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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 000-54939
CIM REAL ESTATE FINANCE TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland27-3148022
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2398 East Camelback Road, 4th Floor
Phoenix,Arizona85016
(Address of principal executive offices)(Zip code)
(602)778-8700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report) 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
NoneNoneNone
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
As of August 8, 2022, there were approximately 436.9 million shares of common stock, par value $0.01 per share, of CIM Real Estate Finance Trust, Inc. outstanding.


Table of Contents

CIM REAL ESTATE FINANCE TRUST, INC.
INDEX
 
2

Table of Contents

PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements
CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share amounts) (Unaudited)
June 30, 2022December 31, 2021
ASSETS
Real estate assets:
Land$599,394 $655,273 
Buildings, fixtures and improvements1,545,493 1,706,902 
Intangible lease assets287,710 314,832 
Condominium developments152,473 171,080 
Total real estate assets, at cost2,585,070 2,848,087 
Less: accumulated depreciation and amortization(244,150)(235,481)
Total real estate assets, net2,340,920 2,612,606 
Investments in unconsolidated entities96,161 109,547 
Real estate-related securities ($274,382 and $41,981 held at fair value as of June 30, 2022 and December 31, 2021, respectively)
274,382 105,471 
Loans held-for-investment and related receivables, net3,911,239 2,624,101 
Less: Current expected credit losses(23,935)(15,201)
Total loans held-for-investment and related receivables, net3,887,304 2,608,900 
Cash and cash equivalents173,417 107,381 
Restricted cash61,022 36,792 
Rents and tenant receivables, net33,101 58,948 
Prepaid expenses, derivative assets and other assets76,348 16,279 
Deferred costs, net11,373 7,214 
Assets held for sale76,623 1,299,638 
Total assets$7,030,651 $6,962,776 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Repurchase facilities, notes payable and credit facilities, net$4,227,067 $4,143,205 
Accrued expenses and accounts payable29,271 45,872 
Due to affiliates14,414 14,594 
Intangible lease liabilities, net20,337 24,896 
Distributions payable13,338 13,252 
Deferred rental income, derivative liabilities and other liabilities7,803 21,282 
Total liabilities4,312,230 4,263,101 
Commitments and contingencies (Note 11)
Redeemable common stock170,096 170,714 
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding
— — 
Common stock, $0.01 par value per share; 490,000,000 shares authorized, 437,311,071 and 437,373,981 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
4,373 4,374 
Capital in excess of par value3,529,285 3,529,126 
Accumulated distributions in excess of earnings(975,820)(1,008,561)
Accumulated other comprehensive (loss) income(10,493)2,949 
Total stockholders’ equity2,547,345 2,527,888 
Non-controlling interests980 1,073 
Total equity2,548,325 2,528,961 
Total liabilities, redeemable common stock, non-controlling interests and stockholders’ equity$7,030,651 $6,962,776 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents
CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share amounts) (Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Revenues:
Rental and other property income$53,508 $75,302 $127,244 $152,232 
Interest income44,984 16,460 76,447 28,413 
Total revenues98,492 91,762 203,691 180,645 
Operating expenses:
General and administrative3,680 3,605 7,155 8,033 
Property operating5,249 11,356 12,976 21,475 
Real estate tax2,024 7,706 8,737 19,925 
Expense reimbursements to related parties3,777 3,210 7,471 5,871 
Management fees13,351 11,755 26,698 23,332 
Transaction-related446 27 453 31 
Depreciation and amortization18,015 24,647 37,156 50,385 
Real estate impairment15,996 77 19,287 4,377 
Increase in provision for credit losses 4,942 123 9,651 691 
Total operating expenses67,480 62,506 129,584 134,120 
Gain on disposition of real estate and condominium developments, net81,107 46,469 113,681 46,469 
Operating income112,119 75,725 187,788 92,994 
Other expense:
Gain on investment in unconsolidated entities1,323 — 6,663 — 
Interest expense and other, net(34,460)(16,460)(65,497)(36,482)
Loss on extinguishment of debt(5,369)(1,478)(16,240)(1,478)
Total other expense(38,506)(17,938)(75,074)(37,960)
Net income$73,613 $57,787 $112,714 $55,034 
Net loss allocated to noncontrolling interest(72)— (63)— 
Net income attributable to the Company$73,685 $57,787 $112,777 $55,034 
Weighted average number of common shares outstanding:
Basic and diluted437,346,523 362,448,778 437,360,190 362,226,607 
Net income per common share:
Basic and diluted$0.17 $0.16 $0.26 $0.15 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (in thousands) (Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Net income$73,613 $57,787 $112,714 $55,034 
Other comprehensive (loss) income
Unrealized (loss) gain on real estate-related securities(10,909)1,930 (15,787)2,052 
Reclassification adjustment for realized gain included in income as other income— (648)— (648)
Unrealized gain (loss) on interest rate swaps795 (52)2,283 71 
Amount of loss reclassified from other comprehensive (loss) income into income as interest expense and other, net69 71 62 3,203 
Total other comprehensive (loss) income(10,045)1,301 (13,442)4,678 
Comprehensive income63,568 59,088 99,272 59,712 
Comprehensive loss attributable to noncontrolling interest(72)— (63)— 
Comprehensive income attributable to the Company$63,640 $59,088 $99,335 $59,712 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 (in thousands, except share amounts) (Unaudited)
 Common StockCapital in  Excess
of Par Value
Accumulated
Distributions in Excess of Earnings
Accumulated Other Comprehensive Income (Loss)Total
Stockholders’
Equity
Non-Controlling InterestsTotal Equity
 Number of
Shares
Par Value
Balance as of January 1, 2022437,373,981 $4,374 $3,529,126 $(1,008,561)$2,949 $2,527,888 $1,073 $2,528,961 
Issuance of common stock1,329,825 13 9,561 — — 9,574 — 9,574 
Equity-based compensation— — 37 — — 37 — 37 
Distributions declared on common stock — $0.09 per common share
— — — (40,018)— (40,018)— (40,018)
Redemptions of common stock(1,345,814)(13)(9,676)— — (9,689)— (9,689)
Changes in redeemable common stock— — 115 — — 115 — 115 
Distributions to non-controlling interests— — — — — — (14)(14)
Comprehensive income (loss)— — — 39,092 (3,397)35,695 35,704 
Balance as of March 31, 2022437,357,992 $4,374 $3,529,163 $(1,009,487)$(448)$2,523,602 $1,068 $2,524,670 
Issuance of common stock1,325,282 $13 $9,529 $— $— $9,542 $— $9,542 
Equity-based compensation22,892 — 120 — — 120 — 120 
Distributions declared on common stock — $0.09 per common share
— — — (40,018)— (40,018)— (40,018)
Redemptions of common stock(1,395,095)(14)(10,030)— — (10,044)— (10,044)
Changes in redeemable common stock— — 503 — — 503 — 503 
Distributions to non-controlling interests— — — — — — (16)(16)
Comprehensive income (loss)— — — 73,685 (10,045)63,640 (72)63,568 
Balance as of June 30, 2022437,311,071 $4,373 $3,529,285 $(975,820)$(10,493)$2,547,345 $980 $2,548,325 


 Common StockCapital in  Excess
of Par Value
Accumulated
Distributions in Excess of Earnings
Accumulated
Other Comprehensive (Loss) Income
Total
Stockholders’
Equity
Non-Controlling InterestsTotal Equity
 Number of
Shares
Par Value
Balance as of January 1, 2021362,001,968 $3,620 $3,157,859 $(961,006)$(2,047)$2,198,426 $— $2,198,426 
Equity-based compensation— — 40 — — 40 — 40 
Distributions declared on common stock — $0.09 per common share
— — — (32,906)— (32,906)— (32,906)
Comprehensive (loss) income— — — (2,753)3,377 624 — 624 
Balance as of March 31, 2021362,001,968 $3,620 $3,157,899 $(996,665)$1,330 $2,166,184 $— $2,166,184 
Issuance of common stock917,769 6,651 — — 6,660 — 6,660 
Equity-based compensation4,104 — 49 — — 49 — 49 
Distributions declared on common stock — $0.09 per common share
— — — (32,948)— (32,948)— (32,948)
Changes in redeemable common stock— — (173,628)— — (173,628)— (173,628)
Comprehensive income— — — 57,787 1,301 59,088 — 59,088 
Balance as of June 30, 2021362,923,841 $3,629 $2,990,971 $(971,826)$2,631 $2,025,405 $— $2,025,405 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited)
Six Months Ended June 30,
20222021
Cash flows from operating activities:
Net income$112,714 $55,034 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization, net37,174 49,184 
Amortization of deferred financing costs6,144 3,782 
Amortization of fair value adjustment of mortgage notes payable assumed— (149)
Amortization and accretion on deferred loan fees(4,937)(817)
Amortization of premiums and discounts on credit investments(1,585)(3,767)
Capitalized interest income on real estate-related securities and loans held-for-investment(608)(435)
Equity-based compensation157 89 
Straight-line rental income(3,191)(2,756)
Write-offs for uncollectible lease-related receivables(695)591 
Gain on disposition of real estate assets and condominium developments, net(113,681)(46,469)
Loss (gain) on sale of credit investments, net170 (813)
Gain on investment in unconsolidated entities(6,663)— 
Gain on sale of marketable security(22)— 
Unrealized loss on equity security6,431 — 
Amortization of fair value adjustment and gain on interest rate swaps140 (2,757)
Gain on interest rate caps(1,851)— 
Impairment of real estate assets19,287 4,377 
Increase in provision for credit losses9,651 691 
Write-off of deferred financing costs7,836 45 
Return on investment in unconsolidated entities2,022 — 
Changes in assets and liabilities:
Rents and tenant receivables, net67,285 15,466 
Prepaid expenses and other assets(58,802)(6,234)
Accrued expenses and accounts payable(3,440)707 
Deferred rental income and other liabilities(12,125)(1,656)
Due to affiliates(180)1,234 
Net cash provided by operating activities61,231 65,347 
Cash flows from investing activities:
Investment in unconsolidated entities(43,250)— 
Return of investment in unconsolidated entities614 — 
Investment in real estate-related securities(259,198)(28,509)
Investment in liquid senior loans(110,369)(142,324)
Investment in real estate assets and capital expenditures(14,426)(14,543)
Investment in corporate senior loans(55,251)— 
Origination and acquisition of loans held-for-investment, net(1,223,605)(533,222)
Origination and exit fees received on loans held-for-investment13,365 4,694 
Principal payments received on loans held-for-investment127,101 97,459 
Principal payments received on real estate-related securities1,250 20 
Net proceeds from sale of real estate-related securities132 27,624 
Net proceeds from disposition of real estate assets and condominium developments1,205,183 304,370 
Net proceeds from sale of liquid senior loans35,290 36,518 
Redemption of investment in unconsolidated entities60,663 — 
Proceeds from the settlement of insurance claims619 58 
Net cash used in investing activities$(261,882)$(247,855)

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CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited) — Continued

Six Months Ended June 30,
20222021
Cash flows from financing activities:
Redemptions of common stock$(19,733)$— 
Distributions to stockholders(60,834)(59,166)
Proceeds from borrowings1,615,858 590,182 
Repayments of borrowings, and prepayment penalties(1,235,322)(298,021)
Termination of interest rate swaps(101)— 
Payment of loan deposits— (650)
Refund of loan deposits— 65 
Distributions to non-controlling interests(30)— 
Deferred financing costs paid(8,921)(4,093)
Net cash provided by financing activities290,917 228,317 
Net increase in cash and cash equivalents and restricted cash90,266 45,809 
Cash and cash equivalents and restricted cash, beginning of period144,173 128,408 
Cash and cash equivalents and restricted cash, end of period$234,439 $174,217 
Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents$173,417 $141,299 
Restricted cash61,022 32,918 
Total cash and cash equivalents and restricted cash$234,439 $174,217 
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Distributions declared and unpaid$13,338 $10,997 
Accrued capital expenditures$561 $4,104 
Accrued deferred financing costs$596 $32 
Real estate acquired via foreclosure$— $191,990 
Foreclosure of assets securing the mezzanine loans$— $(79,968)
Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans$— $102,553 
Mortgage notes payable assumed by buyer in connection with disposition of real estate assets$(313,712)$— 
Change in interest income capitalized to loans held-for-investment$— $(9,469)
Common stock issued through distribution reinvestment plan$19,116 $6,660 
Change in fair value of derivative instruments$2,205 $6,031 
Change in fair value of real estate-related securities $(15,787)$1,404 
Conversion of preferred units to debt$68,242 $— 
Supplemental Cash Flow Disclosures:
Interest paid$61,802 $34,183 
Cash paid for taxes$1,018 $1,412 

The accompanying notes are an integral part of these condensed consolidated financial statements.


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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited)
NOTE 1 — ORGANIZATION AND BUSINESS
CIM Real Estate Finance Trust, Inc. (the “Company”) is a non-exchange traded real estate investment trust (“REIT”) formed as a Maryland corporation on July 27, 2010, that elected to be taxed, and operates its business to qualify, as a REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2012. The Company operates a diversified portfolio of core commercial real estate primarily consisting of net leased properties located throughout the United States and short duration senior secured loans and other credit investments. As of June 30, 2022, the Company owned 402 properties, including two properties owned through a consolidated joint venture arrangement (the “Consolidated Joint Venture”), comprised of 12.1 million rentable square feet of commercial space located in 45 states. As of June 30, 2022, the rentable square feet at these properties was 99.2% leased, including month-to-month agreements, if any. As of June 30, 2022, the Company’s loan portfolio consisted of 341 loans with a net book value of $3.9 billion, and investments in real estate-related securities of $274.4 million. As of June 30, 2022, the Company owned condominium developments with a net book value of $152.5 million.
A majority of the Company’s business is conducted through CIM Real Estate Finance Operating Partnership, LP, a Delaware limited partnership, of which the Company is the sole general partner and owns, directly or indirectly, 100% of the partnership interests.
The Company is externally managed by CIM Real Estate Finance Management, LLC, a Delaware limited liability company (“CMFT Management”), which is an affiliate of CIM Group, LLC (“CIM”). CIM is a community-focused real estate and infrastructure owner, operator, lender and developer. CIM is headquartered in Los Angeles, CA, with offices in Atlanta, GA, Bethesda, MD, Chicago, IL, Dallas, TX, New York, NY, Orlando, FL, Phoenix, AZ, and Tokyo, Japan. CIM also maintains additional offices across the Unites States, as well as in Korea, Hong Kong, and the United Kingdom to support its platform.
CCO Group, LLC is a subsidiary of CIM and owns and controls CMFT Management, the Company’s manager, and is the indirect owner of CCO Capital, LLC (“CCO Capital”), the Company’s dealer manager, and CREI Advisors, LLC (“CREI Advisors”), the Company’s property manager. CCO Group, LLC and its subsidiaries (collectively, “CCO Group”) serve as the Company’s sponsor. The Company relies upon CIM Capital IC Management, LLC, the Company’s investment advisor (the “Investment Advisor”), to provide substantially all of the Company’s day-to-day management with respect to investments in securities and certain other investments.
On January 26, 2012, the Company commenced its initial public offering on a “best efforts” basis of up to a maximum of $2.975 billion in shares of common stock (the “Offering”). The Company ceased issuing shares in the Offering on April 4, 2014. At the completion of the Offering, a total of approximately 297.4 million shares of common stock had been issued, including approximately 292.3 million shares of common stock sold to the public pursuant to the primary portion of the Offering and approximately 5.1 million shares of common stock issued pursuant to the distribution reinvestment plan (“DRIP”) portion of the Offering. The remaining approximately 404,000 unsold shares from the Offering were deregistered.
The Company registered $247.0 million of shares of common stock under the DRIP (the “Initial DRIP Offering”) pursuant to a Registration Statement on Form S-3 (Registration No. 333-192958), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 19, 2013 and automatically became effective with the SEC upon filing. The Company ceased issuing shares under the Initial DRIP Offering effective as of June 30, 2016. At the completion of the Initial DRIP Offering, a total of approximately $241.7 million of shares of common stock had been issued. The remaining $5.3 million of unsold shares from the Initial DRIP Offering were deregistered.
The Company registered an additional $600.0 million of shares of common stock under the DRIP (the “Secondary DRIP Offering,” and together with the Initial DRIP Offering, the “DRIP Offerings,” and the DRIP Offerings collectively with the Offering, the “Offerings”) pursuant to a Registration Statement on Form S-3 (Registration No. 333-212832), which was filed with the SEC on August 2, 2016 and automatically became effective with the SEC upon filing. The Company began to issue shares under the Secondary DRIP Offering on August 2, 2016 and will continue to issue shares under the Secondary DRIP Offering.
The Company’s board of directors (the “Board”) establishes an updated estimated per share net asset value (“NAV”) of the Company’s common stock on at least an annual basis for purposes of assisting broker-dealers that participated in the Offering in meeting their customer account reporting obligations under Financial Industry Regulatory Authority Rule 2231. Distributions
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

are reinvested in shares of the Company’s common stock for participants in the DRIP at the estimated per share NAV as determined by the Board. Additionally, the estimated per share NAV as determined by the Board serves as the per share NAV for purposes of the share redemption program. As of June 30, 2022, the estimated per share NAV of the Company’s common stock was $7.20, which was established by the Board on May 25, 2021 using a valuation date of March 31, 2021. Commencing on May 26, 2021, $7.20 served as the per share NAV under the DRIP. The Board previously established a per share NAV as of August 31, 2015, September 30, 2016, December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019, March 31, 2020 and June 30, 2020. The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.
Principles of Consolidation and Basis of Presentation
The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the SEC regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021, and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.
The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and the Consolidated Joint Venture in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.
In determining whether the Company has controlling interests in an entity and the requirement to consolidate the accounts in that entity, the Company analyzes its credit and real estate investments in accordance with standards set forth in GAAP to determine whether they are variable interest entities (“VIEs”), and if so, whether the Company is the primary beneficiary. The Company’s judgment with respect to its level of influence or control over an entity and whether the Company is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Company’s ownership interest, the Company’s voting interest, the size of the Company’s investment (including loans), and the Company’s ability to participate in major policy-making decisions. The Company’s ability to correctly assess its influence or control over an entity affects the presentation of these credit and real estate investments on the Company’s condensed consolidated financial statements. As of June 30, 2022, the Company has determined that the Consolidated Joint Venture is considered a VIE. Applying the consolidation requirements for VIEs, the Company determined that it is the primary beneficiary based on its power to direct activities through its role as servicer and its obligations to absorb losses and right to receive benefits and therefore met the requirements for consolidation.

