, and the Borrower shall promptly
furnish to the Administrative Agent all renewal notices and evidence that all
premiums or portions thereof then due and payable have been paid.  Borrower
shall provide to Administrative Agent a duplicate original or certified copy of
the insurance policies required hereunder promptly after the original policy is
received by Borrower.  Not less than fifteen (15) days prior to the expiration
date of the policies, as the same may be reduced by Administrative Agent, the
Borrower shall deliver to the Administrative Agent evidence of continued
coverage, as may be satisfactory to the Administrative Agent, and within five
(5) Business Days after the renewal date of such policies, the Borrower shall
deliver a certificate of insurance to Administrative Agent, in form and
substance satisfactory to the Administrative Agent.

(b)  
All policies of
insurance required by this Agreement shall contain clauses or endorsements to
the effect that (i) no act or omission of the Borrower or any Subsidiary
or anyone acting for the Borrower or any Subsidiary (including, without
limitation, any representations made in the procurement of such insurance),
which might otherwise result in a forfeiture of such insurance or any part
thereof, no occupancy or use of the Real Estate for purposes more hazardous
than permitted by the terms of the policy, and no foreclosure or any other
change in title to the Real Estate or any part thereof, shall affect the
validity or enforceability of such insurance insofar as the Administrative
Agent is concerned, (ii) the insurer waives any right of set off,
counterclaim, subrogation, or any deduction in respect of any liability of the
Borrower or any Subsidiary and the Administrative Agent, (iii) such
insurance is primary 

 

 

and without right of contribution
from any other insurance which may be available, (iv) such policies shall
not be modified so as to reduce or in any way negatively affect insurance
coverage on any Mortgaged Property, canceled or terminated prior to the
scheduled expiration date thereof without the insurer thereunder giving at
least thirty (30) days prior written notice to the Administrative Agent by
certified or registered mail; provided, however, that only ten (10) days prior
written notice to Administrative Agent shall be required if such cancellation
or termination is due to non-payment of any insurance premium, and
(v) that the Administrative Agent or the Lenders shall not be liable for
any premiums thereon or subject to any assessments thereunder, and shall in all
events be in amounts sufficient to avoid any coinsurance liability.

(c)   
The insurance required
by this Agreement may be effected through a blanket policy or policies covering
additional locations and property of the Borrower and other Persons not
included in the Mortgaged Property, provided  that such blanket policy or
policies comply with all of the terms and provisions of this Section 5.1,
including, without limitation, the Administrative Agent’s determination based
on a review of the schedule of locations and values that the amount of such
coverage is sufficient in light of the other risks and properties insured under
the blanket policy.

(d)  
All policies of
insurance required by this Agreement shall be issued by companies licensed to
do business in the State where the policy is issued and also in the States
where the Real Estate is located and shall be issued by companies having a
rating in Best’s Key Rating Guide of at least “A” and a financial size category
of at least “X”.

(e)   
Neither the Borrower
nor any Subsidiary shall carry separate insurance, concurrent in kind or form
or contributing in the event of loss, with any insurance required under this
Agreement unless such insurance complies with the terms and provisions of this Article
5. 

(f)   
In the event of any
loss or damage to or Taking of any Mortgaged Property, the Borrower or the
applicable Guarantor shall give prompt written notice to the insurance carrier
and the Administrative Agent.  Each of the Borrower and the Guarantors hereby
irrevocably authorizes and empowers the Administrative Agent, at the
Administrative Agent’s option and in the Administrative Agent’s sole discretion
or at the request of the Requisite Lenders in their sole discretion, as its
attorney in fact, to make proof of such loss, to adjust and compromise any
claim under insurance policies or with respect to any Taking, to appear in and
prosecute any action arising from such insurance policies, to collect and
receive Insurance Proceeds and Condemnation Proceeds, and to deduct therefrom
the Administrative Agent’s reasonable expenses incurred in the collection of
such Insurance Proceeds; provided, however, that so long as no
Default or Potential Default has occurred and is continuing and so long as the
Borrower or any Guarantor shall in good faith diligently pursue such claim, the
Borrower or such Guarantor may make proof of loss and appear in any proceedings
or negotiations with respect to the adjustment of such claim, except that the
Borrower or such Guarantor may not settle, adjust or compromise any such claim
without the prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld or delayed; provided, further,
that the Borrower or such Guarantor may make proof of loss and adjust and
compromise any claim under casualty insurance policies which is in an amount
less than $250,000.00 so long as no Default or Potential Default has occurred
and is continuing and so long as the Borrower or such Guarantor shall in good
faith diligently pursue such claim.  The Borrower and each Guarantor further authorize
the Administrative Agent, at the Administrative 

55 

 

 

Agent’s
option, to (i) apply the balance of such Insurance Proceeds and
Condemnation Proceeds to the payment of the Obligations whether or not then
due, or (ii) if the Administrative Agent shall require the reconstruction
or repair of the Mortgaged Property, to hold the balance of such proceeds as
trustee to be used to pay taxes, charges, sewer use fees, water rates and
assessments which may be imposed on the Mortgaged Property and the Obligations
as they become due during the course of reconstruction or repair of the
Mortgaged Property and to reimburse the Borrower or such Guarantor, in
accordance with such terms and conditions as the Administrative Agent may
prescribe, for, or to pay directly, the costs of reconstruction or repair of
the Mortgaged Property, and upon completion of such reconstruction or repair to
pay any excess Insurance Proceeds to the Borrower, provided that (i) upon
completion of such reconstruction or repair, such Mortgaged Property is in
compliance with all applicable state, federal and local laws, ordinances and
regulations, including, without limitation, all building and zoning laws,
ordinances and regulations and (ii) no Defaults or Potential Defaults
exist or are continuing under this Agreement on the date of such payment to the
Borrower.

(g)  
Notwithstanding the
foregoing or anything to the contrary contained in the Mortgages, the
Administrative Agent shall make net Insurance Proceeds and Condemnation
Proceeds available to the Borrower or such Guarantor to reconstruct and repair
the Mortgaged Property, in accordance with such terms and conditions as the
Administrative Agent may prescribe in the Administrative Agent’s discretion for
the disbursement of the proceeds, provided  that (i) the cost of
such reconstruction or repair is not estimated by the Administrative Agent to
exceed twenty-five percent (25%) of the replacement cost of the damaged
Building (as reasonably estimated by the Administrative Agent), (ii) no
Default or Potential Default shall have occurred and be continuing,
(iii) the Borrower or such Guarantor shall have provided to the
Administrative Agent additional cash security in an amount equal to the amount
reasonably estimated by the Administrative Agent to be the amount in excess of
such proceeds which will be required to complete such repair or restoration,
(iv) the Administrative Agent shall have approved the plans and
specifications, construction budget, construction contracts, and construction
schedule for such repair or restoration and reasonably determined that the
repaired or restored Mortgaged Property will provide the Administrative Agent
with adequate security for the Obligations (provided  that the
Administrative Agent shall not disapprove such plans and specifications if the
Building is to be restored to substantially its condition immediately prior to
such damage), (v) the Borrower or such Guarantor shall have delivered to
the Administrative Agent written agreements binding upon the Major Tenants and
not less than fifty  percent (50%) of the remaining tenants or other
parties having present or future rights to possession of any portion of the
affected Mortgaged Property or having any right to require repair, restoration
or completion of the Mortgaged Property or any portion thereof (determined by
reference to those tenants that are not Major Tenants and that in the aggregate
occupy or have rights to occupy not less than fifty percent (50%) of the net
rentable area of the Building so damaged, excluding the portion leased by the
Major Tenants), agreeing upon a date for delivery of possession of the
Mortgaged Property or their respective portions thereof, to permit time which
is sufficient in the judgment of the Administrative Agent for such repair or
restoration and approving the plans and specifications for such repair or
restoration, or other evidence satisfactory to the Administrative Agent that
none of such tenants or other parties may terminate their Leases as a result of
such casualty (unless such rights to do so are waived then) or as a result of
having a right to approve the plans and specifications for such repair or
restoration and prior to the exhaustion of expiration of any rental loss
insurance coverage, (vi) the Administrative Agent shall reasonably determine
that such repair or reconstruction can be completed prior to the Maturity Date,
(vii) the 

56 

 

 

 

Administrative Agent shall receive
evidence reasonably satisfactory to it that any such restoration, repair or
rebuilding complies in all respects with any and all applicable state, federal
and local laws, ordinances and regulations, including without limitation,
zoning laws, ordinances and regulations, and that all required permits,
licenses and approvals relative thereto have been or will be issued in a manner
so as not to materially impede the progress of restoration, (viii) the
Administrative Agent shall receive evidence reasonably satisfactory to it that
the insurer under such policies of fire or other casualty insurance does not
assert any defense to payment under such policies against the Borrower, any
Guarantor or the Administrative Agent, and (ix) with respect to any
Taking, Administrative Agent shall determine that following such repair or
restoration there shall be no more than the lesser of (i) a ten percent
(10%) reduction in occupancy or rental income from the Mortgaged Property so
affected by such specific condemnation or taking (excluding any proceeds from
rental loss insurance or proceeds from such award allocable to rent) or
(ii) a ten percent (10%) reduction in occupancy or in rental income from
all of the Mortgaged Properties (excluding any proceeds from rental loss
insurance or proceeds of such award allocable to rent), after giving effect to
the current condemnation or taking and any previous condemnations or takings
which may have occurred (provided that in no event shall any such reduction
result in a violation of Section 8.15(d)  on a pro forma basis after
giving effect to such reduction).  Any excess Insurance Proceeds shall be paid
to the Borrower, or if a Default or Potential Default has occurred and is
continuing, such proceeds shall be applied to the payment of the Obligations,
unless in either case by the terms of the applicable insurance policy the
excess proceeds are required to be returned to such insurer.  Any excess
Condemnation Proceeds shall be applied to the payment of the Obligations.  In
no event shall the provisions of this section be construed to extend the
Maturity Date or to limit in any way any right or remedy of the Administrative
Agent upon the occurrence of a Default hereunder.  If the Mortgaged Property is
sold or the Mortgaged Property is acquired by the Administrative Agent, all
right, title and interest of the Borrower and any Guarantor in and to any
insurance policies to the extent that they relate to Mortgaged Properties and
unearned premiums thereon and in and to the proceeds thereof resulting from
loss or damage to the Mortgaged Property prior to the sale or acquisition shall
pass to the Administrative Agent or any other successor in interest to the
Borrower or purchaser of the Mortgaged Property.

(h)  
The Borrower shall,
and shall cause each other Related Party and each other Subsidiary to, maintain
insurance with financially sound and reputable insurance companies against such
risks and in such amounts as is customarily maintained by similar businesses,
including terrorism insurance in such amounts as is customarily maintained by
similar businesses, or, if more restrictive, as may be required by Requirements
of Law.  The Borrower shall from time to time deliver to the Administrative
Agent upon request a detailed list, together with copies of all policies of the
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.

article 6.  REPRESENTATIONS
AND WARRANTIES

As a material
inducement to Lenders’ entry into this Agreement, Borrower represents and
warrants to Administrative Agent and each Lender as of the Effective Date and
continuing thereafter that:  

6.1    AUTHORITY/ENFORCEABILITY.  Each Related Party and Subsidiary is in
material compliance with all Requirements of Law applicable to its respective
organization, 

57 

 

 

 

existence and transaction of business
and have all necessary rights and powers to operate their business as
contemplated by the Loan Documents.

6.2     BINDING OBLIGATIONS.  Borrower and Guarantor are authorized
to execute, deliver and perform their respective obligations under the Loan
Documents, and such obligations shall be valid and binding obligations of such
party.

6.3   FORMATION AND ORGANIZATIONAL
DOCUMENTS.  Borrower
has delivered to Administrative Agent all formation and organizational
documents of each Related Party, and all such formation and organizational
documents remain in full force and effect and have not been amended or modified
since they were delivered to Administrative Agent.  Borrower shall promptly
provide Administrative Agent with copies of any amendments or modifications of
such formation or organizational documents.

6.4     NO VIOLATION.  Neither Borrower’s nor any Guarantor’s
execution, delivery, and performance under the Loan Documents: (a) require any
consent or approval not heretofore obtained under any partnership agreement,
operating agreement, articles of incorporation, bylaws or other document; (b)
violate any Requirements of Law applicable to any Related Party, or the Real
Estate Assets or any other statute, law, regulation or ordinance or any order
or ruling of any court or Governmental Authority; (c) conflict with, or
constitute a breach or default or permit the acceleration of obligations under
any agreement, contract, lease, or other document by which any Related Party,
Subsidiary or the Real Estate Assets are bound or regulated; or (d) violate any
statute, law, regulation or ordinance, or any order of any court or
Governmental Authority.

6.5     COMPLIANCE WITH LAWS.  Each Related Party and Subsidiary has,
and at all times shall have obtained, all permits, licenses, exemptions, and
approvals necessary to construct, occupy, operate and market the Real Estate
Assets except where the failure to obtain would not reasonably be expected to
have a Material Adverse Effect, and shall maintain compliance with all
Requirements of Law applicable to the Real Estate Assets and all other
applicable statutes, laws, regulations and ordinances necessary for the
transaction of its business except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.

6.6      LITIGATION.  Except as disclosed on Schedule 6.6 
attached hereto, there are no claims, actions, suits, or proceedings pending,
or to their knowledge threatened, against any Related Party, any Subsidiary or
affecting the Real Estate Assets which, when considered individually or taken
in the aggregate, would be reasonably likely to have a Material Adverse Effect
or cause a Default.

6.7      FINANCIAL CONDITION.  All financial statements and
information heretofore and hereafter delivered to Administrative Agent by
Borrower, including, without limitation, information relating to the financial
condition of each Related Party and/or the Real Estate Assets, fairly and
accurately represent the financial condition of the subject thereof and have
been prepared (except as noted therein) in accordance with GAAP.  Borrower
acknowledges and agrees that Administrative Agent and Lenders may request and
obtain additional information from third parties regarding any Loan Party, the
Collateral or any Real Estate Asset, including, without limitation, credit
reports.

58 

 

 

6.8    NO MATERIAL
ADVERSE CHANGE. 
There has been no material adverse change in the financial condition of any
Related Party, Subsidiary or the Real Estate Assets since the dates of the financial
statements furnished to Administrative Agent in connection with the closing of
the Facility and, except as otherwise disclosed to Administrative Agent in
writing, no Related Party has entered into any material transaction which is
not disclosed in such financial statements or in filings with the Securities
and Exchange Commission, if applicable.

6.9    ACCURACY.  All reports, documents, instruments,
information and forms of evidence delivered by Borrower to
Administrative Agent concerning the Loan Parties, the Facility or required by
the Loan Documents are accurate, correct and complete in all material respects
to give Administrative Agent and Lenders true and accurate knowledge of their
subject matter, and do not contain any material misrepresentation or omission.

6.10   TAX LIABILITY.  Each Related Party and Subsidiary has
filed all required federal, state, county and municipal tax returns and has
paid all taxes and assessments owed and payable and not yet delinquent, and
Borrower has no knowledge of any basis for any additional payment with respect
to any such taxes and assessments.  None of the United States income tax
returns of any Related Party or Subsidiary are under audit (except as otherwise
disclosed to Administrative Agent in writing on any subsequent date on which
such representation is made).  No tax liens (except for regular, recurring
liens for property taxes and assessments due but not yet delinquent) have been
filed with respect to any such taxes.  All charges, accruals and reserves on
the books of each Related Party and Subsidiary in respect of any taxes or other
governmental charges are in accordance with GAAP.

6.11     TITLE TO ASSETS; NO LIENS AND
INDEBTEDNESS. 
Borrower has good and indefeasible title to all of the interests in the
entities identified as Subsidiaries listed on Exhibit A, free and
clear of all liens and encumbrances.  Each Subsidiary has good and indefeasible
title to its respective Real Estate Asset as identified on Exhibit A,
free and clear of all liens and encumbrances except Permitted Liens and such
exceptions to matters of title and survey as would not, individually or in the
aggregate, have a Material Adverse Effect.  Other than the Total Indebtedness
hereunder and as set forth on Schedule 6.11, as amended from time
to time and disclosed to Administrative Agent, none of Borrower, Guarantor,
Property Owners or other Subsidiaries has any Total Indebtedness.  Except as
otherwise disclosed to Administrative Agent in writing, Borrower, Guarantor,
Property Owners and other Subsidiaries of Borrower have performed and are in
compliance in all material respects with all of the terms of such Total
Indebtedness and all instruments and agreements relating thereto and no Related
Party has received notice of any default or event of default, or event or
condition which with the giving of notice, the lapse of time, a determination
of materiality, the satisfaction of any other condition or any combination of
the foregoing, would constitute such a default or event of default, with respect
to any such Total Indebtedness.

6.12    MARGIN STOCK.  No Related Party or Subsidiary 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” within the meaning of Regulations T, U and X,
and no part of the proceeds of any extension of credit hereunder will be used
to buy or carry any such “margin stock.”

59 

 

 

 

6.13     STATE OF
FORMATION.  Borrower
is a limited partnership formed pursuant to the laws of the State of Delaware. 
The federal employment identification number of Borrower is 27-1449019.

6.14   STRUCTURE OF BORROWER AND
GUARANTOR.  The
ownership structure of the Loan Parties (including the percentage ownership
interests) is accurately set forth on Exhibit H-1  attached hereto
and made a part hereof.  Exhibit H-2  is a complete and correct list
of all Subsidiaries of the Borrower and Guarantor, setting forth for each such
Subsidiary, (a) the jurisdiction of organization of such Subsidiary, (b) each
Person holding ownership interests in such Subsidiary, (c) the nature of the
ownership interests held by each such Person and (d) the percentage of
ownership of such Subsidiary represented by such ownership interests.  Except
as disclosed in such Exhibit (i) each of the Borrower and its Subsidiaries
owns, free and clear of all Liens, and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it on such
Schedule, (ii) all of the issued and outstanding capital stock of each such
Person organized as a corporation is validly issued, fully paid and
nonassessable and (iii) there are no outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including,
without limitation, any stockholders’ or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, any such Person.

6.15    REIT Status.  PE-ARC qualifies as a REIT and is in
compliance with all requirements and conditions imposed under the Internal
Revenue Code to allow PE-ARC to maintain its status as a REIT.  PE-ARC has
elected to be treated as a REIT. 

6.16       [INTENTIONALLY OMITTED]. 

6.17    AMERICANS WITH DISABILITIES
ACT COMPLIANCE.  Each
Real Estate Asset has been and shall be maintained, in accordance and
compliance with all of the applicable requirements of the ADA where failure to
do so would be reasonably likely to have a Material Adverse Effect.  Borrower
shall be responsible for all ADA compliance costs.

6.18    BUSINESS LOAN.  The Facility is a business loan
transaction in the stated amount solely for the purpose of carrying on the
business of Borrower and none of the proceeds of the Facility will be used for
the personal, family or agricultural purposes of the Borrower.

6.19      TAX SHELTER REGULATIONS.  No Related Party or Subsidiary intends
to treat the Facility or the transactions contemplated by this Agreement and
the other Loan Documents as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4).  If any Related Party or
Subsidiary to take any action inconsistent with such intention, the Borrower
will promptly notify Administrative Agent and each Lender thereof.  If the
Borrower so notifies the Administrative Agent and each Lender, the Borrower
acknowledges that each Lender may treat its Commitment as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and Lender will
maintain the lists and other records, including the identity of the applicable
party to the Facility as required by such Treasury Regulation.

6.20    ERISA.  No Related Party or Subsidiary
maintains, nor has any such Person at any time maintained, any ERISA Plan.  No
Related Party or Subsidiary is, nor has at any time 

 

 

been,
a member of any ERISA Group with any Person that has at any time maintained any
such ERISA Plan.

6.21    INVESTMENT COMPANY; PUBLIC
UTILITY HOLDING COMPANY. 
No Related Party or other Subsidiary is (i) an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, (ii) Reserved, or (iii) subject to
any other Applicable Law which purports to regulate or restrict its ability to
borrow money or to consummate the transactions contemplated by this Agreement
or to perform its obligations under any Loan Document to which it is a party.

6.22    FULL DISCLOSURE.  Borrower has disclosed to the
Administrative Agent in writing any and all facts known to the Borrower which
could have an Material Adverse Effect.

6.23    NOT PLAN ASSETS.  None of the assets of any Related Party
or Subsidiary constitute, nor will constitute, plan assets, within the meaning
of ERISA, the Internal Revenue Code and the respective regulations promulgated
thereunder, of any ERISA Plan or Non-ERISA Plan.  The execution, delivery and
performance of this Agreement, and the borrowing and repayment of amounts
hereunder, do not and will not constitute “prohibited transactions” under ERISA
or the Internal Revenue Code.

6.24   MATERIAL AGREEMENTS.  No Related Party or Subsidiary has
assumed liability under or is a party to nor is it or any of its property
subject to or bound by any forward purchase contract, futures contract,
covenant not to compete, unconditional purchase, or other agreement which
restricts its ability to conduct its business and, either individually or in
the aggregate, has a Material Adverse Effect.

6.25   
LEASES.  The Borrower has delivered to the
Administrative Agent true copies of the Leases and any amendments thereto
relating to each Mortgaged Property and which are required to be delivered as a
part of the Eligible Real Estate Qualification Documents prior to the
acceptance of such Real Estate Asset as a Mortgaged Property.  An accurate and
complete Rent Roll as of the date of inclusion of each Mortgaged Property in
the Borrowing Base with respect to all Leases of any portion of the Mortgaged
Property has been provided to the Administrative Agent.  The Leases reflected
on such Rent Roll constitute as of the date thereof the sole agreements
relating to leasing or licensing of space at such Mortgaged Property and in the
Building relating thereto.  Except as reflected on such Rent Roll or on Schedule
6.25 no tenant under any Lease is entitled to any free rent, partial rent,
rebate of rent payments, credit, offset or deduction in rent, including, without
limitation, lease support payments, lease buy-outs or abatements or credits. 
Except as set forth in Schedule 6.25, the Leases reflected therein are,
as of the date of inclusion of the applicable Mortgaged Property in the
Borrowing Base, in full force and effect in accordance with their respective
terms, without any payment default (other than as a result of a dispute over
any charges assessed within the previous six (6) months) or any other material
default by any tenant thereunder, nor are there any defenses, counterclaims,
offsets, concessions or rebates available to any tenant thereunder, and, except
as reflected in Schedule 6.25, neither the Borrower nor any Guarantor
has given or made, any notice of any payment or other material default, or any
claim, which remains uncured or unsatisfied, with respect to any of the Leases,
and to the best of the knowledge and belief of the Borrower, there is no basis
for any such claim or notice of default by any tenant.  Except as reflected in Schedule
6.25, no property, other than the Mortgaged Property which is the subject
of the applicable Lease, is necessary to 

61 

 

 

 

comply with
the requirements (including, without limitation, parking requirements)
contained in such Lease.

6.26    
PROPERTY.  Subject to Schedule 6.26 and the
property condition reports for the Initial Mortgaged Properties delivered to
the Administrative Agent on or before the Effective Date, (i) all of the
Mortgaged Properties, and all major building systems located thereon, are
structurally sound, in good condition and working order and free from material
defects, subject to ordinary wear and tear, (ii) each Mortgaged Property,
and the use and operation thereof, is in material compliance with all
applicable federal and state law and governmental regulations and any local
ordinances, orders or regulations, including without limitation, laws,
regulations and ordinances relating to zoning, building codes, subdivision,
fire protection, health, safety, handicapped access, historic preservation and
protection, wetlands and tidelands, (iii) all water, sewer, electric, gas,
telephone and other utilities necessary for the use and operation of the
Mortgaged Properties are installed to the property lines of the Mortgaged
Properties through dedicated public rights of way or through perpetual private
easements approved by the Administrative Agent with respect to which the
applicable Mortgage creates a valid and enforceable first lien and, except in
the case of drainage facilities, are connected to the Building located thereon
with valid permits and are adequate to service the Building in compliance with
applicable law, (iv) the streets abutting the Mortgaged Properties are
dedicated and accepted public roads, to which the Mortgaged Properties have
direct access by trucks and other motor vehicles and by foot, or are perpetual
private ways (with direct access by trucks and other motor vehicles and by foot
to public roads) to which the Mortgaged Properties have direct access approved
by the Administrative Agent and with respect to which the applicable Mortgage
creates a valid and enforceable first lien, (v) sufficient private ways
providing access to the Mortgaged Properties are zoned in a manner which will
permit access to the Building over such ways by trucks and other commercial and
industrial vehicles, (vi) there are no unpaid or outstanding real estate or
other taxes or assessments on or against any of the Mortgaged Property which
are payable by the Borrower, any Guarantor or any of their respective
Subsidiaries (except only real estate or other taxes or assessments, that are
not yet delinquent), (vii) each Mortgaged Property is separately assessed for
purposes of real estate tax assessment and payment, (viii) there are no unpaid
or outstanding real estate or other taxes or assessments on or against any
other property of the Borrower, the Guarantors or any of their respective
Subsidiaries which are payable by any of such Persons in any material amount
(except only real estate or other taxes or assessments, that are not yet
delinquent), (ix) there are no pending, or to the knowledge of the Borrower,
threatened or contemplated, eminent domain proceedings against any Mortgaged
Property, (x) none of the Mortgaged Property is now damaged as a result of
any fire, explosion, accident, flood or other casualty, (xi) none of the
Borrower, the Guarantors or any of their respective Subsidiaries has received
any outstanding notice from any insurer or its agent requiring performance of
any work with respect to any of the Mortgaged Properties or canceling or
threatening to cancel any policy of insurance, and each of the Mortgaged
Properties complies with the material requirements of all of the Borrower’s,
Guarantors’ and their respective Subsidiaries’ insurance carriers, (xii) no
person or entity has any right or option to acquire any Mortgaged Property or
any Building thereon or any portion thereof or interest therein, (xiii) neither
the Borrower nor any Subsidiary Guarantor is a party to any Management
Agreements for any of the Mortgaged Properties that is not subject to a
Subordination of Management Agreement, (xiv) to the best knowledge of the
Borrower and any Subsidiary Guarantors, there are no material claims or any
bases for material claims in respect of any Mortgaged Property or its operation
by any party to any service agreement or Management Agreement, and (xv) there 

 

 

are no material agreements not otherwise terminable upon
30 days’ notice pertaining to any Mortgaged Property, any Building thereon or
the operation or maintenance of either thereof other than as described in this
Agreement (including the Schedules hereto) or the Title Policies.

6.27   
BROKERS.  None of the Borrower, any Related Party
nor any of their respective Subsidiaries has engaged or otherwise dealt with
any broker, finder or similar entity in connection with this Agreement or the
Loans contemplated hereunder.

6.28   
SOLVENCY.  As of the date of this Agreement and
after giving effect to the transactions contemplated by this Agreement and the
other Loan Documents, including all Loans made or to be made hereunder, neither
the Borrower nor any Guarantor is insolvent on a balance sheet basis such that
the sum of such Person’s assets exceeds the sum of such Person’s liabilities,
the Borrower and each Guarantor is able to pay its debts as they become due,
and the Borrower and each Guarantor has sufficient capital to carry on its
business.

6.29  
NO BANKRUPTCY
FILING.  Neither the
Borrower nor any Guarantor is contemplating either the filing of a petition by
it under any state or federal bankruptcy or insolvency laws or for the
liquidation of its assets or property, and the Borrower has no knowledge of any
Person contemplating the filing of any such petition against it.

6.30  
NO FRAUDULENT
INTENT.  Neither the
execution and delivery of this Agreement or any of the other Loan Documents nor
the performance of any actions required hereunder or thereunder is being
undertaken by the Borrower, any Guarantor or any of their respective
Subsidiaries with or as a result of any actual intent by any of such Persons to
hinder, delay or defraud any entity to which any of such Persons is now or will
hereafter become indebted.

6.31
TRANSACTION IN BEST
INTERESTS OF BORROWER AND GUARANTORS; CONSIDERATION.  The transaction evidenced by this
Agreement and the other Loan Documents is in the best interests of the
Borrower, each Guarantor and their respective Subsidiaries.  The Borrower and
the Guarantors are engaged in common business enterprises related to those of
the Borrower and each Guarantor will derive substantial direct and indirect
benefit from the effectiveness and existence of this Agreement.  The direct and
indirect benefits to inure to the Borrower, each Guarantor and their respective
Subsidiaries pursuant to this Agreement and the other Loan Documents constitute
substantially more than “reasonably equivalent value” (as such term is used in
§548 of the Bankruptcy Code) and “valuable consideration,” “fair value,” and
“fair consideration,” (as such terms are used in any applicable state
fraudulent conveyance law), in exchange for the benefits to be provided by the
Borrower, the Guarantors and their respective Subsidiaries pursuant to this
Agreement and the other Loan Documents, and but for the willingness of each
Guarantor to guaranty the Loan, the Borrower would be unable to obtain the
financing contemplated hereunder which financing will enable the Borrower, each
Guarantor and their respective Subsidiaries to have available financing to
conduct and expand their business.

6.32  
CONTRIBUTION
AGREEMENT.  The
Borrower and the Guarantors have executed and delivered the Contribution
Agreement, and the Contribution Agreement constitutes the valid and legally
binding obligations of such parties enforceable against them in accordance with
the terms and provisions thereof, except as enforceability is limited by
bankruptcy, 

63 

 

 

 

insolvency, reorganization, moratorium or
other laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

6.33  
OFAC.  None of the Borrower or the Guarantors
(i) is (or will be) a person with whom any Lender is restricted from doing
business under OFAC (including, those Persons named on OFAC’s Specially
Designated and Blocked Persons list) or under any statute, executive order
(including the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action or (ii) is engaged (or will
engage) in any dealings or transactions or otherwise be associated with such
persons.  In addition, the Borrower hereby agrees to provide to the Lenders any
additional information that a Lender reasonably deems necessary from time to
time in order to ensure compliance with all applicable laws concerning money
laundering and similar activities.

6.34    GROUND LEASE. 

(a)                  
Each Ground Lease
contains the entire agreement of the Borrower or the Subsidiary Guarantors and
the applicable owner of the fee interest in such Mortgaged Property (the “Fee
Owner”), pertaining to the Mortgaged Property covered thereby.  The Borrower
and the Subsidiary Guarantors have no estate, right, title or interest in or to
the Mortgaged Property except under and pursuant to the Ground Lease.  The
Borrower has delivered a true and correct copy of the Ground Lease to the
Administrative Agent and the Ground Lease has not been modified, amended or
assigned, with the exception of written instruments that have been recorded in
the applicable real estate records and referenced in the Title Policy for such
Mortgaged Property.

(b)                 
The applicable Fee
Owner is the exclusive fee simple owner of the Mortgaged Property, subject only
to the Ground Lease and all Liens and other matters disclosed in the applicable
Title Policy for such Mortgaged Property subject to the Ground Lease, and the
applicable Fee Owner is the sole owner of the lessor’s interest in the Ground
Lease.

(c)                  
There are no rights to
terminate the Ground Lease other than the applicable Fee Owner’s right to
terminate by reason of default, casualty, condemnation or other reasons, in
each case as expressly set forth in the Ground Lease.

(d)                 
Each Ground Lease is
in full force and effect and, to Borrower’s knowledge, no breach or default or
event that with the giving of notice or passage of time would constitute a
breach or default under any Ground Lease (a “Ground Lease Default”) exists or
has occurred on the part of a Borrower or a Subsidiary Guarantor or on the part
of a Fee Owner under any Ground Lease.  All base rent and additional rent, if
any, due and payable under each Ground Lease has been paid through the date
hereof and neither Borrower nor any Subsidiary Guarantor is required to pay any
deferred or accrued rent after the date hereof under any Ground Lease.  Neither
Borrower nor a Subsidiary Guarantor has received any written notice that a
Ground Lease Default has occurred or exists, or that any Fee Owner or any third
party alleges the same to have occurred or exist.

64 

 

 

 

(e)                  
The Borrower or
applicable Subsidiary Guarantor is the exclusive owner of the ground lessee’s
interest under and pursuant to each Ground Lease and has not assigned,
transferred or encumbered its interest in, to, or under the Ground Lease,
except to Administrative Agent under the Loan Documents.

article 7.  HAZARDOUS
MATERIALS

7.1    SPECIAL REPRESENTATIONS AND
WARRANTIES.  Without
in any way limiting the other representations and warranties set forth in this
Agreement, and after reasonable investigation and inquiry, Borrower hereby
specially represents and warrants to the best of its knowledge as of the date
of this Agreement as follows:

(a)                  
Hazardous
Materials.  Except as
disclosed to Administrative Agent in writing (and with respect to any Mortgaged
Property, approved by Administrative Agent in writing), no Real Estate Asset is
or and has been a site for the use, generation, manufacture, storage,
treatment, release, threatened release, discharge, disposal, transportation or
presence of any oil, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“toxic substances,” “wastes,” “regulated substances,” “industrial solid
wastes,” or “pollutants” under the Hazardous Materials Laws, as described below,
and/or other applicable environmental laws, ordinances and regulations
(collectively, the “Hazardous Materials”).  “Hazardous Materials” shall
not include commercially reasonable amounts of such materials used in the
ordinary course of use and operation of the Real Estate Assets which are used
and stored in accordance with all applicable environmental laws, ordinances and
regulations.

(b)                 
Hazardous
Materials Laws.  Each
Real Estate Asset is in compliance with all laws, ordinances and regulations
relating to Hazardous Materials (“Hazardous Materials Laws”), including,
without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et 
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et  seq.; the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. Section 6901 et  seq.; the
Comprehensive Environment Response, Compensation and Liability Act of 1980, as
amended (including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”),
42 U.S.C. Section 9601 et  seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. Section 2601 et  seq.; the
Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 et  seq.; the Mine Safety and Health Act of
1977, as amended, 30 U.S.C. Section 801 et  seq.; the Safe
Drinking Water Act, as amended, 42 U.S.C. Section 300f et  seq.;
and all comparable state and local laws, laws of other jurisdictions or orders
and regulations.

(c)                  
Hazardous
Materials Claims. 
There are no claims or actions (“Hazardous Materials Claims”) pending
or, to Borrower’s best knowledge, threatened against Borrower, any Related
Party or the Real Estate Assets by any governmental entity or agency or by any
other person or entity relating to Hazardous Materials or pursuant to the
Hazardous Materials Laws.

(d)                 
Border Zone
Property.  No Real
Estate Asset has been designated as Border Zone Property under the provisions
of California Health and Safety Code, Sections 25220 

65 

 

 

 

et
seq. nor has there been any occurrence or condition on any real property
adjoining or in the vicinity of any Real Estate Asset that could cause such
Real Estate Asset or any part thereof to be designated as Border Zone Property.

7.2      HAZARDOUS
MATERIALS COVENANTS. 
Borrower agrees as follows:

(a)               
No Hazardous
Activities.  Borrower
and Guarantors shall not cause or permit the Real Estate Assets to be used as a
site for the use, generation, manufacture, storage, treatment, release,
discharge, disposal, transportation or presence of any Hazardous Materials.

(b)              
Compliance.  Borrower and Guarantors shall comply
and cause the Real Estate Assets to comply with all Hazardous Materials Laws.

(c)               
Notices.  Borrower shall promptly notify
Administrative Agent in writing if Borrower becomes aware of: (i) the discovery
of any Hazardous Materials on, under or about any Real Estate Asset;
(ii) any knowledge by any Related Party that any Real Estate Asset does
not comply with any Hazardous Materials Laws; (iii) any Hazardous Materials
Claims; and (iv) the discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Real Estate Asset that could cause
the Real Estate Asset or any part thereof to be designated as Border Zone
Property.

(d)              
Remedial Action.  In response to the presence of any
Hazardous Materials on, under or about any Real Estate Asset, Borrower shall
promptly take, at Borrower’s expense, all remedial action as and to the extent
required by any Hazardous Materials Laws or any judgment, consent decree,
settlement or compromise in respect to any Hazardous Materials Claims.

7.3     INSPECTION BY ADMINISTRATIVE
AGENT.  Upon
reasonable prior notice to Borrower and subject to the rights of tenants under
their leases, Administrative Agent, its employees and agents, may from time to
time (whether before or after the commencement of a nonjudicial or judicial
foreclosure proceeding) enter and inspect the Real Estate Assets for the
purpose of determining the existence, location, nature and magnitude of any
past or present release or threatened release of any Hazardous Materials into,
onto, beneath or from the Real Estate Assets.

7.4  HAZARDOUS MATERIALS INDEMNITY.  BORROWER HEREBY AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER, AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROM
AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS,
JUDGMENTS, COURT COSTS AND REASONABLE LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES) WHICH ADMINISTRATIVE AGENT
AND/OR ANY LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF THE USE,
GENERATION, MANUFACTURE, STORAGE, DISPOSAL, THREATENED DISPOSAL, TRANSPORTATION
OR PRESENCE OF HAZARDOUS-MATERIALS IN, ON, UNDER OR ABOUT THE REAL ESTATE
ASSETS OR IMPROVEMENTS.  BORROWER SHALL PROMPTLY PAY TO ADMINISTRATIVE AGENT
AND/OR ANY LENDER, UPON DEMAND, ANY AMOUNTS OWING UNDER THIS INDEMNITY,
TOGETHER 

66 

 

 

 

WITH INTEREST FROM THE DATE THE TOTAL INDEBTEDNESS
ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE
OF THE FACILITY.  BORROWER’S DUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD
HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER SHALL SURVIVE THE CANCELLATION OF
THE NOTES.

article 8.  COVENANTS OF
BORROWER

8.1     EXPENSES.  Borrower shall immediately pay
Administrative Agent upon demand all costs and expenses incurred by (a)
Administrative Agent in connection with the preparation of this Agreement and
all other Loan Documents contemplated hereby, the interpretation of the Loan
Documents, any amendments or waivers thereto and the addition or release of any
Mortgaged Properties or Guarantors; and (b) the Administrative Agent and the
Lender in connection with the enforcement or satisfaction by Administrative
Agent or Lenders of any of Borrower’s obligations under this Agreement and the
other Loan Documents.  For all purposes of this Agreement, Administrative
Agent’s and Lenders’ costs and expenses shall include, without limitation,
legal fees and expenses, and the cost to Lenders of any notary fees, and if a
Default has occurred or Administrative Agent has reason to believe a Default or
Potential Default has occurred, accounting fees and auditor fees.  If any of
the services described above are provided by or reviewed by an employee of
Administrative Agent, Administrative Agent’s costs and expenses for such
services shall be calculated in accordance with Administrative Agent’s standard
charge for such services.

8.2   ERISA COMPLIANCE.  Each Loan Party shall at all times
comply with the provisions of ERISA with respect to any retirement or other
employee benefit plan to which it is a party as employer, and as soon as
possible after Borrower knows, or has reason to know, that any Reportable Event
(as defined in ERISA) with respect to any such plan of a Loan Party has
occurred, Borrower shall furnish to Administrative Agent a written statement
setting forth details as to such Reportable Event and the action, if any, which
Borrower proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event furnished to the Pension Benefit Guaranty
Corporation.

8.3     LEASING.   

(a)                  
Borrower shall use and
shall cause its Subsidiaries to use commercially reasonable efforts to maintain
all leasable space in the Real Estate Assets which are not Mortgaged Properties
leased at no less than fair market rental rates considering the type, use and
location of the leased space and the nature of the tenant.

(b)                 
The Borrower and each
Guarantor will give notice to the Administrative Agent of any proposed new
Lease that would be with a Major Tenant within any Mortgaged Property for the
lease of space therein and shall provide to the Administrative Agent a copy of
the proposed Lease and any and all agreements or documents related thereto,
current financial information for the proposed tenant and any guarantor of the
proposed Lease and such other information as the Administrative Agent may
reasonably request.  Neither the Borrower nor any Guarantor will lease all or
any portion of a Mortgaged Property or amend, supplement or otherwise modify,
terminate or cancel, or accept the surrender of, or (if Borrower’s or such
Guarantor’s consent is required under the terms of such Lease) consent to the
assignment or 

 

 

subletting of, or grant any concessions
to or waive the performance of any obligations of any tenant, lessee or
licensee under, any now existing or future Lease relating to a Mortgaged
Property without the prior written consent of the Administrative Agent; provided,
however, with respect to any Lease which is not with a Major Tenant, the
Borrower or any Guarantor may enter into any such Lease, or amend, supplement
or otherwise modify, terminate or cancel, or accept the surrender of, or consent
to the assignment or subletting of, or granting concessions to or waive the
performance of any obligations of any tenant, lessee or licensee under, any
such Lease, in each case in the ordinary course of business consistent with
sound leasing and management practices for similar properties.  To the extent
the Administrative Agent’s approval or consent is required pursuant to this Section
8.3, Administrative Agent’s approval shall be deemed granted in the event
the Administrative Agent fails to respond to the Borrower’s request within ten
(10) Business Days if (A) Borrower has delivered to Administrative Agent and
Administrative Agent’s counsel the applicable documents, with the notation
“IMMEDIATE RESPONSE REQUIRED, FAILURE TO RESPOND TO THIS APPROVAL REQUEST
WITHIN TEN (10) BUSINESS DAYS FROM RECEIPT SHALL BE DEEMED TO BE ADMINISTRATIVE
AGENT’S APPROVAL” prominently displayed in bold, all caps and fourteen (14)
point or larger font in the transmittal letter requesting approval and (B)
Administrative Agent does not approve or reject the applicable request within
ten (10) Business Days from the date Administrative Agent and Administrative
Agent’s counsel receive the request as evidenced by a certified mail return
receipt or confirmation by a reputable national overnight delivery service
(e.g., Federal Express) that the same has been delivered.  The Borrower or
Guarantors shall furnish the Administrative Agent with executed copies of all
Leases or amendments thereto hereafter made.  The Borrower or Guarantors shall
deliver a Payment Direction Letter (as defined in the Cash Collateral
Agreement) to each new tenant of a Lease entered into after the date hereof.  

8.4     USE OF PROCEEDS.  Borrower will only use the proceeds of
the Facility for the acquisition of necessity-based neighborhood and community
shopping centers throughout the continental United States and for general
working capital purposes, and for no other purposes.  Borrower may not use any
proceeds of the Facility for the purpose of purchasing or carrying any “margin
stock” within the meaning of Regulations T, U and X.

8.5    LIENS.  Except those Liens granted to the
Administrative Agent by the Pledge Agreement, no Liens shall be permitted upon
any direct or indirect ownership interest in any Loan Party.  Except for those
Liens granted to the Administrative Agent by the Pledge Agreement, no Loan
Party shall create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any Subsidiary
that owns a Real Estate Asset to: (x) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity interest
owned by the Borrower or any other Subsidiary of the Borrower, except pursuant
to any provisions of any Secured Indebtedness permitted under this Agreement
that restrict such payments from the Real Estate Assets securing such
indebtedness following a default, event of default or event that commences a
sweep of income generated by the Real Estate Assets into a deposit account
controlled by the lender under the documentation evidencing such Secured
Indebtedness permitted under this Agreement; (y) pay any Total Indebtedness
owed to any Lender; or (z) transfer any of its property or assets to Administrative
Agent or any Lender.

 

 

8.6   OPINION OF LEGAL
COUNSEL.  Borrower
shall provide, at Borrower’s expense, an opinion of legal counsel in form and
content satisfactory to Administrative Agent to the effect that: (a) upon due
authorization, execution as may be specified in the opinion, each of the Loan
Documents shall be legal, valid and binding instruments, enforceable against
the makers thereof in accordance with their respective terms; (b) each Loan
Party is duly formed and has all requisite authority to enter into the Loan
Documents; and (c) such other matters, incident to the transactions
contemplated hereby, as Administrative Agent may reasonably request.

8.7   FURTHER ASSURANCES.  Upon Administrative Agent’s request and
at Borrower’s sole cost and expense, Borrower and Guarantor shall execute,
acknowledge and deliver any other instruments and perform any other acts
necessary, desirable or proper, as determined by Administrative Agent, to carry
out the purposes of this Agreement and the other Loan Documents.

8.8     ASSIGNMENT.  Without the prior written consent of
Lenders, Borrower shall not assign its interest under any of the Loan
Documents, or in any monies due or to become due thereunder, and any assignment
without such consent shall be void.  In this regard, Borrower acknowledges that
Lenders would not make this Facility except in reliance on Borrower’s
expertise, reputation and prior experience in the ownership of commercial real
property, and Lenders’ knowledge of Borrower.

8.9  REQUIREMENTS OF LAW.  Each Loan Party shall comply with all
Requirements of Law and shall use commercially reasonable and good faith
efforts to cause other persons or entities to comply with same in a timely
manner.

8.10   SPECIAL COVENANTS.  Without the prior written consent of
Administrative Agent, which consent shall not be unreasonably withheld, delayed
or conditioned, (a) no Loan Party shall amend or permit the amendment of the
organizational documents of any other Loan Party, as applicable, thereof, in
each case from the form thereof previously provided to Administrative Agent;
(b) no Loan Party shall engage in any transaction with any Affiliate of any
Loan Party on terms more favorable to such Affiliate than fair market terms and
conditions, except for reimbursement of expenses advanced by any Affiliate of
REIT in connection with investments in the REIT; (c) no Property Owner shall
engage in any business other than the acquisition, ownership, development,
leasing, operation and disposition of the Real Estate Assets owned by such
Person and ancillary related purposes; (d) no Loan Party shall directly or
indirectly guaranty the obligations of any other person or entity other than
Borrower and its Subsidiaries, and no Subsidiary Guarantor shall directly or
indirectly guaranty or be liable with respect to the obligations or
indebtedness of any other person or entity other than the Obligations of
Borrower and Guarantors under the Loan Documents; (e) no Loan Party shall incur
any additional indebtedness or other material obligation, other than ordinary
course obligations or swap or other transactions (excluding, however, any
additional borrowed money) incurred in connection with the Borrower’s permitted
scope of business as referred to above; or (f) no Loan Party shall suffer or permit
any direct or indirect change in the ownership of Borrower (other than
investments in PE-ARC that do not result in a Change of Control).  

 

 

8.11   
LIMITATIONS
ON DISTRIBUTIONS, ETC. 
 

(a)                  
Following the
occurrence and during the continuance of a monetary or other material Default,
neither Borrower nor any Guarantor shall repay any principal or
interest on any loan or other advance made to Borrower or any Guarantor
by any other Related Party, nor shall Borrower or any Guarantor
loan or advance any funds to any other Related Party.  Neither Borrower nor any Guarantor
shall accept any loans from any Related Party.

(b)                 
The Borrower shall not
pay any Restricted Payment to the partners, members or other owners of the
Borrower, and General Partner and PE-ARC shall not pay any Restricted Payment
to their respective partners, members or other owners, during any period of four (4) consecutive calendar quarters to the extent that such Restricted Payment
would cause the aggregate Restricted Payments (less any amount of such Restricted
Payment constituting Dividend Reinvestment Proceeds) paid or declared during
such period to exceed ninety-five percent (95%) of such Person’s
Funds from Operations for such period; provided  that the limitations
contained in this Section 8.11(b) shall not preclude the Borrower,
General Partner or PE-ARC from making Restricted Payments in an amount equal to
the minimum distributions required under the Code to maintain the REIT Status
of PE-ARC, as evidenced by a certification of the principal financial or
accounting officer of PE-ARC containing calculations in detail reasonably
satisfactory in form and substance to the Administrative Agent. 
Notwithstanding the terms of this Section 8.11(b) (but subject to the
terms of Sections 8.11(c) and (d)), the Borrower may, by prior written
notice to the Administrative Agent, exceed such ninety-five percent (95%)
threshold for one (1) fiscal quarter provided that no Default or Potential
Default exists or would occur as a result thereof.

(c)                  
If a Default or
Potential Default shall have occurred and be continuing, the Borrower shall
make no Restricted Payments, and General Partner and PE-ARC shall not pay any
Restricted Payment to their respective partners, members or other owners, other
than Restricted Payments in an amount equal to the minimum distributions
required under the Code to maintain the REIT Status of PE-ARC, as evidenced by
a certification of the principal financial or accounting officer of PE-ARC
containing calculations in detail reasonably satisfactory in form and substance
to the Administrative Agent.

(d)                 
Notwithstanding the
foregoing, at any time when a Default under Sections 10.1(a), (h),
(i)  or (j)  shall have occurred, or the maturity of the
Obligations has been accelerated, neither the Borrower, General Partner nor
PE-ARC shall make any Restricted Payments whatsoever, directly or indirectly.

8.12    COMPLIANCE WITH AND AMENDMENT
OF CHARTER OR BYLAWS. 
Each Loan Party shall (a) comply with the terms of its articles of
incorporation, bylaws, operating agreement, partnership agreement or other
organizational or constituent document, and (b) not amend, supplement, restate
or otherwise modify its articles of incorporation, by-laws, operating
agreement, partnership agreement or other organizational or constituent
document if such amendment, supplement, restatement or other modification could
reasonably be expected to have a Material Adverse Effect.

70 

 

 

 

8.13   
[INTENTIONALLY
OMITTED]. 

8.14   REIT Status.   PE-ARC shall at all times maintain its
status as a REIT and will not revoke its election to be treated as a REIT.

8.15  FINANCIAL AND STRUCTURAL
COVENANTS.        Borrower
hereby covenants and agrees that so long as the Facility remains outstanding:

(a)                  
Leverage Ratio.  The Leverage Ratio of Borrower shall
not exceed sixty-five percent (65%); provided that no more than one time solely
as a result of and immediately following a Material Acquisition, the Leverage
Ratio of Borrower may exceed sixty-five percent (65%) but shall not exceed
seventy percent (70%) for the two (2) calendar quarters immediately following
such Material Acquisition.

(b)                 
Fixed Charges
Coverage.  The ratio
of Adjusted EBITDA of Borrower to Fixed Charges of Borrower shall not be less
than 1.50 to 1; provided that no more than one time solely as a result of and immediately
following a Material Acquisition, such ratio may be less than 1.50 to 1 but
shall not be less than 1.40 to 1 for the two calendar quarters immediately
following such Material Acquisition.

(c)                  
Minimum Net
Worth.  Borrower
shall maintain a Minimum Net Worth of not less than the sum of $74,000,000.00 plus  seventy percent (70%) of Net
Equity Proceeds.

(d)                 
Borrowing Base.  The Borrower shall not at any time
permit the outstanding principal balance of the Revolving Credit Loans, Swing
Loans and the Letter of Credit Liabilities to be greater than the Borrowing
Base Availability.

(e)                  
Minimum
Mortgaged Property Requirement.  Beginning on the first date that there are at least
four (4) Mortgaged Properties included in the calculation of Borrowing Base
Availability with an Appraised Value of not less than $60,000,000.00, the
Borrowing Base shall consist of not less than four (4) Mortgaged Properties
that are encumbered by Mortgages with an aggregate Appraised Value of not less
than $60,000,000.00. 

8.16     INDEBTEDNESS. 

(a)               
No Loan Party will, or
will permit any Guarantor or any Subsidiary of the Borrower to, incur, assume
or suffer to exist any Unsecured Debt other than the indebtedness under the
Existing Credit Agreement in a principal amount not to exceed $10,000,000 (which
debt for the purposes of this Agreement shall be considered Unsecured Debt).

(b)              
PE-ARC shall be
prohibited from (i) owning any assets other than its interest in Borrower,
General Partner and minority interests in other Borrower-related investment
funds; (ii) incurring any direct debt obligations; and (iii) guaranteeing any
indebtedness, other than debt of Borrower or any Subsidiary.

(c)               
No Loan Party will, or
will permit any Subsidiary of any Loan Party to, incur, assume or suffer to
exist any Recourse Indebtedness unless approved in writing by Lender, except
Unsecured Debt permitted in Section 8.16(a)(i) above and Secured
Recourse Indebtedness as permitted in the following sentence.  No Loan Party
will, or will permit any Subsidiary of any 

71 

 

 

 

Loan Party
to, incur, assume or suffer to exist any Secured Recourse Indebtedness, except
up to an aggregate of $25,000,000 of Secured Recourse Indebtedness shall be
permitted hereunder provided that each incurrence shall not (A) be greater than
seventy percent (70.0%) of the market value of the Real Estate Asset secured
thereby based on a third party appraisal, unless approved in writing by the
Requisite Lenders, or (B) result in a Default under Section 8.16(a)-(c)
above or any other provision of this Agreement.  Except for the debt under the
Existing Credit Agreement and the debt under this Agreement, no such Secured
Indebtedness shall be secured by a Lien on Equity Interests or any Restricted
Payments.  Notwithstanding anything to the contrary contained in this Section
8.16(c), the foregoing limitations on Secured Indebtedness shall not apply
to Secured Indebtedness incurred by Borrower under this Agreement and Secured
Indebtedness incurred by the Joint Venture or any of its Subsidiaries but shall
apply to any guaranty provided by any Loan Party with respect thereto.  From
and after such time as Borrower delivers evidence reasonably satisfactory to
Administrative Agent that the Gross Asset Value of Borrower is equal or greater
than $250,000,000, the foregoing $25,000,000 limit in this Section 8.16(c)
shall be modified to be an amount equal to ten percent (10%) of Gross Asset
Value of Borrower as determined from time to time.

8.17     [INTENTIONALLY OMITTED.] 

8.18    
[INTENTIONALLY
OMITTED.] 

8.19     DISTRIBUTIONS OF INCOME TO BORROWER.   

(a)               
Unless otherwise
restricted by the express terms of the partnership agreement of PECO-ARC Joint
Venture, the Borrower shall cause PAI to cause PECO-ARC Joint Venture to
promptly distribute to the Borrower (but not less frequently than once each
calendar quarter, unless otherwise approved by the Administrative Agent),
whether in the form of dividends, distributions or otherwise, all profits,
proceeds or other income relating to or arising from PECO-ARC Joint Venture’s
use, operation, financing, refinancing, sale or other disposition of its assets
and properties after (i) the payment by PECO-ARC Joint Venture of its debt
service, operating expenses, and capital improvements made in the ordinary
course of business consistent with its past practices for such quarter and (ii)
the establishment of reasonable reserves for the payment of operating expenses
not paid on at least a quarterly basis and capital improvements and tenant
improvements to be made to PECO-ARC Joint Venture’s assets and properties approved
by PECO-ARC Joint Venture in the course of its business consistent with its
past practices.  

(b)              
Borrower shall cause
each Subsidiary (subject to the terms of any loan documentation evidencing
Secured Indebtedness permitted by this Agreement and any organizational
documentation related to a joint venture arrangement with any unrelated third
party which contains any provision that would prohibit or limit the same) to
promptly distribute to Borrower (but not less frequently than once each
calendar quarter, unless otherwise approved by Administrative Agent; provided 
that any amounts distributable to Borrower as a result of a sale or other
disposition of any property or asset of such Subsidiary or the refinancing of
any indebtedness relating thereto shall be distributed to Borrower as promptly
as possible), whether in the form of dividends, distributions or otherwise,
Borrower’s pro rata share as received in cash of all profits, proceeds or other
income relating to or arising from such Subsidiary’s use, operation, financing,
refinancing, sale or other disposition of its assets and properties after (i)
the 

72 

 

 

 

payment by such Subsidiary of its debt service,
operating expenses, capital improvements, leasing commissions and bona fide,
arms-length, third-party transaction expenses not paid to an Affiliate for such
sale, financing, or other disposition for such quarter and (ii) the
establishment of reasonable reserves for the payment of operating expenses not
paid on at least a quarterly basis and capital improvements and tenant
improvements to be made to such Subsidiary’s assets and properties approved by
such Subsidiary in the course of its business consistent with its past
practices.

8.20   FEES.  No Loan Party shall pay any management
fees, advisory fees or other payments to Advisor or Sub-Advisor in the event
that a Potential Default or Default shall have occurred and be continuing.

8.21   
MANAGEMENT.  The Borrower shall not and shall not
permit any Guarantor to enter into any Management Agreement after the date hereof
for any Mortgaged Property without the prior written consent of the
Administrative Agent (which shall not be unreasonably withheld), and after such
approval, no such Management Agreement shall be modified in any material
respect or terminated without Administrative Agent’s prior written approval,
such approval not to be unreasonably withheld or delayed.  Administrative Agent
may condition any approval of a new manager engaged by Borrower or a Subsidiary
with respect to a Mortgaged Property upon the execution and delivery to
Administrative Agent of a Subordination of Management Agreement.  Borrower
shall not and shall not permit any Guaranty or other Subsidiary to increase any
management fee payable under a Management Agreement after the date the applicable
Real Estate becomes a Mortgaged Property without the prior written consent of
the Administrative Agent. 

8.22     ADDITIONAL RESTRICTIONS ON INDEBTEDNESS AND LIENS.

(a)               
Notwithstanding
anything in this Agreement to the contrary, (i) none of the indebtedness
included in Total Indebtedness (other than the Obligations) shall have any of
the Mortgaged Properties or any interest therein or any direct or indirect
ownership interest in any Subsidiary Guarantor as collateral, a borrowing base,
unencumbered asset pool or any similar form of credit support for such
Indebtedness, (ii) none of the Borrower, the Guarantors or their
respective Subsidiaries shall create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any indebtedness included in
Total Indebtedness (other than Indebtedness to the Lenders arising under the
Loan Documents) with respect to which there is a Lien on any Equity Interests,
right to receive Restricted Payments or similar right in any Subsidiary
Guarantor; and (iii) no Subsidiary of Borrower which directly or
indirectly owns a Mortgaged Property shall create, incur, assume, guarantee or
be or remain liable, contingently, with respect to any indebtedness included in
Total Indebtedness, other than Indebtedness to the Lenders arising under the
Loan Documents.

(b)              
Notwithstanding
anything in this Agreement to the contrary, (i) no Subsidiary Guarantor
shall create or incur or suffer to be created or incurred or to exist any Lien
(including without limitation with respect to a Mortgaged Property) other than
Liens with respect to a Mortgaged Property permitted pursuant to the applicable
Mortgage (or if no Mortgage has yet been delivered, as approved by
Administrative Agent in writing) to secure taxes or assessments not yet due and
payable or mechanics, construction or materialmen’s Liens which are being
contested, provided  that forthwith upon the commencement of proceedings
to foreclose 

73 

 

 

 

any Lien that may have attached as
security therefor, Borrower, Guarantor or Subsidiary either (A) will
provide a bond issued by a surety reasonably acceptable to the Administrative
Agent and sufficient to stay all such proceedings or (B) if no such bond
is provided, will pay each such tax, assessment, charge, levy or Lien; (ii) PE-ARC
and General Partner shall not create or suffer to be created or incurred or to
exist any Lien on any of their respective properties or assets or those of the
General Partner in the Borrower; and (iii) no Subsidiary of Borrower which
indirectly owns a Mortgaged Property shall create or incur or suffer to be
created or incurred any Lien other than a Lien in favor of the Administrative
Agent for the benefit of the Lenders under the Loan Documents.