10

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Reclassifications
Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation. Other than as shown below, these reclassifications had no effect on previously reported totals or subtotals. The reclassifications have been made to the condensed consolidated balance sheet as of December 31, 2021, and to the condensed consolidated statement of cash flows for the six months ended June 30, 2021 as follows (in thousands):
As of December 31, 2021
As previously reportedReclassificationsAs Revised
Condensed Consolidated Balance Sheets
Rents and tenant receivables, net$61,468 $(2,520)$58,948 
Prepaid expenses and other assets$13,759 $2,520 $16,279 
Six Months Ended June 30, 2021
As previously reportedReclassificationsAs Revised
Condensed Consolidated Statements of Cash Flows
Rents and tenant receivables, net$15,315 $151 $15,466 
Prepaid expenses and other assets$(6,083)$(151)$(6,234)
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Real Estate Assets
Real estate assets are stated at cost, less accumulated depreciation and amortization. The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:
Buildings40 years
Site improvements15 years
Tenant improvementsLesser of useful life or lease term
Intangible lease assetsLease term
Recoverability of Real Estate Assets
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, lease concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; changes in anticipated holding periods; and significant increases to budgeted costs for units under development. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. During the six months ended June 30, 2022, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $11.3 million related to 18 properties, all of which was due to sales prices that were less than their respective carrying values. Additionally, during the six months ended June 30, 2022, certain condominium units were deemed
11

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $7.9 million. The Company’s impairment assessment as of June 30, 2022 was based on the most current information available to the Company, including expected holding periods. If the Company’s expected holding periods for assets change, subsequent tests for impairment could result in additional impairment charges in the future. The Company cannot provide any assurance that additional material impairment charges with respect to the Company’s real estate assets will not occur during 2022 or in future periods. During the six months ended June 30, 2021, the Company recorded impairment charges of $4.4 million related to five properties, of which impairment at three properties was due to sales prices that were less than their respective carrying values and impairment at two properties was due to vacancy. The assumptions and uncertainties utilized in the evaluation of the impairment of real estate assets are discussed in detail in Note 3 — Fair Value Measurements. See also Note 4 — Real Estate Assets for further discussion regarding real estate investment activity.
Assets Held for Sale
When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate its fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount is then recorded to reflect the estimated fair value of the property, net of selling costs. As of June 30, 2022, the Company identified four properties with a carrying value of $76.6 million as held for sale, one of which is in connection with the Purchase and Sale Agreement (as defined in Note 4 — Real Estate Assets). The Company had a mortgage note payable of $42.8 million that was related to the held for sale property in connection with the Purchase and Sale Agreement, which was assumed by the buyer in connection with the disposition of the underlying held for sale property. The Company disposed of these properties subsequent to June 30, 2022, as further discussed in Note 17 — Subsequent Events. As of December 31, 2021, in connection with the Purchase and Sale Agreement, the Company identified 81 properties with a carrying value of $1.3 billion as held for sale, of which the sale of 80 such properties closed during the six months ended June 30, 2022.
Dispositions of Real Estate Assets
Gains and losses from dispositions are recognized once the various criteria relating to the terms of sale and any subsequent involvement by the Company with the asset sold are met. A discontinued operation includes only the disposal of a component of an entity and represents a strategic shift that has (or will have) a major effect on an entity’s financial results. The Company’s dispositions during the six months ended June 30, 2022 and 2021 did not qualify for discontinued operations presentation and thus, the results of the properties and condominiums that were sold will remain in operating income, and any associated gains or losses from the dispositions are included in gain on disposition of real estate and condominium developments, net. See Note 4 — Real Estate Assets for a discussion of the disposition of individual properties and condominiums during the six months ended June 30, 2022.
Allocation of Purchase Price of Real Estate Assets
Upon the acquisition of real properties, the Company allocates the purchase price to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their relative fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.
The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.
Certain acquisition-related expenses related to asset acquisitions are capitalized and allocated to tangible and intangible assets and liabilities, as described above. Acquisition-related manager expense reimbursements are expensed as incurred and are included in expense reimbursements to related parties in the accompanying condensed consolidated statements of operations. Other acquisition-related expenses continue to be expensed as incurred and are included in transaction-related expenses in the accompanying condensed consolidated statements of operations.
12

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Investments in Unconsolidated Entities
On March 31, 2022, the Company fully redeemed its $60.7 million investment in CIM UII Onshore, L. P. (“CIM UII Onshore”) and received 100% of the $60.7 million redemption proceeds as of June 30, 2022. Prior to redemption, the Company had less than 5% ownership of CIM UII Onshore and accounted for its investment under the equity method. The equity method of accounting requires the investment to be initially recorded at cost, including transaction costs incurred to finalize the investment, and subsequently adjusted for the Company’s share of equity in CIM UII Onshore’s earnings and distributions. Prior to redemption, the Company recorded its share of CIM UII Onshore’s profits or losses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s condensed consolidated balance sheet and such share is recognized as a profit or loss on the condensed consolidated statements of operations. The Company recorded its share of CIM UII Onshore’s gain, totaling $5.2 million during the six months ended June 30, 2022, in the condensed consolidated statements of operations. During the six months ended June 30, 2022, the Company received distributions of $531,000 related to its investment in CIM UII Onshore, all of which was recognized as a return on investment. As of December 31, 2021, the Company’s investment in CIM UII Onshore had a carrying value of $56.0 million.
CMFT MT JV Holdings, LLC, an indirect wholly-owned subsidiary of the Company, is engaged in an unconsolidated joint venture arrangement through CIM NP JV Holdings, LLC (“NP JV Holdings”) (the “Unconsolidated Joint Venture”), of which it owns 50% of the outstanding equity. Through the Unconsolidated Joint Venture, which holds 90% of the membership interest in NewPoint JV, LLC (the “NewPoint JV”) pursuant to the terms of the Operating Agreement entered into between the Unconsolidated Joint Venture and NewPoint Bridge Lending, LLC, the Company indirectly owns 45% of the outstanding equity of the NewPoint JV on a fully diluted basis. The Company accounts for its investment under the equity method. The equity method of accounting requires the investment to be initially recorded at cost, including transaction costs incurred to finalize the investment, and is subsequently adjusted for the Company’s share of equity in NP JV Holdings’ earnings and distributions, including unrealized gains and losses as a result of changes in fair value of the NewPoint JV. The Company records its share of NP JV Holdings’ profits or losses on a quarterly basis as an adjustment to the carrying value of the investment on the Company’s condensed consolidated balance sheet and such share is recognized as a profit or loss on the condensed consolidated statements of operations. The Company recorded a gain totaling $1.5 million, which represented its share of NP JV Holdings’ gain, during the six months ended June 30, 2022 in the condensed consolidated statements of operations. During the six months ended June 30, 2022, the Company contributed an additional $43.3 million in NP JV Holdings. As of June 30, 2022, the Company’s aggregate investment in NP JV Holdings of $96.2 million is included in investment in unconsolidated entities on the condensed consolidated balance sheets. The Company received $2.1 million in distributions related to its investment in the NP JV Holdings during the six months ended June 30, 2022.
Noncontrolling Interest in Consolidated Joint Venture
As of June 30, 2022, the Company had a controlling interest in the Consolidated Joint Venture and, therefore, met the requirements for consolidation. The Company recorded a net loss of $63,000 and paid distributions of $30,000 to the noncontrolling interest during the six months ended June 30, 2022. The Company recorded the noncontrolling interest of $1.0 million and $1.1 million as of June 30, 2022 and December 31, 2021, respectively, on the condensed consolidated balance sheets.
Restricted Cash
The Company had $61.0 million and $36.8 million in restricted cash as of June 30, 2022 and December 31, 2021, respectively. Included in restricted cash was $5.7 million and $7.8 million held by lenders in lockbox accounts, as of June 30, 2022 and December 31, 2021, respectively. As part of certain debt agreements, rents from certain encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess is disbursed to the Company. Also included in restricted cash was $55.3 million and $29.0 million of construction reserves, amounts held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement as of June 30, 2022 and December 31, 2021, respectively.
Real Estate-Related Securities
Real estate-related securities consists primarily of the Company’s investments in commercial mortgage-backed securities (“CMBS”) and equity securities. The Company determines the appropriate classification for real estate-related securities at the time of purchase and reevaluates such designation as of each balance sheet date.
As of June 30, 2022, the Company classified its investments in CMBS as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their
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estimated fair value with unrealized gains and losses reported in other comprehensive (loss) income. During the six months ended June 30, 2022, the Company invested $259.2 million in CMBS. As of June 30, 2022, the Company had investments in 10 CMBS with an estimated aggregate fair value of $227.4 million.
In addition, the Company had an investment in an equity security with an estimated aggregate fair value of $47.0 million as of June 30, 2022, which is comprised of RTL Common Stock (as defined in Note 4 — Real Estate Assets) received as consideration in connection with the Purchase and Sale Agreement. These investments are carried at their estimated fair value with unrealized gains and losses reported on the condensed consolidated statements of operations. Dividends received are recorded in interest income on the condensed consolidated statements of operations.
The Company monitors its available-for-sale securities for changes in fair value. A loss is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost has resulted from a credit loss or other factors. The Company records impairments related to credit losses through current expected credit losses. However, the allowance is limited by the amount that the fair value is less than the amortized cost basis. The Company considers many factors in determining whether a credit loss exists, including, but not limited to, the extent to which the fair value is less than the amortized cost basis, recent events specific to the security, industry or geographic area, the payment structure of the security, the failure of the issuer of the security to make scheduled interest or principal payments, and external credit ratings and recent changes in such ratings. The analysis of determining whether a credit loss exists requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion. During the six months ended June 30, 2022 and 2021, the Company did not record current expected credit losses related to CMBS.
The amortized cost of real estate-related securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated statements of operations in interest income. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.
Interest earned is either received in cash or capitalized to real estate-related securities in the Company’s condensed consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each security agreement. During the three and six months ended June 30, 2022, the Company capitalized $274,000 and $546,000, respectively, of interest income to real estate-related securities. During the three and six months ended June 30, 2021, the Company capitalized $262,000 and $435,000, respectively, of interest income to real estate-related securities.
Loans Held-for-Investment
The Company’s loans held-for-investment include loans related to real estate assets, as well as credit investments, including commercial mortgage loans and other loans and securities related to commercial real estate assets, as well as corporate loan opportunities that are consistent with the Company’s investment strategy and objectives. The Company intends to hold the loans held-for-investment for the foreseeable future or until maturity. Loans held-for-investment are carried on the Company’s condensed consolidated balance sheets at amortized cost, net of any current expected credit losses. Discounts or premiums, origination fees and exit fees are amortized as a component of interest income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method. Upon the sale of a loan, the realized net gain or loss is computed on the specific identification method.
Interest earned is either received in cash or capitalized to loans held-for-investment and related receivables, net in the Company’s condensed consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each loan agreement. During the three and six months ended June 30, 2022, the Company capitalized $62,000 of interest income to loans held-for-investment.
Accrual of interest income is suspended on nonaccrual loans. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status. Interest collected is recognized on a cash basis by crediting income when received. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. As of June 30, 2022, the Company did not have nonaccrual loans.
Current Expected Credit Losses
The Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), on January 1, 2020. Current expected credit losses (“CECL”) required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans held-for-investment included in the
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condensed consolidated balance sheets. Changes to current expected credit losses are recognized through net income on the Company’s condensed consolidated statements of operations. While ASU 2016-13 does not require any particular method for determining current expected credit losses, it does specify current expected credit losses should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
The Company estimates the current expected credit loss for its first mortgage loans primarily using the Weighted Average Remaining Maturity method, which has been identified as an acceptable method for estimating CECL reserves in the Financial Accounting Standards Board (“FASB”) Staff Q&A Topic 326, No. 1. This method requires the Company to reference historic loan loss data across a comparable data set and apply such loss rate to each loan investment over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. The Company considers loan investments that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral, and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans. For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date. For collateral-dependent loans that the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan. For the Company’s liquid senior loans and corporate senior loans, the Company uses a probability of default and loss given default method using a comparable data set. The Company may use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data.
Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) ratio and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, dynamics of the geography, property type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s).
Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows:
1-Outperform — Most satisfactory asset quality and liquidity, good leverage capacity. A “1” rating maintains predictable and strong cash flows from operations. The trends and outlook for the credit's operations, balance sheet, and industry are neutral to favorable. Collateral, if appropriate, exceeds performance metrics;
2-Meets or Exceeds ExpectationsAcceptable asset quality, moderate excess liquidity, modest leverage capacity. A “2” rating could have some financial/non-financial weaknesses which are offset by strengths; however, the credit demonstrates an ample current cash flow from operations. The trends and outlook for the credit's operations, balance sheet, and industry are generally positive or neutral. Collateral performance, if appropriate, meets or exceeds substantially all performance metrics included in original or current underwriting / business plan;
3-SatisfactoryAcceptable asset quality, somewhat strained liquidity, minimal leverage capacity. A “3” rating is at times characterized by acceptable cash flows from operations. The trends and conditions of the credit's operations and balance sheet are neutral. Collateral performance, if appropriate, meets or is on track to meet underwriting; business plan can reasonably be achieved;
4-Underperformance — The debt investment possesses credit deficiencies or potential weaknesses which deserve management’s close and continued attention. The portfolio company’s operations and/or balance sheet have demonstrated an adverse trend or deterioration which, while serious, has not reached the point where the liquidation of debt is jeopardized. These weaknesses are generally considered correctable by the borrower in the normal course of business but may weaken the asset or inadequately protect the Company’s credit position if not checked or corrected. Collateral performance, if appropriate, falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and
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5-Default/Possibility of Loss — The debt investment is protected inadequately by the current enterprise value or paying capacity of the obligor or of the collateral, if any. The underlying company’s operations have well-defined weaknesses based upon objective evidence, such as recurring or significant decreases in revenues and cash flows. Major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable; risk of principal loss. Collateral performance, if appropriate, is significantly worse than underwriting.
The Company generally assigns a risk rating of “3” to all newly originated or acquired loans held-for-investment during a most recent quarter, except in the case of specific circumstances warranting an exception.
Leases
The Company has lease agreements with lease and non-lease components. The Company has elected to not separate non-lease components from lease components for all classes of underlying assets (primarily real estate assets) and will account for the combined components as rental and other property income. Non-lease components included in rental and other property income include certain tenant reimbursements for maintenance services (including common-area maintenance services or “CAM”), real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. As a lessor, the Company has further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. The Company is not a party to any material leases where it is the lessee.
Significant judgments and assumptions are inherent in not only determining if a contract contains a lease, but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options, including if they will be exercised, evaluation of implicit discount rates and the assessment and consideration of “fixed” payments for straight-line rent revenue calculations.
Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third-party costs and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are expensed as incurred. Upon successful lease execution, leasing commissions are capitalized.
Development Activities
Project costs and expenses, including interest incurred, associated with the development, construction and lease-up of a real estate project are capitalized as construction in progress. During the six months ended June 30, 2022 and 2021, the Company capitalized $7.2 million and $4.5 million, respectively, of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets. Included in the amounts capitalized during the six months ended June 30, 2022 and 2021 was $711,000 and $1.8 million, respectively, of capitalized interest expense.
Revenue Recognition
Revenue from leasing activities
Rental and other property income is primarily derived from fixed contractual payments from operating leases, and therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses, respectively, within the condensed consolidated statements of operations. The Company defers the recognition of variable rental and other property income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved.
The Company continually reviews whether collection of lease-related receivables, including any straight-line rent, and current and future operating expense reimbursements from tenants are probable. The determination of whether collectability is probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Upon the
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determination that the collectability of a receivable is not probable, the Company will record a reduction to rental and other property income for amounts previously recorded and a decrease in the outstanding receivable. Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate. The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable.
Revenue from lending activities
Interest income from the Company’s loans held-for-investment and real estate-related securities is comprised of interest earned on loans and the accretion and amortization of net loan origination fees and discounts. Interest income on loans is accrued as earned, with the accrual of interest suspended when the related loan becomes a nonaccrual loan. Interest income on the Company’s liquid senior loans is accrued as earned beginning on the settlement date.
Reportable Segments
The Company’s segment information reflects how the chief operating decision makers review information for operational decision-making purposes. The Company has two reportable segments:
Credit — engages primarily in acquiring and originating loans, either directly or through co-investments in joint ventures, related to real estate assets. The Company may acquire first and second lien mortgage loans, mezzanine loans, bridge loans, wraparound mortgage loans, construction mortgage loans on real property and loans on leasehold interest mortgages. This segment also includes investments in real estate-related securities, liquid senior loans and corporate senior loans.
Real estate — engages primarily in acquiring and managing income-producing retail properties that are primarily single-tenant properties, which are leased to creditworthy tenants under long-term net leases. The commercial properties are geographically diversified throughout the United States and have similar economic characteristics.
See Note 16 — Segment Reporting for a further discussion regarding these segments.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements.
In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of the discontinuation of the use of the London Interbank Offered Rate (“LIBOR”) as a benchmark interest rate due to reference rate reform. ASU 2021-01 is effective immediately for all entities with the option to apply retrospectively as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, and can be applied prospectively to any new contract modifications made on or after January 7, 2021. The Company currently uses LIBOR as its benchmark interest rate for its derivative instruments, and has not entered into any new contracts on or after the effective date of ASU 2021-01. The Company has evaluated the impact of this ASU’s adoption, and does not believe this ASU will have a material impact on its condensed consolidated financial statements.
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this update clarify the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual sale restrictions and introduce new disclosure requirements related to such equity securities. The amendments are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.
NOTE 3 — FAIR VALUE MEASUREMENTS
GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.
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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:
Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).
Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.
The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:
Real estate-related securities — The Company generally determines the fair value of its real estate-related securities by utilizing broker-dealer quotations, reported trades or valuation estimates from pricing models to determine the reported price. Pricing models for real estate-related securities are generally discounted cash flow models that usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. Depending upon the significance of the fair value inputs used in determining these fair values, these securities are valued using Level 1, Level 2 or Level 3 inputs. As of June 30, 2022, the Company concluded that $193.1 million of its CMBS fell under Level 2 and $34.4 million of its CMBS fell under Level 3.
The Company’s equity security investment is valued using Level 1 inputs. The estimated fair value of the Company’s equity security is based on quoted market prices that are readily and regularly available in an active market.
Credit facilities and notes payable — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of June 30, 2022, the estimated fair value of the Company’s debt was $4.11 billion, compared to a carrying value of $4.25 billion. The estimated fair value of the Company’s debt as of December 31, 2021 was $4.11 billion, compared to a carrying value of $4.17 billion.
Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps and interest rate caps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments is determined using interest rate market pricing models. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of June 30, 2022 and December 31, 2021, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Loans held-for-investment — The Company’s loans held-for-investment are recorded at cost upon origination and adjusted by net loan origination fees and discounts. The Company estimates the fair value of its loans held-for-investment by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration the credit risk. The Company has determined that its commercial real estate (“CRE”) loans held-for-investment and corporate senior loans are classified in Level 3 of the fair value hierarchy. The Company’s liquid senior loans are classified as Level 2 or Level 3 depending on the number of market quotations or indicative prices from pricing services that are available, and whether the depth of the market is sufficient to transact at those prices in amounts approximating the Company’s investment position at
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the measurement date. As of June 30, 2022, $491.3 million and $149.2 million of the Company’s liquid senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of December 31, 2021, $560.4 million and $94.1 million of the Company’s liquid senior loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of June 30, 2022, the estimated fair value of the Company’s loans held-for-investment and related receivables, net was $3.89 billion, which approximated carrying value. As of December 31, 2021, the estimated fair value of the Company’s loans held-for-investment was $2.63 billion, compared to their carrying value of $2.61 billion.
Other financial instruments  The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.
Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. The Company does not expect that changes in classifications between levels will be frequent.
Items Measured at Fair Value on a Recurring Basis
In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):
Balance as of
June 30, 2022
Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS$227,425 $— $193,074 $34,351 
Equity security46,957 46,957 — — 
Interest rate caps2,030 — 2,030 — 
Interest rate swaps35 — 35 — 
Total financial assets$276,447 $46,957 $195,139 $34,351 
Financial liabilities:
Interest rate swaps$(195)$— $(195)$— 
Total financial liabilities$(195)$— $(195)$— 
  