8.23  
RESTRICTIONS ON
INVESTMENTS. 
Borrower will not make or permit to exist or to remain outstanding any
Investment by Borrower, any Guarantor or any of their respective Subsidiaries
except Investments in:

(a)               
Cash and Cash
Equivalents;

(b)              
Investments in Wholly
Owned Subsidiaries;

(c)               
Investments by
Borrower in PECO-ARC Joint Venture;

(d)              
Investments in land
assets to be developed as a commercial retail center, provided that such
Investments shall not in the aggregate exceed five percent (5%) of Gross Asset
Value;

(e)               
Investments in
Mortgage Notes secured by properties (excluding mezzanine loans secured by
equity interests in Persons owning properties) that are commercial retail
properties, provided that such Investments shall not in the aggregate exceed
ten percent (10%) of Gross Asset Value;

(f)               
Investments in
completed and operational commercial properties that are not commercial retail
properties, provided that such Investments shall not in the aggregate exceed
five percent (5%) of Gross Asset Value; and

(g)              
Investments in
Properties Under Development or Redevelopment Properties, provided that such
Investments shall not in the aggregate exceed ten percent (10%) of Gross Asset
Value.

Notwithstanding the
foregoing, in no event shall the aggregate value of the holdings of Borrower,
Guarantors and their respective Subsidiaries in the Investments described in Section 8.23(d-g) 
exceed twenty percent (20%) of Gross Asset Value at any time.

 

8.24   
EQUITY PLEDGES.  Neither General Partner nor PE-ARC will
create or incur or suffer to be created or incurred any Lien on any of its
direct or indirect legal, equitable or beneficial interest in the Borrower or
any Guarantor which owns a Mortgaged
Property, including, without
limitation, any Restricted Payments or rights to Restricted Payments on account
thereof.

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8.25    MANAGEMENT FEES; ADVISORY FEES.  In the event that a Default shall have
occurred and is continuing, Borrower shall not pay, and shall not permit any
Guarantor to pay, (a) any management fees or other payments under any
Management Agreement for any Mortgaged Property to Borrower, any other manager
that is an Affiliate of Borrower or any other manager or (b) any fee or other
compensation to Advisor or Sub-Advisor.

8.26  
BUSINESS OPERATIONS.  The Borrower and its Subsidiaries shall
operate their respective businesses in substantially the same manner and in
substantially the same fields and lines of business as such business is now
conducted and in compliance with the terms and conditions of this Agreement and
the Loan Documents.  The Borrower will not, and will not permit any Subsidiary
to, directly or indirectly, engage in any line of business other than the
ownership, operation and development of retail centers and business activities
and investments incidental thereto.  

article 9.  REPORTING
COVENANTS

9.1    FINANCIAL INFORMATION.      Borrower shall deliver to Administrative
Agent as soon as available, but in no event later than sixty (60) days after
the end of each of Borrower’s fiscal quarters and one hundred twenty (120) days
after Borrower’s fiscal year end and certified as required by Section 9.9 
below, current, audited (as to annual financial statements only), consolidated
financial statements (including, without limitation, an income and expense
statement, a statement of retained earnings (on an annual basis only),
statement of cash flow (on an annual basis only), and balance sheet) signed by
the chief financial officer of Borrower, together with any other financial
information including, without limitation, cash flow projections for the
immediately succeeding four (4) fiscal quarters, reasonably requested by
Administrative Agent or Lenders for Borrower.

Borrower shall deliver
(a) updates to Exhibit H-1  and H-2  together with its
quarterly financial information delivered as required above, (b) a statement
listing the Real Estate Assets owned by the Loan Parties and their Subsidiaries
(or in which the Loan Parties or their Subsidiaries own an Interest) and
stating the location thereof, the date acquired and the acquisition cost, (c) a
report detailing any Net Equity Proceeds of an Equity Offering, and (iv) all
investor reporting.  Borrower shall also deliver to Administrative Agent such
quarterly and other financial information regarding any Loan Party as
Administrative Agent and the Lenders may reasonably require.  The annual
consolidated financial statements shall bear an unqualified opinion of the
Borrower’s auditors.  Except as otherwise agreed to by Lenders, all such
financial information shall be prepared in accordance with generally accepted
accounting principles consistently applied.

Notwithstanding the
terms of Section 9.1, provided that (a) PE-ARC owns no assets other than
its interests in Borrower, Cash and Equivalents (which Cash and Cash
Equivalents are held on a short term basis pending distribution to shareholders
of PE-ARC or contribution to Borrower), prepaid expenses up to $1,000,000 and
intercompany payables, and (b) PE-ARC owns not less than ninety-five percent
(95%) of the legal, economic and beneficial interests of Borrower, the
financial statements and reporting required pursuant to this Section 9.1
may be provided in the form of the consolidated financial statements and other
reporting of PE-ARC instead of the consolidated statements and other reporting
of Borrower (but without limitation of any requirement for an audit or certification).

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9.2     BOOKS AND RECORDS.  Borrower shall maintain complete books
of account and other records for the Real Estate Assets and for disbursement
and use of the proceeds of the Facility, and the same shall be available for
inspection and copying by Administrative Agent and each Lender upon reasonable
prior notice.

9.3      CHANGES IN ORGANIZATIONAL
STRUCTURE.  Borrower shall
provide to Administrative Agent on a quarterly basis detailed information
regarding any material changes in the organizational structure of the Loan
Parties which occurred during the preceding quarter and an updated
organizational chart, certified as true and correct by Borrower.

9.4      
INTENTIONALLY
OMITTED. 

9.5      
INTENTIONALLY
OMITTED.  

9.6    KNOWLEDGE OF DEFAULT;  ETC.     
  Borrower shall promptly,
upon obtaining knowledge thereof, report in writing to Administrative Agent (i)
the occurrence of any Default or Potential Default; (ii) [intentionally
omitted]; (iii) [intentionally omitted]; and (iv) any release or threatened
release of Hazardous Materials, any violation of Hazardous Materials Laws or
similar environmental event with respect to a Real Estate Asset that could
become a Disqualifying Environmental Event.  In the case of any Potential
Default, such notice shall include, as applicable, the affirmative steps which
Borrower has taken or intends to take during the applicable cure period in
order to avoid the occurrence of a Default with respect to the subject event,
circumstance or condition.

9.7    LITIGATION, ARBITRATION OR
GOVERNMENT INVESTIGATION. 
Borrower shall promptly, upon obtaining knowledge thereof, report in writing to
Administrative Agent, (i) the institution of, or threat of, any material
proceeding against or affecting Borrower, Guarantor or the Real Estate Assets,
including any eminent domain or other condemnation proceedings affecting the
Real Estate Assets, or (ii) any material development in any proceeding already
disclosed, which, in either case, has or could reasonably be expected to result
in, a Material Adverse Effect, which notice shall contain such information as
may be reasonably available to Borrower to enable Administrative Agent and its
counsel to evaluate such matters.

9.8       ENVIRONMENTAL NOTICES.  Borrower shall notify Administrative
Agent, in writing, as soon as practicable, and in any event within ten (10)
days after learning thereof, of any notice required pursuant to Section 7.2(c). 

9.9     CERTIFICATE OF BORROWER.     
   Together with each delivery
of any financial statement pursuant to this Article 9, and in any
event, no less frequently than quarterly within sixty (60) days after the end
of each of Borrower’s fiscal quarters and ninety (90) days after the end of
each fiscal year of Borrower, Borrower shall provide the certificate of its
chief financial officer or other authorized signatory that such person has
reviewed the terms of this Agreement and the other Loan Documents, and has made
a review in reasonable detail of the transactions and condition of Borrower
during the accounting period covered by such financial statements, and that
such review has not disclosed the existence during or at the end of such
accounting period, and that such person does not have knowledge of the
existence as of the date of such certificate, of any condition or event which
constitutes a Default or a Potential Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence 

 

 

thereof and what action has been taken, is being taken
and is proposed to be taken with respect thereto.

9.10    COVENANT COMPLIANCE
CERTIFICATE.  Within
sixty (60) days after the close of each of the first, second and third fiscal
quarters of the Borrower and ninety (90) days after the end of each fiscal year
of the Borrower, a certificate, in the form of Exhibit I  hereto
(the “Compliance Certificate”), executed by the Chief Financial Officer
of the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower is in compliance with the requirements of Sections 8.11,
8.15, 8.16, and 8.23 and there exists no Default or Potential Default under
Section 10.1(p)  hereof on the date of such financial statements and
(ii) stating whether any Potential Default or Default exists on the date of
such certificate and, if any Potential Default or Default then exists, setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto.

9.11  
RENT ROLL.  Simultaneously with the delivery of the
financial statements referred to in Section 9.1, Borrower shall deliver
to Administrative Agent, (i) a Rent Roll for each of the Mortgaged Properties
and a summary thereof in form satisfactory to Administrative Agent as of the
end of each calendar quarter (including the fourth calendar quarter in each
year), together with a listing of each tenant that has taken occupancy of such
Mortgaged Property during each calendar quarter (including the fourth calendar
quarter in each year), (ii) an operating statement for each of the Mortgaged
Properties for each such calendar quarter and year to date and a consolidated
operating statement for the Mortgaged Properties for each such calendar quarter
and year to date (such statements and reports to be in form reasonably
satisfactory to Administrative Agent), and (iii) a copy of each Lease or
amendment to any Lease entered into with respect to a Mortgaged Property during
such calendar quarter (including the fourth calendar quarter in each year).

9.12    
GROUND LEASE.     
   The Borrower will promptly
notify the Administrative Agent in writing of any default by a Fee Owner in the
performance or observance of any of the terms, covenants and conditions on the
part of a Fee Owner to be performed or observed under a Ground Lease, which
default has not been cured within any applicable cure period.  The Borrower
will promptly deliver to the Administrative Agent copies of all material
notices, certificates, requests, demands and other instruments received from or
given by a Fee Owner to Borrower or a Subsidiary Guarantor under a Ground
Lease.

9.13  
ELECTRONIC DELIVERY.  Any material to be delivered pursuant
to Sections 9.1, 9.9, 9.10 and 9.11 may be delivered electronically
directly to Administrative Agent and the Lenders provided that such material is
in a format reasonably acceptable to Administrative Agent, and such material
shall be deemed to have been delivered to Administrative Agent and the Lenders
upon Administrative Agent’s receipt thereof.  Upon the request of
Administrative Agent, the Borrower shall deliver paper copies thereof to
Administrative Agent and the Lenders.  The Borrower authorizes Administrative
Agent and Arranger to disseminate any such materials through the use of
Intralinks, SyndTrak or any other electronic information dissemination system,
and the Borrower releases Administrative Agent and the Lenders from any
liability in connection therewith.

 

 

article
10. 
DEFAULTS AND REMEDIES

10.1      DEFAULT.  The occurrence of any one or more of
the following shall constitute an event of default (“Default”) under
this Agreement and the other Loan Documents:

(a)            
Monetary.  Borrower’s failure to pay when due any
sums payable under the Notes or any of the other Loan Documents as and when
required under this Agreement; provided, however, Borrower shall have a grace
period of three (3) Business Days after the date when due within which to cure
such failure other than with respect to any sums due and owing under this
Agreement on the Maturity Date; or

(b)           
Performance of
Obligations. 
Borrower’s or Guarantor’s failure to perform any obligation other than those in
Section 10.1(a)  above under any of the Loan Documents and the
continuation of such failure for more than thirty (30) days after written
notice to Borrower from Administrative Agent requesting that Borrower cure such
failure and if such default is of a nature that it is not curable within said
thirty (30) day period, the defaulting party shall have such additional time
period (not to exceed an additional thirty (30) days) (except for a default
under Section 10.1(l), where such extension period is not capped) as may
be required to effectuate such cure so long as such defaulting party is
diligently pursuing said cure; provided, however, if a shorter
cure period is provided for the remedy of such failure elsewhere in the Loan
Documents, Borrower’s failure to perform will constitute a Default at the end
of such specified cure period.  The parties hereby acknowledge and agree that
there shall be no right to cure any default under any covenant set forth in Section 8.5;
or

(c)            
Default in
Covenants.  The
Borrower shall fail to perform under any covenants set forth in Sections
8.15 or 8.16  hereof or clause (y) of Schedule 12.3 hereto; or

(d)           
Litigation.  Borrower or Guarantor shall disavow,
revoke or terminate any Loan Document or Contribution Agreement to which it is
a party or shall otherwise challenge or contest in any action, suit or
proceeding in any court or before any Governmental Authority the validity or
enforceability of this Agreement, any Note, any other Loan Document or the
Contribution Agreement; or

(e)            
Liens,
Attachment; Condemnation. 
(i) The recording of any claim of Lien against any Real Estate Asset and the
continuance of such claim of Lien for forty-five (45) days without discharge,
satisfaction or provision for payment being made by Borrower in a manner
satisfactory to Administrative Agent; or (ii) the condemnation, seizure or
appropriation of, or occurrence of an uninsured casualty with respect to any
portion of any Real Estate Asset that would be reasonably likely to have a
Material Adverse Effect; or (iii) the sequestration or attachment of, or any
levy or execution upon any of the Real Estate Assets, any other collateral
provided by Borrower under any of the Loan Documents, or any substantial
portion of the other assets of Borrower, which sequestration, attachment, levy
or execution is not released, expunged or dismissed prior to the earlier of
forty-five (45) days or the sale of the assets affected thereby; or

(f)            
Judgment.  The entry of a judgment or order for
the payment of money (not adequately covered by insurance as to which the
insurance company has acknowledged coverage in writing) shall be entered
against the Borrower, any Subsidiary of the Borrower, or any other Related
Party by any court or other tribunal:

78 

 

 

 

(i)                
which in amount,
individually or together with all other such judgments or orders entered
against such Person would exceed $5,000,000.00 in the aggregate; or

(ii)              
which could otherwise
have a Material Adverse Effect;

(g)           
Representations
and Warranties.  (i)
The material breach of any representation or warranty of Borrower or any
Guarantor in any of the Loan Documents; (ii) any material adverse change in the
financial condition of Borrower or any Guarantor, and the continuation of such
breach for more than thirty (30) days after written notice to Borrower from
Administrative Agent requesting that Borrower cure same, it being acknowledged
and agreed that in no event shall the Lenders be obligated to make any advances
under the Facility until such breach is cured; or

(h)           
Voluntary
Bankruptcy; Insolvency; Dissolution.  (i) The filing of a petition by Borrower for relief
under the Bankruptcy Code, or under any other present or future state or
federal law regarding bankruptcy, reorganization or other debtor relief law;
(ii) the filing of any pleading or an answer by Borrower in any involuntary
proceeding under the Bankruptcy Code or other debtor relief law which admits
the jurisdiction of the court or the petition’s material allegations regarding
Borrower’s insolvency; a general assignment by Borrower for the benefit of
creditors; or (iv) Borrower applying for, or the appointment of, a receiver,
trustee, custodian or liquidator of Borrower or any of its property; or

(i)             
Involuntary
Bankruptcy.  The
failure of Borrower to effect a full dismissal of any involuntary petition
under the Bankruptcy Code or under any other debtor relief law that is filed
against Borrower or in any way restrains or limits Borrower, Administrative
Agent or Lenders regarding the Facility or the Real Estate Assets, prior to the
earlier of the entry of any court order granting relief sought in such
involuntary petition, or sixty (60) days after the date of filing of such
involuntary petition; or

(j)             
Guarantors and
Subsidiaries of Borrower and Guarantor.  The occurrence of any of the events specified in Section 10.1(h) 
or Section 10.1(i)  as to Borrower, any Guarantor and any Subsidiary
of Borrower or any Guarantor; or

(k)           
Unenforceability
of Loan Documents. 
The failure at any time of any of the Loan Documents or the Contribution
Agreement to be valid, binding and enforceable obligations of Borrower or
Guarantor; or 

(l)             
Hazardous
Materials.  The
discovery of any significant Hazardous Materials in, on, under or about any
Real Estate Asset subsequent to the Effective Date not in compliance with
applicable law and the failure to remediate or take other satisfactory
measures, if required by applicable law, regarding said Hazardous Materials
within thirty (30) days after written notice to Borrower from Administrative
Agent requesting that Borrower remediate same, if such remediation is required
by applicable law or court order, it being acknowledged and agreed that in no
event shall the Lenders be obligated to make any advances under the Facility
until such breach is cured.  In the event such remediation is susceptible of
cure but is not cured within said thirty (30) days, so long as Borrower is
diligently and continuously pursuing such cure, as evidenced to Administrative
Agent’s satisfaction, Administrative Agent shall permit Borrower an additional
sixty (60) days (or such lesser period of time as may be permitted under 

79 

 

 

 

applicable law) to effectuate such cure; provided,
however, that such additional time shall not apply where such failure to
remediate results, in Administrative Agent’s sole judgment, in a matter which
is of an emergency nature.  Any such Hazardous Materials shall be “significant”
for this purpose if said Hazardous Materials, in Administrative Agent’s sole
discretion, have a materially adverse impact on the value of the related Real
Estate Asset; or

(m)         
ERISA.  The assets of the Borrower, any
Guarantor or any other Related Party at any time constitute assets, within the
meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder, of any ERISA plan or non-ERISA plan; or

(n)           
[Intentionally
Omitted.]

(o)           
Indebtedness
Cross-Default.  (i)
Any default of any indebtedness of Borrower, any Guarantor or any
Subsidiary of Borrower or any Guarantor with respect to Recourse
Indebtedness or (ii) any monetary default (including without limitation as a
result of acceleration) of any indebtedness of Borrower, any Guarantor
or any Subsidiary of Borrower or any Guarantor with an aggregate outstanding
principal amount of $35,000,000 or more with respect to Non-Recourse
Indebtedness, which, as to any of the aforesaid, is not cured within any
applicable cure period and which, if not cured, would permit the lender to call
or accelerate such indebtedness; or

(p)           
Prohibited
Events relating to Related Parties. 

(i)                
If any Related Party
shall fail to comply with all Requirements of Law or fail to use commercially
reasonable and good faith efforts to cause other Persons to comply with same in
a timely manner, and such default is not cured within a period of thirty (30)
days after first learning thereof;

(ii)              
If any Related Party
shall engage in any transaction with any Affiliate of any Related Party on
other than fair market terms and conditions without the prior written consent
of Administrative Agent, which consent shall not be unreasonably withheld or
delayed, and such default is not cured within a period of thirty (30) days
after first learning thereof;

(iii)            
Except those Liens
granted to Administrative Agent pursuant to the Pledge Agreement, if any Lien
shall be permitted upon any direct or indirect ownership interest in any
Related Party or if any Related Party shall create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on (A) the ability of any Subsidiary to: pay dividends or make any
other distribution on any of such Subsidiary’s capital stock or other equity
interest owned by the Borrower, Guarantor or any Subsidiary, except pursuant to
any provisions of any loan documentation evidencing Secured Indebtedness
permitted by this Agreement that restrict such payments from a Real Estate
Asset following a default, event of default or event that commences a sweep
of income generated by the Real Estate Assets into a deposit account controlled
by the lender under the loan documentation evidencing Secured Indebtedness
permitted by this Agreement; or (B) the ability of Borrower and/or Guarantor to
pay any Total Indebtedness owed to any Lender;

(iv)            
If any Related Party
shall (A) fail to comply with the terms of its articles of incorporation,
bylaws, operating agreement, partnership agreement or other 

80 

 

 

organizational
or constituent document, or (B) amend or permit the amendment of the
organizational documents of any other Loan Party, as applicable, thereof, in
each case from the form thereof previously provided to Administrative Agent,
without the prior written consent of Administrative Agent or Requisite Lenders,
as applicable; or

(v)              
If Borrower or
Guarantor shall (A) enter into any transaction of merger or consolidation; (B)
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); (C) convey, sell, lease, sublease, transfer or otherwise dispose
of, in one transaction, all or any substantial part of its business or assets,
whether now owned or hereafter acquired; or (D) incur any unsecured Total
Indebtedness; or

(q)              
Change of
Control/Change of Management.  Any Change of Control shall occur; or

(r)                
Forfeiture.  The Borrower, any Guarantor or any of
their respective Subsidiaries or any shareholder, officer, director, partner or
member of any of them shall be indicted for a federal crime, a punishment for
which could include the forfeiture of the Collateral; or 

(s)               
Other Loan
Documents.  A Default
or Event of Default under any of the other Loan Documents shall occur and be
continuing after the expiration of any applicable grace or cure periods.

10.2     ACCELERATION UPON DEFAULT;
REMEDIES.  Upon the
occurrence of a Default, and in every such event, Administrative Agent shall,
upon the direction of the Requisite Lenders, (i) by notice to the Borrower
terminate the Commitments, which shall thereupon terminate, and (ii) by notice
to the Borrower declare the Facility and all other obligations to be, and the
Facility and all other obligations shall thereupon become, immediately due and
payable without presentment, demand, protest or notice of intention to
accelerate, all of which are hereby waived by Borrower.  Notwithstanding the
foregoing, upon the occurrence of any Default specified in Sections 10.1(h)
through (j) above, without any notice to the Borrower or any other act by
Administrative Agent, the Commitments shall thereupon immediately and
automatically terminate and the Facility and all other obligations shall become
immediately due and payable without presentment, demand, protest, notice of
intention to accelerate or notice of acceleration, or other notice of any kind,
all of which are hereby waived by the Borrower.  Upon the occurrence and during
the continuance of a Default, the right of the Borrower to request advances
shall be suspended.  Upon demand by Administrative Agent or the Requisite
Lenders in their absolute and sole discretion after the occurrence and during
the continuance of a Default, and regardless of whether the conditions
precedent in this Agreement for a Loan under Section 2.1 have been
satisfied, the Lenders will cause a Loan under Section 2.1 to be made in
the undrawn amount of all Letters of Credit.  The proceeds of any such Loan
will be pledged to and held by Administrative Agent as security for any amounts
that become payable under the Letters of Credit and all other Obligations.  In
the alternative, if demanded by Administrative Agent in its absolute and sole
discretion after the occurrence and during the continuance of a Default, the
Borrower will deposit into the Collateral Account and pledge to Administrative
Agent cash in an amount equal to the amount of all undrawn Letters of Credit. 
Such amounts will be pledged to and held by Administrative Agent for the
benefit of the Lenders as security for any amounts that become payable under
the Letters of Credit and all other Obligations.  Upon any draws under 

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Letters of Credit, at Administrative Agent’s sole
discretion, Administrative Agent may apply any such amounts to the repayment of
amounts drawn thereunder and upon the expiration of the Letters of Credit any
remaining amounts will be applied to the payment of all other Obligations or if
there are no outstanding Obligations and the Lenders have no further obligation
to make Revolving Credit Loans or issue Letters of Credit or if such excess no
longer exists, such proceeds deposited by the Borrower will be released to the
Borrower.  Notwithstanding the provisions of this Agreement providing that the
Loans may be evidenced by multiple Notes in favor of the Lenders, the Lenders
acknowledge and agree that only the Administrative Agent may exercise any
remedies arising by reason of a Default or Potential Default.

10.3     DISBURSEMENTS TO THIRD
PARTIES.  Upon the
occurrence of a Default occasioned by Borrower’s failure to pay money to a
third party as required by this Agreement, Administrative Agent may but shall
not be obligated to make such payment from the Facility proceeds or other funds
of Administrative Agent or the Lenders, provided that it gives at least 5 Business
Days’ prior written notice to Borrower of its intent to make such payment
provided no Default then exists.  If such payment is made from proceeds of the
Facility, Borrower shall immediately deposit with Administrative Agent, upon
written demand, an amount equal to such payment.  If such payment is made from
funds of Administrative Agent or the Lenders, Borrower shall immediately repay
such funds upon written demand of Administrative Agent.  In either case, the
Default with respect to which any such payment has been made by Administrative
Agent or Lenders shall not be deemed cured until such deposit or repayment (as
the case may be) has been made by Borrower to Administrative Agent.

10.4      [INTENTIONALLY OMITTED].   

10.5  REPAYMENT OF FUNDS ADVANCED.  Any funds expended by Administrative
Agent or any Lender in the exercise of its rights or remedies under this
Agreement and the other Loan Documents shall be payable to Administrative Agent
upon demand, together with interest at the rate applicable to the principal
balance of the Facility from the date the funds were expended.

10.6    RIGHTS CUMULATIVE, NO WAIVER.  All Administrative Agent’s and Lenders’
rights and remedies provided in this Agreement and the other Loan Documents,
together with those granted by law or at equity, are cumulative and may be
exercised by Administrative Agent or Lenders at any time.  Administrative
Agent’s or any Lender’s exercise of any right or remedy shall not constitute a
cure of any Default unless all sums then due and payable to Lenders under the
Loan Documents are repaid and Borrower has cured all other Defaults.  No waiver
shall be implied from any failure of Administrative Agent or any Lender to
take, or any delay by Administrative Agent or any Lender in taking, action concerning
any Default or failure of condition under the Loan Documents, or from any
previous waiver of any similar or unrelated Default or failure of condition. 
Any waiver or approval under any of the Loan Documents must be in writing and
shall be limited to its specific terms.

10.7  
DISTRIBUTION OF
COLLATERAL PROCEEDS. 
In the event that, following the occurrence and during the continuance of any
Default, any monies are received in connection with the enforcement of any of
the Loan Documents, or otherwise with respect to the realization upon any of
the Collateral or other assets of the Borrower or the Guarantors, such monies
shall be distributed for application as follows:

 

 

(a)            
First, to the payment
of, or (as the case may be) the reimbursement of the Administrative Agent for
or in respect of, all reasonable out-of-pocket costs, expenses, disbursements
and losses which shall have been paid or incurred or sustained by the
Administrative Agent to protect or preserve the Collateral or in connection
with the collection of such monies by the Administrative Agent, for the
exercise, protection or enforcement by the Administrative Agent of all or any
of the rights, remedies, powers and privileges of the Administrative Agent or
the Lenders under this Agreement or any of the other Loan Documents or in
respect of the Collateral or in support of any provision of adequate indemnity
to the Administrative Agent against any taxes or liens which by law shall have,
or may have, priority over the rights of the Administrative Agent or the
Lenders to such monies;

(b)           
Second, to all other
Obligations (including any interest, expenses or other obligations incurred
after the commencement of a bankruptcy) in such order or preference as the
Requisite Lenders shall determine; provided, that (i) Swing Loans
shall be repaid first, (ii) distributions in respect of such other
Obligations shall include, on a pari passu basis, any Administrative Agent’s
fee payable pursuant to Section 2.3(c); (iii) in the event
that any Lender is a Defaulting Lender, payments to such Lender shall be
governed by Section 2.15, and (iv) except as otherwise provided in
clause (iii), Obligations owing to the Lenders with respect to each type of
Obligation such as interest, principal, fees and expenses (but excluding the
Swing Loans) shall be made among the Lenders, pro rata; and provided, further 
that the Requisite Lenders may in their discretion make proper allowance to
take into account any Obligations not then due and payable; and

(c)            
Third, the excess, if
any, shall be returned to the Borrower or to such other Persons as are entitled
thereto.

10.8     COLLATERAL ACCOUNT.   

(a)               
As collateral security
for the prompt payment in full when due of all Letter of Credit Liabilities,
Swing Loans and the other Obligations, the Borrower hereby pledges and grants
to the Administrative Agent, for the ratable benefit of the Administrative
Agent and the Lenders as provided herein, a security interest in all of its
right, title and interest in and to the Collateral Account and the balances
from time to time in the Collateral Account (including the investments and
reinvestments therein provided for below).  The balances from time to time in
the Collateral Account shall not constitute payment of any Letter of Credit
Liabilities or Swing Loans until applied by the Administrative Agent as
provided herein.  Anything in this Agreement to the contrary notwithstanding,
funds held in the Collateral Account shall be subject to withdrawal only as
provided in this section.

(b)              
Amounts on deposit in
the Collateral Account shall be invested and reinvested by the Administrative
Agent in such Cash Equivalents as the Administrative Agent shall determine in
its sole discretion.  All such investments and reinvestments shall be held in
the name of and be under the sole dominion and control of the Administrative
Agent for the ratable benefit of the Lenders.  The Administrative Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the
Administrative Agent accords other funds deposited with the Administrative
Agent, it being understood that the Administrative Agent shall not have any
responsibility for taking any 

 

necessary steps to
preserve rights against any parties with respect to any funds held in the
Collateral Account.

(c)               
If a drawing pursuant
to any Letter of Credit occurs on or prior to the expiration date of such
Letter of Credit, the Borrower and the Lenders authorize the Administrative
Agent to use the monies deposited in the Collateral Account to make payment to
the beneficiary with respect to such drawing or the payee with respect to such
presentment.  If a Swing Loan is not refinanced as a Base Rate loan as provided
in Section 2.2 above, then the Administrative Agent is authorized to use
monies deposited in the Collateral Account to make payment to the Swing Loan
Lender with respect to any participation not funded by a Defaulting Lender.

(d)              
If a Default exists,
the Requisite Lenders may, in their discretion, at any time and from time to
time, instruct the Administrative Agent to liquidate any such investments and
reinvestments and apply proceeds thereof to the Obligations in accordance with Section 10.7. 

(e)               
So long as no Default
or Potential Default exists, and to the extent amounts on deposit in the
Collateral Account exceed the aggregate amount of the Letter of Credit
Liabilities then due and owing and the pro rata share of any Letter of Credit
Obligations and Swing Loans of any Defaulting Lender after giving effect to Section 2.15(c),
the Administrative Agent shall, from time to time, at the request of the
Borrower, deliver to the Borrower within ten (10) Business Days after the
Administrative Agent’s receipt of such request from the Borrower, against
receipt but without any recourse, warranty or representation whatsoever, such
of the balances in the Collateral Account as exceed the aggregate amount of the
Letter of Credit Liabilities and Swing Loans at such time.

(f)               
The Borrower shall pay
to the Administrative Agent from time to time such fees as the Administrative
Agent normally charges for similar services in connection with the
Administrative Agent’s administration of the Collateral Account and investments
and reinvestments of funds therein.  The Borrower authorizes Administrative
Agent to file such financing statements as Administrative Agent may reasonably
require in order to perfect Administrative Agent’s security interest in the
Collateral Account, and Borrower shall promptly upon demand execute and deliver
to Administrative Agent such other documents as Administrative Agent may
reasonably request to evidence its security interest in the Collateral Account.

article 11. THE
ADMINISTRATIVE AGENT; INTERCREDITOR PROVISIONS

11.1     APPOINTMENT AND AUTHORIZATION. 

(a)               
Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to take such
action as contractual representative on such Lender’s behalf and to exercise
such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto.  Not
in limitation of the foregoing, each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents for the benefit of the
Lenders.

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(b)              
Each Lender hereby
agrees that, except as otherwise set forth herein, any action taken by the
Requisite Lenders in accordance with the provisions of this Agreement and the
Loan Documents, and the exercise by the Requisite Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders.

(c)               
Nothing herein shall
be construed to deem the Administrative Agent a trustee or fiduciary for any
Lender or to impose on the Administrative Agent duties or obligations other
than those expressly provided for herein.  Without limiting the generality of
the foregoing, the use of the terms “Administrative Agent”, “Agent”, “agent”
and similar terms in the Loan Documents with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.  Instead, use
of such terms is merely a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.

(d)              
The Administrative
Agent shall deliver to each Lender, promptly upon receipt thereof by the
Administrative Agent, copies of each of the financial statements, certificates,
notices and other documents delivered to the Administrative Agent pursuant to Article 9. 
The Administrative Agent will also furnish to any Lender, upon the request of
such Lender, a copy (or, where appropriate, an original) of any document,
instrument, agreement, certificate or notice furnished to the Administrative
Agent by the Borrower, any Related Party or any other Affiliate of the Borrower,
pursuant to this Agreement or any other Loan Document not already delivered to
such Lender pursuant to the terms of this Agreement or any such other Loan
Document.

(e)               
As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of any of Borrower’s obligations hereunder),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders (or all of the Lenders if explicitly
required under any other provision of this Agreement), and such instructions
shall be binding upon all Lenders and all holders of any of the obligations of
Borrower; provided, however, that, notwithstanding anything in
this Agreement to the contrary, the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or which is contrary to this Agreement or any other Loan Document or
Requirements of Law.  Not in limitation of the foregoing, the Administrative
Agent shall exercise any right or remedy it or the Lenders may have under any
Loan Document upon the occurrence of a Potential Default or Default unless the
Requisite Lenders have directed the Administrative Agent otherwise.  Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent acting
or refraining from acting under this Agreement or the other Loan Documents, in
accordance with the instructions of the Requisite Lenders, or where applicable,
all the Lenders.

11.2    
KEYBANK AS LENDER.  KeyBank, as a Lender, shall have the
same rights and powers under this Agreement and any other Loan Document as any
other Lender and may exercise the same as though it were not the Administrative
Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include KeyBank in each case in its individual capacity.  KeyBank
and its affiliates may each accept deposits from, maintain deposits 

 

or credit balances for, invest in, lend money to, act as
trustee under indentures of, serve as financial advisor to, and generally engage
in any kind of business with the Borrower, any other Related Party or any other
Affiliate thereof as if it were any other bank and without any duty to account
therefor to the other Lenders.  Further, the Administrative Agent and any
affiliate may accept fees and other consideration from the Borrower for
services in connection with this Agreement and otherwise without having to
account for the same to the other Lenders.  The Lenders acknowledge that,
pursuant to such activities, KeyBank or its affiliates may receive information
regarding the Borrower, other Loan Parties, other Subsidiaries and other
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Person) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to them.

11.3     LOAN DISBURSEMENTS. 

(a)               
Following receipt of a
complete Application for Payment, Administrative Agent shall send a copy
thereof by facsimile to each other Lender and shall otherwise notify each
Lender of the proposed disbursement and the Funding Date (as such term is
defined in Exhibit C attached hereto).  Each Lender shall make available to
Administrative Agent (or the funding bank or entity designated by
Administrative Agent), the amount of such Lender’s Pro Rata Share of such
disbursement in immediately available funds not later than the times designated
in Section 11.3(b).  Unless Administrative Agent shall have been
notified by any Lender not later than 2:00 PM (Cleveland time) on the Business
Day immediately preceding the Funding Date in respect of any disbursement that
such Lender does not intend to make available to Administrative Agent such
Lender’s Pro Rata Share of such disbursement, Administrative Agent may assume
that such Lender shall make such amount available to Administrative Agent.  If
any Lender does not notify Administrative Agent of its intention not to make
available its Pro Rata Share of such disbursement as described above, but does
not for any reason make available to Administrative Agent such Lender’s Pro
Rata Share of such disbursement, such Lender shall pay to Administrative Agent
forthwith on demand such amount, together with interest thereon at the Federal
Funds Effective Rate.  In any case where a Lender does not for any reason make
available to Administrative Agent such Lender’s Pro Rata Share of such
disbursement, Administrative Agent, in its sole discretion, may, but shall not
be obligated to, fund to Borrower such Lender’s Pro Rata Share of such
disbursement.  If Administrative Agent funds to Borrower such Lender’s Pro Rata
Share of such disbursement and if such Lender subsequently pays to
Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender’s Pro Rata Share of such disbursement.  Nothing in this Section
11.3(a) shall alter the respective rights and obligations of the parties
hereunder in respect of a Defaulting Lender or a Non-Pro Rata Advance.

(b)              
Requests by
Administrative Agent for funding by Lenders of disbursements will be made by
telecopy.  Each Lender shall make the amount of its disbursement available to
Administrative Agent in Dollars and in immediately available funds, to such
bank and account, in Cleveland, Ohio (to such bank and account in such other
place) as Administrative Agent may designate, not later than 9:00 A.M. (Ohio
time) on the Funding Date designated by Administrative Agent with respect to
such disbursement, but in no event earlier than two (2) Business Days following
Lender’s receipt of the Application for Payment if such advance is to bear
interest by reference to the LIBO Rate or one (1) Business Day if such advance
is to bear interest by reference to the Base Rate.

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(c)               
Nothing in this Section
11.3 shall be deemed to relieve any Lender of its obligation hereunder to
make its Pro Rata Share of disbursements on any Funding Date, nor shall
Administrative Agent or any Lender be responsible for the failure of any other
Lender to perform its obligations to make any disbursement hereunder, and the
Commitment of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to perform its obligation to make a disbursement.

11.4     DISTRIBUTION AND
APPORTIONMENT OF PAYMENTS. 

(a)               
Subject to Section
11.4(b) below, payments actually received by Administrative Agent for the
account of Lenders shall be paid to them promptly after receipt thereof by
Administrative Agent, but in any event within two (2) Business Days, provided
that Administrative Agent shall pay to Lenders interest thereon, at the lesser
of (i) the Federal Funds Effective Rate and (ii) the rate of interest
applicable to the Facility, from the Business Day following receipt of such
funds by Administrative Agent until such funds are paid in immediately
available funds to Lenders.  All payments of principal, interest, and other
payments under the Loan Documents shall be allocated among such of Lenders as
are entitled thereto, in proportion to their respective Pro Rata Shares in the
Facility or otherwise as provided herein or as separately agreed by
Administrative Agent and any Lender.  Administrative Agent shall promptly
distribute, but in any event within two (2) Business Days, to each Lender at
its primary address set forth on the appropriate signature page hereof or on
the Assignment and Assumption Agreement, or at such other address as a Lender
may request in writing, such funds as it may be entitled to receive, provided
that Administrative Agent shall in any event not be bound to inquire into or
determine the validity, scope or priority of any interest or entitlement of any
Lender and may suspend all payments and seek appropriate relief (including,
without limitation, instructions from Requisite Lenders or all Lenders, as
applicable, or an action in the nature of interpleader) in the event of any
doubt or dispute as to any apportionment or distribution contemplated hereby. 
The order of priority herein is set forth solely to determine the rights and
priorities of Lenders as among themselves and may at any time or from time to time
be changed by Lenders as they may elect, in writing in accordance with this
Agreement, without necessity of notice to or consent of or approval by
Borrower, Guarantor or any other Person.  All payments or other sums received
by Administrative Agent for the account of Lenders shall not constitute
property or assets of the Administrative Agent and shall be held by
Administrative Agent, solely in its capacity as agent for itself and the other
Lenders, subject to the Loan Documents.

(b)              
If in the opinion of
the Administrative Agent the distribution of any amount received by it in such
capacity hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making such distribution
until its right to make such distribution shall have been adjudicated by a
court of competent jurisdiction.  If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Administrative Agent is
to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Administrative Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.  In the event that the
Administrative Agent shall refrain from making any distribution of any amount
received by it as provided in this Section 11.4(b), the
Administrative Agent shall endeavor to hold such amounts in an interest bearing
account and at such time as such amounts may be distributed to the Lenders, the
Administrative Agent shall 

 

 

distribute to each Lender,
based on their respective Pro Rata Shares, its pro  rata  share of
the interest or other earnings from such deposited amount.

11.5     PRO RATA TREATMENT.  Except to the extent otherwise provided
herein: (a) each borrowing from Lenders shall be made from the Lenders,
each payment of the fees shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments pursuant to this
Agreement shall be applied to the respective Commitments of the Lenders, pro
rata according to the amounts of their respective Commitments; (b) each payment
or prepayment of principal by the Borrower shall be made for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Commitments held by them, provided that if immediately prior to giving
effect to any such payment the outstanding principal amount of the Facility
shall not be held by the Lenders pro rata in accordance with their respective
Commitments, then such payment shall be applied in such manner as shall result,
as nearly as is practicable, in the outstanding principal amount of the
Facility being held by the Lenders pro rata in accordance with their respective
Commitments; and (c) each payment of interest by the Borrower shall be made for
the account of the Lenders pro rata in accordance with the amounts of interest
then due and payable to the respective Lenders.

11.6    SHARING OF PAYMENTS, ETC.  Lenders agree among themselves that
(i) with respect to all amounts received by them which are applicable to
the payment of the obligations of Borrower or Guarantor under the Facility,
equitable adjustment will be made so that, in effect, all such amounts will be
shared among them ratably in accordance with their Pro Rata Shares in the
Facility, whether received by voluntary payment, by counterclaim or cross
action or by the enforcement of any or all of such obligations, (ii) if any of
them shall by voluntary payment or by the exercise of any right of counterclaim
or otherwise, receive payment of a proportion of the aggregate amount of such
obligations held by it which is greater than its Pro Rata Share in the Facility
of the payments on account of such obligations, the one receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such obligations owed to the others so that all
such recoveries with respect to such obligations shall be applied ratably in
accordance with such Pro Rata Shares; provided, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from
it, those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery. 
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 11.6  may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of Borrower
in the amount of such participation.

11.7    
DUTIES IN THE CASE
OF ENFORCEMENT.   In case one or more Defaults have
occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Administrative Agent may, and if so
requested by the Requisite Lenders and the Lenders have provided to the
Administrative Agent such additional indemnities and assurances in accordance
with their respective Pro Rata Share against expenses and liabilities as the
Administrative Agent may reasonably request, shall proceed to enforce the
provisions of the Security Documents authorizing the sale or other disposition
of all or any part of the Collateral and exercise all or any legal and
equitable and other rights or remedies as it may have in respect 

88 

 

 

 

of such Collateral.  The Requisite Lenders may direct the
Administrative Agent in writing as to the method and the extent of any such
sale or other disposition, the Lenders hereby agreeing to indemnify and hold
the Administrative Agent harmless in accordance with their respective Pro Rata
Share from all liabilities incurred in respect of all actions taken or omitted
in accordance with such directions, provided that the Administrative Agent need
not comply with any such direction to the extent that the Administrative Agent
reasonably believes the Administrative Agent’s compliance with such direction
to be unlawful or commercially unreasonable in any applicable jurisdiction.

11.8
    BANKRUPTCY.   In the event a bankruptcy or other insolvency
proceeding is commenced by or against Borrower or any Guarantor with respect to
the Obligations, the Administrative Agent shall have the sole and exclusive
right to file and pursue a joint proof claim on behalf of all Lenders.  Any
votes with respect to such claims or otherwise with respect to such proceedings
shall be subject to the vote of the Requisite Lenders or all of the Lenders as
required by this Agreement.  Each Lender irrevocably waives its right to file
or pursue a separate proof of claim in any such proceedings unless
Administrative Agent fails to file such claim within thirty (30) days after
receipt of written notice from the Lenders requesting that Administrative Agent
file such proof of claim.

11.9     APPROVALS OF LENDERS.  All communications from the
Administrative Agent to any Lender requesting such Lender’s determination,
consent, approval or disapproval (a) shall be given in the form of a written
notice to such Lender, (b) shall be accompanied by a description of the matter
or issue as to which such determination, approval, consent or disapproval is
requested, or shall advise such Lender where information, if any, regarding
such matter or issue may be inspected, or shall otherwise describe the matter
or issue to be resolved, (c) shall include, if reasonably requested by such
Lender and to the extent not previously provided to such Lender, written
materials and a summary of all oral information provided to the Administrative
Agent by the Borrower in respect of the matter or issue to be resolved, and
(d) shall include the Administrative Agent’s recommended course of action
or determination in respect thereof.  Unless a Lender shall give written notice
to the Administrative Agent that it specifically objects to the recommendation
or determination of the Administrative Agent (together with a reasonable
written explanation of the reasons behind such objection) within ten (10)
Business Days (or such lesser or greater period as may be specifically required
under the express terms of the Loan Documents) of receipt of such
communication, such Lender shall be deemed to have conclusively approved of or
consented to such recommendation or determination.

11.10     NOTICE OF DEFAULTS.  The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default or Potential
Default unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing with reasonable specificity
such Default or Potential Default and stating that such notice is a “notice of
default”.  If any Lender (excluding the Lender which is also serving as the
Administrative Agent) becomes aware of any Default or Potential Default, it
shall promptly send to the Administrative Agent such a “notice of default”. 
Further, if the Administrative Agent receives such a “notice of default,” the
Administrative Agent shall give prompt notice thereof to the Lenders.

89 

 

 

 

11.11     ADMINISTRATIVE
AGENT’S RELIANCE, ETC. 
Notwithstanding any other provisions of this Agreement, any other Loan
Documents, neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or not taken
by it under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction after the expiration of all
applicable appeal periods in connection with its duties expressly set forth
herein or therein.  Without limiting the generality of the foregoing, the
Administrative Agent: may consult with legal counsel (including its own counsel
or counsel for the Borrower or any other Related Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts.  Neither the Administrative
Agent nor any of its directors, officers, agents, employees or counsel: (a)
makes any warranty or representation to any Lender or any other Person and
shall be responsible to any Lender or any other Person for any statement,
warranty or representation made or deemed made by the Borrower, any other
Related Party or any other Person in or in connection with this Agreement or
any other Loan Document; (b) shall have any duty to ascertain or to inquire as
to the perfection, performance or observance of any of the terms, covenants or
conditions of this Agreement or any other Loan Document or the satisfaction of
any conditions precedent under this Agreement or any Loan Document on the part
of the Borrower, Guarantor or other Persons or inspect the property, books or
records of the Borrower, Guarantor or any other Person; (c) shall be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency or value of this Agreement
or any other Loan Document, any other instrument or document furnished pursuant
thereto; (d) shall have any liability in respect of any recitals, statements,
certifications, representations or warranties contained in any of the Loan
Documents or any other document, instrument, agreement, certificate or
statement delivered in connection therewith; and (e) shall incur any liability
under or in respect of this Agreement or any other Loan Document by acting upon
any notice, consent, certificate or other instrument or writing (which may be
by telephone, telecopy or electronic mail) believed by it to be genuine and
signed, sent or given by the proper party or parties.  The Administrative Agent
may execute any of its duties under the Loan Documents by or through agents,
employees or attorneys-in-fact and shall not be responsible for the negligence
or misconduct of any agent or attorney-in-fact that it selects in the absence
of gross negligence or willful misconduct.

11.12     INDEMNIFICATION OF
ADMINISTRATIVE AGENT. 
Regardless of whether the transactions contemplated by this Agreement and the
other Loan Documents are consummated, each Lender agrees to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) pro rata in accordance with
such Lender’s respective Pro Rata Share, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may at any time be imposed on, incurred by, or asserted against the
Administrative Agent (in its capacity as Administrative Agent but not as a
“Lender”) in any way relating to or arising out of the Loan Documents, any
transaction contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under the Loan Documents (collectively, “Indemnifiable
Amounts”); provided, however, that no Lender shall be liable for any
portion of such Indemnifiable Amounts to the extent resulting from the
Administrative Agent’s gross negligence or willful misconduct as determined by
a court of competent jurisdiction in a final, non-appealable judgment;
provided, however, that no action taken in accordance with the directions of
the Requisite Lenders shall be deemed to constitute 

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gross
negligence or willful misconduct for purposes of this Section.  Without
limiting the generality of the foregoing, each Lender agrees to reimburse the
Administrative Agent (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) promptly upon demand for its
ratable share of any out-of-pocket expenses (including the reasonable fees and
expenses of the counsel to the Administrative Agent) incurred by the
Administrative Agent in connection with the preparation, negotiation,
execution, administration, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice with respect to the rights or
responsibilities of the parties under, the Loan Documents, any suit or action
brought by the Administrative Agent to enforce the terms of the Loan Documents
and/or collect any obligation of Borrower or any Guarantor
hereunder, any “lender liability” suit or claim brought against the
Administrative Agent and/or the Lenders, and any claim or suit brought against
the Administrative Agent and/or the Lenders arising under any Hazardous
Materials Laws.  Such out-of-pocket expenses (including counsel fees) shall be
advanced by the Lenders on the request of the Administrative Agent
notwithstanding any claim or assertion that the Administrative Agent is not
entitled to indemnification hereunder upon receipt of an undertaking by the
Administrative Agent that the Administrative Agent will reimburse the Lenders
if it is actually and finally determined by a court of competent jurisdiction
that the Administrative Agent is not so entitled to indemnification.  The
agreements in this Section shall survive the payment of the Facility and all
other amounts payable hereunder or under the other Loan Documents and the termination
of this Agreement.  If the Borrower shall reimburse the Administrative Agent
for any Indemnifiable Amount following payment by any Lender to the
Administrative Agent in respect of such Indemnifiable Amount pursuant to this
Section, the Administrative Agent shall share such reimbursement on a ratable
basis with each Lender making any such payment.

11.13     LENDER CREDIT DECISION, ETC.  Each Lender expressly acknowledges and
agrees that neither the Administrative Agent nor any of its officers, directors,
employees, agents, counsel, attorneys-in-fact or other affiliates has made any
representations or warranties to such Lender and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of
the Borrower, any other Related Party or Affiliate, shall be deemed to
constitute any such representation or warranty by the Administrative Agent to
any Lender.  Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, any other Lender or counsel to the
Administrative Agent, or any of their respective officers, directors,
employees, agents or counsel, and based on the financial statements of the
Borrower, the other Loan Parties or Affiliates, and inquiries of such Persons,
its independent due diligence of the business and affairs of the Borrower, the
other Loan Parties and other Persons, its review of the Loan Documents, the
legal opinions required to be delivered to it hereunder, the advice of its own
counsel and such other documents and information as it has deemed appropriate,
made its own credit and legal analysis and decision to enter into this
Agreement and the transactions contemplated hereby.  Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Lender or counsel to the Administrative Agent
or any of their respective officers, directors, employees and agents, and based
on such review, advice, documents and information as it shall deem appropriate
at the time, continue to make its own decisions in taking or not taking action
under the Loan Documents.  The Administrative Agent shall not be required to
keep itself informed as to the performance or observance by the Borrower or any
other Loan Party of the Loan Documents or any other document referred to or
provided for therein or to inspect the properties or books of, or make any
other investigation of, the Borrower, any other Related Party.  Except for
notices, reports and other documents and 

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information
expressly required to be furnished to the Lenders by the Administrative Agent
under this Agreement, any of the other Loan Documents, the Administrative Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrower, any other Related Party or
any other Affiliate thereof which may come into possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or other Affiliates.  Each Lender acknowledges that the
Administrative Agent’s legal counsel in connection with the transactions
contemplated by this Agreement is only acting as counsel to the Administrative
Agent and is not acting as counsel to such Lender.

11.14     SUCCESSOR ADMINISTRATIVE
AGENT. 
Administrative Agent may resign at any time as Administrative Agent under the
Loan Documents by giving written notice thereof to the Lenders and the
Borrower.  Any such resignation may at Administrative Agent’s option also
constitute Administrative Agent’s resignation as Issuing Lender and Swing Loan
Lender.  Upon any such resignation, the Requisite Lenders shall have the right
to appoint a successor Administrative Agent and, if applicable Issuing Lender
and Swing Loan Lender, which appointment shall, provided no Default or
Potential Default exists, be subject to the Borrower’s approval, which approval
shall not be unreasonably withheld, conditioned or delayed (except that the
Borrower shall, in all events, be deemed to have approved each Lender and any
of its Affiliates as a successor Administrative Agent and, if applicable
Issuing Lender and Swing Loan Lender).  If no successor Administrative Agent
shall have been so appointed in accordance with the immediately preceding
sentence, and shall have accepted such appointment, within ten (10) calendar
days after the current Administrative Agent’s giving of notice of resignation,
then the current Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a Lender, if any Lender shall be
willing to serve, and otherwise shall be an Eligible Assignee.  Upon the
acceptance of any appointment as Administrative Agent and, if applicable
Issuing Lender and Swing Loan Lender, hereunder by a successor Administrative
Agent and, if applicable Issuing Lender and Swing Loan Lender, such successor
Administrative Agent and, if applicable Issuing Lender and Swing Loan Lender,
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the current Administrative Agent and, if applicable
Issuing Lender and Swing Loan Lender, and the current Administrative Agent and,
if applicable Issuing Lender and Swing Loan Lender, shall be discharged from
its duties and obligations under the Loan Documents.  After any Administrative
Agent’s resignation hereunder as Administrative Agent, the provisions of this Article 11 
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under the Loan Documents.  If the
resigning Administrative Agent shall also resign as the Issuing Lender, such
successor Administrative Agent shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession
or shall make other arrangements satisfactory to the current Issuing Lender, in
either case, to assume effectively the obligations of the current
Administrative Agent with respect to such Letters of Credit.  Upon any change
in the Administrative Agent under this Agreement, the resigning Administrative
Agent shall execute such assignments of and amendments to the Loan Documents as
may be necessary to substitute the successor Administrative Agent for the
resigning Administrative Agent.  Notwithstanding anything contained herein to
the contrary, the Administrative Agent may assign its rights and duties under
the Loan Documents to any of its affiliates by giving the Borrower and each
Lender prior written notice.

 

11.15   BORROWER NOT BENEFICIARY.   Except for the provisions of Section 11.14 
relating to the appointment of a successor Administrative Agent, the provisions
of this Section 11 are solely for the benefit of the Administrative
Agent and the Lenders, may not be enforced by the Borrower, and except for the
provisions of Section 11.14 may be modified or waived without the
approval or consent of the Borrower.  

11.16     
REQUEST FOR
ADMINISTRATIVE AGENT ACTION.  Administrative Agent and the Lenders acknowledge that in the
ordinary course of business of the Borrower, (a) Borrower and Guarantors will
enter into leases or rental agreements covering Mortgaged Properties that may
require the execution of a Subordination, Attornment and Non-Disturbance Agreement
in favor of the tenant thereunder, (b) a Mortgaged Property may be subject to a
Taking, (c) Borrower or a Guarantor may desire to enter into easements or other
agreements affecting the Mortgaged Properties, or take other actions or enter
into other agreements in the ordinary course of business (including, without
limitation, Leases) which similarly require the consent, approval or agreement
of the Administrative Agent.  In connection with the foregoing, the Lenders
hereby expressly authorize the Administrative Agent to (w) execute and deliver
to the Borrower and the Guarantors Subordination, Attornment and
Non-Disturbance Agreements with any tenant under a Lease upon such terms as
Administrative Agent in its good faith judgment determines are appropriate
(Administrative Agent in the exercise of its good faith judgment may agree to
allow some or all of the casualty, condemnation, restoration or other
provisions of the applicable Lease to control over the applicable provisions of
the Loan Documents), (x) execute releases of liens in connection with any
Taking, (y) execute consents or subordinations in form and substance
satisfactory to Administrative Agent in connection with any easements or
agreements affecting the Mortgaged Property, or (z) execute consents,
approvals, or other agreements in form and substance satisfactory to the
Administrative Agent in connection with such other actions or agreements as may
be necessary in the ordinary course of Borrower’s business.

article 12.  collateral

12.1    
COLLATERAL.  The Obligations of the Borrower shall
be secured by (a) a perfected first priority lien or security interest to be
held by the Administrative Agent for the benefit of the Lenders in the
collateral more particularly described in each of the Security Documents, and
(b) such additional collateral, if any, the Administrative Agent for the
benefit of the Lenders from time to time may accept as security for the
Obligations with the consent of the Requisite Lenders, which consent may be
given or withheld in the sole discretion of the Requisite Lenders.  The
Obligations shall also be guaranteed pursuant to the terms of the Guaranty.

12.2     APPRAISALS; ADJUSTED VALUE.   

(a)               
The Administrative
Agent may obtain new Appraisals or an update to existing Appraisals with
respect to the Mortgaged Properties, or any of them, as the Administrative
Agent shall determine at any time following a Default or Potential Default. 
The expense of such Appraisals and/or updates performed pursuant to this Section 12.2(a) 
shall be borne by the Borrower and payable to Administrative Agent within
fifteen (15) days of demand; provided, notwithstanding anything herein
to the contrary,  the Borrower shall not be obligated to 

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pay
for an Appraisal of a Mortgaged Property more often than once in any period of
twelve (12) months pursuant to any provision of this Agreement.

(b)              
The Borrower
acknowledges that the Administrative Agent has the right to approve any
Appraisal performed pursuant to this Agreement.  The Borrower further agrees
that the Lenders and Administrative Agent do not make any representations or
warranties with respect to any such Appraisal and shall have no liability as a
result of or in connection with any such Appraisal for statements contained in
such Appraisal, including without limitation, the accuracy and completeness of
information, estimates, conclusions and opinions contained in such Appraisal,
or variance of such Appraisal from the fair value of such property that is the
subject of such Appraisal given by the local tax assessor’s office, or the
Borrower’s idea of the value of such property.

12.3 
ADDITION OF
MORTGAGED PROPERTIES. 
Provided no Default or Potential Default exists, the Borrower shall have the
right, subject to the consent of the Requisite Lenders (which consent may be
withheld in the Requisite Lender’s sole and absolute discretion), and the
satisfaction by the Borrower of the conditions set forth in this Section
12.3, to add Potential Collateral to the Collateral as part of the
Borrowing Base.  In the event the Borrower desires to add additional Potential
Collateral to the Borrowing Base as aforesaid, the Borrower shall provide
written notice to the Administrative Agent of such request (which the Administrative Agent shall promptly
furnish to the Lenders), together with a description of such Potential
Collateral, a current rent roll, operating statements for the prior four (4)
quarters, other information as may be requested by Administrative Agent, and
all documentation and other information required to permit the Administrative
Agent to determine whether such Potential Collateral is Eligible Real Estate. 
Thereafter, the Administrative Agent and the Lenders shall have ten (10)
Business Days from the date of the receipt of such documentation and other
information to advise the Borrower whether the Requisite Lenders consent to the
acceptance of such Potential Collateral to the Borrowing Base Asset.  If a
Lender shall fail to respond within such ten (10) Business Day period, such
Lender shall be deemed to have approved such Potential Collateral. 
Notwithstanding the foregoing, no
Potential Collateral shall be included as Collateral in the Borrowing Base
unless and until the following conditions precedent shall have been satisfied:

(a)               
such Potential
Collateral shall be Eligible Real Estate;

(b)              
if such Potential
Collateral is owned by a Wholly Owned Subsidiary of Borrower, said Wholly Owned
Subsidiary shall have executed a Joinder Agreement and satisfied the conditions
of Section 12.5; 

(c)               
prior to or
contemporaneously with such addition, Borrower shall have submitted to
Administrative Agent a Compliance Certificate prepared using the financial
statements of the Borrower most recently provided or required to be provided to
the Administrative Agent under this Agreement, prepared on a pro forma basis
and adjusted to give effect to such addition, and shall certify that after
giving effect to such addition, no Default or Potential Default shall exist;

(d)              
the Borrower or the
Wholly Owned Subsidiary which is the owner of the Potential Collateral shall
have executed and delivered to the Administrative Agent all Eligible 

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Real Estate Qualification Documents, all of which
instruments, documents or agreements shall be in form and substance reasonably
satisfactory to the Administrative Agent;

(e)               
after giving effect to
the inclusion of such Potential Collateral, each of the representations and
warranties made by or on behalf of the Borrower or the Guarantors or any of
their respective Subsidiaries contained in this Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with this Agreement shall be true in all material respects both as
of the date as of which it was made and shall also be true as of the time of
the addition of Mortgaged Properties in the Borrowing Base, with the same
effect as if made at and as of that time, and no Default or Potential Default
shall have occurred and be continuing (including, without limitation, any
Default under Section 8.15(d)), and the Administrative Agent shall have
received a certificate of the Borrower to such effect; and

(f)               
the Requisite Lenders
shall have consented to the inclusion of such Real Estate Asset as a Mortgaged
Property, which consent may be granted in the Requisite Lenders’ sole and
absolute discretion.