Balance as of
December 31, 2021
Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS$41,871 $— $— $41,871 
Preferred units63,490 — — 63,490 
Marketable security110 110 — — 
Interest rate caps179 — 179 — 
Total financial assets
$105,650 $110 $179 $105,361 
Financial liabilities:
Interest rate swaps$(2,466)$— $(2,466)$— 
Total financial liabilities$(2,466)$— $(2,466)$— 
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The following are reconciliations of the changes in financial assets with Level 3 inputs in the fair value hierarchy for the six months ended June 30, 2022 (in thousands):
Level 3
Beginning Balance, January 1, 2022
$105,361 
Total gains and losses:
Unrealized loss included in other comprehensive (loss) income, net(8,687)
Purchases and payments received:
Conversion of preferred units (1)
(68,243)
Purchases
4,752 
Discounts, net622 
Capitalized interest income546 
Ending Balance, June 30, 2022
$34,351 
____________________________________
(1)    Reflects the Company’s investment in preferred units which matured during the six months ended June 30, 2022 and was redeemed in exchange for an investment in a first mortgage loan. Refer to Note 8 — Loans Held-For-Investment for further discussion.
Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)
Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment related to real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies.
As discussed in Note 4 — Real Estate Assets, during the six months ended June 30, 2022, real estate assets related to 18 properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $110.5 million, resulting in impairment charges of $11.3 million. Additionally, during the six months ended June 30, 2022, certain condominium units were deemed to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $7.9 million. During the six months ended June 30, 2021, real estate assets related to five properties were deemed to be impaired and their carrying values were reduced to an estimated fair value of $31.2 million, resulting in impairment charges of $4.4 million. The Company estimates fair values using Level 3 inputs and a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) terminal capitalization rates; (2) discount rates; (3) the number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions, including the number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and the future performance and sustainability of the Company’s tenants. The Company determined that the selling prices used to determine the fair values were Level 2 inputs.
The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the six months ended June 30, 2022 and 2021:
Six Months Ended June 30,
20222021
Discount RateTerminal Capitalization RateDiscount RateTerminal Capitalization Rate
8.0% – 9.7%
7.5% – 9.2%
7.9% – 9.7%
7.4% – 9.2%
20

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

The following table presents the impairment charges by asset class recorded during the six months ended June 30, 2022 and 2021 (in thousands):
Six Months Ended June 30,
20222021
Asset class impaired:
Land$1,913 $781 
Buildings, fixtures and improvements8,453 3,496 
Intangible lease assets980 230 
Intangible lease liabilities(4)(130)
Condominium developments7,945 — 
Total impairment loss$19,287 $4,377 
NOTE 4 — REAL ESTATE ASSETS
2022 Property Acquisitions
During the six months ended June 30, 2022, the Company did not acquire any properties.
2022 Condominium Development Project
During the six months ended June 30, 2022, the Company capitalized $7.2 million of expenses associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.
2022 Condominium Dispositions
During the six months ended June 30, 2022, the Company disposed of condominium units for an aggregate sales price of $22.5 million, resulting in proceeds of $20.6 million after closing costs and a gain of $3.3 million. The Company has no continuing involvement that would preclude sale treatment with these condominium units. The gain on sale of condominium units is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
2022 Property Dispositions and Real Estate Assets Held for Sale
On December 20, 2021, certain subsidiaries of the Company entered into an Agreement of Purchase and Sale, as amended (the “Purchase and Sale Agreement”), with American Finance Trust, Inc. (now known as The Necessity Retail REIT, Inc.) (NASDAQ: RTL) (“RTL”), American Finance Operating Partnership, L.P. (now known as The Necessity Retail REIT Operating Partnership, L.P.) (“RTL OP”), and certain of their subsidiaries (collectively, the “Purchaser”) to sell to the Purchaser 79 shopping centers and two single-tenant properties encompassing approximately 9.5 million gross rentable square feet of commercial space across 27 states for total consideration of $1.32 billion (the “Purchase Price”). The Purchase Price included the Purchaser’s option to seek the assumption of certain existing debt, and Purchaser’s issuance of up to $53.4 million in value of RTL’s Class A common stock, par value $0.01 per share (“RTL Common Stock”), or Class A units in RTL OP (“RTL OP Units”), subject to certain limits described more fully in the Purchase and Sale Agreement.
During the six months ended June 30, 2022, the Company disposed of 112 properties, including 55 anchored shopping centers, 54 retail properties, two office buildings and one industrial property, and an outparcel of land for an aggregate gross sales price of $1.55 billion, resulting in proceeds of $1.50 billion after closing costs and a gain of $110.4 million. The sale of 80 of these properties closed pursuant to the Purchase and Sale Agreement for total consideration of $1.3 billion, which consisted of $1.2 billion in cash proceeds and $53.4 million of RTL Common Stock, which shares are subject to certain registration rights as described in the Purchase and Sale Agreement. Such shares are included in real estate-related securities in the condensed consolidated balance sheets. During the six months ended June 30, 2022, the Company recognized earnout income of $74.1 million related to the disposition of these properties pursuant to the Purchase and Sale Agreement, and recorded a related receivable of $51.0 million in prepaid expenses and other assets in the condensed consolidated balance sheets. The Company has no continuing involvement that would preclude sale treatment with these properties. The gain on sale of real estate, including the earnout income, is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
21

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

As of June 30, 2022, the Company identified four properties with a carrying value of $76.6 million as held for sale, one of which is in connection with the Purchase and Sale Agreement. Subsequent to June 30, 2022, the Company disposed of these properties, as further discussed in Note 17 — Subsequent Events.
2022 Impairment
The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate that the carrying value of certain of its real estate assets may not be recoverable. See Note 2 — Summary of Significant Accounting Policies for a discussion of the Company’s accounting policies regarding impairment of real estate assets.
During the six months ended June 30, 2022, 18 properties totaling approximately 800,000 square feet with a carrying value of $121.8 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $110.5 million, resulting in impairment charges of $11.3 million, which were recorded in the condensed consolidated statements of operations. Additionally, during the six months ended June 30, 2022, certain condominium units were deemed to be impaired and their carrying values were reduced to their estimated fair value, resulting in impairment charges of $7.9 million, which were recorded in the condensed consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.
2021 Property Acquisitions
During the six months ended June 30, 2021, the Company did not acquire any properties.
Assets Acquired Via Foreclosure
During the six months ended June 30, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its eight mezzanine loans, including 75 condominium units and 21 rental units across four buildings, including certain units that are under development. No land was acquired in connection with the foreclosure.
The following table summarizes the purchase price allocation for the real estate acquired via foreclosure (in thousands):
As of June 30, 2021
Buildings, fixtures and improvements$192,182 
Acquired in-place leases and other intangibles134 
Intangible lease liabilities(326)
Total purchase price$191,990 
In connection with the foreclosure, the Company assumed $102.6 million of mortgage notes payable related to the assets, as further discussed in Note 10 — Repurchase Facilities, Credit Facilities and Notes Payable.
2021 Condominium Development Project
During the six months ended June 30, 2021, the Company capitalized $4.5 million of expenses as construction in progress associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets.
2021 Condominium Dispositions
During the six months ended June 30, 2021, the Company disposed of condominium units for an aggregate sales price of $8.8 million, resulting in proceeds of $8.5 million after closing costs and a gain of $1.5 million. The Company has no continuing involvement that would preclude sale treatment with these condominium units. The gain on sale of condominium units is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
2021 Property Dispositions and Real Estate Assets Held for Sale
During the six months ended June 30, 2021, the Company disposed of 47 retail properties, for an aggregate gross sales price of $304.0 million, resulting in proceeds of $269.0 million after closing costs and a gain of $46.5 million. The Company has no continuing involvement that would preclude sale treatment with these properties.
22

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

As of June 30, 2021, there were two properties classified as held for sale with a carrying value of $6.1 million included in assets held for sale in the accompanying condensed consolidated balance sheets. Subsequent to June 30, 2021, the Company disposed of these properties.
2021 Impairment
During the six months ended June 30, 2021, five properties totaling approximately 165,000 square feet with a carrying value of $35.5 million were deemed to be impaired and their carrying values were reduced to an estimated fair value of $31.2 million, resulting in impairment charges of $4.4 million, which were recorded in the condensed consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.
Consolidated Joint Venture
As of June 30, 2022, the Company had an interest in a Consolidated Joint Venture that owned and managed two properties, with total assets of $6.8 million, which included $7.2 million of land, building and improvements and $641,000 of intangible assets, net of accumulated depreciation and amortization of $1.2 million, and total liabilities of $47,000. The Consolidated Joint Venture did not have any debt outstanding as of June 30, 2022. The Company has the ability to control operating and financial policies of the Consolidated Joint Venture. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of the partner (the “Consolidated Joint Venture Partner”) in accordance with the joint venture agreement for any major transactions. The Company and the Consolidated Joint Venture Partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. Subsequent to June 30, 2022, the Company disposed of the two properties previously owned through the Consolidated Joint Venture, as further discussed in Note 17 — Subsequent Events.
NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES
Intangible lease assets and liabilities consisted of the following as of June 30, 2022 and December 31, 2021 (in thousands, except weighted average life remaining):
June 30, 2022December 31, 2021
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $77,745 and $73,923, respectively (both with a weighted average life remaining of 11.4 years)
$194,473 $224,931 
Acquired above-market leases, net of accumulated amortization of $3,733 and $3,204, respectively (with a weighted average life remaining of 13.1 years and 13.3 years, respectively)
11,759 12,774 
Total intangible lease assets, net$206,232 $237,705 
Intangible lease liabilities:
Acquired below-market leases, net of accumulated amortization of $4,922 and $9,043, respectively (with a weighted average life remaining of 12.8 years and 11.5 years, respectively)
$20,337 $24,896 
Amortization of the above-market leases is recorded as a reduction to rental and other property income, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying condensed consolidated statements of operations. Amortization of below-market leases is recorded as an increase to rental and other property income in the accompanying condensed consolidated statements of operations.
The following table summarizes the amortization related to the intangible lease assets and liabilities for the three and six months ended June 30, 2022 and 2021 (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
In-place lease and other intangible amortization$6,326 $7,428 $13,112 $15,201 
Above-market lease amortization$305 $599 $621 $1,249 
Below-market lease amortization$484 $1,377 $1,063 $2,843 
23

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

As of June 30, 2022, the estimated amortization relating to the intangible lease assets and liabilities is as follows (in thousands):
Amortization
In-Place Leases and
Other Intangibles
Above-Market LeasesBelow-Market Leases
Remainder of 2022$12,128 $573 $959 
202323,167 1,140 1,865 
202421,696 1,035 1,739 
202518,734 975 1,667 
202616,961 930 1,646 
Thereafter101,787 7,106 12,461 
Total$194,473 $11,759 $20,337 
NOTE 6 — INVESTMENTS IN UNCONSOLIDATED ENTITIES
On December 16, 2021, as a result of the merger with CIM Income NAV, Inc. (“CIM Income NAV”) (the “CIM Income NAV Merger”), the Company acquired a limited partnership interest in CIM UII Onshore. CIM UII Onshore’s sole purpose is to invest all of its assets in CIM Urban Income Investments, L.P. (“CIM Urban Income”), which is a private institutional fund that acquires, owns and operates substantially stabilized, diversified real estate and real estate-related assets in urban markets primarily located throughout North America.
During the three and six months ended June 30, 2022, the Company recognized an equity method net gain of $5.2 million related to its investment in CIM UII Onshore. The Company recognized distributions of $531,000 related to its investment in CIM UII Onshore during the six months ended June 30, 2022, all of which was recognized as a return on investment. On March 31, 2022, the Company fully redeemed its $60.7 million investment in CIM UII Onshore, which represented less than 5% ownership of CIM UII Onshore and approximated fair value. As of June 30, 2022, the Company received 100% of the redemption proceeds.
Additionally, during the year ended December 31, 2021, the Company entered into the Unconsolidated Joint Venture, of which the Company owns 50% of the outstanding equity. The Unconsolidated Joint Venture holds 90% of the membership interest in the NewPoint JV. Through the Unconsolidated Joint Venture, the Company has a 45% interest in the NewPoint JV and accounts for its investment under the equity method. The primary purpose of the NewPoint JV is to source, underwrite, close and service on an ongoing basis multifamily bridge loans, participation interests, and other debt instruments such as loans. As of June 30, 2022, the carrying value of the Company’s investment in NP JV Holdings was $96.2 million, which approximates fair value and is included in investments in unconsolidated entities on the condensed consolidated balance sheets. The Company received $2.1 million in distributions related to its investment in NP JV Holdings during the six months ended June 30, 2022, $1.5 million of which was recognized as a return on investment and $614,000 of which was recognized as a return of investment and reduced the invested capital and the carrying amount.
NOTE 7 — REAL ESTATE-RELATED SECURITIES
As of June 30, 2022, the Company had real estate-related securities with an aggregate estimated fair value of $274.4 million, which included 10 CMBS investments and an investment in a publicly-traded equity security. The CMBS mature on various dates from March 2024 through June 2058 and have interest rates ranging from 5.4% to 7.6%, with one CMBS earning a zero coupon rate. The following is a summary of the Company’s real estate-related securities as of June 30, 2022 (in thousands):
Real Estate-Related Securities
Amortized Cost BasisUnrealized LossFair Value
CMBS$240,415 $(12,990)$227,425 
Equity security53,388 (6,431)46,957 
Total real estate-related securities$293,803 $(19,421)$274,382 
24

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

The following table provides the activity for the real estate-related securities during the six months ended June 30, 2022 (in thousands):
Amortized Cost BasisUnrealized Gain (Loss)Fair Value
Real estate-related securities as of January 1, 2022
$102,674 $2,797 $105,471 
Face value of real estate-related securities acquired258,820 — 258,820 
Investment in preferred units, net (1)
(63,490)— (63,490)
Premiums and discounts on purchase of real estate-related securities, net of acquisition costs
(4,374)— (4,374)
Amortization of discount on real estate-related securities987 — 987 
Realized gain on sale of real estate-related securities(110)(22)(132)
Capitalized interest income on real estate-related securities546 — 546 
Principal payments received on real estate-related securities(1,250)— (1,250)
Unrealized loss on real estate-related securities
— (22,196)(22,196)
Real estate-related securities as of June 30, 2022
$293,803 $(19,421)$274,382 
____________________________________
(1)    Included in this balance is $68.2 million of the Company’s investment in preferred units which were redeemed during the six months ended June 30, 2022 in exchange for an investment in a first mortgage loan, as further discussed in Note 8 — Loans Held-For-Investment.
During the six months ended June 30, 2022, the Company invested $259.2 million in CMBS. During the same period, the Company sold one marketable security with an aggregate carrying value of $110,000 resulting in net proceeds of $132,000 and a gain of $22,000. The Company also received $53.4 million in an equity security during the six months ended June 30, 2022 as consideration in connection with the Purchase and Sale Agreement. Unrealized gains and losses on CMBS are recorded in other comprehensive (loss) income, with a portion of the amount subsequently reclassified into interest expense and other, net in the accompanying condensed consolidated statements of operations as securities are sold and gains and losses are recognized. Unrealized gains and losses on the equity security are reported on the condensed consolidated statements of operations. During the six months ended June 30, 2022, the Company recorded $22.2 million of unrealized loss on its real estate-related securities, $15.8 million of which is included in other comprehensive (loss) income in the accompanying condensed consolidated statements of comprehensive income. The remaining $6.4 million of unrealized loss on the Company’s equity security is included in interest expense and other, net in the accompanying condensed consolidated statements of operations.
The scheduled maturities of the Company’s CMBS as of June 30, 2022 are as follows (in thousands):
CMBS
Amortized Cost Estimated Fair Value
Due within one year$— $— 
Due after one year through five years200,175 193,074 
Due after five years through ten years— — 
Due after ten years40,240 34,351 
Total$240,415 $227,425 
Actual maturities of real estate-related securities can differ from contractual maturities because borrowers on certain corporate credit securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on such securities.
In estimating credit losses related to real estate-related securities, management considers a variety of factors, including (1) whether the Company has the intent to sell the impaired security before the recovery of its amortized cost basis, (2) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (3) whether the Company expects to recover the entire amortized cost basis of the security. As of June 30, 2022, the Company had no credit losses related to real estate-related securities.
25

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

NOTE 8 — LOANS HELD-FOR-INVESTMENT
The Company’s loans held-for-investment consisted of the following as of June 30, 2022 and December 31, 2021 (in thousands):
As of June 30,As of December 31,
20222021
First mortgage loans (1)
$3,171,155 $1,968,585 
Total CRE loans held-for-investment and related receivables, net3,171,155 1,968,585 
Liquid senior loans684,866 655,516 
Corporate senior loans55,218 — 
Loans held-for-investment and related receivables, net$3,911,239 $2,624,101 
Less: Current expected credit losses$(23,935)$(15,201)
Total loans held-for-investment and related receivable, net$3,887,304 $2,608,900 
____________________________________
(1)    As of June 30, 2022, first mortgage loans included $20.1 million of contiguous mezzanine loan components that, as a whole, have expected credit quality similar to that of a first mortgage loan.
The following table details overall statistics for the Company’s loans held-for-investment as of June 30, 2022 and December 31, 2021 (dollar amounts in thousands):
CRE Loans (1) (2)
Liquid Senior LoansCorporate Senior Loans
June 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021
Number of loans28 22 309 295 — 
Principal balance$3,196,721 $1,985,722 $688,965 $659,007 $55,801 $— 
Net book value$3,158,080 $1,958,655 $674,677 $650,245 $54,547 $— 
Weighted-average interest rate4.5 %3.3 %5.1 %3.7 %7.8 %— %
Weighted-average maximum years to maturity
4.14.35.05.15.30.0
Unfunded loan commitments (3)
$364,221 $209,368 $2,031 $1,562 $6,649 $— 
____________________________________
(1)As of June 30, 2022, 100% of the Company’s CRE loans by principal balance earned a floating rate of interest, primarily indexed to U.S. dollar LIBOR and the Secured Overnight Financing Rate (“SOFR”).
(2)Maximum maturity date assumes all extension options are exercised by the borrowers; however, the Company’s CRE loans may be repaid prior to such date.
(3)Unfunded loan commitments are subject to the satisfaction of borrower milestones and are not reflected in the accompanying condensed consolidated balance sheets. This balance does not include unsettled liquid senior loan purchases of $22.4 million that are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.

26

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Activity relating to the Company’s loans held-for-investment portfolio was as follows (in thousands):
CRE LoansLiquid Senior LoansCorporate Senior LoansTotal Loan Portfolio
Balance, January 1, 2022$1,958,655 $650,245 $— $2,608,900 
Loan originations and acquisitions (1)
1,291,847 111,546 55,851 1,459,244 
Sale of loans— (35,460)— (35,460)
Principal repayments received (2)
(80,911)(46,140)(50)(127,101)
Capitalized interest62 — — 62 
Deferred fees and other items (3)
(13,367)(1,176)(600)(15,143)
Accretion and amortization of fees and other items4,938 581 17 5,536 
Current expected credit losses(3,144)(4,919)(671)(8,734)
Balance, June 30, 2022
$3,158,080 $674,677 $54,547 $3,887,304 
____________________________________
(1)The Company’s investment in preferred units, which was previously recorded in real estate-related securities on the accompanying condensed consolidated balance sheets, was redeemed during the six months ended June 30, 2022 in exchange for an investment in a first mortgage loan. The converted investment in preferred units of $68.2 million is included in the CRE loans balance with an all-in-rate of 8.0% and an initial maturity date of October 9, 2023.
(2)Includes the repayment of a $80.9 million first mortgage loan prior to the maturity date.
(3)Other items primarily consist of purchase discounts or premiums, accretion of exit fees and deferred origination expenses.
Current Expected Credit Losses
Current expected credit losses reflect the Company’s current estimate of potential credit losses related to the loans held-for-investment included in the Company’s condensed consolidated balance sheets. Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s current expected credit losses.
The following table presents the activity in the Company’s current expected credit losses by loan type for the six months ended June 30, 2022 (in thousands):
First Mortgage Loans
Unfunded First Mortgage Loans (1)
Liquid Senior Loans
Unfunded or Unsettled Liquid Senior Loans (1)
Corporate Senior Loans
Unfunded Corporate Senior Loans (1)
Total
Current expected credit losses as of January 1, 2022$9,930 $— $5,271 $— $— $— $15,201 
Provision for credit losses1,312 360 2,581 400 56 — 4,709 
Current expected credit losses as of March 31, 2022
$11,242 $360 $7,852 $400 $56 $— $19,910 
Provision for credit losses1,832 170 2,338 (96)615 83 4,942 
Current expected credit losses as of June 30, 2022
$13,074 $530 $10,190 $304 $671 $83 $24,852 
____________________________________
(1)Current expected losses for unfunded or unsettled loan commitments are included in accrued expenses and accounts payable in the condensed consolidated balance sheets.
Changes to current expected credit losses are recognized through net income on the Company’s condensed consolidated statements of operations.
Troubled Debt Restructuring
An individual financial instrument is classified as a troubled debt restructuring when there is a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concessions to the borrower who is experiencing financial difficulties. Concessions could include term extensions, payment deferrals, interest rate reductions,
27

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. Current expected credit losses for financial instruments that are troubled debt restructurings are determined individually.
The Company also classifies a financial instrument as a troubled debt restructuring when receivables from third parties, real estate, or other assets are transferred from the debtor to the creditor in order to fully or partially satisfy a debt, such as in the event of a foreclosure or repossession. During the year ended December 31, 2019, the borrower on the Company’s eight mezzanine loans became delinquent on certain required reserve payments. Throughout 2020, the borrower remained delinquent on the required reserve payments and became delinquent on principal and interest. As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings during the year ended December 31, 2020. Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured the loans, including 75 condominium units and 21 rental units across four buildings. As a result of the foreclosure, the Company recorded a $58.0 million decrease to its provision for credit losses related to its mezzanine loans during the three months ended March 31, 2021.
Risk Ratings
As further described in Note 2 — Summary of Significant Accounting Policies, the Company evaluates its loans held-for-investment portfolio on a quarterly basis. Each quarter, the Company assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV ratio, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s). Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 — Summary of Significant Accounting Policies.
The Company’s primary credit quality indicator is its risk ratings, which are further discussed above. The following table presents the net book value of the Company’s loans held-for-investment portfolio as of June 30, 2022 by year of origination, loan type, and risk rating (dollar amounts in thousands):
Amortized Cost of Loans Held-For-Investment by Year of Origination (1)
As of June 30, 2022
Number of Loans2022202120202019Total
First mortgage loans by internal risk rating:
1$— $— $— $— $— 
2— — — — — 
3281,171,306 1,803,406 147,736 48,707 3,171,155 
4— — — — — 
5— — — — — 
Total first mortgage loans281,171,306 1,803,406 147,736 48,707 3,171,155 
Liquid senior loans by internal risk rating:
1— — — — — 
22— — 5,325 — 5,325 
330189,497 338,809 235,780 3,024 667,110 
463,306 — 9,125 — 12,431 
5— — — — — 
Total liquid senior loans30992,803 338,809 250,230 3,024 684,866 
Corporate senior loans by internal risk rating:
1— — — — — 
2— — — — — 
3455,218 — — — 55,218 
4— — — — — 
5— — — — — 
Total corporate senior loans455,218 — — — 55,218 
Less: Current expected credit losses(23,935)
Total loans held-for-investment and related receivables, net341$3,887,304 
Weighted Average Risk Rating (2)
3.0 
28

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

____________________________________
(1)    Date loan was originated or acquired by the Company. Origination dates are subsequently updated to reflect material loan modifications.
(2)    Weighted average risk rating calculated based on carrying value at period end.
NOTE 9 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. During the six months ended June 30, 2022, one of the Company’s interest rate swap agreements matured, four of the Company’s interest rate cap agreements matured, and the Company terminated one interest rate swap agreement prior to the maturity date. As of June 30, 2022, the Company had one non-designated interest rate cap agreement and three interest rate swap agreements designated as hedging instruments. Subsequent to June 30, 2022, one of the Company’s interest rate swap agreements matured, as further discussed in Note 17 — Subsequent Events.
The following table summarizes the terms of the Company’s interest rate cap agreements and interest rate swap agreements as of June 30, 2022 and December 31, 2021 (dollar amounts in thousands):
   Outstanding Notional   Fair Value of Assets (Liabilities) as of
Balance SheetAmount as ofInterestEffectiveMaturityJune 30,December 31,
LocationJune 30, 2022
Rates (1)
DatesDates20222021
Interest Rate CapPrepaid expenses, derivative assets and other assets$650,000 
 5.99%
 7/15/2021
7/15/2023
$2,030 $179 
Interest Rate SwapsPrepaid expenses, derivative assets and other assets$55,800 
3.46% to 4.04%
6/27/2017 to 9/30/2019
7/1/2022 to 9/6/2022
$35 $— 
Interest Rate SwapDeferred rental income, derivative liabilities and other liabilities$100,000 
 4.99%
10/31/2018

9/6/2022
$(195)$(2,466)
____________________________________
(1)The interest rate consists of the underlying index swapped or capped to a fixed rate as of June 30, 2022.
Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. The notional amount under the derivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.
Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company has interest rate caps that are used to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments. The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings in interest expense and other, net on the accompanying condensed consolidated statements of operations. During the six months ended June 30, 2022, the Company had interest rate swaps designated as cash flow hedges in order to hedge the variability of the anticipated cash flows on its variable rate debt. The change in fair value of the derivative instruments designated as hedges is recorded in other comprehensive (loss) income, with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable rate debt. For the three and six months ended June 30, 2022, the amount of loss reclassified from other comprehensive (loss) income as an increase to interest expense was $69,000 and $62,000, respectively. For the three and six months ended June 30, 2021, the amount of loss reclassified from other comprehensive (loss) income as an increase to interest expense was $71,000 and $3.2 million, respectively. The total unrealized gain on interest rate swaps of $2.5 million as of June 30, 2022, and the total unrealized gain on interest rate swaps of $152,000 as of December 31, 2021, respectively, is included in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statements of stockholders’ equity. During the next 12 months, the Company estimates that $203,000 will be reclassified from other comprehensive (loss) income as an increase to interest expense. The Company includes cash flows from interest rate swap agreements in net cash flows provided by operating activities on its condensed consolidated statements of cash flows, as the Company’s accounting policy is to present cash flows from hedging instruments in the same category in its condensed consolidated statements of cash flows as the category for cash flows from the hedged items.
The Company has agreements with each of its derivative counterparties that contain provisions whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to
29

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

settle its obligations under the agreements at their aggregate termination value, inclusive of interest payments and accrued interest of $210,000 as of June 30, 2022. In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. The Company records credit risk valuation adjustments on its derivative instruments based on the credit quality of the Company and the respective counterparty. There were no events of default related to the derivative instruments as of June 30, 2022.
NOTE 10 — REPURCHASE FACILITIES, CREDIT FACILITIES AND NOTES PAYABLE
As of June 30, 2022, the Company had $4.2 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 3.2 years and a weighted average interest rate of 3.3%. The weighted average years to maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable. The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date.
The following table summarizes the debt balances as of June 30, 2022 and December 31, 2021, and the debt activity for the six months ended June 30, 2022 (in thousands):
During the Six Months Ended June 30, 2022
 Balance as of December 31, 2021
Debt Issuances & Assumptions (1)
Repayments & Modifications (2)
Accretion & (Amortization)Balance as of
June 30, 2022
Notes payable – fixed rate debt$471,967 $— $(376,650)
(4)
$— $95,317 
Notes payable – variable rate debt70,268 314,903 (21,007)— 364,164 
First lien mortgage loan650,000 — (514,728)— 135,272 
ABS mortgage notes770,775 — (3,870)— 766,905 
Credit facilities910,000 372,000 (548,000)— 734,000 
Repurchase facilities1,298,414 928,955 (76,375)— 2,150,994 
Total debt4,171,424 1,615,858 (1,540,630)— 4,246,652 
Deferred costs – credit facility (3)
(143)(213)— 239 (117)
Deferred costs – fixed rate debt and first lien mortgage loan(11,678)— 7,481 1,923 (2,274)
Deferred costs – variable rate debt(271)(2,524)— 380 (2,415)
Deferred costs – ABS mortgage notes(16,127)— 382 966 (14,779)
Total debt, net$4,143,205 $1,613,121 $(1,532,767)$3,508 $4,227,067 
____________________________________
(1)Includes deferred financing costs incurred during the period.
(2)In connection with the repayment of certain mortgage notes, the Company recognized a loss on extinguishment of debt of $16.2 million during the six months ended June 30, 2022.
(3)Deferred costs related to the term portion of the CIM Income NAV Credit Facility (as defined below).
(4)Includes mortgage notes of $313.7 million that were assumed by buyer in connection with disposition of real estate assets.
Notes Payable
As of June 30, 2022, the fixed rate debt outstanding of $95.3 million included $15.8 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt. The fixed rate debt has interest rates ranging from 4.0% to 4.5% per annum. The fixed rate debt outstanding matures on various dates from July 2022 through February 2025. Should a loan not be repaid by its scheduled repayment date, the applicable interest rate may increase as specified in the respective loan agreement. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $173.4 million as of June 30, 2022. Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed.
As of June 30, 2022, the Company had $364.2 million of variable rate debt outstanding, which included $314.9 million of borrowings financed through a note on note financing arrangement with Massachusetts Mutual Life Insurance Company (the “Mass Mutual Financing”). In addition, upon completing foreclosure proceedings to take control of the assets which previously
30

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

secured the Company’s mezzanine loans in January 2021, the Company assumed $102.6 million in variable rate debt related to the underlying properties. The variable rate debt outstanding had a weighted average interest rate of 3.8% as of June 30, 2022, and matures on various dates from July 2022 to October 2027.
First Lien Mortgage Loan
On July 15, 2021, JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan Chase”), and DBR Investments Co. Limited originated a $650.0 million first lien mortgage loan (the “Mortgage Loan”) to 114 single purpose entities (the “Borrowers”), each of which is an affiliate of the Company and is managed on a day-to-day basis by affiliates of CIM. As of June 30, 2022, the Mortgage Loan is secured by, among other things, cross-collateralized and cross-defaulted first priority mortgages, deeds of trust, security agreements or other similar security instruments on the Borrowers’ fee simple interests in 53 properties, comprised of 52 single-tenant retail properties and one office property. As of June 30, 2022, the aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the notes was $333.9 million. Amounts outstanding on the Mortgage Loan totaled $135.3 million with a weighted average interest rate of 6.0% as of June 30, 2022. The Mortgage Loan is a floating-rate, interest-only, non-recourse loan with a two-year initial term ending on August 9, 2023, with three one-year extension options, subject to certain conditions.
ABS Mortgage Notes
On July 28, 2021, the Company issued $774.0 million aggregate principal amount of asset backed securities (“ABS”) mortgage notes, Series 2021-1 (the “Class A Notes”) in six classes, as shown below:
Class of NotesInitial Principal BalanceNote RateAnticipated Repayment DateRated Final Payment Date
Credit Rating (1)
A-1 (AAA)$146,400,000 2.09%July 2028July 2051AAA (sf)
A-2 (AAA)$219,600,000 2.57%July 2031July 2051AAA (sf)
A-3 (AA)$39,200,000 2.51%July 2028July 2051AA (sf)
A-4 (AA)$58,800,000 3.04%July 2031July 2051AA (sf)
A-5 (A)$124,000,000 2.91%July 2028July 2051A (sf)
A-6 (A)$186,000,000 3.44%July 2031July 2051A (sf)
____________________________________
(1)Reflects credit rating from Standard & Poor’s Financial Services LLC (“Standard & Poor’s”).
The collateral pool for the Class A Notes is comprised of 168 of the Company’s double- and triple-net leased single tenant properties, together with the related leases and certain other rights and interests. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the Class A Notes was $977.3 million. As of June 30, 2022, amounts outstanding on the Class A Notes totaled $766.9 million with a weighted average interest rate of 2.8%. The Company may prepay the Class A Notes in full on or after the payment date beginning in July 2026 for the Class A-1 (AAA) Notes, the Class A-3 (AA) Notes and the Class A-5 (A) Notes, and on or after the payment date in July 2028 for the Class A-2 (AAA) Notes, the Class A-4 (AA) Notes and the Class A-6 (A) Notes.
Credit Facilities
On December 16, 2021, as a result of the CIM Income NAV Merger, a subsidiary of the Company assumed CIM Income NAV’s obligations pursuant to the credit agreement by and among CIM Income NAV Operating Partnership, LP, the operating partnership of CIM Income NAV (“CIM Income NAV OP”), JPMorgan Chase, as administrative agent, and the lender parties thereto (the “CIM Income NAV Credit Agreement”), including as guarantor under a guaranty provided by CIM Income NAV, and as modified by a modification agreement dated as of September 6, 2017 and subsequently modified following the consummation of the CIM Income NAV Merger by a second modification agreement on December 16, 2021. The CIM Income NAV Credit Agreement allowed for borrowings of up to $425.0 million (the “CIM Income NAV Credit Facility”), including $212.5 million in term loans (the “CIM Income NAV Term Loans”) and up to $212.5 million in revolving loans (the “CIM Income NAV Revolving Loans”). The CIM Income NAV Term Loans and the CIM Income NAV Revolving Loans had a maturity date of September 6, 2022. The Company paid down the $212.5 million outstanding balance under the CIM Income NAV Credit Facility and terminated the CIM Income NAV Credit Facility subsequent to June 30, 2022, as further discussed in Note 17 — Subsequent Events.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

As of June 30, 2022, the CIM Income NAV Term Loans outstanding totaled $212.5 million, $140.0 million of which was subject to interest rate swap agreements (the “Swapped Term Loans”). The interest rate swap agreements had the effect of fixing the Eurodollar Rate per annum of the Swapped Term Loans at an all-in rate of 4.6%. As of June 30, 2022, the Company had $212.5 million outstanding under the CIM Income NAV Credit Facility at a weighted average interest rate of 4.2% and $212.5 million in unused capacity, subject to borrowing availability.
CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Company, has a revolving credit and security agreement (the “Third Amended Credit and Security Agreement”) with the lenders from time to time parties thereto, Citibank, N.A. (“Citibank”), as administrative agent, CMFT Securities Investments, LLC, a wholly-owned subsidiary of the Company (“CMFT Securities”), as equityholder and as collateral manager, Citibank (acting through its Agency & Trust division), as both a collateral agent and as a collateral custodian, and Virtus Group, LP, as collateral administrator. The Third Amended Credit and Security Agreement provides for available borrowings under the revolving credit facility to an aggregate principal amount up to $550.0 million (the “Credit Securities Revolver”). The Credit Securities Revolver may be increased from time to time pursuant to the Third Amended Credit and Security Agreement. As of June 30, 2022, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $521.5 million at a weighted average interest rate of 3.4%.
Borrowings under the Third Amended Credit and Security Agreement will bear interest equal to the one-month Term SOFR (as defined in the Third Amended Credit and Security Agreement) for the relevant interest period, plus an applicable rate. The applicable rate is dependent on the type of loan being financed, which includes broadly syndicated, private and middle market loans meeting certain criteria as set forth in the Third Amended Credit and Security Agreement and ranges from 1.90% to 2.75% per annum during the first two years of the reinvestment period and 2.00% to 2.85% during the last year of the reinvestment period and 2.10% to 2.95% per annum during the amortization period (and, in each case, an additional 2.00% per annum following an event of default under the Third Amended Credit and Security Agreement). The reinvestment period began on December 31, 2019 (the “Closing Date”) and concludes on the earlier of (i) the date that is three years after the Closing Date, (ii) the final maturity date and (iii) the date on which the total assets under management of the Company and its wholly-owned subsidiaries is less than $1.25 billion (the “Reinvestment Period”). The final maturity date is the earliest to occur of: (i) the date that the Credit Securities Revolver is paid down and (ii) the second anniversary after the Reinvestment Period concludes. Borrowings under the Third Amended Credit and Security Agreement are secured by substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of liquid senior secured loans subject to certain eligibility criteria under the Third Amended Credit and Security Agreement.
The Company believes it was in compliance with the financial covenants under the Company’s various fixed and variable rate debt agreements, as of June 30, 2022.
Repurchase Facilities
As of June 30, 2022, indirect wholly-owned subsidiaries of the Company (collectively, the “CMFT Lending Subs”), had Master Repurchase Agreements with Citibank, Barclays Bank PLC (“Barclays”), Wells Fargo Bank, N.A. (“Wells Fargo”), Deutsche Bank AG (“Deutsche Bank”), and J.P. Morgan Securities LLC (“J.P. Morgan”) (collectively, the “Repurchase Agreements”) to provide financing primarily through each bank’s purchase of the Company’s CRE mortgage loans and CMBS and future funding advances (the “Repurchase Facilities”).
The following table is a summary of the Repurchase Facilities as of June 30, 2022 (dollar amounts in thousands):
Repurchase FacilityDate of Agreement
Maturity Date(1)
Maximum Facility Size(2)
Weighted Average Interest RateCarrying Value of Loans Financed under Repurchase FacilityAmount Financed
Citibank6/4/20208/17/2024$400,000 3.0%
(3)
$456,225 $329,153 
Barclays9/21/20209/21/20241,250,000 3.1%
(3)
1,158,109 912,598 
Wells Fargo5/20/20215/19/2024750,000 2.9%
(3)
881,515 690,810 
Deutsche Bank10/8/202110/8/2022300,000 3.5%
(4)
186,253 143,023 
J.P. Morgan6/1/20227/13/2022
(5)
(5)
2.5%
(6)
193,075 75,410 
Total$2,700,000 $2,875,177 $2,150,994 
__________________________________
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