12.4   
RELEASE OF
MORTGAGED PROPERTY.          

(a)               
Provided no Default or
Potential Default shall have occurred hereunder and be continuing (or would
exist immediately after giving effect to the transactions contemplated by this Section
12.4), the Administrative Agent shall release a Mortgaged Property from the
lien or security title of the Security Documents encumbering the same upon the
request of the Borrower in connection with a sale or refinance of such
Mortgaged Property subject to and upon the following terms and conditions:

(i)                
the Borrower shall
deliver to the Administrative Agent written notice of its desire to obtain such
release no later than ten (10) days prior to the date on which such release is
to be effected;

(ii)              
the Borrower shall
submit to the Administrative Agent with such request a Compliance Certificate
prepared using the financial statements of the Borrower most recently provided
or required to be provided to the Administrative Agent under this Agreement
adjusted in the best good faith estimate of the Borrower to give effect to the
proposed release and demonstrating that no Default or Potential Default with
respect to the covenants referred to therein shall exist after giving effect to
such release;

(iii)            
all release documents
to be executed by the Administrative Agent shall be in form and substance
reasonably satisfactory to the Administrative Agent;

(iv)            
the Borrower shall pay
all reasonable costs and expenses of the Administrative Agent in connection
with such release, including without limitation, reasonable attorney’s fees;

(v)              
the Borrower shall pay
to the Administrative Agent for the account of the Lenders a release price,
which payment shall be applied to reduce the outstanding principal balance of
the Loans as provided in Section 2.9, in an amount equal to the amount
necessary to reduce the outstanding principal balance of the Loans so that no
violation of the covenant set forth in Section 8.15(d) shall occur;

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(vi)            
without limiting or
affecting any other provision hereof, any release of a Mortgaged Property will
not cause the Borrower to be in violation of any of the covenants set forth in Section
8.15 or cause the outstanding principal balance of the Revolving Credit
Loans, Swing Loans and Letter of Credit Liabilities to exceed the Borrowing
Base Availability of the Mortgaged Properties remaining after the requested
release;

(vii)          
the Requisite Lenders
shall have approved in writing such release in their sole discretion; provided,
however, that the consent of the Requisite Lenders shall not be required to
release a Mortgaged Property if such Mortgaged Property has been a Mortgaged
Property for not more than ninety (90) days and (i) such Mortgaged Property
will contemporaneously with such release be refinanced with a separate
Non-Recourse Indebtedness provided by a Lender or an Affiliate of a Lender or
(ii) Borrower pays any necessary release price from its own funds which are not
to be reimbursed to Borrower from any subsequent financing of such Mortgaged
Property; and

(viii)        
if such Mortgaged
Property is owned by a Subsidiary Guarantor and such Mortgaged Property is the
only asset of such Subsidiary Guarantor, then subject to the satisfaction of
the conditions of Section 12.4, Administrative Agent shall also release
any Equity Interests in such Subsidiary Guarantor pledged pursuant to the
Pledge Agreement.

(b)              
Borrower proposes to
acquire a property commonly known as Hilfiker Square in Salem, Oregon, and if
such property becomes a Mortgaged Property, Borrower desires the ability to
obtain a release to sell a portion of such property outlined on Exhibit Q
hereto (the “Hilfiker Release Parcel”) back
to the seller
thereof pursuant to the purchase and sale contract for such
property approved by Administration Agent.  Provided no Default or Potential
Default shall have occurred hereunder and be continuing (or would exist
immediately after giving effect to the transactions contemplated by this Section
12.4), the Administrative Agent shall release the Hilfiker Release Parcel from the lien or security title of the Security
Documents encumbering the same upon the request of the Borrower in connection
with the sale described
above of the Hilfiker Release Parcel subject to and upon the following terms and conditions:

(i)                
the Borrower shall
deliver to the Administrative Agent written notice of its desire to obtain such
release no later than thirty (30) days prior to the date on which such
release is to be effected;

(ii)              
all release documents
to be executed by the Administrative Agent shall be in form and substance
reasonably satisfactory to the Administrative Agent;

(iii)            
the Borrower shall pay
all reasonable costs and expenses of the Administrative Agent in connection
with such release, including without limitation, reasonable attorney’s fees;

(iv)            
the Appraised Value attributable
to the Hilfiker Release Parcel as determined by Administrative Agent shall for
all purposes of this Agreement be deducted from the Appraised Value of such
Mortgaged Property, and the
Borrower shall pay to the Administrative Agent for the account of the Lenders a
release price, which payment shall be applied to reduce the outstanding
principal balance of the Loans as provided in Section 2.9, in an amount
equal to the amount necessary to reduce
the outstanding principal balance of the Loans so that no violation of the
covenant set forth in Section 8.15(d) shall occur;

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(v)              
Borrower shall deliver to
Administrative Agent a survey
reasonably satisfactory to Administrative
Agent showing such land that
Borrower desires to release from the Security
Documents and the location of
all access to rights of way and easements and such other evidence as Administrative Agent may reasonably require to show the availability
of unrestricted (whether by private agreement or governmental provision) direct
access to public roads and utilities from all unreleased portions of such
Mortgaged Property, such access and utilities to be reasonably acceptable to
Agent;

(vi)            
Borrower shall deliver to
Administrative Agent evidence
reasonably satisfactory to Administrative
Agent that the conveyance by
Borrower of the Hilfiker Release Parcel will not violate or cause a violation of
or restrict or reduce the rights of Administrative
Agent or the Lenders under
the terms of any Lease, agreement  or restriction by such Mortgaged
Property is subject or give any tenant a right to terminate its Lease or reduce
any payment or other obligation of such tenant under its Lease;

(vii)          
Borrower shall deliver to
Administrative Agent evidence
reasonably satisfactory to Administrative Agent that the remaining Mortgaged
Property will satisfy all Requirements of
Law (including, without
limitation, parking requirements) without utilization of the released property;

(viii)        
Borrower shall deliver to
Administrative Agent evidence
of the proper subdivision of the property to be released;

(ix)            
Borrower shall deliver to
Administrative Agent evidence
reasonably satisfactory to Administrative Agent that the Borrower has taken
such actions as may be required to cause the portion of the Mortgaged Property
to be released to be taxed separately from the remaining portion of the
Mortgaged Property; 

(x)              
Borrower shall deliver to
Administrative Agent evidence
reasonably satisfactory to Administrative Agent that the Borrower has reserved
appropriate easements for the benefit of the remaining Mortgaged
Property and that the property to be released has been subjected to covenants and
restrictions acceptable to Administrative
Agent; and

(xi)            
Borrower, at its sole
cost and expense, shall have delivered to Administrative
Agent and Administrative Agent shall have approved one or more endorsements to
the Title Policy which brings forward the date of the Title Policy to the date
and time of recording of the recordation of the instrument releasing such
release parcel from the lien of the Mortgage, amends the legal description
thereof to delete the release parcel therefrom and to add any easements
appurtenant to the Mortgaged Property executed in connection with or
relating to the sale of such release parcel, confirms the Administrative Agent’s liens created by the Mortgage and insured
thereunder are first priority liens on the respective remaining portion of the
Mortgaged Property subject only to the permitted encumbrances permitted under
the Mortgage applicable to the remaining Mortgaged Property (including any
easements approved by Agent in connection with the sale of the release parcel),
and that such Title Policy is in full force and effect and unaffected by the
transfer of the release parcel. 

12.5    
ADDITIONAL
GUARANTORS.  In the
event that the Borrower shall request that certain Real Estate of a Wholly
Owned Subsidiary of Borrower be included as a Mortgaged Property as
contemplated by Section 12.3 and such Real Estate is approved for
inclusion as a 

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Mortgaged Property in accordance with
the terms hereof, the Borrower shall, as a condition to such Real Estate being
included as a Mortgaged Property, cause each such Wholly Owned Subsidiary to
execute and deliver to Administrative Agent a Joinder Agreement, and such
Subsidiary shall become a Guarantor hereunder and thereunder.  In addition, in
the event any Subsidiary of the Borrower shall constitute a Material
Subsidiary, the Borrower shall cause such Subsidiary to execute and deliver to
Administrative Agent a Joinder Agreement, and such Subsidiary shall become a
Guarantor hereunder.  PECO-ARC Joint Venture is not a Material Subsidiary
hereunder.  Each such Subsidiary shall be specifically authorized, in
accordance with its respective organizational documents, to be a Guarantor
hereunder and thereunder and to execute the Contribution Agreement and such
Security Documents as Administrative Agent may require.  The Borrower shall
further cause all representations, covenants and agreements in the Loan
Documents with respect to Guarantors to be true and correct with respect to
each such Subsidiary.  In connection with the delivery of such Joinder
Agreement, the Borrower shall deliver to the Administrative Agent such
organizational agreements, resolutions, consents, opinions and other documents
and instruments as the Administrative Agent may reasonably require.

12.6    
RELEASE OF
GUARANTORS.  The
Borrower may request in writing that the Administrative Agent release, and upon
receipt of such request the Administrative Agent shall release (subject to the
terms hereof), a Guarantor from the Guaranty so long as:  (a) no Default or Potential
Default shall then be in existence or would occur as a result of such release
or the removal of a Mortgaged Property referred to in clause (c) below; (b) the
Administrative Agent shall have received such written request at least ten (10)
days prior to the requested date of release; (c) any Mortgaged Property
directly or indirectly owned or leased by such Guarantor shall be released as
provided in Section 12.4 and removed from the calculation of the
Borrowing Base Availability effective as of the date of such release; and (d)
the Borrower shall deliver to Administrative Agent evidence reasonably
satisfactory to Administrative Agent that (i) the Borrower has disposed of or
simultaneously with such release will dispose of its entire interest in such Guarantor
or that all of the assets of such Guarantor will be disposed of in compliance
with the terms of this Agreement, and if such transaction involves the
disposition by such Guarantor of all of its assets, the net cash proceeds, if
any, from such disposition are being distributed to the Borrower in connection
with such disposition, (ii) such Guarantor will be the borrower with respect to
Secured Indebtedness that is not prohibited under this Agreement, which Secured
Indebtedness will be secured by a Lien on the assets of such Guarantor and such
Guarantor shall then be an Excluded Subsidiary, (iii) the Borrower has
contributed or simultaneously with such release will contribute its entire
direct or indirect interest in such Guarantor to a Joint Venture, or a
Subsidiary which is not a Wholly Owned Subsidiary or that such Guarantor will
be contributing all of its assets to a Joint Venture or a Subsidiary which is
not a Wholly Owned Subsidiary in compliance with the terms of this Agreement,
or (iv) such Guarantor is not the direct or indirect owner of a Mortgaged
Property or a Material Subsidiary (unless
such Material Subsidiary is also an Excluded Subsidiary under clause (ii)
above) and is an Excluded
Subsidiary.  Delivery by the Borrower to the Agent of any such request for a
release shall constitute a representation by the Borrower that the matters set
forth in the preceding sentence (both as of the date of the giving of such
request and as of the date of the effectiveness of such request) are true and
correct with respect to such request.  The provisions of this Section 12.6
shall not apply to PE-ARC or General Partner, which shall not be entitled to
obtain a release pursuant to this Section 12.6. 

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12.7     RELEASE OF COLLATERAL.  Upon the refinancing or repayment of the Obligations
in full and termination of the obligation to provide additional Loans to the
Borrower or issue Letters of Credit hereunder and upon termination,
cancellation or expiration of all outstanding Letters of Credit, then the
Administrative Agent shall release the Collateral from the lien and security
interest of the Security Documents and release the Borrower and all Guarantors
other than with respect to any indemnification or reimbursement obligations
that expressly survive payment of the Obligations and termination of this
Agreement or any of the other Loan Documents.

article 13.  MISCELLANEOUS
PROVISIONS

13.1    INDEMNITY.            BORROWER HEREBY AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER, THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS (“INDEMNITEES”)
FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS,
JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS’ FEES AND EXPENSES) WHICH ADMINISTRATIVE AGENT OR ANY
LENDER MAY INCUR AS A CONSEQUENCE OF: (A) THE PURPOSE TO WHICH BORROWER APPLIES
THE LOAN PROCEEDS; (B) THE FAILURE OF BORROWER OR ANY GUARANTOR TO PERFORM ANY
OBLIGATIONS AS AND WHEN REQUIRED BY THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY OTHER RELATED DOCUMENT; (C) ANY FAILURE AT ANY TIME OF ANY OF
BORROWER’S OR GUARANTORS’ REPRESENTATIONS OR WARRANTIES TO BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS; (D) ANY ACT OR OMISSION BY BORROWER, ANY GUARANTOR,
CONSTITUENT PARTNER OR MEMBER OF BORROWER OR ANY GUARANTOR OR (E) ANY USE OF
INTRALINKS, SYNDTRAK OR ANY OTHER SYSTEM FOR THE DISSEMINATION AND SHARING OF
DOCUMENTS AND INFORMATION.  BORROWER SHALL PROMPTLY PAY TO ADMINISTRATIVE AGENT
OR SUCH LENDER UPON DEMAND ANY AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER
WITH INTEREST FROM THE DATE THE TOTAL INDEBTEDNESS ARISES UNTIL PAID AT THE
RATE OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE OF THE FACILITY. 
BORROWER’S DUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD HARMLESS
ADMINISTRATIVE AGENT AND EACH LENDER SHALL SURVIVE CANCELLATION OF THE NOTES.

13.2   FORM OF DOCUMENTS.  The form and substance of all
documents, instruments, and forms of evidence to be delivered to Administrative
Agent under the terms of this Agreement, any of the other Loan Documents shall
be subject to Administrative Agent’s approval and shall not be modified,
superseded or terminated in any respect without Administrative Agent’s prior
written approval.

13.3    NO THIRD PARTIES BENEFITED.  No person other than Administrative
Agent, Lenders, Borrower and their permitted successors and assigns shall have
any right of action under any of the Loan Documents.

13.4    NOTICES.  Subject to the provisions set forth in Section 13.25,
all notices, demands, or other communications under this Agreement and the
other Loan Documents shall be 

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in writing and shall be
delivered to the appropriate party at the address set forth on the signature
page of this Agreement (subject to change from time to time by written notice
to all other parties to this Agreement).  All communications shall be deemed
served upon delivery of, or if mailed, upon the first to occur of receipt, the
expiration of one (1) Business Day after deposit with a reputable overnight
delivery service, or the expiration of three (3) days after the deposit in the
United States Postal Service mail, postage prepaid and addressed to the address
of Borrower or Administrative Agent and Lenders at the address specified;
provided, however, that non-receipt of any communication as the result of any
change of address of which the sending party was not notified or as the result
of a refusal to accept delivery shall be deemed receipt of such communication.

13.5   ATTORNEY-IN-FACT.  Borrower hereby irrevocably appoints
and authorizes Administrative Agent, as Borrower’s attorney-in-fact, which
agency is coupled with an interest, to execute and/or record in Administrative
Agent’s or Borrower’s name any notices, instruments or documents that Administrative
Agent deems appropriate to protect Lenders’ interest under and consistent with
the provisions of any of the Loan Documents.

13.6  ACTIONS.  Borrower agrees that Administrative
Agent or any Lender, in exercising the rights, duties or liabilities of
Administrative Agent or Lenders may commence, appear in or defend any action or
proceeding purporting to affect the Real Estate Assets or the Loan Documents
and Borrower shall promptly reimburse Administrative Agent or such Lender upon
demand for all such expenses so incurred or paid by Administrative Agent or
such Lender, including, without limitation, attorneys’ fees and expenses and
court costs.

13.7    SET-OFFS.  Regardless of the adequacy of any
Collateral, during the continuance of any Default, including in connection with
any acceleration of the Obligations, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch
where such deposits are held) or other sums credited by or due from any Lender
to the Borrower or the Guarantors and any securities or other property of the
Borrower or the Guarantors in the possession of such Lender may, without notice
to the Borrower or any Guarantor (any such notice being expressly waived by the
Borrower and each Guarantor) but with the prior written approval of the
Administrative Agent, be applied to or set off against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower or the Guarantors to such Lender.  Each of the Lenders agree with each
other Lender that if such Lender shall receive from the Borrower or the
Guarantors, whether by voluntary payment, exercise of the right of setoff, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Lender (but excluding the Swing Loan Note) any amount in excess of its
ratable portion of the payments received by all of the Lenders with respect to
the Notes held by all of the Lenders, such Lender will make such disposition
and arrangements with the other Lenders with respect to such excess, either by
way of distribution, pro tanto assignment of claims, subrogation or otherwise
as shall result in each Lender receiving in respect of the Notes held by it its
proportionate payment as contemplated by this Agreement; provided that if all
or any part of such excess payment is thereafter recovered from such Lender,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.  In the event that any
Defaulting Lender shall exercise any such right of setoff, (a) all amounts so
set off shall be paid over immediately to the Agent for further application in
accordance with the provisions of this Agreement and, pending such payment,
shall be 

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segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent and the Lenders, and (b) such Defaulting Lender shall provide promptly to
the Administrative Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff.

13.8     RELATIONSHIP OF PARTIES.  The relationship of Borrower, Administrative
Agent and Lenders under the Loan Documents is, and shall at all times remain,
solely that of borrower, guarantor and lender, and Administrative Agent and
Lenders neither undertake nor assumes any responsibility or duty to Borrower or
to any third party, except as expressly provided in this Agreement and the
other Loan Documents.

13.9    DELAY OUTSIDE LENDER’S
CONTROL.  No Lender
or Administrative Agent shall be liable in any way to Borrower or any third
party for Administrative Agent’s or such Lender’s failure to perform or delay
in performing under the Loan Documents (and Administrative Agent or any Lender
may suspend or terminate all or any portion of Administrative Agent’s or such
Lender’s obligations under the Loan Documents) if such failure to perform or
delay in performing results directly or indirectly from, or is based upon, the
action, inaction, or purported action, of any governmental or local authority,
or because of war, rebellion, insurrection, strike, lock-out, boycott or blockade
(whether presently in effect, announced or in the sole judgment of
Administrative Agent or such Lender deemed probable), or from any Act of God or
other cause or event beyond Administrative Agent’s or such Lender’s control.

13.10    ATTORNEYS’ FEES AND EXPENSES;
ENFORCEMENT.  If any
attorney is engaged by Administrative Agent or any Lender to enforce or defend
any provision of this Agreement or any of the other Loan Documents, or as a
consequence of any Default under the Loan Documents, with or without the filing
of any legal action or proceeding, and including, without limitation, any fees
and expenses incurred in any bankruptcy proceeding of the Borrower, then
Borrower shall immediately pay to Administrative Agent or such Lender, upon
demand, the amount of all attorneys’ fees and expenses and all costs incurred
by Administrative Agent or such Lender in connection therewith, together with
interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance of the Facility.

13.11    IMMEDIATELY AVAILABLE FUNDS.  Unless otherwise expressly provided for
in this Agreement, all amounts payable by Borrower to Administrative Agent or
any Lender or by Administrative Agent to Borrower shall be payable only in
United States Dollars, immediately available funds.

13.12    AMENDMENTS AND
WAIVERS. 

(a)            
Generally.  Except as otherwise expressly provided
in this Agreement, (i) any consent or approval required or permitted by
this Agreement or in any Loan Document to be given by the Lenders may be given,
(ii) any term of this Agreement or of any other Loan Document (other than any
fee letter solely between the Borrower and the Administrative Agent) may be
amended, (iii) the performance or observance by the Borrower or any other Loan
Party of any terms of this Agreement or such other Loan Document (other than
any fee letter solely between the Borrower and the Administrative Agent) may be
waived, (iv) the financial covenants set forth in Section 8.15 
hereof and the definitions used therein may be amended, 

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(v) the
release of any of the Collateral other than as contemplated herein or in the
other Security Documents, and (vi) the continuance of any Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite
Lenders (or the Administrative Agent at the written direction of the Requisite
Lenders), and, in the case of an amendment to any Loan Document, the written
consent of each Loan Party which is party thereto.  Notwithstanding the
previous sentence, the Administrative Agent, shall be authorized on behalf of
all the Lenders, without the necessity of any notice to, or further consent
from, any Lender, to waive the imposition of the late fees provided in Section 2.8(c),
up to a maximum of three (3) times per calendar year.

(b)           
Unanimous
Consent. 
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing, and signed by all of the Lenders (or the Administrative Agent at the
written direction of the Lenders), do any of the following:

(i)                
increase any or all of
the Commitments of the Lenders (excluding any increase pursuant to Section
2.14 or as a result of an assignment of Commitments permitted under Section 13.13),
or subject the Lenders to any additional obligations;

(ii)              
reduce the principal
of, or interest rates that have accrued or that will be charged on the
outstanding principal amount of, the Facility, other than as expressly provided
in this Agreement;

(iii)            
reduce the amount of
any fees payable to the Lenders hereunder;

(iv)            
postpone any date
fixed for any required payment of principal of, or interest on, the Facility
(including, without limitation, the Maturity Date) or for the payment of fees
or any other obligations of Borrower or Guarantor;

(v)              
change the Pro Rata
Shares (excluding any change as a result of Section 2.14  or an
assignment of Commitments permitted under Section 13.13); 

(vi)            
amend this Section or
amend the definitions of the terms used in this Agreement or the other Loan Documents
insofar as such definitions affect the substance of this Section;

(vii)          
modify the definition
of the term “Requisite Lenders” or modify in any other manner the number or
percentage of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof;

(viii)        
release any Guarantor
from its obligations under its Guaranty, other than in accordance with its
respective terms or the terms of this Agreement;

(ix)            
waive a Default or
Potential Default under Section 10.1(a). 

Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder and any
amendment, waiver or consent which by its terms requires the consent of all
Lenders or each affected Lender may be effected with the consent of the
applicable Lenders other than Defaulting 

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Lenders,
except that the Commitment of any Defaulting Lender may not be increased
without the consent of such Lender.  

(c)            
Amendment of
Administrative Agent’s Duties, Etc.  No amendment, waiver or consent unless in writing
and signed by the Administrative Agent, in addition to the Lenders required
hereinabove to take such action, shall affect the rights or duties of the
Administrative Agent under this Agreement or any of the other Loan Documents. 
There shall be no amendment, modification or waiver of any provision in the
Loan Documents with respect to Swing Loans without the consent of the Swing
Loan Lender, nor any amendment, modification or waiver of any provision in the
Loan Documents with respect to Letters of Credit without the consent of the
Issuing Lender.  No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon and any amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose set forth therein.  No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto.  Any
Default occurring hereunder shall continue to exist until such time as such
Default is waived in writing in accordance with the terms of this Section,
notwithstanding any attempted cure or other action by the Borrower, any other
Loan Party or any other Person subsequent to the occurrence of such Default. 
Except as otherwise explicitly provided for herein or in any other Loan
Document, no notice to or demand upon the Borrower shall entitle the Borrower
to other or further notice or demand in similar or other circumstances.

13.13   SUCCESSORS AND
ASSIGNS. 

(a)               
Generally.  The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all the Lenders (and any such assignment or transfer to
which all of the Lenders have not consented shall be void).

(b)              
Participations.  Any Lender may at any time grant to an
affiliate of such Lender, or one or more banks or other financial institutions
(each a “Participant”) participating interests in its Commitment or the
obligations owing to such Lender hereunder.  No Participant shall have any
rights or benefits under this Agreement or any other Loan Document.  In the
event of any such grant by a Lender of a participating interest to a
Participant, such Lender shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement.  Any agreement pursuant
to which any Lender may grant such a participating interest shall provide that
such Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any provision of this Agreement;
provided  however, such Lender may agree with the Participant that
it will not, without the consent of the Participant, agree to (i) increase such
Lender’s Commitment, (ii) extend the date fixed for the payment of principal on
the Facility or a portion thereof owing to such Lender, or (iii) reduce the
rate at which interest is payable thereon.  An assignment or other transfer
which is not permitted by subsection (c)  below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b). 

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(c)               
Assignments.  Any Lender may with the prior written
consent of the Administrative Agent and the Borrower (which consent, in each
case, shall not be unreasonably withheld, conditioned or delayed) at any time
assign to one or more Eligible Assignees (each an “Assignee”) all or a
portion of its rights and obligations under this Agreement, the Notes and the
other Loan Documents; provided, however, (i) no such consent by
Borrower shall be required (x) if a Default or Potential Default shall
exist or (y) in the case of an assignment to another Lender or an affiliate of
another Lender; (ii) any partial assignment shall be in an amount at least
equal to $10,000,000.00 and after giving effect to such assignment the
assigning Lender retains a Commitment, or if the Commitments have been
terminated, holds a Note having an outstanding principal balance, of at least
$5,000,000.00, and (iii) each such assignment shall be effected by means of an
Assignment and Assumption Agreement.  Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be deemed to be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender with a Commitment as
set forth in such Assignment and Assumption Agreement, and the transferor
Lender shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required.  Upon
the consummation of any assignment pursuant to this subsection (c),
the transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangement so the new Notes are issued to the Assignee and such
transferor Lender, as appropriate.  In connection with any such assignment, the
transferor Lender shall pay to the Administrative Agent an administrative fee
for processing such assignment in the amount of $4,500.00.  Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate
any interest held by it hereunder to the Borrower, Guarantor or any of their
respective Affiliates or subsidiaries.  In connection with any assignment of
rights and obligations of any Defaulting Lender, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases
by the assignee of participations or actions, including funding, with the
consent of the Borrower and the Administrative Agent, the applicable pro rata
share of Loans previously requested but not funded by the Defaulting Lender to
each of which the applicable assignee and assignor hereby irrevocably consent),
to (x) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Administrative Agent or any Lender hereunder (and
interest accrued thereon) and (y) acquire (and fund as appropriate) its full
pro rata share of all Loans and participations in Letters of Credit and Swing
Loans in accordance with its Pro Rata Share.  Notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting
Lender hereunder shall become effective under applicable law without compliance
with the provisions of this paragraph, then the assignee of such interest shall
be deemed to be a Defaulting Lender for all purposes of this Agreement until
such compliance occurs.

(d)              
Tax Withholding.  At least five (5) Business Days prior
to the first day on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, shall furnish the
Administrative Agent and Borrower with a properly completed executed copy of
either Internal Revenue Service Form W-8ECI or Internal Revenue Service Form
W-8BEN and either Internal Revenue Service Form W-8 or Internal Revenue Service
Form W-9 and any additional form (or such other form) as is necessary to claim
complete exemption from United States 

104 

 

 

 

withholding
taxes on all payments hereunder.  At all times each Lender shall own or
beneficially own a Note, such Lender shall (i) promptly provide to the
Administrative Agent and Borrower a new Internal Revenue Service Form W-8ECI or
Internal Revenue Service Form W-8BEN and Internal Revenue Service Form W-8 or
Internal Revenue Service Form W-9 and any additional form (or such other form)
(or any successor form or forms) upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments duly executed and
completed by such Lender, and (ii) comply at all times with all applicable
United States laws and regulations, including all provisions of any applicable tax
treaty, with regard to any withholding tax exemption claimed with respect to
any payments on the Facility.  If any Lender cannot deliver such form, then
Borrower may withhold from payments due under the Loan Documents such amounts
as Borrower is able to determine from accurate information provided by such
Lender are required by the Internal Revenue Code. If any Governmental Authority
asserts that the Administrative Agent or Borrower (as to Borrower, with respect
to Excluded FATCA Taxes only) did not properly withhold or backup withhold, as
the case may be, any tax or other amount from payments made to or for the
account of any Lender, such Lender shall indemnify the Administrative Agent
and/or Borrower (as to Borrower, with respect to Excluded FATCA Taxes only)
therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent or by the
Borrower (as to Borrower, with respect to Excluded FATCA Taxes only) under this
section, and costs and expenses (including all reasonable fees and
disbursements of any law firm or other external counsel and the allocated cost
of internal legal services and all disbursements of internal counsel) of the
Administrative Agent and Borrower (as to Borrower, with respect to Excluded
FATCA Taxes only).  The obligation of the Lenders under this section shall
survive the termination of the Commitments, repayment of all Obligations and
all the resignation or replacement of the Administrative Agent.  Without
limitation of Section 13.13(d), if a payment made to a Lender under any
Loan Document would be subject to United States federal withholding tax imposed
by FATCA if such Lender were to fail to comply with the applicable reporting
and document provision 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 Administrative Agent, at the time or times
prescribed by law and at such time or times reasonably requested by either,
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/or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA, to determine that such Lender has or has not complied
with such Lender obligations under FATCA and, as necessary, to determine the
amount to deduct and withhold from such payment.