(1)The repurchase facilities with Citibank, Barclays, and Wells Fargo are set to mature on various dates between May 2024 and September 2024, with up to two one-year extension options, while the repurchase facility with Deutsche Bank (“Deutsche Bank Repurchase Facility”) is set to mature on October 8, 2022, with four one-year extension options, all of which are subject to certain conditions set forth in the Repurchase Agreements. Subsequent to June 30, 2022, the Company exercised the Deutsche Bank Repurchase Facility’s first extension option, extending the date of maturity to October 8, 2023, as discussed in Note 17 — Subsequent Events.
(2)During the six months ended June 30, 2022, the Company increased the repurchase facility with Barclays (the “Barclays Repurchase Facility”) and Wells Fargo (the “Wells Fargo Repurchase Facility”) to provide up to $1.25 billion and $750.0 million, respectively, in financing.
(3)Advances under the repurchase agreement accrue interest at per annum rates based on the one-month LIBOR, Term SOFR (as such term is defined in the applicable Repurchase Agreement), 30-day SOFR average, or the daily compounded SOFR plus a spread ranging from 1.25% to 2.15% to be determined on a case-by-case basis between Citibank, Barclays or Wells Fargo and the CMFT Lending Subs.
(4)Under the Amended and Restated Master Repurchase Agreement with Deutsche Bank, advances under the repurchase agreement may be made based on one-month Term SOFR plus a spread designated by Deutsche Bank and the interest rate used for certain existing advances under the existing Deutsche Bank Repurchase Facility may be converted from the one-month LIBOR to one-month SOFR plus a spread ranging from 1.90% to 2.75%.
(5)Facilities under the Master Repurchase Agreement with J.P. Morgan carry a rolling term which is reset monthly. Such facilities carry no maximum facility size.
(6)Under the Master Repurchase Agreement with J.P. Morgan, advances under the repurchase agreement may be made based on one-month Term SOFR plus a spread designated by J.P. Morgan ranging from 1.20% to 1.35%.
The Repurchase Agreements provide for simultaneous agreements by Citibank, Barclays, Wells Fargo, Deutsche Bank and J.P. Morgan to re-sell such purchased CRE mortgage loans and CMBS back to CMFT Lending Subs at a certain future date or upon demand.
In connection with certain of the Repurchase Agreements, the Company (as the guarantor) entered into guaranties with Citibank, Barclays, Wells Fargo, and Deutsche Bank (the “Guaranties”), under which the Company agreed to guarantee up to 25% of the CMFT Lending Subs’ obligations under certain Repurchase Agreements.
The Repurchase Agreements and the Guaranties contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the Guaranties contain financial covenants that require the Company to maintain: (i) minimum liquidity of not less than the lower of (a) $50.0 million and (b) the greater of (A) $10.0 million and (B) 5% of the Company’s recourse indebtedness, as defined in the Guaranties; (ii) minimum consolidated net worth greater than or equal to $1.0 billion plus (a) 75% of the equity issued by the Company following the respective closing dates of the Repurchase Agreements (the “Repurchase Closing Dates”) minus (b) the aggregate amount of any redemptions or similar transaction by the Company from the Repurchase Closing Dates; (iii) maximum leverage ratio of total indebtedness to total equity less than or equal to 80%; and (iv) minimum interest coverage ratio of EBITDA (as defined in the Guaranties) to interest expense equal to or greater than 1.40. The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of June 30, 2022.
Maturities
The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to June 30, 2022 (in thousands):
Principal Repayments
Remainder of 2022$500,079 
2023140,235 
20242,520,151 
202512,763 
2026— 
Thereafter1,073,424 
Total$4,246,652 
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

NOTE 11 — COMMITMENTS AND CONTINGENCIES
Litigation
In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject.
Unfunded Commitments
As of June 30, 2022, the Company had $370.9 million of unfunded loan commitments related to its existing CRE loans held-for-investment and corporate senior loans, and $115.7 million of unfunded commitments related to the NewPoint JV. These commitments are not reflected in the accompanying condensed consolidated balance sheet.
Unfunded Liquid Senior Loans
As of June 30, 2022, the Company had $2.0 million of unfunded liquid senior loans and $22.4 million of unsettled liquid senior loan acquisitions, $14.8 million of which settled subsequent to June 30, 2022. Unsettled acquisitions are included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity.
NOTE 12 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS
The Company has incurred fees and expenses payable to CMFT Management and certain of its affiliates in connection with the acquisition, management and disposition of its assets. On August 20, 2019, the Company and CMFT Management entered into an Amended and Restated Management Agreement (the “Management Agreement”), which amended and restated that certain Advisory Agreement between the parties dated January 24, 2012.
Management and investment advisory fees
The Company pays CMFT Management a management fee, payable quarterly in arrears, equal to the greater of (a) $250,000 per annum ($62,500 per quarter) and (b) 1.50% per annum (0.375% per quarter) of the Company’s Equity (as defined in the Management Agreement).
CMFT Securities has an investment advisory and management agreement dated December 6, 2019 (the “Investment Advisory and Management Agreement”) with the Investment Advisor. CMFT Securities was formed for the purpose of holding any securities investments and certain other investments made by the Company. The Investment Advisor, a wholly-owned subsidiary of CIM, is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Pursuant to the Investment Advisory and Management Agreement, the Investment Advisor manages the day-to-day business affairs of CMFT Securities and its investments in corporate credit and real estate-related securities (collectively, the “Managed Assets”), subject to the supervision of the Board. In connection with the services provided by the Investment Advisor, CMFT Securities pays the Investment Advisor an investment advisory fee (the “Investment Advisory Fee”), payable quarterly in arrears, equal to 1.50% per annum (0.375% per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement). Because the Managed Assets are excluded from the calculation of management fees payable by the Company to CMFT Management pursuant to the Management Agreement, the total management and advisory fees payable by the Company to its external advisors are not increased as a result of the Investment Advisory and Management Agreement.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

In addition, the Investment Advisor has a sub-advisory agreement dated December 6, 2019 (the “Sub-Advisory Agreement”) with OFS Capital Management, LLC (the “Sub-Advisor”) to act as an investment sub-advisor to CMFT Securities. The Sub-Advisor is registered as an investment adviser under the Advisers Act and is an affiliate of the Investment Advisor. The Sub-Advisor principally provides investment management services with respect to the corporate credit-related securities held by CMFT Securities and its subsidiaries. The Sub-Advisor may allocate a portion of these corporate credit-related securities to its other clients, including affiliates of CIM. On a quarterly basis, the Investment Advisor designates 50% of the sum of the Investment Advisory Fee and incentive compensation attributable to the assets for which Sub-Advisor has provided investment management services payable to the Investment Advisor as sub-advisory fees.
Incentive compensation
CMFT Management is entitled to receive incentive compensation, payable with respect to each quarter, which is generally equal to the excess of (a) the product of (i) 20% and (ii) the excess of (A) Core Earnings (as defined in the Management Agreement) of the Company for the previous 12-month period, over (B) the product of (1) the Company’s Consolidated Equity (as defined in the Management Agreement) in the previous 12-month period, and (2) 7% per annum, over (b) the sum of any incentive compensation paid to CMFT Management with respect to the first three calendar quarters of such previous 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). During the three and six months ended June 30, 2022 and 2021, no incentive compensation fees were incurred.
In addition, the Investment Advisor is eligible to receive a portion of the incentive compensation payable to CMFT Management pursuant to the Management Agreement. In the event that the incentive compensation is earned and payable with respect to any quarter, CMFT Management calculates the portion of the incentive compensation that was attributable to the Managed Assets and payable to the Investment Advisor.
Expense reimbursements to related parties
The Company reimburses CMFT Management, the Investment Advisor or their affiliates for certain expenses paid or incurred in connection with the services provided to the Company. The Company will reimburse CMFT Management, the Investment Advisor, or their affiliates for salaries and benefits paid to personnel who provide services to the Company, excluding the Company’s executive officers and any portfolio management, acquisitions or investment professionals.
The Company recorded fees and expense reimbursements as shown in the table below for services provided by CMFT Management or its affiliates related to the services described above during the periods indicated (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Management fees$13,351 $11,755 $26,698 $23,332 
Expense reimbursements to related parties (1)
$3,777 $3,210 $7,471 

$5,871 
____________________________________
(1)During the six months ended June 30, 2022, the Company paid $461,000 of expense reimbursements attributable to earnout leasing costs under the Purchase and Sale Agreement, which are included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
Due to Affiliates
Of the amounts shown above, $14.4 million and $16.0 million had been incurred, but not yet paid, for services provided by CMFT Management or its affiliates in connection with the management and operating activities during the six months ended June 30, 2022 and 2021, respectively, and such amounts were recorded as liabilities of the Company as of such dates.
Development Management Agreements
On January 7, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its mezzanine loans, including 75 condominium units and 21 rental units across four buildings in New York. Upon foreclosure, and with the approval of the valuation, compensation and affiliate transactions committee of the Board, CIM NY Management, LLC, an affiliate of the Company’s manager, CMFT Management, entered into a Development Management Agreement with the indirect wholly owned subsidiaries of the Company that own each of the four buildings (the “Building Owners”), wherein CIM NY Management, LLC will act as project manager in overseeing the development and construction of property improvements in accordance with each respective Development Management Agreement (the “Development
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Services”). In consideration for the Development Services, CIM NY Management, LLC will receive a development management fee from the Building Owners equal to 4% of the aggregate gross project costs expended during the term of the Development Management Agreement, subject to the conditions in each respective Development Management Agreement. During the six months ended June 30, 2022 and 2021, the Company recorded $234,000 and $56,000, respectively, in development management fees. Additionally, CIM NY Management, LLC is reimbursed by the Building Owners for expenses incurred in connection with the Development Services, including services provided that are incidental to but not part of the Development Services. The Development Management Agreement shall remain in effect until the project completion date, and is terminable by either party with fifteen days prior notice to the other party, with or without cause.
Affiliated Investments
In September 2021, the Company co-invested $68.4 million in preferred units and $138.8 million in a mortgage loan to a third-party for the purchase of a multi-family, office and retail building in Fort Lauderdale, Florida with CIM Real Assets & Credit Fund, a fund that is advised by affiliates of CMFT Management (“CIM RACR”). During the six months ended June 30, 2022, the Company and CIM RACR upsized their investment in the preferred units with an additional $4.8 million and $364,000, respectively, and upsized their investment in the mortgage loan with an additional $6.4 million and $490,000, respectively. The Company subsequently redeemed its investment in the preferred units during the six months ended June 30, 2022 in exchange for an investment in a first mortgage loan. As a result of the upsize and the conversion of preferred units, as of June 30, 2022, the Company had $203.6 million invested in the mortgage loan.
In October 2021, the Company invested in a $130.0 million first mortgage loan, with an initial advance of $119.0 million, to a third-party, the proceeds of which were used to finance the acquisition of a property from a fund that is advised by an affiliate of CMFT Management. As of June 30, 2022, $121.2 million of the first mortgage loan was outstanding. An affiliate of CMFT Management serves as the property manager for this property and has entered into a subordination agreement with the Company in connection with the loan.
In November 2021, the Company entered into the Unconsolidated Joint Venture (the “MT-FT JV”) with CMMT Holdings, LLC, a fund that is advised by an affiliate of CMFT Management, for the purposes of investing in the NewPoint JV. The Company owns 50% of the equity interests of the MT-FT JV and has committed to fund capital to the MT-FT JV up to $212.5 million, of which $96.8 million has been funded. For more information on the NewPoint JV, see Note 2 — Summary of Significant Accounting Policies.
In December 2021, the Company invested in a $155.0 million first mortgage loan, with an initial advance of $154.0 million, to a third-party, the proceeds of which were used to finance the acquisition of a property from a fund that is advised by an affiliate of CMFT Management. As of June 30, 2022, $154.0 million of the first mortgage loan was outstanding.
During the six months ended June 30, 2022, the Company invested in a $147.0 million first mortgage loan, with an initial advance of $143.0 million, to a third-party, which was previously funded by a fund that is advised by an affiliate of CMFT Management. As of June 30, 2022, $143.3 million of the first mortgage loan was outstanding.
As a result of the CIM Income NAV Merger, the Company had an investment in CIM UII Onshore, a fund that is advised by an affiliate of CMFT Management, which was fully redeemed for $60.7 million during the six months ended June 30, 2022. See Note 2 — Summary of Significant Accounting Policies for more information on the CIM UII Onshore investment.
During the six months ended June 30, 2022, the Company and CIM RACR co-invested $55.9 million and $12.2 million, respectively, in four corporate senior loans to a third-party. As of June 30, 2022, $55.8 million of the corporate senior loans was outstanding. Subsequent to June 30, 2022, the Company and CIM RACR co-invested $20.0 million and $2.5 million, respectively, in a corporate senior loan to a third-party. The Sub-Advisor provided investment management services related to these corporate senior loans pursuant to the Sub-Advisory Agreement.
NOTE 13 — ECONOMIC DEPENDENCY
Under various agreements, the Company has engaged and may in the future engage CMFT Management or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and stockholder relations. As a result of these relationships, the Company is dependent upon CMFT Management or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.
36

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

NOTE 14 — STOCKHOLDERS’ EQUITY
Equity-Based Compensation
On August 10, 2018, the Board approved the adoption of the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), under which 400,000 of the Company’s shares of common stock were reserved for issuance and awards of approximately 284,000 shares of common stock were available for future grant at June 30, 2022. On April 27, 2022, the Board and the compensation committee of the Board approved the Amended and Restated CIM Real Estate Finance Trust, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) and the 2022 Plan was approved by the Company’s stockholders at the Company’s 2022 Annual Meeting of Stockholders held on July 12, 2022. The 2022 Plan supersedes and replaces the 2018 Plan. Awards that are granted on or after the effective date of the 2022 Plan are subject to the terms and provisions of the 2022 Plan. The total number of shares of Company common stock reserved and available for issuance under the 2022 Plan at any time during the term of the 2022 Plan are 250,000 shares, which is a reduction from 400,000 shares authorized for issuance under the 2018 Plan. Under the 2022 Plan, the Board or the compensation committee of the Board has the authority to grant certain awards to employees, non-employee directors, and consultants or advisors of the Company, including stock option awards, restricted stock awards or deferred stock awards, which awards will further align such persons’ interests with the interests of the Company’s stockholders. The Board or the compensation committee of the Board also has the authority to determine the terms of any award granted pursuant to the 2022 Plan, including vesting schedules, restrictions and acceleration of any restrictions. The 2022 Plan may be amended or terminated by the Board or the compensation committee of the Board at any time, subject to the right of the Company’s stockholders to approve certain amendments.
As of June 30, 2022, the Company has granted awards of approximately 116,000 restricted shares in the aggregate to the independent members of the Board under the 2018 Plan. As of June 30, 2022, 73,000 of the restricted shares had vested based on one year of continuous service. The remaining 43,000 restricted shares issued had not vested or been forfeited as of June 30, 2022. The fair value of the Company’s share awards is determined using the Company’s per share NAV on the date of grant. Compensation expense related to the restricted shares is recognized over the vesting period. The Company recorded compensation expense of $120,000 and $157,000 for the three and six months ended June 30, 2022, respectively, and $49,000 and $89,000 for the three and six months ended June 30, 2021, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2022, there was $285,000 of total unrecognized compensation expense related to these restricted shares, which will be recognized ratably over the applicable remaining service period.
NOTE 15 — LEASES
The Company’s real estate assets are leased to tenants under operating leases for which the terms, expirations and extension options vary. The Company’s operating leases do not convey to the lessee the right to purchase the underlying asset upon expiration of the lease period. To determine whether a contract contains a lease, the Company reviews contracts to determine if the agreement conveys the right to control the use of an asset. The Company accounts for lease and non-lease components as a single, combined operating lease component. Non-lease components primarily consist of maintenance services, including CAM, real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. Non-lease components are considered to be variable rental and other property income and are recognized in the period incurred.
As of June 30, 2022, the Company’s leases had a weighted-average remaining term of 10.6 years. Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other negotiated terms and conditions. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
37

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

As of June 30, 2022, the future minimum rental income from the Company’s real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):
Future Minimum Rental Income
Remainder of 2022$79,395 
2023158,069 
2024156,089 
2025152,295 
2026148,093 
Thereafter1,110,635 
Total$1,804,576 
A certain amount of the Company’s rental and other property income is from tenants with leases which are subject to contingent rent provisions. These contingent rents are subject to the tenant achieving periodic revenues in excess of specified levels. For the three and six months ended June 30, 2022 and 2021, the amount of the contingent rent earned by the Company was not significant.
Rental and other property income during the three and six months ended June 30, 2022 and 2021 consisted of the following (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Fixed rental and other property income (1)
$47,941 $64,060 $112,647 $130,601 
Variable rental and other property income (2)
5,567 11,242 14,597 21,631 
Total rental and other property income$53,508 $75,302 $127,244 $152,232 
__________________________________
(1)Consists primarily of fixed contractual payments from operating leases with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above- and below-market leases, and is net of uncollectible lease-related receivables.
(2)Consists primarily of tenant reimbursements for recoverable real estate taxes and property operating expenses, and percentage rent.
The Company has one property subject to a non-cancelable operating ground lease with a remaining term of 11.2 years, with a lease liability (in deferred rental income, derivative liabilities and other liabilities) and a related right-of-use (“ROU”) asset (in prepaid expenses, derivative assets and other assets) of $2.2 million in the condensed consolidated balance sheets. The lease liability and ROU asset were initially measured at the present value of the future minimum lease payments using a discount rate of 4.3%. This reflects the Company’s incremental borrowing rate, which was calculated based on the interest rate the Company would incur to borrow on a fully collateralized basis over a term similar to the lease.
The Company recognized $63,000 and $125,000 of ground lease expense during the three and six months ended June 30, 2022, of which $61,000 and $121,000 was paid in cash during the period it was recognized. As of June 30, 2022, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $125,000 for the remainder of 2022, $250,000 annually for 2023 through 2027, and $1.4 million thereafter through the maturity date of the lease in August 2033.
NOTE 16 — SEGMENT REPORTING
The Company has two reportable segments: real estate and credit. Corporate/other represents all corporate level and unallocated items and includes the Company’s other asset management activities and operating expenses. There were no changes in the structure of the Company’s internal organization that prompted the change in reportable segments. Prior period amounts have been revised to conform to the current year presentation shown below.
38

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

The following tables present segment reporting for the three and six months ended June 30, 2022 and 2021 (in thousands):
Real EstateCredit
Corporate/Other (1)
Company Total
Three Months Ended June 30, 2022
Rental and other property income$53,405 $— $103 $53,508 
Interest income— 44,984 — 44,984 
Total revenues53,405 44,984 103 98,492 
General and administrative130 (61)3,611 3,680 
Property operating4,155 — 1,094 5,249 
Real estate tax1,515 — 509 2,024 
Expense reimbursements to related parties— — 3,777 3,777 
Management fees5,196 8,155 — 13,351 
Transaction-related430 — 16 446 
Depreciation and amortization18,015 — — 18,015 
Real estate impairment8,051 — 7,945 15,996 
Increase in provision for credit losses— 4,942 — 4,942 
Total operating expenses37,492 13,036 16,952 67,480 
Gain (loss) on disposition of real estate and condominium developments, net81,181 — (74)81,107 
Operating income (loss)97,094 31,948 (16,923)112,119 
Other expense:
Gain on investment in unconsolidated entities— 1,323 — 1,323 
Interest expense and other, net(9,169)(21,698)(3,593)(34,460)
Loss on extinguishment of debt(2,257)— (3,112)(5,369)
Segment net income (loss)$85,668 $11,573 $(23,628)$73,613 
Net income allocated to noncontrolling interest(72)— — (72)
Segment net income (loss) attributable to the Company85,740 11,573 (23,628)73,685 
Total assets as of June 30, 2022
$2,399,845 $4,375,338 $255,468 $7,030,651 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021.
39

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Real EstateCredit
Corporate/Other (1) (2)
Company Total
Six Months Ended June 30, 2022
Rental and other property income
$127,044 $— $200 $127,244 
Interest income
— 76,447 — 76,447 
Total revenues
127,044 76,447 200 203,691 
General and administrative
279 169 6,707 7,155 
Property operating
11,292 — 1,684 12,976 
Real estate tax
7,866 — 871 8,737 
Expense reimbursements to related parties— — 7,471 7,471 
Management fees12,327 14,371 — 26,698 
Transaction-related
437 — 16 453 
Depreciation and amortization
37,156 — — 37,156 
Real estate impairment11,342 — 7,945 19,287 
Increase in provision for credit losses— 9,651 — 9,651 
Total operating expenses
80,699 24,191 24,694 129,584 
Gain on disposition of real estate and condominium developments, net110,446 — 3,235 113,681 
Operating income (loss)
156,791 52,256 (21,259)187,788 
Other expense:
Gain on investment in unconsolidated entities— 1,491 5,172 6,663 
Interest expense and other, net
(23,010)(35,612)(6,875)(65,497)
Loss on extinguishment of debt
(12,994)— (3,246)(16,240)
Segment net income (loss)
$120,787 $18,135 $(26,208)$112,714 
Net income allocated to noncontrolling interest(63)— — (63)
Segment net income (loss) attributable to the Company120,850 18,135 (26,208)112,777 
Total assets as of June 30, 2022
$2,399,845 $4,375,338 $255,468 $7,030,651 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021.
(2)Includes the Company’s investment in CIM UII Onshore.
40

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)


Real EstateCredit
Corporate/Other (1)
Company Total
Three Months Ended June 30, 2021
Rental and other property income
$75,203 $— $99 $75,302 
Interest income
— 16,460 — 16,460 
Total revenues
75,203 16,460 99 91,762 
General and administrative
55 331 3,219 3,605 
Property operating
7,613 — 3,743 11,356 
Real estate tax
7,196 — 510 7,706 
Expense reimbursements to related parties— — 3,210 3,210 
Management fees8,533 3,222 — 11,755 
Transaction-related
27 — — 27 
Depreciation and amortization
24,647 — — 24,647 
Real estate impairment77 — — 77 
Increase in provision for credit losses— 123 — 123 
Total operating expenses
48,148 3,676 10,682 62,506 
Gain on disposition of real estate and condominium developments, net44,976 — 1,493 46,469 
Operating income (loss)
72,031 12,784 (9,090)75,725 
Other expense:
Interest expense and other, net
(3,713)(3,341)(9,406)(16,460)
Loss on extinguishment of debt(1,372)— (106)(1,478)
Segment net income (loss)
$66,946 $9,443 $(18,602)$57,787 
Total assets as of June 30, 2021
$3,089,744 $1,479,061 $280,357 $4,849,162 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021.
41

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Real EstateCredit
Corporate/Other (1)
Company Total
Six Months Ended June 30, 2021
Rental and other property income
$151,998 $— $234 $152,232 
Interest income
— 28,413 — 28,413 
Total revenues
151,998 28,413 234 180,645 
General and administrative
119 713 7,201 8,033 
Property operating
14,742 — 6,733 21,475 
Real estate tax
15,065 — 4,860 19,925 
Expense reimbursements to related parties— — 5,871 5,871 
Management fees17,864 5,468 — 23,332 
Transaction-related
31 — — 31 
Depreciation and amortization
50,385 — — 50,385 
Real estate impairment4,377 — — 4,377 
Increase in provision for credit losses— 691 — 691 
Total operating expenses
102,583 6,872 24,665 134,120 
Gain on disposition of real estate and condominium developments, net44,976 — 1,493 46,469 
Operating income (loss)
94,391 21,541 (22,938)92,994 
Other expense:
Interest expense and other, net
(7,829)(6,888)(21,765)(36,482)
Loss on extinguishment of debt(1,372)— (106)(1,478)
Segment net income (loss)
$85,190 $14,653 $(44,809)$55,034 
Total assets as of June 30, 2021
$3,089,744 $1,479,061 $280,357 $4,849,162 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the year ended December 31, 2021.
NOTE 17 — SUBSEQUENT EVENTS
Redemptions of Shares of Common Stock
Subsequent to June 30, 2022, the Company redeemed approximately 1.3 million shares for $9.4 million (at a redemption price of $7.20 per share). The remaining redemption requests received during the three months ended June 30, 2022 totaling approximately 23.1 million shares went unfulfilled.
Investment and Disposition Activity
Subsequent to June 30, 2022, the Company’s investment and disposition activity included the following:
Disposed of the final property under contract for sale pursuant to the Purchase and Sale Agreement for total consideration of $68.3 million.
In addition to the property disposed of pursuant to the Purchase and Sale Agreement, the Company disposed of seven properties and condominium units for an aggregate gross sales price of $36.9 million, resulting in net proceeds of $33.3 million after closing costs and a net gain of approximately $1.6 million.
Invested $20.0 million in a corporate senior loan to a third-party and received principal repayments of $17.6 million.
Purchased $4.4 million in CMBS.
Settled $37.7 million of liquid senior loan transactions, $14.1 million of which were traded as of June 30, 2022.
Contributed an additional $5.4 million in capital to NP JV Holdings.
42

CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022 (Unaudited) – (Continued)

Financing Activity
Subsequent to June 30, 2022, the Company’s financing activity included the following:
Financed one of the Company’s first mortgage loans under the Mass Mutual Financing arrangement for $60.8 million.
Extended the maturity date on $49.3 million of its mortgage note payable that was set to mature in July 2022, extending the date of maturity to September 1, 2022.
Exercised the Deutsche Bank Repurchase Facility’s first extension option which was set to mature on October 8, 2022, extending the date of maturity to October 8, 2023.
Paid down the $212.5 million outstanding balance under the CIM Income NAV Credit Facility and terminated the CIM Income NAV Credit Facility. In connection with the facility pay down and termination, the Company terminated two interest rate swap agreements that held an aggregate notional value of $140.0 million upon termination.
Entered into a credit agreement with JPMorgan Chase, which provides for borrowings of $300.0 million, which includes a $100.0 million term loan facility and the ability to borrow up to $200.0 million in revolving loans under a revolving credit facility with a $30.0 million letter of credit subfacility. The term loan and the revolving facility both mature on July 15, 2025.
Borrowed $215.0 million under the credit agreement entered into with JPMorgan Chase subsequent to June 30, 2022 and repaid $100.0 million of such borrowings.
One of the Company’s interest rate swap agreements matured and the Company repaid in full $15.8 million of the underlying mortgage notes payable.

43

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see Item 1A — Risk Factors of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the condensed consolidated financial statements contained therein, and the terms “we,” “us,” “our” and the “Company” refer to CIM Real Estate Finance Trust, Inc.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. In addition, these risks and uncertainties include those associated with (i) the scope, severity and duration of the current pandemic of COVID-19 and actions taken to contain the pandemic or mitigate its impact, (ii) the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets, among others, and (iii) general economic, market and other conditions. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The forward-looking statements should be read in light of the risk factors identified in Item 1A — Risk Factors of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2021.
The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:
We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
We are subject to risks associated with tenant, geographic and industry concentrations with respect to our investments and properties.
Our properties, intangible assets and other assets, as well as the property securing our loans or other investments, may be subject to impairment charges.
We could be subject to unexpected costs or unexpected liabilities that may arise from dispositions.
We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may suffer delays or be unable to acquire, dispose of, or lease properties on advantageous terms.
We are subject to risks associated with bankruptcies or insolvencies of our borrowers and tenants and from borrower or tenant defaults generally.
Our credit and real estate investments subject us to the political, economic, capital markets and other conditions in the United States, including with respect to the effects of the COVID-19 pandemic and other events that impact the United States.
We are subject to fluctuations in interest rates which could reduce our ability to generate income on our credit investments.
We are subject to an increase in inflation that could increase our credit and real estate portfolio related costs at a higher rate than our rental income and other revenue and adversely impact demand for rental space and future extensions of our tenants’ leases.
We are subject to competition from entities engaged in lending which may impact the availability of origination and acquisition opportunities acceptable to us.
44

Table of Contents

We have substantial indebtedness, which may affect our ability to pay distributions and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.
We are subject to risks associated with the incurrence of additional secured or unsecured debt.
We may not be able to maintain profitability.
We may not generate cash flows sufficient to pay our distributions to stockholders or meet our debt service obligations.
Our continued compliance with debt covenants depends on many factors and could be impacted by current or future economic conditions associated with the COVID-19 pandemic.
We may be affected by risks resulting from losses in excess of insured limits.
We may fail to remain qualified as a REIT for U.S. federal income tax purposes.
We may be unable to successfully reposition our portfolio or list our shares on a national securities exchange in the timeframe we expect or at all.
Definitions
We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:
The phrase “annualized rental income” refers to the straight-line rental revenue under our leases on operating properties owned as of the respective reporting date, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance.
Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. The tenant generally agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease. There are various forms of net leases, most typically classified as either triple-net or double-net. Triple-net leases typically require the tenant to pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs, including roof, structure and parking lot). Double-net leases typically hold the landlord responsible for the capital expenditures for the roof and structure, while the tenant is responsible for all lease payments and remaining operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance).
Overview
We are primarily focused on originating, acquiring, financing and managing shorter duration senior secured loans, other related credit investments and core commercial real estate. Our investment strategy allows us to adapt over time in order to respond to evolving market conditions and to capitalize on investment opportunities that may arise at different points in the economic and real estate investment cycle. We are continuing our strategy as a credit focused REIT, balancing our existing core of necessity commercial real estate assets leased to creditworthy tenants under long-term net leases with a portfolio of commercial mortgage loans and other credit investments. Assuming the successful repositioning of our portfolio and subject to market conditions, we then expect to pursue a listing of our common stock on a national securities exchange, though we can provide no assurances that a listing will happen on that timeframe or at all.
We were formed on July 27, 2010, and we elected to be taxed, and conduct our operations to qualify, as a REIT for U.S. federal income tax purposes. We have no paid employees and are externally managed by CMFT Management and, with respect to investments in securities and certain other of our investments, our Investment Advisor, each of which is an affiliate of CIM, a community-focused real estate and infrastructure owner, operator, lender and developer.
As of June 30, 2022, we owned 402 properties, which consisted of 378 retail properties, 13 industrial properties, 10 office properties, and one anchored shopping center, representing 33 industry sectors and comprising 12.1 million rentable square feet of commercial space located in 45 states. As of June 30, 2022, we owned condominium developments with a net book value of $152.5 million.
As of June 30, 2022, our loan portfolio consisted of 341 loans with a net book value of $3.9 billion, and investments in real estate-related securities of $274.4 million.
In furtherance of our strategy, during the six months ended June 30, 2022, we disposed of 112 properties and an outparcel of land, encompassing 10.6 million gross rentable square feet. On December 20, 2021, certain subsidiaries of the Company
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entered into the Purchase and Sale Agreement to sell 79 shopping centers and two single-tenant properties, for which we were to receive, in the aggregate, approximately $1.32 billion in total consideration at closing. During the six months ended June 30, 2022, the sale of 80 properties closed under the Purchase and Sale Agreement for total consideration of $1.3 billion, as further discussed in Note 4 — Real Estate Assets to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q. The remaining property is classified as held for sale in the condensed consolidated balance sheets as of June 30, 2022 with a carrying value of $66.2 million. The sale of the final property closed for total consideration of $68.3 million subsequent to June 30, 2022, as further discussed in Note 17 — Subsequent Events to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Our operating results and cash flows are primarily influenced by rental and other property income from our commercial properties, interest income from our credit investments, interest expense on our indebtedness and investment and operating expenses. As 99.2% of our rentable square feet was under lease, including any month-to-month agreements, as of June 30, 2022, with a weighted average remaining lease term of 10.6 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors, including due to circumstances related to COVID-19. Our manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If CMFT Management identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease. In addition, our manager reviews our investment portfolios and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.
COVID-19
We are closely monitoring the negative impacts that the COVID-19 pandemic and the efforts to mitigate its spread are having on the economy, our tenants and our business. The extent to which the COVID-19 pandemic continues to impact our operations and those of our tenants will depend on future developments, including, among other factors, the duration, spread and resurgences of the virus, including certain variants thereof, along with related travel advisories and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, the pace, scope and efficacy of vaccination programs, and general uncertainty as to the impact of COVID-19, including related variants, on the global economy.
Macroeconomic Environment
The U.S. Federal Reserve’s recent actions to increase interest rates in order to control inflation have created further uncertainty for the economy and for our borrowers and tenants. Although the majority of our business model is such that rising interest rates will, all else being equal, correlate to increases in our net income, increases in interest rates may adversely affect our existing borrowers, tenants and owned property values. It is difficult to predict the full impact of recent changes and any future changes in interest rates or inflation.
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Operating Highlights and Key Performance Indicators
Activity from January 1, 2022 through June 30, 2022
Operating Results:
Net income attributable to the Company of $112.8 million, or $0.26 per share.
Declared aggregate distributions of $0.18 per share.
Credit Portfolio Activity:
Invested $1.2 billion in first mortgage loans and received principal repayments on loans held-for-investment of $127.1 million.
Invested $110.4 million in liquid senior loans and sold liquid senior loans for an aggregate gross sales price of $35.6 million.
Invested $259.2 million in CMBS and sold one marketable security for an aggregate gross sales price of $132,000.
Converted $68.2 million of preferred units into a CRE loan upon maturity.
Invested $55.3 million in corporate senior loans and received principal repayments of $50,000.
Real Estate Portfolio Activity:
Disposed of 112 properties and an outparcel of land for an aggregate sales price of $1.55 billion.
Disposed of condominium units for an aggregate sales price of $22.5 million.
Financing Activity:
Increased total debt by $75.2 million.
Entered into a new repurchase agreement and increased maximum financing amounts on two existing repurchase facilities to provide up to $1.25 billion and $750.0 million, respectively, to finance a portfolio of existing and future commercial real estate mortgage loans and CMBS.
Portfolio Information
The following table shows the carrying value of our portfolio by investment type as of June 30, 2022 and 2021 (dollar amounts in thousands):
 