(e)               
Federal Reserve
Bank Assignments.  In
addition to the assignments and participations permitted under the foregoing
provisions of this Section, and without the need to comply with any of the
formal or procedural requirements of this Section, any Lender may at any time
and from time to time, pledge and assign all or any portion of its rights under
all or any of the Loan Documents to a Federal Reserve Bank; provided that no
such pledge of assignment shall release such Lender from its obligation
thereunder.

(f)               
Information to
Assignee, Etc.  A
Lender may furnish any information concerning the Borrower, any Subsidiary of
Borrower or any other Related Party in the possession of such Lender from time
to time to Assignees and Participants (including 

105 

 

 

 

prospective
Assignees and Participants).  In connection with such negotiation, execution
and delivery, Borrower authorizes Administrative Agent and Lenders to
communicate all information and documentation related to the Facility (whether
to Borrower or to any Participant, Assignee, legal counsel, appraiser or other
necessary party) directly by e-mail, fax, or other electronic means used to
transmit information.

(g)              
Mandatory
Assignment.  In the
event the Borrower requests that certain amendments, modifications or waivers
be made to this Agreement or any of the other Loan Documents which request
requires approval of (a) the Requisite Lenders or (b) all of the Lenders
directly affected thereby and with respect to an item requiring approval of all
Lenders is approved by the Requisite Lenders, but is not approved by one or
more of the Lenders (any such non-consenting Lender shall hereafter be referred
to as the “Non-Consenting Lender”), then, within thirty (30) Business Days
after the Borrower’s receipt of notice of such disapproval by such
Non-Consenting Lender, the Borrower shall have the right as to such
Non-Consenting Lender, to be exercised by delivery of written notice delivered
to the Administrative Agent and the Non-Consenting Lender within thirty (30)
Business Days of receipt of such notice, to elect to cause the Non-Consenting
Lender to transfer its Commitment.  The Administrative Agent shall promptly
notify the remaining Lenders that each of such Lenders shall have the right,
but not the obligation, to acquire a portion of the Commitment, pro rata based
upon their relevant Pro Rata Shares, of the Non-Consenting Lender (or if any of
such Lenders does not elect to purchase its pro rata share, then to such
remaining Lenders in such proportion as approved by the Administrative Agent). 
In the event that the Lenders do not elect to acquire all of the Non-Consenting
Lender’s Commitment, then the Administrative Agent shall endeavor to find a new
Lender or Lenders to acquire such remaining Commitment.  Upon any such purchase
of the Commitment of the Non-Consenting Lender, the Non-Consenting Lender’s
interests in the Obligations and its rights hereunder and under the Loan
Documents shall terminate at the date of purchase, and the Non-Consenting
Lender shall promptly execute and deliver any and all documents reasonably
requested by Administrative Agent to surrender and transfer such interest,
including, without limitation, an Assignment and Assumption Agreement in the
form attached hereto as Exhibit D  and such Non-Consenting Lender’s
original Note.  The purchase price for the Non-Consenting Lender’s Commitment
shall equal any and all amounts outstanding and owed by Borrower to the
Non-Consenting Lender, including principal and all accrued and unpaid interest
or fees, plus any applicable amounts payable pursuant to Section 2.8(h) 
which would be owed to such Non-Consenting Lender if the Loans were to be
repaid in full on the date of such purchase of the Non-Consenting Lender’s
Commitment (provided that the Borrower may pay to such Non-Consenting Lender
any interest, fees or other amounts (other than principal) owing to such
Non-Consenting Lender).

13.14     CERTAIN ALLOWED DISCLOSURES.  Notwithstanding anything to the
contrary set forth herein or in any other written or oral understanding or agreement
to which the parties hereto are parties or by which they are bound, the parties
hereto acknowledge and agree that (i) any obligations of confidentiality
contained herein and therein do not apply and have not applied from the
commencement of discussions between the parties to the tax treatment and tax
structure of the transactions contemplated by the Loan Documents (and any
related transactions or arrangements), and (ii) each party (and each of its
employees, representatives, or other agents) may disclose to any and all
parties as required, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by the Loan Documents and all
materials of any kind (including opinions or other tax analyses) that are
provided to such party relating to 

 

such tax treatment
and tax structure, all within the meaning of Treasury Regulations
Section 1.6011-4; provided, however, that each party recognizes that the
privilege each has to maintain, in its sole discretion, the confidentiality of
a communication relating to the transactions contemplated by the Loan
Documents, including a confidential communication with its attorney or a
confidential communication with a federally authorized tax practitioner under
Section 7525 of the Internal Revenue Code, is not intended to be affected
by the foregoing.

13.15    CAPITAL ADEQUACY.  If any Lender or any Assignee in the
Facility determines that compliance with any law or regulation or with any
guideline or request from any central bank or other governmental agency
(whether or not having the force of law) affects or would adversely affect the
amount of capital required or expected to be maintained by such Lender or such
Assignee, or any corporation controlling such Lender or such Assignee, as a consequence
of, or with reference to, such Lender’s or such Assignee’s or such
corporation’s commitments or its making or maintaining advances below the rate
which such Lender or such Assignee or such corporation controlling such Lender
or such Assignee could have achieved but for such compliance (taking into
account the policies of such Lender or such Assignee or corporation with regard
to capital), then Borrower shall, from time to time, within ninety (90)
calendar days after written demand by such Lender or such Assignee, pay to such
Lender or such Assignee additional amounts sufficient to compensate such Lender
or such Assignee or such corporation controlling such Lender or such Assignee
to the extent that such Lender or such Assignee determines such increase in
capital is allocable to such Lender’s or such Assignee’s obligations
hereunder.  A certificate as to such amounts, submitted to Borrower by such
Lender or such Assignee, shall be conclusive and binding for all purposes,
absent manifest error.  For purposes of this Section 13.15, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, publications, orders, guidelines and directives thereunder or issued in
connection therewith and all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to Basel III,
shall be deemed to have been adopted and gone into effect after the date of
this Agreement regardless of when adopted, enacted or issued.

13.16      TITLED AGENTS.  No  Titled
Agent in such respective capacity, assumes no responsibility or obligation
hereunder, including, without limitation, for servicing, enforcement or
collection of the Loan, nor any duties as an agent hereunder for the Lenders. 
The title given to the Titled Agent is solely honorific and implies 
no fiduciary responsibility on the part of the Titled Agents to the
Administrative Agent, any Lender, the Borrower or any other Loan Party and the
use of such titles does not impose on the Titled Agent any duties or
obligations greater than those of any other Lender or entitle the Titled Agent
to any rights other than those to which any other Lender is entitled. 

13.17    LENDER’S AGENTS.        Administrative
Agent and/or any Lender may designate an agent or independent contractor to
exercise any of such Person’s rights under this Agreement and any of the other
Loan Documents.  Any reference to Administrative Agent or any Lender in any of
the Loan Documents shall include Administrative Agent’s and such Lender’s
agents, employees or independent contractors.

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13.18      TAX SERVICE.  Administrative Agent, on behalf of
Lenders, is authorized to secure, at Borrower’s expense, a tax service contract
with a third party vendor which shall provide tax information on the Real
Estate Assets satisfactory to Administrative Agent.

13.19     WAIVER OF RIGHT TO TRIAL BY
JURY.  EACH PARTY TO
THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR
(b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE LOAN DOCUMENTS (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.  THE BORROWER HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, PUNITIVE
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  THE BORROWER (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE
ADMINISTRATIVE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER
OR  THE ADMINISTRATIVE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 13.19. 
THE BORROWER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS SECTION 13.19 
WITH LEGAL COUNSEL AND THAT THE BORROWER AGREES TO THE FOREGOING AS ITS FREE,
KNOWING AND VOLUNTARY ACT.

13.20      SEVERABILITY.  If any provision or obligation under
this Agreement or the other Loan Documents shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, that provision
shall be deemed severed from the Loan Documents and the validity, legality and
enforceability of the remaining provisions or obligations shall remain in full
force as though the invalid, illegal, or unenforceable provision had never been
a part of the Loan Documents, provided, however, that if the rate
of interest or any other amount payable under the Notes or this Agreement or
any other Loan Document, or the right of collectability therefor, are declared
to be or become invalid, illegal or unenforceable, Lenders’ obligations to make
advances under the Loan Documents shall not be enforceable by Borrower.

 

13.21       TIME.  Time is of the essence of each and
every term of this Agreement.

13.22      HEADINGS.  All article, section or other headings
appearing in this Agreement and the other Loan Documents are for convenience of
reference only and shall be disregarded in construing this Agreement and any of
the other Loan Documents.

13.23    GOVERNING LAW.  This Agreement shall pursuant to New
York General Obligations Law Section 5-1401 be governed by, and construed and
enforced in accordance with the laws of the State of New York, except to the
extent preempted by federal laws.  Borrower and all persons and entities in any
manner obligated to Lender under the Loan Documents consent to the jurisdiction
of any federal or state court within the State of New York having proper venue
and also consent to service of process by any means authorized by New York or
federal law.

13.24     USA PATRIOT ACT NOTICE;
COMPLIANCE.  The USA
Patriot Act of 2001 (Public Law 107-56) and federal regulations issued with
respect thereto require all financial institutions to obtain, verify and record
certain information that identifies individuals or business entities which open
an “account” with such financial institution.  Consequently, Administrative
Agent (for itself and/or as Administrative Agent for all Lenders hereunder) may
from time-to-time request, and Borrower shall provide to Lender, Borrower’s
name, address, tax identification number and/or such other identification
information as shall be necessary for Lender to comply with federal law.  An “account”
for this purpose may include, without limitation, a deposit account, cash
management service, a transaction or asset account, a credit account, a loan or
other extension of credit, and/or other financial services product.

13.25    ELECTRONIC DOCUMENT
DELIVERIES. 
Documents required to be delivered pursuant to the Loan Documents shall be
delivered by electronic communication and delivery, including, the Internet,
e-mail or intranet websites to which the Administrative Agent and each Lender
have access (including a commercial, third-party website such as www.Edgar.com
<http://www.Edgar.com> or a website sponsored or hosted by the
Administrative Agent or the Borrower) provided that (A) the foregoing shall not
apply to notices to any Lender pursuant to Article 3  and (B) the
Lender has not notified the Administrative Agent or Borrower that it cannot or
does not want to receive electronic communications.  The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic delivery pursuant to procedures
approved by it for all or particular notices or communications.  Documents or
notices delivered electronically shall be deemed to have been delivered
twenty-four (24) hours after the date and time on which the Administrative
Agent or Borrower posts such documents or the documents become available on a
commercial website and the Administrative Agent or Borrower notifies each
Lender of said posting and provides a link thereto provided if such notice or
other communication is not sent or posted during the normal business hours of
the recipient, said posting date and time shall be deemed to have commenced as
of 9:00 a.m. on the opening of business on the next business day for the
recipient.  Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the certificate required
by Section 9.10  to the Administrative Agent and shall deliver paper
copies of any documents to the Administrative Agent or to any Lender that
requests such paper copies until a written request to cease delivering paper
copies is given by the Administrative Agent or such Lender.  Except for the
certificates required by Section 9.10, the Administrative Agent
shall have no obligation to request the 

109 

 

 

 

delivery of
or to maintain paper copies of the documents delivered electronically, and in
any event shall have no responsibility to monitor compliance by the Borrower
with any such request for delivery.  Each Lender shall be solely responsible
for requesting delivery to it of paper copies and maintaining its paper or
electronic documents.  Borrower shall promptly reimburse Administrative Agent
for the expenses of any such Internet, e-mail or website used by Administrative
Agent. 

13.26    INTEGRATION; INTERPRETATION.  The Loan Documents contain or expressly
incorporate by reference the entire agreement of the parties with respect to
the matters contemplated therein and supersede all prior negotiations or
agreements, written or oral.  The Loan Documents shall not be modified except
by written instrument.  Any reference to the Loan Documents includes any
amendments, renewals or extensions now or hereafter approved by Administrative
Agent in writing.

13.27    JOINT AND SEVERAL LIABILITY.       The liability of all persons and entities
obligated in any manner under this Agreement or any of the Loan Documents,
other than Administrative Agent and/or Lenders, shall be joint and several.

13.28       COUNTERPARTS.       To facilitate execution, this document
may be executed in as many counterparts as may be convenient or required.  It
shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of all persons required to bind any party, appear on each
counterpart.  All counterparts shall collectively constitute a single
document.  It shall not be necessary in making proof of this document to
produce or account for more than a single counterpart containing the respective
signatures of, or on behalf of, each of the parties hereto.  Any signature page
to any counterpart may be detached from such counterpart without impairing the
legal effect of the signatures thereon and thereafter attached to another
counterpart identical thereto except having attached to it additional signature
pages.

13.29     
DISCLOSURE.  The Borrower agrees to promptly
cooperate with any Lender in connection with any proposed assignment or
participation of all or any portion of its Commitment.  The Borrower agrees
that in addition to disclosures made in accordance with standard banking
practices any Lender may disclose information obtained by such Lender pursuant
to this Agreement to assignees or participants and potential assignees or
participants hereunder.  Each Lender agrees for itself that it shall use
reasonable efforts in accordance with its customary procedures to hold
confidential all non-public information obtained from the Borrower or any
Guarantor that has been identified in writing as confidential by any of them,
and shall use reasonable efforts in accordance with its customary procedures to
not disclose such information to any other Person, it being understood and
agreed that, notwithstanding the foregoing, a Lender may make
(a) disclosures to its participants (provided such Persons are advised of
the provisions of this Section 13.29), (b) disclosures to its
directors, officers, employees, Affiliates, accountants, appraisers, legal
counsel and other professional advisors of such Lender (provided that such
Persons who are not employees of such Lender are advised of the provision of
this Section 13.29), (c) disclosures customarily provided or
reasonably required by any potential or actual bona fide assignee, transferee
or participant or their respective directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors in
connection with a potential or actual assignment or transfer by such Lender of
any Loans or any participations therein (provided such Persons are advised of
the provisions of this Section 13.29 and are required by a writing or
electronic election to use 

110 

 

 

 

reasonable efforts to
maintain the confidentiality of such information), (d) disclosures to bank
regulatory authorities or self-regulatory bodies with jurisdiction over such
Lender, or (e) disclosures required or requested by any other Governmental
Authority or representative thereof or pursuant to legal process; provided
that, unless specifically prohibited by applicable law or court order, each
Lender shall notify the Borrower of any request by any Governmental Authority
or representative thereof prior to disclosure (other than any such request in
connection with any examination of such Lender by such Governmental Authority)
for disclosure of any such non-public information prior to disclosure of such
information.  In addition, each Lender may make disclosure of such information
to any contractual counterparty in swap agreements or such contractual
counterparty’s professional advisors (so long as such contractual counterparty
or professional advisors agree to be bound by the provisions of this Section
13.29).  Non-public information shall not include any information which is
or subsequently becomes publicly available other than as a result of a
disclosure of such information by a Lender, or prior to the delivery to such
Lender is within the possession of such Lender if such information is not known
by such Lender to be subject to another confidentiality agreement with or other
obligations of secrecy to the Borrower or the Guarantors, or is disclosed with
the prior approval of the Borrower.  Nothing herein shall prohibit the
disclosure of non-public information to the extent necessary to enforce the
Loan Documents.

13.30      REPLACEMENT NOTES.  Upon receipt of evidence reasonably
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
any Note, and in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory to the Borrower or, in the
case of any such mutilation, upon surrender and cancellation of the applicable
Note, the Borrower will execute and deliver, in lieu thereof, a replacement
Note, identical in form and substance to the applicable Note and dated as of
the date of the applicable Note and upon such execution and delivery all
references in the Loan Documents to such Note shall be deemed to refer to such
replacement Note.

111 

 

 

[Signature
Page to Phillips Edison Loan Agreement]

IN WITNESS WHEREOF, Borrower,
Administrative Agent and Lenders have executed this Agreement as of the date
appearing on the first page of this Agreement.

	
  “ADMINISTRATIVE AGENT” AND “LENDER”

  KEYBANK
  NATIONAL ASSOCIATION

  By:  /s/ Michael P. Szuba_________________________

  Name:  Michael P. Szuba_________________________

  Title:  Vice President____________________________

   

  	
  Administrative Agent’s Address: 

  KeyBank National Association

  127 Public Square, 8th Floor

  Cleveland, Ohio  44114

  Attention:       Michael P. Szuba                                                                                Vice President

  

 

 

 

[Signature
Page to Phillips Edison Loan Agreement]

	
  BORROWER:

   

  PHILLIPS EDISON - ARC SHOPPING
  CENTER OPERATING PARTNERSHIP, L.P.,
  a Delaware

  limited partnership

   

  By:      Phillips
  Edison Shopping Center OP GP LLC, a Delaware limited liability company

              Its: General Partner

             

               

   

   

  By: 
  /s/ Richard J. Smith__________________

  Name: Richard J. Smith

  Title: Vice President

   

  	
  Borrower’s Address: 

  c/o Phillips Edison & Company Ltd.

  11501 Northlake Drive

  Cincinnati, Ohio  45249

  Attention:        Richard Smith                     Chief Financial Officer

  

 

 

 

112 

 

 

Schedule 1.1

Pro Rata Shares

 

Schedule 1.1 to REVOLVING  LOAN AGREEMENT between (i)
PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

	
  Lender

  	
  Commitment Amount

  	
  Pro Rata Share

  
	
  KEYBANK  NATIONAL ASSOCIATION

  	
  $40,000,000.00

  	
  100%

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TOTALS

  	
  $40,000,000.00

  	
  100%

  

 

113 

 

 

 

Schedule 1.2

Debt Service Coverage Amount

 

Schedule
1.2 to REVOLVING  LOAN
AGREEMENT between (i) PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership, as “Borrower”, (ii) KEYBANK
NATIONAL ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders,
dated as of December 21, 2012.

 

	
  NOI

  	
  $610,077

  
	
  Cap Ex
  Reserve

  	
  ($9,700)

  
	
  Adjusted
  Mortgaged Property NOI

  	
  $600,377

  
	
  Debt
  Service Coverage Amount

  	
  $5,730,852

  
	
             
  Interest Rate (greater of 7% or 10yUST plus 2.5%)

  	
  7%

  
	
             
  Amortization Period

  	
  30

  
	
             
  1.3x until December 2013, then 1.35x

  	
  $  461,829

  

 

 

 

 

 

Schedule 1.3

Initial Mortgaged Properties

 

Schedule 1.3 to REVOLVING  LOAN AGREEMENT between (i)
PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

 

Heron Creek Towne
Centre, Sarasota County, Florida.

115 

 

 

 

Schedule 1.4

Subsidiary Guarantors

Schedule 1.4 to REVOLVING  LOAN AGREEMENT between (i)
PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

Heron Creek Station
LLC.

 

 

Schedule
6.6

Litigation Disclosure

 

Schedule 6.6 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

NONE

117 

 

 

 

Schedule 6.11

Total Indebtedness of Borrower, Guarantor, Property Owners or Other
Subsidiaries

 

Schedule 6.11 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

118 

 

 

 

Schedule
6.25

Leases

 

Schedule 6.25 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

 

119 

 

 

Schedule 6.26

Property

 

Schedule 6.26 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

 

SCHEDULE 12.3

Eligible Real Estate Qualification Documents

Schedule 12.3 to REVOLVING LOAN AGREEMENT between
(i) PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

With respect to any Real
Estate Asset of the Borrower or a Subsidiary Guarantor proposed to be included
in the Collateral, each of the following:

(a)               
Description of
Property.  A narrative
description of the Real Estate Asset, the improvements thereon and the tenants
and Leases relating to such Real Estate Asset.

(b)              
Security Documents.  Such Security Documents relating to
such Real Estate Asset as the Administrative Agent shall in good faith require,
duly executed and delivered by the respective parties thereto, including any
amendments to or additional Security Documents, in order to grant to the
Administrative Agent, for the benefit of the Lenders, a first priority lien and
security interest of such Equity Interests as required by this Agreement.  At
the option of Borrower to be exercised by delivery of written notice to
Administrative Agent at any time there are at least four (4) Mortgaged
Properties encumbered by Mortgages included in the calculation of Borrowing
Base Availability with an aggregate Appraised Value of not less than
$60,000,000.00, Borrower may, subject to subsection (y) of this Schedule 12.3,
elect to pledge the Equity Interests in the Subsidiary Guarantor that owns the
Eligible Real Estate in lieu of delivering a Mortgage and Assignment of Leases
and Rents.  In such event, (i) Borrower shall execute and deliver the Pledge Agreement and deliver to Administrative Agent such certificates
evidencing such Equity Interests together with such transfer powers or
assignments as the Administrative Agent may reasonably require, and authorize
the filing of such UCC financing statements or amendments thereto reflecting
such pledge as the Administrative Agent may reasonably require and (ii)
Borrower shall not be required to subject such Real Estate Asset to the Cash
Collateral Agreement until such time as Borrower is required to deliver a
Mortgage pursuant to the provisions of subsection (y) of this Section 12.3. 

(c)               
Authority Documents.  Such organizational and formation
documents of such Subsidiary Guarantor as the Administrative Agent shall in
good faith require.

(d)              
Enforceability
Opinion.  If required by
the Administrative Agent, the favorable legal opinion of counsel to Borrower or
such Subsidiary Guarantor, from counsel reasonably acceptable to the
Administrative Agent and qualified to practice in the State in which such Real
Estate Asset is located, addressed to the Lenders and the Administrative Agent
covering the enforceability of such Security Documents and such other matters
as the Administrative Agent shall reasonably request.

(e)               
Perfection of Liens.  Evidence reasonably satisfactory to the
Administrative Agent that the Security Documents are effective to create in
favor of the Administrative Agent a legal, valid and enforceable first lien or
security title and security interest in such Real Estate Asset (or as
applicable Equity Interests) and that all filings, recordings, deliveries of
instruments 

 

and other actions necessary or desirable
to protect and preserve such liens or security title or security interests have
been duly effected.

(f)               
Survey and Taxes.  The Survey of such Real Estate Asset,
together with the Surveyor Certification and evidence of payment of all real
estate taxes, assessments and municipal charges on such Real Estate Asset which
on the date of determination are due and would be delinquent if not paid by or
before such date.

(g)              
Title Insurance;
Title Exception Documents. 
The Title Policy (or “marked” commitment/pro forma policy for a Title Policy)
covering such Real Estate Asset, including all endorsements thereto, and
together with proof of payment of all fees and premiums for such policy, and
true and accurate copies of all documents listed as exceptions under such
policy.  In the event that only Equity Interests are being pledged at such
time, Borrower shall deliver the Subsidiary Guarantor’s existing owner’s title
insurance policy and if required by the Administrative Agent an updated title
commitment (or “marked” commitment/proforma policy for a Title Policy) covering
such Real Estate Asset, including all endorsements thereto, and together with
proof of payment of all fees and premiums for such policy, and true and
accurate copies of all documents listed as exceptions under such policy.

(h)              
UCC Certification.  A certification from the Title
Insurance Company, records search firm, or counsel satisfactory to the
Administrative Agent that a search of the appropriate public records disclosed
no conditional sales contracts, security agreements, chattel mortgages, leases
of personalty, financing statements or title retention agreements which affect
any property, rights or interests of the Borrower or such Subsidiary Guarantor
that are or are intended to be subject to the security interest, liens,
security title, assignments, and mortgage liens created by the Security
Documents relating to such Real Estate Asset except to the extent that the same
are discharged and removed prior to or simultaneously with the inclusion of the
Real Estate Asset (including for the purposes hereof pursuant to the Pledge
Agreement) in the Collateral.

(i)                
Management
Agreement.  A true copy
of the Management Agreement, if any, relating to such Real Estate Asset, which
shall be in the form and substance reasonably satisfactory to the
Administrative Agent and a subordination of the manager’s rights thereunder to
the rights of Administrative Agent and the Lenders under the Loan Documents.

(j)                
Leases.  True copies of all Leases relating to
such Real Estate Asset, and a Rent Roll for such Real Estate Asset certified by
the Borrower or Subsidiary Guarantor as accurate and complete as of a recent
date, each of which shall be in form and substance reasonably satisfactory to
the Administrative Agent.

(k)              
Lease Form.  The form of Lease, if any, to be used
by the Borrower or such Subsidiary Guarantor in connection with future leasing
of such Mortgaged Property, which shall be in form and substance reasonably
satisfactory to the Administrative Agent.

(l)                
Tenant Direction
Letter.  A Payment
Direction Letter (as defined in the Cash Collateral Agreement) for each of the tenants
of such Mortgaged Property.

(m)            
Subordination
Agreements.  A
Subordination, Attornment and Non-Disturbance Agreement from each Major Tenant
and from other tenants of such Real Estate Asset as required by the
Administrative Agent.

 

 

(n)              
Estoppel
Certificates.  Estoppel
certificates from each Major Tenant and other tenants of such Real Estate Asset
as required by Administrative Agent, such certificates to be dated not more
than thirty (30) days prior to the inclusion of such Real Estate Asset in the
Collateral (unless extended in Administrative Agent’s reasonable discretion,
but in any case, not to exceed 60 days), each such estoppel certificate to be
in form and substance reasonably satisfactory to the Administrative Agent.

(o)              
Certificates of
Insurance.  Each of (i) a
current certificate of insurance as to the insurance maintained by the Borrower
or such Subsidiary Guarantor on such Real Estate Asset (including flood
insurance if necessary) from the insurer or an independent insurance broker
dated as of the date of determination, identifying insurers, types of
insurance, insurance limits, and policy terms; (ii) certified copies of
all policies evidencing such insurance (or certificates therefor signed by the
insurer or an agent authorized to bind the insurer); and (iii) such
further information and certificates from the Borrower or such Subsidiary
Guarantor, its insurers and insurance brokers as the Administrative Agent may
reasonably request, all of which shall be in compliance with the requirements
of this Agreement.

(p)              
Property Condition
Report.  A property
condition report from a firm of professional engineers or architects selected
by Borrower and reasonably acceptable to Administrative Agent (the “Inspector”)
satisfactory in form and content to the Administrative Agent, dated not more
than ninety (90) days prior to the inclusion of such Real Estate Asset in the
Collateral (including for the purposes hereof pursuant to the Pledge
Agreement), addressing such matters as the Administrative Agent may reasonably
require.

(q)              
Hazardous Materials
Assessments.  A hazardous
waste site assessment report addressed to the Administrative Agent (or the
subject of a reliance letter addressed to, and in a form reasonably
satisfactory to, the Administrative Agent) concerning Hazardous Materials and
asbestos on such Real Estate Asset dated or updated not more than one hundred
twenty (120) days prior to the inclusion of such Real Estate Asset in the
Collateral (including for the purposes hereof pursuant to the Pledge
Agreement), from an environmental engineer reasonably acceptable to the
Administrative Agent, such report to contain no qualifications except those
that are acceptable to the Requisite Lenders in their reasonable discretion and
to otherwise be in form and substance reasonably satisfactory to the
Administrative Agent in its sole discretion.

(r)                
Zoning and Land Use
Compliance.  Such
evidence regarding zoning and land use compliance as the Administrative Agent
may require and approve in its reasonable discretion.  A satisfactory PZR Zoning
report will constitute acceptable evidence.

(s)               
Certificate of
Occupancy.  A copy of the
certificate(s) of occupancy issued to the Borrower or any Subsidiary Guarantor
for such Real Estate Asset permitting the use and occupancy of the Building
thereon (or a copy of the certificates of occupancy issued for such Real Estate
Asset and evidence satisfactory to the Administrative Agent that any previously
issued certificate(s) of occupancy is not required to be reissued to the
Borrower or any Subsidiary Guarantor), or a legal opinion or certificate from
the appropriate authority reasonably satisfactory to the Administrative Agent
that no certificates of occupancy are necessary to the use and occupancy
thereof.

123 

 

 

 

(t)                
Appraisal.  An Appraisal of such Real Estate Asset,
in form and substance satisfactory to the Administrative Agent and the
Requisite Lenders as provided in Section 12.3  and dated not more
than ninety (90) days prior to the inclusion of such Real Estate Asset in the
Collateral.

(u)              
Budget.  An operating and capital expenditure
budget for such Real Estate Asset in form and substance reasonably satisfactory
to the Administrative Agent.

(v)              
Operating
Statements.  Operating
statements for such Real Estate Asset in the form of such statements delivered
to the Lenders under Section 9.11 covering each of the four fiscal
quarters ending immediately prior to the addition of such Real Estate Asset to
the Collateral, to the extent available.

(w)            
Subsidiary
Guarantor Documents. 
With respect to Real Estate Asset owned or ground leased by a Subsidiary, the
Joinder Agreement and such other documents, instruments, reports, assurances,
or opinions as the Administrative Agent may reasonably require.

(x)              
Additional
Documents.  Such other
agreements, documents, certificates, reports or assurances as the
Administrative Agent may reasonably require.

(y)              
Delivery of
Mortgage. 
Notwithstanding the foregoing, if Borrower elects as provided in this Schedule 12.3 
to only provide a pledge of its Equity Interests in a Subsidiary Guarantor,
Borrower shall not be required to deliver the Mortgage, Assignment of Leases
and Rents and related UCC financing statements, Appraisal, Subordination, Attornment and Non-Disturbance Agreements,
tenant estoppel certificates
or a Title Policy when such Real Estate Asset is accepted as a Mortgaged
Property, provided, however, that Borrower shall be obligated to
deliver each of such items to Administrative Agent, together with any updates
to any other item required under this Schedule 12.3 as may be reasonably
required by Administrative Agent, and pay any costs, or fees due in connection
with the recording, filing or issuance of such items no later than the date
that is ninety (90) days after the acceptance of such Real Estate Asset as a
Mortgaged Property.

124 

 

 

 

EXHIBIT
A

PROPERTY
OWNERS AND REAL ESTATE ASSETS

 

 

125 

 

 

 

EXHIBIT B

DOCUMENTS

Exhibit B to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

1.     Loan Documents. 
The documents listed below, and amendments, modifications and supplements
thereto which have received the prior written consent of Lender, together with
any documents executed in the future that are approved by Lender and that
recite that they are “Loan Documents” for purposes of this Agreement are
collectively referred to herein as the Loan Documents.

1.1      
This Agreement.

1.2      
The Notes.

1.3     
Various Guarantees 
of Payment and Performance of even date herewith by Guarantor in favor of
Administrative Agent.

1.4      
Pledge Agreement.

1.5      
The Contribution Agreement.

1.6       Cash Collateral Agreement.

1.7       Mortgages

1.8       Assignments of Leases and Rents

1.9       Indemnity Agreement

1.10     Other documents now or hereafter evidencing
or securing the Obligations

126 

 

 

 

EXHIBIT
C

DISBURSEMENT
PLAN

Exhibit C to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

2.     
  Timing of Disbursement.  Unless another provision of this Agreement
specifies otherwise, Borrower shall submit to:

	
                      ____________________

  ______________________________ 

  ______________________________ 

  ______________________________ 

  Attention:  _____________________ 

  

  

  
	
  With a copy to:

  ______________________________

  ______________________________ 

  ______________________________ 

  ______________________________ 

  Attention:  _____________________ 

  

  

  

a written itemized statement, signed by Borrower in
the form attached hereto (“Application for Payment”) setting forth:

1.1       the date on which Borrower requests that
such disbursement be made (subject to Section 11.3, the “Funding
Date”), which date shall in no event be later than three (3) Business Days
(or one (1) Business Day if such disbursement is to bear interest by reference
to the Base Rate) following submittal by Borrower to Administrative Agent of
the Application for Payment, together with all related supporting information
and certificates and the satisfaction by Borrower of each applicable condition
to disbursement set forth in this Agreement; and

1.2       If Borrower requests that such
disbursement accrue interest in whole or in part at a Fixed Rate, the amount of
each Fixed Rate Portion and each Fixed Rate Period applicable to such
disbursement.

Each Application for Payment by Borrower shall constitute a
representation and warranty by Borrower that Borrower is in compliance with all
the conditions precedent to a disbursement specified in this Agreement, that
Borrower is in compliance with all of the financial covenants of Borrower set
forth in Section 8.15  of this Agreement, and that there exists no
Default or Potential Default under this Agreement.

127 

 

 

 

2.       Lenders’
Right to Condition Disbursements.  Administrative Agent and Lenders’ shall
have the right to condition any disbursement upon Administrative Agent’s
receipt and approval of the following:

2.1      
the Application for Payment;

2.2 
any other document,
requirement, evidence or information that Administrative Agent may reasonably
request under any applicable provision of the Loan Documents.

128 

 

 

 

Application
for Payment

KEYBANK
NATIONAL ASSOCIATION

DISBURSEMENT
REQUEST

Date: _____________________                                                       
Request # _______________

Borrower:  PHILLIPS EDISON – ARC
SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware limited partnership

Total Loan Amount: 
$______________

Request made under Revolving
Loan Agreement dated December 21, 2012 (“Loan Agreement”)  

Disburse funds to Borrower’s
Account:         Account No. ________________

A request is hereby made for
payment of the sum indicated below which we believe to is payable in accordance
with the Loan Agreement referred to above between Borrower and Lender. 
Following is a summary of the payment requested.

Intended use of funds:

______________________________________________________________________________

______________________________________________________________________________

Amount
of this Request:                                                
                    $_______________________ 

Total
Disbursed to Date and remaining unpaid,

Including
This Request                                                                     
$_______________________ 

Total Undisbursed                                                                              $_______________________ 

FOR OFFICE USE ONLY

Date Rec’d Disb. Dept.:           ____________              Other:    
  ___________________________ 

Check Attached:        _____________                Copies Sent:    
   _________________ 

EXPRESS MAIL TO:

	
  ______________________________

  ______________________________ 

  ______________________________ 

  ______________________________ 

  Attention:  _____________________ 

  	
  ______________________________

  ______________________________ 

  ______________________________ 

  ______________________________ 

  Attention:  _____________________ 

  

1.          Borrower hereby represents and warrants
to Administrative Agent and the Lenders that as of the date of this
Disbursement Request (capitalized terms not defined in this Disbursement
Request are defined in the Loan Agreement):

129 

 

 

 

(a)      No
Default exists under the Loan Agreement or under any other Loan Documents nor
has there occurred or failed to occur any event which continues as of the date
hereof and may with the giving of notice or the passage of time become a
Default;

(b)       There does not exist a breach
of any financial covenant set forth in the Loan Agreement;

(c)    All representations and
warranties of Borrower and Guarantor contained in the Loan Documents are true
and correct;

(d)      There is no order or decree in
any court of competent jurisdiction enjoining or prohibiting Borrower from
performing its obligations under the Loan Agreement or other Loan Documents;
and

(e)     All amounts previously disbursed
under the Facility have been applied by Borrower as indicated in previous
Disbursement Requests.

BORROWER:

 

PHILLIPS EDISON - ARC SHOPPING CENTER OPERATING
PARTNERSHIP, L.P.,

a
Delaware limited partnership

 

By:      Phillips
Edison Shopping Center

OP GP LLC, a Delaware limited liability company

            Its: General Partner

 

By:  ________________________________

Name: ______________________________ 

Title: _______________________________ 

 

 

130 

 

 

 

EXHIBIT
D

FORM
OF ASSIGNMENT AND ASSUMPTION AGREEMENT

Exhibit D to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

ASSIGNMENT
AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT
(this “Agreement”) is dated as of _________ __, _____, between
_________________ (“Assignor”) and _______________ (“Assignee”). 

RECITALS:

A.       Assignor is a Lender under the Revolving Loan
Agreement dated as of December 21, 2012 (as from time to time amended,
supplemented or restated, the “Loan Agreement”), by and among (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) the persons named therein as Lenders and
such other Persons as may become Lenders in accordance with the terms of the
Loan Agreement.  (Capitalized terms used in this Agreement without definition
have the same meanings as in the Loan Agreement.)

B.     Currently,
Assignor’s Pro Rata Share is equal to ________% and Assignee’s Pro Rata Share
is equal to __________%.  Assignor desires to assign to Assignee, and Assignee
desires to accept and assume, [all/a portion] of the rights and
obligations of Assignor under the Loan Agreement.

C.       Assignor
desires to assign to Assignee, and Assignee desires to accept and assume, a
portion of the rights and obligations of Assignor under the Loan Agreement.

NOW, THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

2.         Assignment. 

(a)               
Effective on the Assignment
Effective Date (as defined in Section 3  below), Assignor hereby
assigns to Assignee the Assigned Share (as defined below) of [all/a portion
of] of Assignor’s rights, title, interest and obligations under the Loan
Agreement and other Loan Documents.  The Assigned Share of all such rights,
title, interest and obligations is referred to collectively as the “Assigned
Rights and Obligations”. 

(b)              
The “Assigned Share” means
the portion of Assignor’s Pro Rata Share in the Facility being assigned hereby,
such portion being equal to $___________ of Assignor’s Commitment.  The new Pro
Rata Share being held by Assignee (after giving effect to the assignment
hereunder), and the Pro Rata Share retained by Assignor, shall be as specified
on the signature pages of this Agreement.

131 

 

 

 

3.                 
Assumption.  Effective on the Assignment Effective Date,
Assignee hereby accepts the foregoing assignment of, and hereby assumes from
Assignor, the Assigned Rights and Obligations.

4.                 
Effectiveness.  This Agreement shall become effective on a date
(the “Assignment Effective Date”) selected by Assignor, which shall be
on or as soon as practicable after the execution and delivery of counterparts
of this Agreement by Assignor, Assignee, Administrative Agent and Borrower. 
Assignor shall promptly notify Assignee, Administrative Agent and Borrower in
writing of the Assignment Effective Date.

5.                 
Payments on Assignment
Effective Date.  In consideration of
the assignment by Assignor to Assignee, and the assumption by Assignee, of the
Assigned Rights and Obligations, on the Assignment Effective Date Assignee
shall pay to Assignor such amounts as are specified in any written agreement or
exchange of letters between them and additionally shall pay to Administrative
Agent an assignment processing fee of $4,500.00.

6.                 
Allocation and Payment of
Interest and Fees. 

(a)               
Administrative Agent shall pay to
Assignee all interest and other amounts (including Fees, except as otherwise
provided in the written agreement referred to in Section 4  above)
not constituting principal that are paid by or on behalf of Borrower pursuant
to the Loan Documents and are attributable to the Assigned Rights and
Obligations (“Borrower Amounts”), that accrue on and after the
Assignment Effective Date.  If Assignor receives or collects any such Borrower
Amounts, Assignor shall promptly pay them to Assignee.

(b)              
Administrative Agent shall pay to
Assignor all Borrower Amounts that accrue before the Assignment Effective Date
(or otherwise pursuant to the written agreement referred to in Section 4 
above) when and as the same are paid by Administrative Agent to the other
Lenders.  If Assignee receives or collects any such Borrower Amounts, Assignee
shall promptly pay such amounts to Assignor.

(c)               
Unless specifically assumed by
Assignee, Assignor shall be responsible and liable for all reimbursable
liabilities and costs and indemnification obligations which accrue under Section 13.12 
of the Loan Agreement prior to the Assignment Effective Date, and such
liability shall survive the Assignment Effective Date.

7.                 
Administrative Agent Liability.  Administrative Agent shall not be liable for any
allocation or payment to either Assignor or Assignee subsequently determined to
be erroneous, unless resulting from Administrative Agent’s willful misconduct
or gross negligence as finally determined by a court of competent jurisdiction
after the expiration of all applicable appeal periods.

8.                 
Representations and Warranties. 

(a)               
Each of Assignor and Assignee
represents and warrants to the other and to Administrative Agent as follows:

132 

 

 

(i)                
It has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement and
to fulfill its obligations under, and to consummate the transactions
contemplated by, this Agreement;

(ii)              
The making and performance of this
Agreement and all documents required to be executed and delivered by it
hereunder do not and will not violate any law or regulation applicable to it;

(iii)            
This Agreement has been duly
executed and delivered by it and constitutes its legal, valid and binding
obligation enforceable in accordance with its terms; and

(iv)            
All approvals, authorizations or
other actions by, or filings with, any governmental authority necessary for the
validity or enforceability of its obligations under this Agreement have been
made or obtained.

(b)              
Assignor represents and warrants
to Assignee that Assignor owns the Assigned Rights and Obligations free and
clear of any Lien or other encumbrance.

(c)               
Assignee represents and warrants
to Assignor as follows:

(i)                
Assignee is and shall continue to
be an “Eligible Assignee” as defined in the Loan Agreement;

(ii)              
Assignee has made and shall
continue to make its own independent investigation of the financial condition,
affairs and creditworthiness of Borrower and any other Related Party; and

(iii)            
Assignee has received copies of
the Loan Documents and such other documents, financial statements and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement.

9.                 
No Assignor Responsibility.  Assignor makes no representation or warranty
regarding, and assumes no responsibility to Assignee for:

(a)               
the execution (by any party other
than Assignor), effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of the Loan Documents or any representations,
warranties, recitals or statements made in the Loan Documents or in any financial
or other written or oral statement, instrument, report, certificate or any
other document made or furnished or made available by Assignor to Assignee or
by or on behalf of any Related Party to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby;

(b)              
the performance or observance of
any of the terms, covenants or agreements contained in any of the Loan
Documents or as to the existence or possible existence of any Default or
Potential Default under the Loan Documents; or

(c)               
the accuracy or completeness of
any information provided to Assignee, whether by Assignor or by or on behalf of
any Related Party.

133 

 

 

Assignor
shall have no initial or continuing duty or responsibility to make any
investigation of the financial condition, affairs or creditworthiness of any of
the Loan Parties, in connection with the assignment of the Assigned Rights and
Obligations or to provide Assignee with any credit or other information with
respect thereto, whether coming into its possession before the date hereof or
at any time or times thereafter.

10.             
Assignee Bound By Loan
Agreement.  Effective on the
Assignment Effective Date, Assignee (a) shall be deemed to be a party to the
Loan Agreement and as such, shall be directly liable to Borrower for any
failure by Assignee to comply with Assignee’s assumed obligations thereunder,
including, without limitation, Assignee’s obligation to fund its Pro Rata Share
of the Facility in accordance with provisions of the Loan Agreement, (b) agrees
to be bound by the Loan Agreement to the same extent as it would have been if
it had been an original Lender thereunder, (c) agrees to perform in accordance
with their respective terms all of the obligations which are required under the
Loan Documents to be performed by it as a Lender, and (d) agrees to maintain
its status as an Eligible Assignee.  Assignee appoints and authorizes
Administrative Agent to take such actions as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.

11.             
Assignor Released From Loan
Agreement.  Effective on the
Assignment Effective Date, Assignor shall be released from the Assigned Rights
and Obligations; provided, however, that Assignor shall retain all of its
rights to indemnification under the Loan Agreement and the other Loan Documents
for any events, acts or omissions occurring before the Assignment Effective
Date, and, to the extent not assumed by Assignee, Assignor shall continue to be
responsible for the liabilities and obligations described in Section 5(c)
of this Agreement.

12.             
New Notes.  On or promptly after the Assignment Effective Date,
Borrower, Administrative Agent, Assignor and Assignee shall make appropriate
arrangements so that new Notes executed by Borrower, dated the Assignment
Effective Date and in the amount of the respective Pro Rata Shares of Assignor
and Assignee in the original Facility amount, after giving effect to this
Agreement, are issued to Assignor and Assignee, in exchange for the surrender
by Assignor and Assignee to Borrower of any applicable outstanding Notes,
marked “Exchanged”.

13.             
General. 

(a)               
No term or provision of this
Agreement may be amended, waived or terminated orally, but only by an
instrument signed by the parties hereto.

(b)              
This Agreement may be executed in
one or more counterparts.  Each set of executed counterparts shall be an
original.  Executed counterparts may be delivered by facsimile transmission.

(c)               
If Assignor has not assigned its
entire remaining Pro Rata Share of the Facility to Assignee, Assignor may at
any time and from time to time grant to others, subject to applicable
provisions in the Loan Agreement, assignments of or participation in all of
Assignor’s remaining Pro Rata Share of the Facility.

(d)              
This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Neither Assignor nor Assignee may 

 

assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the other and Administrative Agent and (subject to the
provisions of Section 13.13  of the Loan Agreement) Borrower.  The
preceding sentence shall not limit the right of Assignee to grant to others a
participation in all or part of the Assigned Rights and Obligations subject to
the terms of the Loan Agreement.

(e)               
All payments to Assignor or
Assignee hereunder shall, unless otherwise specified by the party entitled
thereto, be made in United States dollars, in immediately available funds, and
to the address or account specified on the signature pages of this Agreement. 
The address of Assignee for notice purposes under the Loan Agreement shall be
as specified on the signature pages of this Agreement.

(f)               
If any provision of this Agreement
is held invalid, illegal or unenforceable, the remaining provisions hereof will
not be affected or impaired in any way.

(g)              
Each party shall bear its own
expenses in connection with the preparation and execution of this Agreement.

(h)              
This Agreement shall be pursuant
to New York General Obligations Law Section 5-1401 governed by and construed in
accordance with the laws of the State of New York.

(i)                
[Foreign Withholding.  On or
before the Assignment Effective Date, Assignee shall comply with the provisions
of Section 13.13(d)  of the Loan Agreement.]

(REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK)

135 

 

 

 

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

	
  ASSIGNOR:

  	
   _____________________________________ 

  
	
   

  	
  By: _______________________________

  Name: _______________________________

  Its:        _______________________________

  Pro Rata Share: ________________%

  Payment
  Instruction: 

  _____________________________________

  _____________________________________

  ABA No.:        
  _________________________

  Account No.:    _________________________

  Reference:  _________________________

  Loan No.:         _________________________

  Attn:   _________________________

  Telephone:  _________________________

  Facsimile:         _________________________

  
	
  ASSIGNEE:

  	
  _____________________________________

  
	
   

  	
  By:   _______________________________

  Name:   _______________________________

  Its:        _______________________________

  Pro Rata Share: __________________%

  Payment
  Instruction: 

  _____________________________________

  _____________________________________

  ABA No.:      
  _________________________ 

  Account No.:    _________________________ 

  Reference:     _________________________

  Loan No.:         _________________________

  Attn:      _________________________

  Telephone: _________________________

  Facsimile:         _________________________

  

 

ACKNOWLEDGED AND AGREED:

BORROWER:

[To the extent required 

by the Loan Agreement]

136 

 

 

 

PHILLIPS EDISON - ARC
SHOPPING CENTER OPERATING PARTNERSHIP, L.P.,

a
Delaware limited partnership

 

By:      Phillips
Edison Shopping Center

OP GP LLC, a Delaware limited liability company

            Its: General Partner

 

 

By:  ________________________________

Name:    _____________________________  

Title: _______________________________ 

 

 

 

ADMINISTRATIVE AGENT:

KEYBANK NATIONAL ASSOCIATION

By: _ 

Name: __

Its:  ______________________________________ 

 

 

 

 

EXHIBIT E-1

FORM
OF REVOLVING NOTE

Exhibit E-1 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

REVOLVING
PROMISSORY NOTE

$________________                                                                                     __________ ___, 20__

FOR VALUE RECEIVED,
PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware limited liability company (“Borrower”),
HEREBY PROMISES TO PAY to the order of ________________________ (“Lender”)
the principal sum of ___________________ Dollars ($__________), or if less, the
aggregate unpaid principal amount of all disbursements advanced and/or
readvanced by Lender as a Revolving Credit Loan pursuant to the requirements
set forth in the Revolving Loan Agreement dated as of December 21, 2012
(as amended, supplemented or restated from time to time the “Loan Agreement”),
among inter alia Borrower, Lender, certain other Lenders named therein
or made parties thereto and KeyBank National Association, as Administrative
Agent, together with interest on the unpaid principal balance hereof at the
rate (or rates) determined in accordance with Section 2.8  of the
Loan Agreement from the date such principal is advanced until it is paid in
full.  It is contemplated that there will be advances, payments and readvances
under this Note from time to time, but no advances, payments or readvances
under this Note (including payment in full of the unpaid balance of principal
hereof prior to maturity) shall affect or impair the validity or enforceability
of this Note as to future advances hereunder.

This Note is one of the
Revolving Credit Notes referred to in and governed by the Loan Agreement, which
Loan Agreement, among other things, contains provisions for the acceleration of
the maturity hereof and for the payment of certain additional sums to Lender
upon the happening of certain stated events.  Capitalized terms used in this
Note without definition have the same meanings as in the Loan Agreement.

The principal amount of
this Note, unless accelerated in accordance with Loan Agreement as described
below, if not sooner paid, will be due and payable, together with all accrued
and unpaid interest and other amounts due and unpaid under the Loan Agreement,
on the Maturity Date.

Interest on the
Facility is payable in arrears on the first Business Day of each month during
the term of the Loan Agreement, commencing with the first Business Day of the
first calendar month to begin after the date of this Note. Interest will be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of three hundred sixty (360) days.  The Loan
Agreement provides for the payment by Borrower of various other charges and
fees, in addition to the interest charges described in the Loan Agreement, as
set forth more fully in the Loan Agreement.

All payments of any
amount becoming due under this Note shall be made in the manner provided in the
Loan Agreement, in Dollars.

138 

 

 

 

Upon
and after the occurrence and continuance of a Default, unless such Default is
waived as provided in the Loan Agreement, this Note may, at the option of
Requisite Lenders and without further demand, notice or legal process of any
kind, be declared by Administrative Agent, and in such case immediately shall
become, due and payable.  Upon and after the occurrence of certain Defaults,
this Note shall, without any action by Lenders and without demand, notice or
legal process of any kind, automatically and immediately become due and
payable.

Demand, presentment,
protest and notice of nonpayment and protest, notice of intention to accelerate
maturity, notice of acceleration of maturity and notice of dishonor are hereby
waived by Borrower.  Subject to the terms of the Loan Agreement, Lender may
extend the time of payment of this Note, postpone the enforcement hereof, grant
any indulgences, release any party primarily or secondarily liable hereon or
agree to any subordination of Borrower’s obligations hereunder without
affecting or diminishing Lender’s right of recourse against Borrower, which
right is hereby expressly reserved.

This Note shall
pursuant to New York General Obligations Law Section 5-1401 be interpreted in
accordance with, and the rights and liabilities of the parties hereto shall be
determined and governed by, the laws of the State of New York.

All notices or other
communications required or permitted to be given pursuant to this Note shall be
given to the Borrower or Lender at the address and in the manner provided for
in the Loan Agreement.

It is the intention of
the parties hereto to conform strictly to applicable usury laws.  Accordingly,
all agreements between Borrower and Lender with respect to the Facility are
hereby expressly limited so that in no event, whether by reason of acceleration
of maturity or otherwise, shall the amount paid or agreed to be paid to Lender
or charged by Lender for the use, forbearance or detention of the money to be
lent hereunder or otherwise, exceed the maximum amount allowed by law.  If the
Facility would be otherwise usurious under applicable law based on the interest
rate and other charges stated or demanded for payment at any relevant time,
then, notwithstanding anything to the contrary in the Loan Documents: (1) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received under the Loan
Documents shall under no circumstances exceed the maximum amount of interest allowed
by applicable law, and any excess shall be credited on this Note by the holder
hereof (or, if this Note has been paid in full, refunded to Borrower); and (2)
if maturity is accelerated by reason of an election or deemed election by
Lenders, or in the event of any prepayment, then any consideration which
constitutes interest may never include more than the maximum amount allowed by
applicable law.  In such case, excess interest, if any, provided for in the
Loan Documents or otherwise, to the extent permitted by applicable law, shall
be amortized, prorated, allocated and spread from the date of advance until
payment in full so that the actual rate of interest is uniform through the term
hereof.  If such amortization, proration, allocation and spreading is not
permitted under applicable law, then such excess interest shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on this Note (or, if this Note has been
paid in full, refunded to Borrower).  The terms and provisions of this
paragraph shall control and supersede every other provision of the Loan
Documents.  If at any time the laws of the United States of America permit
Lender to contract for, take, reserve, charge or receive a higher rate of
interest than is allowed by applicable state law (whether such federal laws
directly so provide or refer to the law of any 

139 

 

 

 

state),
then such federal laws shall to such extent govern as to the rate of interest
which Lender may contract for, take, reserve, charge or receive under the Loan
Documents.

Whenever possible each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Note.

Borrower hereby agrees
and acknowledges that this Note is an instrument for the payment of money, and
hereby consents that Administrative Agent, at its sole option, in the event of
a default by Borrower in the payment of any sums due hereunder, shall have the
right to bring a motion action under New York CPLR Section 3213.

[This Note is issued in replacement
of a Note dated ____________________ in the amount of $_______________,
previously issued by Borrower to __________________ pursuant to the Loan
Agreement.]

140 

 

 

 

IN WITNESS
WHEREOF, Borrower has executed this Note as of the date first above written.

BORROWER:

 

PHILLIPS EDISON - ARC SHOPPING CENTER OPERATING
PARTNERSHIP, L.P.,

a
Delaware limited partnership

 

By:      Phillips
Edison Shopping Center

OP GP LLC, a Delaware limited liability company

            Its: General Partner

 

 

By:  ________________________________

Name:  ______________________________ 

Title: _______________________________

 

141 

 

 

 

EXHIBIT E-2

FORM
OF SWING LOAN NOTE

Exhibit E-2 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

SWING
LOAN NOTE

$________________                                                                                     __________ ___, 20__

FOR VALUE RECEIVED,
PHILLIPS EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware limited liability company (“Borrower”),
HEREBY PROMISES TO PAY to the order of ________________________ (“Lender”)
the principal sum of ___________________ Dollars ($__________), or if less, the
aggregate unpaid principal amount of all disbursements advanced and/or
readvanced by Lender as a Swing Loan pursuant to the requirements set forth in
the Revolving Loan Agreement dated as of December 21, 2012 (as amended,
supplemented or restated from time to time the “Loan Agreement”), among inter
alia Borrower, Lender, certain other Lenders named therein or made parties
thereto and KeyBank National Association, as Administrative Agent, together
with interest on the unpaid principal balance hereof at the rate (or rates)
determined in accordance with Section 2.8  of the Loan Agreement
from the date such principal is advanced until it is paid in full.  It is
contemplated that there will be advances, payments and readvances under this
Note from time to time, but no advances, payments or readvances under this Note
(including payment in full of the unpaid balance of principal hereof prior to maturity)
shall affect or impair the validity or enforceability of this Note as to future
advances hereunder.

This Note is the Swing
Loan Note referred to in and governed by the Loan Agreement, which Loan
Agreement, among other things, contains provisions for the acceleration of the
maturity hereof and for the payment of certain additional sums to Lender upon
the happening of certain stated events.  Capitalized terms used in this Note
without definition have the same meanings as in the Loan Agreement.

The principal amount of
this Note, unless accelerated in accordance with Loan Agreement as described
below, if not sooner paid, will be due and payable, together with all accrued
and unpaid interest and other amounts due and unpaid under the Loan Agreement,
on the Maturity Date.

Interest on the
Facility is payable in arrears on the first Business Day of each month during
the term of the Loan Agreement, commencing with the first Business Day of the
first calendar month to begin after the date of this Note. Interest will be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of three hundred sixty (360) days.  The Loan
Agreement provides for the payment by Borrower of various other charges and
fees, in addition to the interest charges described in the Loan Agreement, as
set forth more fully in the Loan Agreement.

All payments of any
amount becoming due under this Note shall be made in the manner provided in the
Loan Agreement, in Dollars.

 

 

Upon
and after the occurrence and continuance of a Default, unless such Default is
waived as provided in the Loan Agreement, this Note may, at the option of
Requisite Lenders and without further demand, notice or legal process of any
kind, be declared by Administrative Agent, and in such case immediately shall
become, due and payable.  Upon and after the occurrence of certain Defaults,
this Note shall, without any action by Lenders and without demand, notice or
legal process of any kind, automatically and immediately become due and
payable.

Demand, presentment,
protest and notice of nonpayment and protest, notice of intention to accelerate
maturity, notice of acceleration of maturity and notice of dishonor are hereby
waived by Borrower.  Subject to the terms of the Loan Agreement, Lender may
extend the time of payment of this Note, postpone the enforcement hereof, grant
any indulgences, release any party primarily or secondarily liable hereon or
agree to any subordination of Borrower’s obligations hereunder without
affecting or diminishing Lender’s right of recourse against Borrower, which
right is hereby expressly reserved.

This Note shall
pursuant to New York General Obligations Law Section 5-1401 be interpreted in
accordance with, and the rights and liabilities of the parties hereto shall be
determined and governed by, the laws of the State of New York.

All notices or other
communications required or permitted to be given pursuant to this Note shall be
given to the Borrower or Lender at the address and in the manner provided for
in the Loan Agreement.

It is the intention of
the parties hereto to conform strictly to applicable usury laws.  Accordingly,
all agreements between Borrower and Lender with respect to the Facility are
hereby expressly limited so that in no event, whether by reason of acceleration
of maturity or otherwise, shall the amount paid or agreed to be paid to Lender
or charged by Lender for the use, forbearance or detention of the money to be
lent hereunder or otherwise, exceed the maximum amount allowed by law.  If the
Facility would be otherwise usurious under applicable law based on the interest
rate and other charges stated or demanded for payment at any relevant time,
then, notwithstanding anything to the contrary in the Loan Documents: (1) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received under the Loan
Documents shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be credited on this Note by the
holder hereof (or, if this Note has been paid in full, refunded to Borrower);
and (2) if maturity is accelerated by reason of an election or deemed election
by Lenders, or in the event of any prepayment, then any consideration which
constitutes interest may never include more than the maximum amount allowed by
applicable law.  In such case, excess interest, if any, provided for in the
Loan Documents or otherwise, to the extent permitted by applicable law, shall be
amortized, prorated, allocated and spread from the date of advance until
payment in full so that the actual rate of interest is uniform through the term
hereof.  If such amortization, proration, allocation and spreading is not
permitted under applicable law, then such excess interest shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on this Note (or, if this Note has been
paid in full, refunded to Borrower).  The terms and provisions of this
paragraph shall control and supersede every other provision of the Loan
Documents.  If at any time the laws of the United States of America permit
Lender to contract for, take, reserve, charge or receive a higher rate of
interest than is allowed by applicable state law (whether such federal laws
directly so provide or refer to the law of any 

143 

 

 

state),
then such federal laws shall to such extent govern as to the rate of interest
which Lender may contract for, take, reserve, charge or receive under the Loan
Documents.

Whenever possible each
provision of this Note shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Note.