As of June 30,
20222021
Asset CountCarrying ValueAsset CountCarrying Value
Loan Held-For-Investment
First mortgage loans28$3,171,155 48.5 %10$872,188 19.1 %
Liquid senior loans309684,866 10.4 %237484,059 10.6 %
Corporate senior loans455,218 0.8 %— — %
Less: Current expected credit losses(23,935)(0.4)%(13,011)(0.3)%
Total loans held-for-investment and related receivable, net3413,887,304 59.3 %2471,343,236 29.4 %
Real Estate-Related Securities
CMBS and equity security11274,382 4.2 %342,071 0.9 %
Real Estate
Total real estate assets and intangible lease liabilities, net4022,397,206 36.5 %4693,181,245 69.7 %
Total Investment Portfolio754$6,558,892 100.0 %719$4,566,552 100.0 %
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Credit Portfolio Information
The following table details overall statistics for our credit portfolio as of June 30, 2022 (dollar amounts in thousands):
First Mortgage Loans (1)
Liquid Senior LoansCMBS and Equity SecurityCorporate Senior Loans
Number of investments28 309 11 
Principal balance$3,196,721 $688,965 $317,550 $55,801 
Net book value$3,158,080 $674,677 $274,382 $54,547 
Unfunded loan commitments$364,221 $2,031 $— $6,649 
Weighted-average interest rate4.5 %5.1 %5.7 %7.8 %
Weighted-average maximum years to maturity (2)
4.15.07.2 5.3
____________________________________
(1)As of June 30, 2022, 100% of our loans by principal balance earned a floating rate of interest, primarily indexed to U.S. dollar LIBOR and SOFR.
(2)Maximum maturity date assumes all extension options are exercised by the borrower; however, our CRE loans may be repaid prior to such date.
Real Estate Portfolio Information
As of June 30, 2022, we owned 402 properties located in 45 states, the gross rentable square feet of which was 99.2% leased, including any month-to-month agreements, with a weighted average lease term remaining of 10.6 years. As of June 30, 2022, no single tenant accounted for greater than 10% of our 2022 annualized rental income. As of June 30, 2022, we had certain geographic and industry concentrations in our property holdings. In particular, we had properties located in Ohio, which accounted for 11% of our 2022 annualized rental income. In addition, we had tenants in the health and personal care stores and sporting goods, hobby and musical instruments store industries, which accounted for 12% and 10%, respectively, of our 2022 annualized rental income. During the six months ended June 30, 2022, we disposed of 112 properties and an outparcel of land, for an aggregate gross sales price of $1.55 billion. Additionally, during the six months ended June 30, 2022, we sold condominium units for an aggregate gross sales price of $22.5 million.
The following table shows the property statistics of our real estate assets as of June 30, 2022 and 2021:
 As of June 30,
 20222021
Number of commercial properties402469
Rentable square feet (in thousands) (1)
12,07918,564
Percentage of rentable square feet leased99.2 %93.1 %
Percentage of investment-grade tenants (2)
38.7 %38.8 %
____________________________________
(1)     Includes square feet of buildings on land parcels subject to ground leases.
(2)     Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. (“Moody’s”). The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable. The weighted average credit rating is weighted based on annualized rental income and is for only those tenants rated by Standard & Poor’s.
During the six months ended June 30, 2022 and 2021, the Company did not acquire any properties.
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Results of Operations
Overview
We are not aware of any material trends or uncertainties, other than those listed in the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021 and this Quarterly Report on Form 10-Q, the effects of the COVID-19 pandemic, and national economic conditions affecting real estate in general that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties. Currently, we are unable to predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows in future periods due to numerous uncertainties.
Same Store Analysis
Our results of operations are influenced by the timing of acquisitions and the operating performance of our real estate assets. We review our stabilized operating results, measured by net operating income, from properties that we owned for the entirety of both the current and prior year reporting periods, referred to as “same store” properties, and we believe that the presentation of operating results for same store properties provides useful information to stockholders. Net operating income is a supplemental non-GAAP financial measure of a real estate company’s operating performance. Net operating income is considered by management to be a helpful supplemental performance measure, as it enables management to evaluate the impact of occupancy, rents, leasing activity and other controllable property operating results at our real estate properties, and it provides a consistent method for the comparison of our properties. We define net operating income as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and other non-property related revenue and expense items such as (a) general and administrative expenses, (b) expense reimbursements to related parties, (c) management fees, (d) transaction-related expenses, (e) real estate impairment, (f) increase in provision for credit losses, (g) gain on disposition of real estate and condominium developments, net, (h) merger-related expenses, net and (i) interest income. Our calculation of net operating income may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net income. In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.
Comparison of the Three Months Ended June 30, 2022 and 2021
The following table reconciles net income, calculated in accordance with GAAP, to net operating income (in thousands):
For the Three Months Ended June 30,
20222021Change
Net income$73,613 $57,787 $15,826 
Loss on extinguishment of debt5,369 1,478 3,891 
Interest expense and other, net34,460 16,460 18,000 
Gain on investment in unconsolidated entities(1,323)— (1,323)
Operating income 112,119 75,725 36,394 
Gain on disposition of real estate and condominium developments, net(81,107)(46,469)(34,638)
Increase in provision for credit losses4,942 123 4,819 
Real estate impairment15,996 77 15,919 
Depreciation and amortization18,015 24,647 (6,632)
Transaction-related expenses446 27 419 
Management fees13,351 11,755 1,596 
Expense reimbursements to related parties3,777 3,210 567 
General and administrative expenses3,680 3,605 75 
Interest income(44,984)(16,460)(28,524)
Net operating income$46,235 $56,240 $(10,005)
Our operating segments include credit and real estate. Refer to Note 16 — Segment Reporting to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion of our operating segments.
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Credit Segment
Interest Income
The increase in interest income of $28.5 million for the three months ended June 30, 2022, as compared to the same period in 2021, was due to an increase in the overall size of our investment portfolio. As of June 30, 2022, we held investments in CRE loans held-for-investment of $3.2 billion, liquid senior loans of $684.9 million, corporate senior loans of $55.2 million, and CMBS and other securities of $274.4 million. As of June 30, 2021, we held investments in CRE loans held-for-investment of $872.2 million, liquid senior loans of $484.1 million, and CMBS of $42.1 million.
Increase in Provision for Credit Losses
The increase in provision for credit losses of $4.8 million during the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the increased number of loan investments entered into during the three months ended June 30, 2022, as compared to the same period in 2021.
Real Estate Segment
A total of 307 properties were acquired before April 1, 2021 and represent our “same store” properties during the three months ended June 30, 2022 and 2021. “Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after April 1, 2021.
The following table details the components of net operating income broken out between same store and non-same store properties (in thousands):
TotalSame StoreNon-Same Store
For the Three Months Ended June 30,
For the Three Months Ended June 30,
For the Three Months Ended June 30,
20222021Change20222021Change20222021Change
Rental and other property income$53,508 $75,302 $(21,794)$31,604 $30,370 $1,234 $21,904 $44,932 $(23,028)
Property operating expenses5,249 11,356 (6,107)914 1,076 (162)4,335 10,280 (5,945)
Real estate tax expenses2,024 7,706 (5,682)1,207 1,209 (2)817 6,497 (5,680)
Total property operating expenses7,273 19,062 (11,789)2,121 2,285 (164)5,152 16,777 (11,625)
Net operating income$46,235 $56,240 $(10,005)$29,483 $28,085 $1,398 $16,752 $28,155 $(11,403)
Loss on Extinguishment of Debt
The increase in loss on extinguishment of debt of $3.9 million for the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the increase in terminations of certain mortgage notes in connection with the disposition of the underlying properties during the three months ended June 30, 2022, as compared to the same period in 2021.
Gain on Investment in Unconsolidated Entities
The increase in gain on investment in unconsolidated entities of $1.3 million for the three months ended June 30, 2022, as compared to the same period in 2021, was due to the Company’s investment in NP JV Holdings, which was not invested in by the Company during the three months ended June 30, 2021.
Interest Expense and Other, Net
Interest expense and other, net also includes amortization of deferred financing costs.
The increase in interest expense and other, net, of $18.0 million for the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to an increase in the three-month average aggregate amount of debt outstanding from $2.2 billion as of June 30, 2021 to $4.1 billion as of June 30, 2022 as a result of entering into and upsizing additional repurchase agreements, originating the Mortgage Loan and Class A Notes, and assuming the CIM Income NAV Credit Facility as part of the CIM Income NAV Merger subsequent to June 30, 2021. In addition, interest expense and other, net was further increased by the unrealized loss on the Company’s equity security of $4.1 million during the three months ended June 30, 2022.
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Gain on Disposition of Real Estate and Condominium Developments, Net
The increase in gain on disposition of real estate and condominium developments, net, of $34.6 million during the three months ended June 30, 2022, as compared to the same period in 2021, was due to the disposition of 43 properties and an outparcel of land for a gain of $81.2 million, partially offset by the disposition of condominium units for a loss of $74,000 during the three months ended June 30, 2022, compared to the disposition of 46 properties for a gain of $45.0 million during the three months ended June 30, 2021.
Real Estate Impairment
The increase in real estate impairments of $15.9 million during the three months ended June 30, 2022, as compared to the same period in 2021, was due to 11 properties and certain condominium units that were deemed to be impaired, resulting in impairment charges of $16.0 million during the three months ended June 30, 2022, compared to one property that was deemed to be impaired, resulting in impairment charges of $77,000 during the three months ended June 30, 2021.
Depreciation and Amortization
The decrease in depreciation and amortization of $6.6 million during the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the disposition of 182 properties subsequent to June 30, 2021, partially offset by the acquisition of 115 properties through the CIM Income NAV Merger that closed in December 2021.
Transaction-Related Expenses
The increase in transaction-related expenses of $419,000 during the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to escrow holdbacks that were deemed uncollectible as of June 30, 2022 and were therefore written off. No such write-offs occurred during the same period in 2021.
Management Fees
We pay CMFT Management a management fee pursuant to the Management Agreement, payable quarterly in arrears, equal to the greater of (a) $250,000 per annum ($62,500 per quarter) and (b) 1.50% per annum (0.375% per quarter) of the Company’s Equity (as defined in the Management Agreement). Furthermore, as discussed in Note 12 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q, pursuant to the Investment Advisory and Management Agreement, for management of investments in the Managed Assets (as defined in the Investment Advisory and Management Agreement), CMFT Securities pays the Investment Advisor the Investment Advisory Fee, payable quarterly in arrears, equal to 1.50% per annum (0.375% per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement). Because the Managed Assets are excluded from the calculation of management fees payable by the Company to CMFT Management pursuant to the Management Agreement, the total management and advisory fees payable by the Company to its external advisors are not increased as a result of the Investment Advisory and Management Agreement. In addition, pursuant to the Sub-Advisory Agreement, in connection with providing investment management services with respect to the corporate credit-related securities held by CMFT Securities, on a quarterly basis, the Investment Advisor designates 50% of the sum of the Investment Advisory Fee payable to the Investment Advisor as sub-advisory fees.
The increase in management fees of $1.6 million during the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to increased equity from the issuance of common stock in connection with the CIM Income NAV Merger that closed in December 2021.
Expense Reimbursements to Related Parties
Pursuant to the Investment Advisory and Management Agreement, CMFT Securities reimburses the Investment Advisor for costs and expenses incurred by the Investment Advisor on its behalf. Additionally, we may be required to reimburse certain expenses incurred by CMFT Management in providing management services, subject to limitations as set forth in the Management Agreement (as discussed in Note 12 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q).
The increase in expense reimbursements to related parties of $567,000 during the three months ended June 30, 2022, as compared to the same period in 2021, was primarily due to increased operating expense reimbursements due to CMFT Management, primarily as a result of increased allocated payroll resulting from increased portfolio activity.
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General and Administrative Expenses
The primary general and administrative expense items are legal and accounting fees, banking fees and transfer agency and board of directors costs.
General and administrative expenses remained generally consistent during the three months ended June 30, 2022, as compared to the same period in 2021.
Net Operating Income
Same store property net operating income increased $1.4 million during the three months ended June 30, 2022, as compared to the same period in 2021. The increase was partially due to an increase in same store occupancy to 98.9% as of June 30, 2022 from 98.8% as of June 30, 2021.
Non-same store property net operating income decreased $11.4 million during the three months ended June 30, 2022, as compared to the same period in 2021. The decrease was primarily due to the disposition of 182 properties subsequent to June 30, 2021, partially offset by an increase in net operating income due to the acquisition of 115 properties in connection with the CIM Income NAV Merger that closed in December 2021.
Comparison of the Six Months Ended June 30, 2022 and 2021
The following table reconciles net income, calculated in accordance with GAAP, to net operating income (in thousands):
For the Six Months Ended June 30,
20222021Change
Net income$112,714 $55,034 $57,680 
Loss on extinguishment of debt16,240 1,478 14,762 
Interest expense and other, net65,497 36,482 29,015 
Gain on investment in unconsolidated entities(6,663)— (6,663)
Operating income 187,788 92,994 94,794 
Gain on disposition of real estate and condominium developments, net(113,681)(46,469)(67,212)
Increase in provision for credit losses9,651 691 8,960 
Real estate impairment19,287 4,377 14,910 
Depreciation and amortization37,156 50,385 (13,229)
Transaction-related expenses453 31 422 
Management fees26,698 23,332 3,366 
Expense reimbursements to related parties7,471 5,871 1,600 
General and administrative expenses7,155 8,033 (878)
Interest income(76,447)(28,413)(48,034)
Net operating income$105,531 $110,832 $(5,301)
Credit Segment
Interest Income
The increase in interest income of $48.0 million for the six months ended June 30, 2022, as compared to the same period in 2021, was due to an increase in the overall size of our investment portfolio. As of June 30, 2022, we held investments in CRE loans held-for-investment of $3.2 billion, liquid senior loans of $684.9 million, corporate senior loans of $55.2 million, and CMBS and other securities of $274.4 million. As of June 30, 2021, we held investments in CRE loans held-for-investment of $872.2 million, liquid senior loans of $484.1 million, and CMBS of $42.1 million.
Increase in Provision for Credit Losses
The increase in provision for credit losses of $9.0 million during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the increased number of loan investments entered into during the six months ended June 30, 2022, as compared to the same period in 2021.
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Real Estate Segment
A total of 307 properties were acquired before January 1, 2021 and represent our “same store” properties during the six months ended June 30, 2022 and 2021. “Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after January 1, 2021.
The following table details the components of net operating income broken out between same store and non-same store properties (in thousands):
TotalSame StoreNon-Same Store
For the Six Months Ended June 30,
For the Six Months Ended June 30,
For the Six Months Ended June 30,
20222021Change20222021Change20222021Change
Rental and other property income$127,244 $152,232 $(24,988)$63,150 $62,040 $1,110 $64,094 $90,192 $(26,098)
Property operating expenses12,976 21,475 (8,499)1,727 1,915 (188)11,249 19,560 (8,311)
Real estate tax expenses8,737 19,925 (11,188)2,414 2,556 (142)6,323 17,369 (11,046)
Total property operating expenses21,713 41,400 (19,687)4,141 4,471 (330)17,572 36,929 (19,357)
Net operating income$105,531 $110,832 $(5,301)$59,009 $57,569 $1,440 $46,522 $53,263 $(6,741)
Loss on Extinguishment of Debt
The increase in loss on extinguishment of debt of $14.8 million for the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the increased terminations of certain mortgage notes in connection with the disposition of the underlying properties during the six months ended June 30, 2022, as compared to the same period in 2021.
Gain on Investment in Unconsolidated Entities
The increase in gain on investment in unconsolidated entities of $6.7 million for the six months ended June 30, 2022, as compared to the same period in 2021, was due to the Company’s investment in CIM UII Onshore and NP JV Holdings, neither of which were invested in by the Company during the six months ended June 30, 2021.
Interest Expense and Other, Net
The increase in interest expense and other, net, of $29.0 million for the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to an increase in the six-month average aggregate amount of debt outstanding from $2.4 billion as of June 30, 2021 to $4.2 billion as of June 30, 2022 as a result of entering into and upsizing additional repurchase agreements, originating the Mortgage Loan and Class A Notes, and assuming the CIM Income NAV Credit Facility as part of the CIM Income NAV Merger subsequent to June 30, 2021. In addition, interest expense and other, net was further increased by the unrealized loss on the Company’s equity security of $6.4 million during the six months ended June 30, 2022.
Gain on Disposition of Real Estate and Condominium Developments, Net
The increase in gain on disposition of real estate and condominium developments, net, of $67.2 million during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the disposition of 112 properties and one outparcel of land for a gain of $110.4 million and the disposition of condominium units for a gain of $3.3 million during the six months ended June 30, 2022, compared to the disposition of 47 properties for a gain of $45.0 million during the six months ended June 30, 2021.
Real Estate Impairment
The increase in impairments of $14.9 million during the six months ended June 30, 2022, as compared to the same period in 2021, was due to 18 properties and certain condominium units that were deemed to be impaired, resulting in impairment charges of $19.3 million during the six months ended June 30, 2022, compared to five properties that were deemed to be impaired, resulting in impairment charges of $4.4 million during the six months ended June 30, 2021.
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Depreciation and Amortization
The decrease in depreciation and amortization of $13.2 million during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to the disposition of 182 properties subsequent to June 30, 2021, partially offset by the acquisition of 115 properties through the CIM Income NAV Merger that closed in December 2021.
Transaction-Related Expenses
The increase in transaction-related expenses of $422,000 during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to escrow holdbacks that were deemed uncollectible as of June 30, 2022 and were therefore written off. No such write-offs occurred during the same period in 2021.
Management Fees
The increase in management fees of $3.4 million during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to increased equity from the issuance of common stock in connection with the CIM Income NAV Merger that closed in December 2021.
Expense Reimbursements to Related Parties
The increase in expense reimbursements to related parties of $1.6 million during the six months ended June 30, 2022, as compared to the same period in 2021, was primarily due to increased operating expense reimbursements due to CMFT Management, primarily as a result of increased allocated payroll resulting from increased portfolio activity.
General and Administrative Expenses
The decrease in general and administrative expenses of $878,000 for the six months ended June 30, 2022, compared to the same period in 2021, was primarily due to increased legal expenses incurred during the six months ended June 30, 2021 related to the foreclosure completed in January 2021 to take control of the assets which previously secured the Company’s mezzanine loans, as discussed in Note 8 — Loans Held-For-Investment to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q. Such foreclosure activity did not occur during the six months ended June 30, 2022. The overall decrease was partially offset by increased expenses related to the assumption of the CIM Income NAV Credit Facility in connection with the CIM Income NAV Merger completed in December 2021.
Net Operating Income
Same store property net operating income increased $1.4 million during the six months ended June 30, 2022, as compared to the same period in 2021. The increase was partially due to an increase in same store occupancy to 98.9% as of June 30, 2022 from 98.8% as of June 30, 2021.
Non-same store property net operating income decreased $6.7 million during the six months ended June 30, 2022, as compared to the same period in 2021. The decrease was primarily due to the disposition of 182 properties subsequent to June 30, 2021, partially offset by an increase in net operating income due to the acquisition of 115 properties in connection with the CIM Income NAV Merger that closed in December 2021.
Distributions
Prior to April 1, 2020, on a quarterly basis, our Board authorized a daily distribution for the succeeding quarter. Our Board authorized the following daily distribution amounts per share for the periods indicated below:
Period CommencingPeriod EndingDaily Distribution Amount
April 14, 2012December 31, 2012$0.001707848
January 1, 2013December 31, 2015$0.001712523
January 1, 2016December 31, 2016$0.001706776
January 1, 2017December 31, 2019$0.001711452
January 1, 2020March 31, 2020$0.001706776
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On April 20, 2020, our Board decided to make a determination as to the amount and timing of distributions on a monthly, instead of a quarterly, basis until such time that we had greater visibility into the impact that the COVID-19 pandemic would have on our tenants’ ability to continue to pay rent on their leases on a timely basis or at all, the degree to which federal, state or local governmental authorities grant rent relief or other relief or amnesty programs applicable to our tenants, our ability to access the capital markets, and on the United States and worldwide financial markets and economy. On March 25, 2021, the Board resumed declaring distributions on a quarterly basis, which are paid out on a monthly basis.
Since April 2020, our Board authorized the following monthly distribution amounts per share, payable to stockholders as of the record date for the applicable month, for the periods indicated below:
Period CommencingPeriod EndingMonthly Distribution Amount
April 2020May 2020$0.0130
June 2020June 2020$0.0161
July 2020July 2020$0.0304
August 2020December 2021$0.0303
January 2022September 2022$0.0305
As of June 30, 2022, we had distributions payable of $13.3 million.
The following table presents distributions and source of distributions for the periods indicated below (dollar amounts in thousands):
Six Months Ended June 30,
20222021
AmountPercentAmountPercent
Distributions paid in cash$60,834 76 %$59,166 90 %
Distributions reinvested19,116 24 %6,660 10 %
Total distributions$79,950 100 %$65,826 100 %
Sources of distributions:
Net cash provided by operating activities (1)(2)
$79,950 100 %$65,347 99 %
Proceeds from the issuance of debt (3)
— — %479 %
Total sources$79,950 100 %$65,826 100 %
____________________________________
(1)Net cash provided by operating activities for the six months ended June 30, 2022 and 2021 was $61.2 million and $65.3 million, respectively.
(2)Our distributions covered by cash flows from operating activities for the six months ended June 30, 2022 include cash flows from operating activities in excess of distributions from prior periods of $18.7 million.
(3)Net proceeds on the repurchase facilities, credit facilities and notes payable for the six months ended June 30, 2021 was $292.2 million.
Share Redemptions
Our share redemption program permits our stockholders to sell their shares of common stock back to us, subject to certain conditions and limitations. We will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things, to the net proceeds we receive from the sale of shares under our DRIP, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We will determine whether we have sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable payment date. If we cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available from DRIP and/or the limit on the number of shares we may redeem during any quarter or year, we will give priority to the redemption of deceased stockholders’ shares. While deceased stockholders’ shares will be included in
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calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps; therefore, if the volume of requests to redeem deceased stockholders’ shares in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders’ shares would be completed in full, assuming sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were available. If sufficient proceeds from the sale of shares under our DRIP, net of shares redeemed to date, were not available to pay all such redemptions in full, the requests to redeem deceased stockholders’ shares would be honored on a pro rata basis. We next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time we receive the request, in order to reduce the expense of maintaining small accounts. Thereafter, we will honor the remaining redemption requests on a pro rata basis. Following such quarterly redemption period, if a stockholder would like to resubmit the unsatisfied portion of the prior request for redemption, such stockholder must submit a new request for redemption of such shares prior to the last day of the new quarter. Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods. In addition, our management reserves the right, in its sole discretion at any time, and from time to time, to reject any request for redemption for any reason. Our Board may choose to amend the terms of, suspend or terminate our share redemption program at any time in its sole discretion if it believes that such action is in the best interest of us and our stockholders. Any material modifications or suspension of the share redemption program will be disclosed to our stockholders as promptly as practicable in our reports filed with the SEC and via our website. During the six months ended June 30, 2022, we received valid redemption requests under our share redemption program totaling approximately 49.6 million shares, of which we redeemed approximately 1.4 million shares as of June 30, 2022 for $10.0 million (at an average redemption price of $7.20 per share) and approximately 1.3 million shares subsequent to June 30, 2022 for $9.4 million (at a redemption price of $7.20 per share). The remaining redemption requests relating to approximately 46.9 million shares went unfulfilled. A valid redemption request is one that complies with the applicable requirements and guidelines of the share redemption program then in effect. The share redemptions were funded with proceeds from the Secondary DRIP Offering and available borrowings.
Liquidity and Capital Resources
General
We expect to utilize proceeds from real estate dispositions, sales proceeds and principal payments received on credit investments, cash flows from operations and future proceeds from secured or unsecured financing to complete future acquisitions and loan originations, repayment of certain indebtedness and for general corporate uses. The sources of our operating cash flows will primarily be provided by interest income from our portfolio of credit investments and the rental and other property income received from current and future leased properties.
Sources of Liquidity
Our primary sources of liquidity include cash and cash equivalents and available borrowings under our debt facilities, which are set forth in the following table:
June 30, 2022December 31, 2021
Cash and cash equivalents$173,417 $107,381 
Unused borrowing capacity (1)
797,101 549,811 
$970,518 $657,192 
____________________________________
(1)Subject to borrowing availability.
See Note 10 — Repurchase Facilities, Credit Facilities and Notes Payable to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for additional details regarding our notes payable, credit facilities and repurchase facilities. The following table details our outstanding financing arrangements and borrowing capacity as of June 30, 2022 (in thousands):
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Portfolio Financing Outstanding Principal Balance
Maximum Capacity (1)
Notes payable – fixed rate debt$95,317 $95,317 
Notes payable – variable rate debt364,164 364,164 
First lien mortgage loan135,272 135,272 
ABS mortgage notes766,905 774,000 
Credit facilities734,000 975,000 
Repurchase facilities2,150,994 2,700,000 
(2)
Total portfolio financing$4,246,652 $5,043,753 
____________________________________
(1)Subject to borrowing availability.
(2)Facilities under the Master Repurchase Agreement with J.P. Morgan carry no maximum facility size.
Liquidity and Capital Resources
Our principal demands for funds will be for the acquisition of real estate-related securities, real estate and real estate-related assets and the payment of tenant improvements, acquisition-related expenses, operating expenses, distributions, redemptions and interest and principal on current and any future debt financings, including principal repayments of $504.2 million within the next 12 months, $228.3 million of which was paid down subsequent to June 30, 2022, as further discussed in Note 17 — Subsequent Events to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q. Subsequent to June 30, 2022, we entered into a new credit agreement with JPMorgan Chase which provides for borrowings of $300.0 million, the proceeds of which were used to pay down the $212.5 million outstanding balance under the CIM Income NAV Credit Facility. We also exercised the Deutsche Bank Repurchase Facility’s first extension option which was set to mature on October 8, 2022, extending the date of maturity to October 8, 2023.
Generally, we expect to meet our liquidity requirements through cash proceeds from real estate asset dispositions, net cash provided by operations and proceeds from the Secondary DRIP Offering, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions and loan originations. We expect that substantially all net cash flows from operations will be used to pay distributions to our stockholders after certain capital expenditures, including tenant improvements and leasing commissions, are paid; however, we have used, and may continue to use, other sources to fund distributions, as necessary, including borrowings on our unencumbered assets. To the extent that cash flows from operations are lower, distributions paid to our stockholders may be lower. Operating cash flows are expected to increase as we complete future acquisitions. We expect that substantially all net cash flows from the Secondary DRIP Offering or debt financings will be used to fund acquisitions, loan originations, certain capital expenditures, repayments of outstanding debt or distributions and redemptions to our stockholders. We believe that the resources stated above will be sufficient to satisfy our operating requirements for the foreseeable future, and we do not anticipate a need to raise funds from sources other than those described above within the next 12 months. Management intends to use the proceeds from the disposition of properties to, among other things, acquire additional high-quality net-lease properties and credit investments in furtherance of our investment objectives and for other general corporate purposes.
Contractual Obligations
As of June 30, 2022, we had debt outstanding with a carrying value of $4.2 billion and a weighted average interest rate of 3.3%. See Note 10 — Repurchase Facilities, Credit Facilities and Notes Payable to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding.
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Our contractual obligations as of June 30, 2022 were as follows (in thousands):
Payments due by period (1)
TotalLess Than 1
Year
1-3 Years3-5 YearsMore Than
5 Years
Principal payments — fixed rate debt$95,317 $16,238 $79,079 $— $— 
Interest payments — fixed rate debt (2)
7,160 3,328 3,832 — — 
Principal payments — variable rate debt364,164 49,261 — — 314,903 
Interest payments — variable rate debt (3)
55,963 10,813 21,529 21,500 2,121 
Principal payments — first lien mortgage loan135,272 — 135,272 — — 
Interest payments — first lien mortgage loan (3)
9,020 8,109 911 — — 
Principal payments — ABS mortgage notes766,905 7,740 645 — 758,520 
Interest payments — ABS mortgage notes (3)
165,253 21,313 42,801 42,743 58,396 
Principal payments — credit facilities734,000 212,500 521,500 — — 
Interest payments — credit facilities (3)
46,105 19,399 26,706 — — 
Principal payments — repurchase facilities2,150,994 218,433 1,932,561 — — 
Interest payments — repurchase facilities (3)
123,537 59,638 63,899 — — 
Total$4,653,690 $626,772 $2,828,735 $64,243 $1,133,940 
____________________________________
(1)The table does not include amounts due to CMFT Management or its affiliates pursuant to our Management Agreement because such amounts are not fixed and determinable. The table also does not include $370.9 million of unfunded commitments related to our existing CRE loans held-for-investment and corporate senior loans held-for-investment and $115.7 million of unfunded commitments related to the NewPoint JV, which are subject to the satisfaction of borrower milestones. In addition, the table does not include $2.0 million of unfunded liquid senior loans and $22.4 million of unsettled liquid senior loan acquisitions, the unsettled amount of which is included in cash and cash equivalents in the accompanying condensed consolidated balance sheet.
(2)As of June 30, 2022, we had $15.8 million of variable rate debt effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our interest rate swap agreements to calculate the debt payment obligations in future periods.
(3)Interest payments on the variable rate debt, first lien mortgage loan, ABS mortgage notes, credit facilities and repurchase facilities have been calculated based on outstanding balances as of June 30, 2022 through their respective maturity dates. This is only an estimate as actual amounts borrowed and interest rates could vary over time.
We expect to incur additional borrowings in the future to acquire additional properties and credit investments. There is no limitation on the amount we may borrow against any single improved property. As of June 30, 2022, our ratio of debt to total gross assets net of gross intangible lease liabilities was 60.8% and our ratio of debt to the fair market value of our gross assets net of gross intangible lease liabilities was 60.5%. Fair market value of our first mortgage loans is based on the estimated market value as of June 30, 2022. Fair market value of the remaining credit investments is based on the market value as of June 30, 2022. Fair market value of our real estate assets is based on the estimated market value as of March 31, 2021 that was used to determine our estimated per share NAV, and for those assets acquired from April 1, 2021 through June 30, 2022 is based on the purchase price.
Cash Flow Analysis
Operating Activities. Net cash provided by operating activities decreased by $4.1 million for the six months ended June 30, 2022, as compared to the same period in 2021. The decrease was primarily due to the disposition of 182 properties subsequent to June 30, 2021, offset by the acquisition of 115 properties through the CIM Income NAV Merger. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.
Investing Activities. Net cash used in investing activities increased $14.0 million for the six months ended June 30, 2022, as compared to the same period in 2021. The change was primarily due to an increase in the net investment in loans held-for-investment of $676.6 million and an increase in the net investment of real estate-related securities of $257.0 million, partially offset by an increase in proceeds from disposition of real estate assets of $900.8 million.
Financing Activities. Net cash provided by financing activities increased $62.6 million for the six months ended June 30, 2022, as compared to the same period in 2021. The change was primarily due to an increase in net proceeds on the repurchase
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facilities, notes payable and credit facilities of $88.4 million, partially offset by an increase in redemptions of common stock of $19.7 million due to the reinstatement of the share redemption program on April 1, 2021.
Election as a REIT
We elected to be taxed, and operate our business to qualify, as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2012. To maintain our qualification as a REIT, we must continue to meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).
If we fail to maintain our qualification as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to maintain our qualification as a REIT. We also will be disqualified for the four taxable years following the year during which qualification was lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to maintain our qualification as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying condensed consolidated financial statements. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying condensed consolidated financial statements.
Critical Accounting Policies and Significant Accounting Estimates
Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 — Summary of Significant Accounting Policies to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021. We consider our critical accounting policies to be the following:
Recoverability of Real Estate Assets;
Allocation of Purchase Price of Real Estate Assets; and
Current Expected Credit Losses.
A complete description of such policies and our considerations is contained in our Annual Report on Form 10-K for the year ended December 31, 2021. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2021 and related notes thereto.
Related-Party Transactions and Agreements
We have entered into agreements with CMFT Management and our Investment Advisor whereby we agree to pay certain fees to, or reimburse certain expenses of, CMFT Management, the Investment Advisor or their affiliates. In addition, we have invested in, and may continue to invest in, certain co-investments with funds that are advised by an affiliate of CMFT Management. We may also originate loans to third parties that use the proceeds to finance the acquisition of real estate from funds that are advised by an affiliate of CMFT Management. See Note 12 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.
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Conflicts of Interest
Richard S. Ressler, the chairman of our Board, chief executive officer and president, who is also a founder and principal of CIM and is an officer/director of certain of its affiliates, is the vice president of our manager. One of our directors, Avraham Shemesh, who is also a founder and principal of CIM and is an officer/director of certain of its affiliates, is the president and treasurer of our manager. Additionally, two of our directors, Jason Schreiber and Emily Vande Krol, are employees of CIM. Nathan D. DeBacker, our chief financial officer and treasurer, is a vice president of our manager and is an officer of certain of its affiliates. As such, there may be conflicts of interest where CMFT Management or its affiliates, while serving in the capacity as sponsor, general partner, officer, director, key personnel and/or advisor for CIM or another program sponsored or operated by affiliates of our manager, may be in conflict with us in connection with providing services to other real estate-related programs related to property acquisitions, property dispositions, and property management, among others. The compensation arrangements between affiliates of CMFT Management and these other real estate programs sponsored or operated by affiliates of our manager could influence the advice provided to us. See Part I, Item 1. Business — Conflicts of Interest in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We do not intend to hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.
Interest Rate Risk
Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We are subject to interest rate risk in connection with our investments and the related financing obligations. In general, we seek to match the interest rate characteristics of our investments with the interest rate characteristics of any related financing obligations such as repurchase agreements, bank credit facilities, term loans, revolving facilities and securitizations.
As of June 30, 2022, we had an aggregate of $3.2 billion of variable rate debt, excluding any debt subject to interest rate swap agreements and interest rate cap agreements, and therefore, we are exposed to interest rate changes in LIBOR and SOFR. As of June 30, 2022, an increase or decrease of 50 basis points in interest rates would result in an increase or decrease in interest expense of $16.2 million per year.
As of June 30, 2022, we had three interest rate swap agreements and one interest rate cap agreement outstanding, which had maturity dates ranging from July 2022 through July 2023, with an aggregate notional amount of $805.8 million and an aggregate fair value of the net derivative asset of $1.9 million. The fair value of these interest rate swap agreements and interest rate cap agreements is dependent upon existing market interest rates and spreads. As of June 30, 2022, an increase of 50 basis points in interest rates would result in a change of $1.6 million to the fair value of the net derivative asset, resulting in a net derivative asset of $3.5 million. A decrease of 50 basis points in interest rates would result in a $1.1 million change to the fair value of the net derivative asset, resulting in a net derivative liability of $758,000. Subsequent to June 30, 2022, one of our interest rate swap agreements matured, as further discussed in Note 17 — Subsequent Events to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
As the information presented above includes only those exposures that existed as of June 30, 2022, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.
These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure.
In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced its intent to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve
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Bank of New York organized the Alternative Reference Rates Committee which identified the SOFR as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts. On December 31, 2021, the FCA ceased publishing one week and two-month LIBOR, and the FCA intends to cease publishing all remaining LIBOR after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to SOFR. The Company anticipates that LIBOR will continue to be available at least until June 30, 2023. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.
As of June 30, 2022, we have interest rate swap agreements and interest rate cap agreements maturing on various dates from July 2022 through July 2023, as further discussed above, that are indexed to LIBOR. As such, we are monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition.
If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected.
While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.
Alternative rates and other market changes related to the replacement of LIBOR, including the introduction of financial products and changes in market practices, may lead to risk modeling and valuation challenges, such as adjusting interest rate accrual calculations and building a term structure for an alternative rate.
The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.
Credit Risk
Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions. We are subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, states or industries could result in a material reduction of our cash flows or material losses to us.
The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status, including the impact of the COVID-19 pandemic (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants and mitigation options.
Our loans and investments are also subject to credit risk. The performance and value of our loans and investments depend upon the owners’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us. To monitor this risk, our manager reviews our investment portfolios and in certain instances is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In
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designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of June 30, 2022 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of June 30, 2022, were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended June 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1.Legal Proceedings
In the ordinary course of business, we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we or our subsidiaries are a party or to which our properties are the subject.
Item 1A.Risk Factors
There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Our share redemption program permits our stockholders to sell their shares of common stock back to us, subject to certain conditions and limitations. We will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited, among other things, to the net proceeds we receive from the sale of shares under our DRIP, net of shares redeemed to date. In an effort to accommodate redemption requests throughout the calendar year, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. As of June 30, 2022, the estimated per share NAV was $7.20, which was determined by the Board on May 25, 2021 using a valuation date of March 31, 2021.
In general, we redeem shares on a quarterly basis. Shares are redeemed with a trade date no later than the end of the month following the end of each fiscal quarter. Any redemption capacity that is not used as a result of the withdrawal or rejection of redemption requests may be used to satisfy the redemption requests of other stockholders received for that fiscal quarter, and such redemption payments may be made at a later time than when that quarter’s redemption payments are made. During the three months ended June 30, 2022, we redeemed shares, including those redeemable due to death, as follows:
Period (1)
Total Number
of Shares
Redeemed
Average Price
Paid per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
April 1, 2022 - April 30, 2022— $— — (2)
May 1, 2022 - May 31, 20221,380,718 $7.20 1,380,718 (2)
June 1, 2022 - June 30, 202214,377 $7.20 14,377 (2)
Total1,395,095 1,395,095 (2)
____________________________________
(1)Redemptions are included in the month of payment, which is made one business day following the trade date.
(2)A description of the maximum number of shares that may be purchased under our share redemption program is included in the narrative preceding this table.
Unregistered Sales of Equity Securities
None.
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
Not applicable.
Item 5.Other Information
None.
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Item 6.Exhibits
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 (and are numbered in accordance with Item 601 of Regulation S-K).
Exhibit No.Description
3.1
3.2
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5*
10.6*
31.1*
31.2*
32.1**
101.INS*XBRL Instance Document.
101.SCH*XBRL Taxonomy Extension Schema Document.
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document.
104*Cover Page Interactive Data File (formatted as InLine XBRL and contained in Exhibit 101).
*Filed herewith.
**In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
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Table of Contents