Borrower hereby agrees
and acknowledges that this Note is an instrument for the payment of money, and
hereby consents that Administrative Agent, at its sole option, in the event of
a default by Borrower in the payment of any sums due hereunder, shall have the
right to bring a motion action under New York CPLR Section 3213.

[This Note is issued in replacement
of a Note dated ____________________ in the amount of $_______________,
previously issued by Borrower to __________________ pursuant to the Loan
Agreement.]

 

 

IN WITNESS
WHEREOF, Borrower has executed this Note as of the date first above written.

BORROWER:

 

PHILLIPS EDISON - ARC SHOPPING CENTER OPERATING
PARTNERSHIP, L.P.,

a
Delaware limited partnership

 

By:      Phillips
Edison Shopping Center

OP GP LLC, a Delaware limited liability company

            Its: General Partner

 

By:
________________________________ 

Name:   _____________________________ 

Title: _______________________________

 

 

 

 

EXHIBIT
F

FIXED
RATE NOTICE

KeyBank National Association, as
Administrative Agent

4910 Tiedeman Road

Brooklyn, Ohio  44144

Attention:  ________________________

Date:  ________________

 

Ladies and Gentlemen:

Reference is made to
the promissory note made by Phillips Edison – ARC Shopping Center Operating
Partnership, L.P., a Delaware limited partnership (“Borrower”), in favor of
KeyBank National Association (the “Note”) pursuant to that certain Revolving
Loan Agreement dated as of December 21, 2012, by and between Borrower and
KeyBank National Association (the “Loan Agreement”).  Capitalized terms used
herein shall have the meanings set forth in the Loan Agreement.  The
undersigned hereby gives notice pursuant to Section 2.8(f) of the Loan
Agreement of its desire for a Fixed Rate Portion of the proceeds of the loan
evidenced by the Note.

The Following are the
details of the Fixed Rate funding election to be set up as of the commencement
date specified below:

1.         The Fixed Rate Commencement Date is:

2.         The Fixed Rate Period expires:

3.         The amount of the Fixed Rate Portion is:

4.         The Fixed Rate funding rate is the LIBO Rate plus the Applicable
Margin

            The sources for the above
LIBO Rate are as follows (Choose as appropriate):

Base
Rate Note Outstanding Balance:

Interest due: _____________________

Current Fixed Rate Period maturing:
____________

Total:

            The next FIXED RATE ELECTION
NOTIFICATION date is ______.

 

146 

 

 

 

EXHIBIT G

DESIGNATED
ACCOUNTS

Exhibit G to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

	
  Bank:

  	
  KeyBank National Association

  
	
  ABA Number:

  	
  041 001 039

  
	
  Account Name: 

  	
  Phillips Edison - ARC Shopping Center Operating
  Partnership LC Operating Account

  
	
  Account Number:

  	
  359681333431

  
	
  Special Instructions:

  	
  Please notify:  Jeff Brown
  (jbrown@phillipsedison.com)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

 

147 

 

 

 

EXHIBIT H-1

OWNERSHIP
STRUCTURE

Exhibit H-1 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

 

148 

 

 

 

EXHIBIT
H-2

INFORMATION
ON SUBSIDIARIES

Exhibit H-2 to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL
ASSOCIATION, as “Administrative Agent”, and (iii) various Lenders, dated as
of December 21, 2012.

 

(See Attached
Organizational Chart)

149 

 

 

 

EXHIBIT I

COMPLIANCE
CERTIFICATE

Exhibit I to REVOLVING LOAN AGREEMENT between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) KEYBANK NATIONAL ASSOCIATION,
as “Administrative Agent”, and (iii) various Lenders, dated as of December 21,
2012.

FORM
OF COMPLIANCE CERTIFICATE

To:       KeyBank
National Association, Administrative Agent

This Compliance
Certificate is made with reference to that certain Revolving Loan Agreement
dated as of December 21, 2012 (as amended, supplemented or otherwise modified
from time to time, the “Loan Agreement”), by and between (i) PHILLIPS
EDISON – ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership, as “Borrower”, (ii) each of the financial
institutions initially a signatory to the Loan Agreement, together with their
assignees under Section 13.13  of the Loan Agreement (“Lenders”),
and (iii) KEYBANK NATIONAL ASSOCIATION (“KeyBank”), as
contractual representative of the Lenders to the extent and in the manner
provided in Article 12  (in such capacity, the “Administrative
Agent”).  All capitalized terms used in this Compliance Certificate or in Schedule
A attached hereto and not otherwise defined in this Compliance Certificate
shall have the meanings set forth for such terms in the Loan Agreement.

1.         The
undersigned is the Chief Financial Officer of Borrower.

2.       As of the date
of this Compliance Certificate, no Default or Potential Default has occurred
and is continuing under the Loan Documents.  To the extent a Default or
Potential Default has occurred and is continuing under the Loan Documents, Schedule
B attached hereto sets forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto.

3.      The undersigned
hereby represents and warrants that the following are true and correct for the
period __________ to _________________ [fill in applicable time period]

(a)   Leverage Ratio. 
The Leverage Ratio of Borrower is ________ percent as detailed on Schedule
3(a) hereto, which does not exceed _______ percent (___%) as required under
the Loan Agreement.

(b)   Fixed Charges Coverage.  The ratio of Adjusted EBITDA of Borrower to Fixed
Charges of Borrower is  _______ to 1, as detailed on Schedule
3(b) hereto, which is not less than 1.50 to 1 as required under the Loan
Agreement.

(c)   Minimum Net Worth.  Borrower has a Minimum Net Worth of $_________ as detailed on Schedule
3(c) hereto which is not less than the sum of $_________________ plus 
seventy percent (70%) of Net Equity Proceeds as required under the Loan
Agreement.

(d)   Borrowing Base.   The
outstanding principal balance of the Revolving Credit Loans, Swing Loans and
the Letter of Credit Liabilities is $___________, which does not exceed the
Borrowing Base Availability of $_____________.

 

 

(e)   Minimum Mortgaged Property Requirements.   There are ____ Mortgaged Properties in the
calculation of the Borrowing Base Availability having an Appraised Value of
$___________.

(f)  Restricted Payments.  
The Restricted Payments of Borrower, General Partner and PE-ARC, respectively,
for the period of four (4) consecutive calendar quarters is $__________, and
the Funds from Operations for such period is $___________.  The Restricted
Payments for such period do not exceed 95% of Funds from Operations for such
period, except as permitted by Section 8.11(b). 

            4.         All of the information
contained herein and in Schedules 3(a) through 3(f) is true, correct and
complete.  All financial calculations have been performed in accordance with
the Loan Agreement.

EXECUTED as of the date set forth below.

Dated: _________________

BORROWER:

 

PHILLIPS
EDISON - ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

By:      Phillips
Edison Shopping Center

OP GP LLC, 

a Delaware limited liability company

Its: General Partner

By:
________________________________ 

Name:  ______________________________ 

Title: _______________________________

 

151 

 

 

 

EXHIBIT J

 

FORM
OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT
(“Joinder Agreement”) is executed as of __________________, 20__, by
_________________________________________________, a __________________________
(“Joining Party”), and delivered to KeyBank National Association, as
Administrative Agent, pursuant to Section 12.5 of the Revolving Loan
Agreement dated as of December 21, 2012, as from time to time in effect (the
“Loan Agreement”), by and among Phillips Edison – ARC Shopping Center Operating
Partnership, L.P. (the “Borrower”), KeyBank National Association, for itself
and as Administrative Agent, and the other Lenders from time to time party
thereto.  Terms used but not defined in this Joinder Agreement shall have the
meanings defined for those terms in the Loan Agreement.

RECITALS

A.    Joining Party is
required, pursuant to Section 12.5 of the Loan Agreement, to
become an additional Subsidiary Guarantor under the Guaranty, the Cash
Collateral Agreement, the Indemnity Agreement and the Contribution Agreement.

B.    Joining Party
expects to realize direct and indirect benefits as a result of the availability
to the Borrower of the credit facilities under the Loan Agreement.

NOW, THEREFORE, Joining
Party agrees as follows:

AGREEMENT

1.                 
Joinder.  By this Joinder Agreement, Joining
Party hereby becomes a “Subsidiary Guarantor” and a “Guarantor” under the Loan
Agreement, the Guaranty, the Cash Collateral Agreement, the Indemnity
Agreement, and the other Loan Documents with respect to all the Obligations of
the Borrower now or hereafter incurred under the Loan Agreement and the other
Loan Documents, and a “Subsidiary Guarantor” under the Contribution Agreement. 
Joining Party agrees that Joining Party is and shall be bound by, and hereby
assumes, all representations, warranties, covenants, terms, conditions, duties
and waivers applicable to a “Subsidiary Guarantor” and a “Guarantor” under the
Loan Agreement, the Guaranty, the Cash Collateral Agreement, the Indemnity
Agreement, the other Loan Documents and the Contribution Agreement.

2.                 
Representations and
Warranties of Joining Party. 
Joining Party represents and warrants to Administrative Agent, as of the
Effective Date (as defined below), that the representations and warranties
contained in the Loan Agreement and the other Loan Documents applicable to a
“Guarantor” or “Subsidiary Guarantor” are true and correct in all material
respects as applied to Joining Party as a Subsidiary Guarantor and a Guarantor
on and as of the Effective Date as though made on that date.  As of the
Effective Date, all covenants and agreements in the Loan Documents and the
Contribution Agreement of the Subsidiary Guarantors apply to Joining Party and
no Default or Potential Default shall exist or might exist upon the Effective
Date in the event that Joining Party becomes a Subsidiary Guarantor.

3.                 
Joint and
Several.  Joining Party
hereby agrees that, as of the Effective Date, the Guaranty, the Cash Collateral
Agreement, the Contribution Agreement and the Indemnity Agreement heretofore
delivered to the Administrative Agent and the Lenders shall be a joint and 

152 

 

 

 

several obligation of Joining Party to the same extent
as if executed and delivered by Joining Party, and upon request by
Administrative Agent, will promptly become a party to the Guaranty, the Cash
Collateral Agreement, the Contribution Agreement and the Indemnity Agreement to
confirm such obligation.

4.                 
Further Assurances.  Joining Party agrees to execute and
deliver such other instruments and documents and take such other action, as the
Administrative Agent may reasonably request, in connection with the
transactions contemplated by this Joinder Agreement.

5.                 
GOVERNING
LAW.  THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL,
PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

6.                 
Counterparts.  This Joinder Agreement may be executed
in any number of counterparts which shall together constitute but one and the
same agreement.

The effective date (the “Effective
Date”) of this Joinder Agreement is _________________, 201__.

IN WITNESS WHEREOF, Joining Party has
executed this Joinder Agreement under seal as of the day and year first above
written.

“JOINING PARTY”

_________________________________________,
a ________________________________

By: ___ 

Name: _ 

Title:
_____________________________________

[SEAL]

ACKNOWLEDGED:

KEYBANK NATIONAL ASSOCIATION, 

as Administrative Agent

By:___________________________

Its:___________________________

 

153 

 

 

 

EXHIBIT K

FORM
OF LETTER OF CREDIT REQUEST

[Date]

KeyBank National Association, as
Administrative Agent

4900 Tiedeman Road

Brooklyn, Ohio  44144

Attn:  _____________________

Re:   Letter of Credit Request under Revolving Loan
Agreement dated as of 

December 21, 2012

Ladies and Gentlemen:

Pursuant to Section
2.6 of the Revolving Loan Agreement dated as of December 21, 2012, by
and among you, certain other Lenders and Phillips Edison – ARC Shopping Center
Operating Partnership, L.P. (the “Borrower”), as amended from time to time (the
“Loan Agreement”), we hereby request that you issue a Letter of Credit as
follows:

(i)        Name and
address of beneficiary:

(ii)       Face
amount:  $

(iii)      Proposed
Issuance Date:

(iv)      Proposed
Expiration Date:

(v)     Other terms and
conditions as set forth in the proposed form of Letter of Credit attached
hereto.

(vi)      Purpose of
Letter of Credit:

This Letter of Credit
Request is submitted pursuant to, and shall be governed by, and subject to
satisfaction of, the terms, conditions and provisions set forth in Section
2.6 of the Loan Agreement.

The undersigned chief
executive officer, president, chief financial officer or chief accounting
officer of the Borrower certifies on behalf of the Borrower that the Borrower
is and will be in compliance with all covenants under the Loan Documents after
giving effect to the issuance of the Letter of Credit requested hereby and no
Default or Potential Default has occurred and is continuing.  

We also understand that
if you grant this request this request obligates us to accept the requested
Letter of Credit and pay the issuance fee and Letter of Credit fee as required
by Section 2.6(c).  All capitalized terms defined in the Loan Agreement
and used herein without definition shall have the meanings set forth in the
Loan Agreement.

154 

 

 

 

The
undersigned chief executive officer, president, chief financial officer or
chief accounting officer of the Borrower certifies, represents and agrees on
behalf of the Borrower that each of the representations and warranties made by
or on behalf of the Borrower, the Guarantors or their respective Subsidiaries,
contained in the Loan Agreement, in the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with the Loan Agreement
was true in all material respects as of the date on which it was made, is true
as of the date hereof and shall also be true at and as of the proposed issuance
date of the Letter of Credit requested hereby, with the same effect as if made
at and as of the proposed issuance date.

Very truly yours,

PHILLIPS
EDISON - ARC SHOPPING CENTER OPERATING PARTNERSHIP, L.P.,

a Delaware limited partnership

By:      Phillips
Edison Shopping Center

OP GP LLC, a Delaware limited liability company

Its: General Partner

By: _ 

Name:  _ 

Title: _____________________________________

(SEAL)

 

155 

 

 

 

EXHIBIT L

FORM
OF LETTER OF CREDIT APPLICATION

[See
Attached]

156 

 

 

 

EXHIBIT M

FORM
OF ACKNOWLEDGMENT

157 

 

 

 

EXHIBIT N

FORM
OF PLEDGE AGREEMENT

 

158 

 

 

EXHIBIT o

 

FORM
OF mortgage

 

159 

 

 

 

EXHIBIT p

 

FORM
OF assignment of leases and rents

160 

 

 

 

EXHIBIT Q

HILFIKER
RELEASE PARCEL

161 

 

 

 

TABLE OF CONTENTS

	
  ARTICLE 1

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
  DEFINED TERMS

  	
  1

  
	
  1.2

  	
  CHANGES IN GAAP

  	
  27

  
	
  1.3

  	
  SCHEDULES AND EXHIBITS
  INCORPORATED

  	
  28

  
	
  ARTICLE 2

  	
  LOAN

  	
  28

  
	
  2.1

  	
  LOANS

  	
  28

  
	
  2.2

  	
  SWING LOAN COMMITMENT

  	
  29

  
	
  2.3

  	
  LOAN FEES

  	
  31

  
	
  2.4

  	
  LOAN DOCUMENTS

  	
  32

  
	
  2.5

  	
  INTENTIONALLY OMITTED

  	
  32

  
	
  2.6

  	
  LETTERS OF CREDIT

  	
  32

  
	
  2.7

  	
  MATURITY DATE

  	
  36

  
	
  2.8

  	
  INTEREST ON THE FACILITY

  	
  38

  
	
  2.9

  	
  PAYMENTS

  	
  42

  
	
  2.10

  	
  [INTENTIONALLY OMITTED]

  	
  43

  
	
  2.11

  	
  LENDERS’ ACCOUNTING

  	
  43

  
	
  2.12

  	
  AMOUNT LIMITATIONS

  	
  43

  
	
  2.13

  	
  OBLIGATIONS ABSOLUTE

  	
  43

  
	
  2.14

  	
  INCREASE IN TOTAL
  COMMITMENT

  	
  44

  
	
  2.15

  	
  DEFAULTING LENDERS

  	
  46

  
	
  ARTICLE 3

  	
  DISBURSEMENT

  	
  50

  
	
  3.1

  	
  CONDITIONS PRECEDENT TO
  ADVANCES

  	
  50

  
	
  3.2

  	
  DISBURSEMENT AUTHORIZATION

  	
  51

  
	
  3.3

  	
  LOAN DISBURSEMENTS

  	
  51

  
	
  3.4

  	
  FUNDS TRANSFER
  DISBURSEMENTS

  	
  51

  
	
  ARTICLE 4

  	
  INSPECTIONS

  	
  52

  
	
  ARTICLE 5

  	
  INSURANCE; CONDEMNATION

  	
  52

  
	
  5.1

  	
  INSURANCE; CONDEMNATION

  	
  52

  
	
  ARTICLE 6

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  57

  
	
  6.1

  	
  AUTHORITY/ENFORCEABILITY

  	
  57

  
	
  6.2

  	
  BINDING OBLIGATIONS

  	
  58

  
	
  6.3

  	
  FORMATION AND
  ORGANIZATIONAL DOCUMENTS

  	
  58

  
	
  6.4

  	
  NO VIOLATION

  	
  58

  
	
  6.5

  	
  COMPLIANCE WITH LAWS

  	
  58

  
	
  6.6

  	
  LITIGATION

  	
  58

  
	
  6.7

  	
  FINANCIAL CONDITION

  	
  58

  
	
  6.8

  	
  NO MATERIAL ADVERSE CHANGE

  	
  59

  
	
  6.9

  	
  ACCURACY

  	
  59

  
	
  6.10

  	
  TAX LIABILITY

  	
  59

  

 

162 

 

 

	
  6.11

  	
  TITLE TO ASSETS; NO LIENS
  AND INDEBTEDNESS

  	
  59

  
	
  6.12

  	
  MARGIN STOCK

  	
  59

  
	
  6.13

  	
  STATE OF FORMATION

  	
  60

  
	
  6.14

  	
  STRUCTURE OF BORROWER AND
  GUARANTOR

  	
  60

  
	
  6.15

  	
  REIT Status

  	
  60

  
	
  6.16

  	
  [INTENTIONALLY OMITTED]

  	
  60

  
	
  6.17

  	
  AMERICANS WITH
  DISABILITIES ACT COMPLIANCE

  	
  60

  
	
  6.18

  	
  BUSINESS LOAN

  	
  60

  
	
  6.19

  	
  TAX SHELTER REGULATIONS

  	
  60

  
	
  6.20

  	
  ERISA

  	
  60

  
	
  6.21

  	
  INVESTMENT COMPANY; PUBLIC
  UTILITY HOLDING COMPANY

  	
  61

  
	
  6.22

  	
  FULL DISCLOSURE

  	
  61

  
	
  6.23

  	
  NOT PLAN ASSETS

  	
  61

  
	
  6.24

  	
  MATERIAL AGREEMENTS

  	
  61

  
	
  6.25

  	
  LEASES

  	
  61

  
	
  6.26

  	
  PROPERTY

  	
  62

  
	
  6.27

  	
  BROKERS

  	
  63

  
	
  6.28

  	
  SOLVENCY

  	
  63

  
	
  6.29

  	
  NO BANKRUPTCY FILING

  	
  63

  
	
  6.30

  	
  NO FRAUDULENT INTENT

  	
  63

  
	
  6.31

  	
  TRANSACTION IN BEST
  INTERESTS OF BORROWER AND GUARANTORS;                                                                                                     63

  
	
   

  	
  CONSIDERATION

  	
  63

  
	
  6.32

  	
  CONTRIBUTION AGREEMENT

  	
  63

  
	
  6.33

  	
  OFAC

  	
  64

  
	
  6.34

  	
  GROUND LEASE

  	
  64

  
	
  ARTICLE 7

  	
  HAZARDOUS MATERIALS

  	
  65

  
	
  7.1

  	
  SPECIAL REPRESENTATIONS
  AND WARRANTIES

  	
  65

  
	
  7.2

  	
  HAZARDOUS MATERIALS
  COVENANTS

  	
  66

  
	
  7.3

  	
  INSPECTION BY
  ADMINISTRATIVE AGENT

  	
  66

  
	
  7.4

  	
  HAZARDOUS MATERIALS
  INDEMNITY

  	
  66

  
	
  ARTICLE 8

  	
  COVENANTS OF BORROWER

  	
  67

  
	
  8.1

  	
  EXPENSES

  	
  67

  
	
  8.2

  	
  ERISA COMPLIANCE

  	
  67

  
	
  8.3

  	
  LEASING

  	
  67

  
	
  8.4

  	
  USE OF PROCEEDS

  	
  68

  
	
  8.5

  	
  LIENS

  	
  68

  
	
  8.6

  	
  OPINION OF LEGAL COUNSEL

  	
  69

  
	
  8.7

  	
  FURTHER ASSURANCES

  	
  69

  

 

	
  8.8

  	
  ASSIGNMENT

  	
  69

  
	
  8.9

  	
  REQUIREMENTS OF LAW

  	
  69

  
	
  8.10

  	
  SPECIAL COVENANTS

  	
  69

  
	
  8.11

  	
  LIMITATIONS ON
  DISTRIBUTIONS, ETC

  	
  70

  
	
  8.12

  	
  COMPLIANCE WITH AND
  AMENDMENT OF CHARTER OR BYLAWS

  	
  70

  
	
  8.13

  	
  [INTENTIONALLY OMITTED]

  	
  71

  
	
  8.14

  	
  REIT Status

  	
  71

  
	
  8.15

  	
  FINANCIAL AND STRUCTURAL
  COVENANTS

  	
  71

  
	
  8.16

  	
  INDEBTEDNESS

  	
  71

  
	
  8.17

  	
  [INTENTIONALLY OMITTED.]

  	
  72

  
	
  8.18

  	
  [INTENTIONALLY OMITTED.]

  	
  72

  
	
  8.19

  	
  DISTRIBUTIONS OF INCOME TO
  BORROWER

  	
  72

  
	
  8.20

  	
  FEES

  	
  73

  
	
  8.21

  	
  MANAGEMENT

  	
  73

  
	
  8.22

  	
  ADDITIONAL RESTRICTIONS ON
  INDEBTEDNESS AND LIENS 

  	
  73

  
	
  8.23

  	
  RESTRICTIONS ON
  INVESTMENTS

  	
  74

  
	
  8.24

  	
  EQUITY PLEDGES

  	
  74

  
	
  8.25

  	
  MANAGEMENT FEES; ADVISORY
  FEES

  	
  75

  
	
  8.26

  	
  BUSINESS OPERATIONS

  	
  75

  
	
  ARTICLE 9

  	
  REPORTING COVENANTS

  	
  75

  
	
  9.1

  	
  FINANCIAL INFORMATION

  	
  75

  
	
  9.2

  	
  BOOKS AND RECORDS

  	
  76

  
	
  9.3

  	
  CHANGES IN ORGANIZATIONAL
  STRUCTURE

  	
  76

  
	
  9.4

  	
  INTENTIONALLY OMITTED

  	
  76

  
	
  9.5

  	
  INTENTIONALLY OMITTED

  	
  76

  
	
  9.6

  	
  KNOWLEDGE OF DEFAULT; ETC

  	
  76

  
	
  9.7

  	
  LITIGATION, ARBITRATION OR
  GOVERNMENT INVESTIGATION 

  	
  76

  
	
  9.8

  	
  ENVIRONMENTAL NOTICES

  	
  76

  
	
  9.9

  	
  CERTIFICATE OF BORROWER

  	
  76

  
	
  9.10

  	
  COVENANT COMPLIANCE
  CERTIFICATE

  	
  77

  
	
  9.11

  	
  RENT ROLL

  	
  77

  
	
  9.12

  	
  GROUND LEASE

  	
  77

  
	
  9.13

  	
  ELECTRONIC DELIVERY

  	
  77

  
	
  ARTICLE 10

  	
  DEFAULTS AND REMEDIES

  	
  78

  
	
  10.1

  	
  DEFAULT

  	
  78

  
	
  10.2

  	
  ACCELERATION UPON DEFAULT;
  REMEDIES

  	
  81

  
	
  10.3

  	
  DISBURSEMENTS TO THIRD
  PARTIES

  	
  82

  
	
  10.4

  	
  [INTENTIONALLY OMITTED]

  	
  82

  

 

 

	
  10.5

  	
  REPAYMENT OF FUNDS
  ADVANCED

  	
  82

  
	
  10.6

  	
  RIGHTS CUMULATIVE, NO
  WAIVER

  	
  82

  
	
  10.7

  	
  DISTRIBUTION OF COLLATERAL
  PROCEEDS

  	
  82

  
	
  10.8

  	
  COLLATERAL ACCOUNT

  	
  83

  
	
  ARTICLE 11

  	
  THE ADMINISTRATIVE AGENT;
  INTERCREDITOR PROVISIONS

  	
  84

  
	
  11.1

  	
  APPOINTMENT AND
  AUTHORIZATION

  	
  84

  
	
  11.2

  	
  KEYBANK AS LENDER

  	
  85

  
	
  11.3

  	
  LOAN DISBURSEMENTS

  	
  86

  
	
  11.4

  	
  DISTRIBUTION AND
  APPORTIONMENT OF PAYMENTS

  	
  87

  
	
  11.5

  	
  PRO RATA TREATMENT

  	
  88

  
	
  11.6

  	
  SHARING OF PAYMENTS, ETC

  	
  88

  
	
  11.7

  	
  DUTIES IN THE CASE OF
  ENFORCEMENT

  	
  88

  
	
  11.8

  	
  BANKRUPTCY

  	
  89

  
	
  11.9

  	
  APPROVALS OF LENDERS

  	
  89

  
	
  11.10

  	
  NOTICE OF DEFAULTS

  	
  89

  
	
  11.11

  	
  ADMINISTRATIVE AGENT’S
  RELIANCE, ETC

  	
  90

  
	
  11.12

  	
  INDEMNIFICATION OF
  ADMINISTRATIVE AGENT

  	
  90

  
	
  11.13

  	
  LENDER CREDIT DECISION,
  ETC

  	
  91

  
	
  11.14

  	
  SUCCESSOR ADMINISTRATIVE
  AGENT

  	
  92

  
	
  11.15

  	
  BORROWER NOT BENEFICIARY

  	
  93

  
	
  11.16

  	
  REQUEST FOR ADMINISTRATIVE
  AGENT ACTION

  	
  93

  
	
  ARTICLE 12

  	
  COLLATERAL

  	
  93

  
	
  12.1

  	
  COLLATERAL

  	
  93

  
	
  12.2

  	
  APPRAISALS; ADJUSTED VALUE

  	
  93

  
	
  12.3

  	
  ADDITION OF MORTGAGED
  PROPERTIES

  	
  94

  
	
  12.4

  	
  RELEASE OF MORTGAGED
  PROPERTY

  	
  95

  
	
  12.5

  	
  ADDITIONAL GUARANTORS

  	
  97

  
	
  12.6

  	
  RELEASE OF GUARANTORS

  	
  98

  
	
  12.7

  	
  RELEASE OF COLLATERAL

  	
  99

  
	
  ARTICLE 13

  	
  MISCELLANEOUS PROVISIONS

  	
  99

  
	
  13.1

  	
  INDEMNITY

  	
  99

  
	
  13.2

  	
  FORM OF DOCUMENTS

  	
  99

  
	
  13.3

  	
  NO THIRD PARTIES BENEFITED

  	
  99

  
	
  13.4

  	
  NOTICES

  	
  99

  
	
  13.5

  	
  ATTORNEY-IN-FACT

  	
  100

  
	
  13.6

  	
  ACTIONS

  	
  100

  
	
  13.7

  	
  SET-OFFS

  	
  100

  
	
  13.8

  	
  RELATIONSHIP OF PARTIES

  	
  101

  
	
  13.9

  	
  DELAY OUTSIDE LENDER’S
  CONTROL

  	
  101

  

164 

 

 

 

 

	
  13.10

  	
  ATTORNEYS’ FEES AND
  EXPENSES; ENFORCEMENT

  	
  101

  
	
  13.11

  	
  IMMEDIATELY AVAILABLE
  FUNDS

  	
  101

  
	
  13.12

  	
  AMENDMENTS AND WAIVERS

  	
  101

  
	
  13.13

  	
  SUCCESSORS AND ASSIGNS

  	
  103

  
	
  13.14

  	
  CERTAIN ALLOWED
  DISCLOSURES

  	
  106

  
	
  13.15

  	
  CAPITAL ADEQUACY

  	
  107

  
	
  13.16

  	
  TITLED AGENTS

  	
  107

  
	
  13.17

  	
  LENDER’S AGENTS

  	
  107

  
	
  13.18

  	
  TAX SERVICE

  	
  108

  
	
  13.19

  	
  WAIVER OF RIGHT TO TRIAL
  BY JURY

  	
  108

  
	
  13.20

  	
  SEVERABILITY

  	
  108

  
	
  13.21

  	
  TIME

  	
  109

  
	
  13.22

  	
  HEADINGS

  	
  109

  
	
  13.23

  	
  GOVERNING LAW

  	
  109

  
	
  13.24

  	
  USA PATRIOT ACT NOTICE;
  COMPLIANCE

  	
  109

  
	
  13.25

  	
  ELECTRONIC DOCUMENT
  DELIVERIES

  	
  109

  
	
  13.26

  	
  INTEGRATION; INTERPRETATION

  	
  110

  
	
  13.27

  	
  JOINT AND SEVERAL
  LIABILITY

  	
  110

  
	
  13.28

  	
  COUNTERPARTS

  	
  110

  
	
  13.29

  	
  DISCLOSURE

  	
  110

  
	
  13.30

  	
  REPLACEMENT NOTES

  	
  111

  

165

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00214-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00214-of-00352.parquet"}]]