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
CIM Real Estate Finance Trust, Inc.
(Registrant)
By:/s/ Nathan D. DeBacker
Name:Nathan D. DeBacker
Title:
Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: August 12, 2022

65
Exhibit 10.5
AMENDED AND RESTATED
CIM REAL ESTATE FINANCE TRUST, INC.
2022 EQUITY INCENTIVE PLAN
1Purpose
The purpose of this Plan is to promote the interests of the Company, and any Parent or Subsidiary thereof, by providing the opportunity to purchase or receive Shares or to receive compensation that is based upon appreciation in the value of Shares to Eligible Recipients in order to attract and retain Eligible Recipients and providing Eligible Recipients an incentive to work to increase the value of Shares and a stake in the future of the Company that corresponds to the stake of each of the Company’s Stockholders. The Plan provides for the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock Awards, Deferred Stock Units and Stock Appreciation Rights to aid the Company, and any Parent or Subsidiary thereof, in obtaining these goals.
The Plan was originally adopted by the Company (formerly known as Cole Credit Property Trust IV, Inc.) effective August 18, 2018 as the Cole Credit Property Trust IV, Inc. 2018 Equity Incentive Plan, and is amended and restated in its entirety as provided herein. This amendment and restatement of the Plan does not adversely impact any outstanding Stock Incentive of any Participant prior to the Effective Date. To the extent that the terms of this amended and restated Plan document differ from or conflict with the Plan document and Stock Incentive Agreement applicable to such Stock Incentives granted prior to the Effective Date (the “Prior Documents”) in a manner that diminishes the rights or benefits of a Participant, the Prior Documents shall control.
2Definitions
Each term set forth in this Section shall have the meaning set forth opposite such term for purposes of this Plan and any Stock Incentive Agreements under this Plan (unless noted otherwise), and for purposes of such definitions, the singular shall include the plural and the plural shall include the singular, and reference to one gender shall include the other gender. Note that some definitions may not be used in this Plan, and may be inserted here solely for possible use in Stock Incentive Agreements issued under this Plan.
2.1Amendment Date means, with respect to any amendment to this Plan pursuant to Section 12 referenced in Section 9.1, the earlier of (1) date on which this Plan is so amended by the Board, or (2) the date on which such amendment is approved by the Stockholders.
2.2Board means the Board of Directors of the Company.
2.3Business means developing, marketing, selling, or providing services related to (i) those products and services that are the same as or substantially similar to the products and services offered and/or provided by the Company (ii) the support, maintenance or related services related to the provision of the services and products provided in clause (i), or (iii) any other business engaged in by the Company.
2.4Cause shall be defined as set forth in a written employment agreement between the Participant and the Company, a Parent or a Subsidiary in existence as of the grant date, or, if no such written agreement exists or if “Cause” is not defined in such written employment agreement, “Cause” shall mean an act or acts by a Participant involving (a) the use for profit or disclosure to unauthorized Persons of confidential information or trade secrets of the Company, a Parent or a Subsidiary, (b) the breach of any contract with the Company, a Parent or a Subsidiary, (c) the violation of any fiduciary obligation to the Company, a Parent or a Subsidiary, (d) the unlawful trading in the securities of the Company, a Parent or a Subsidiary, or of another corporation based on information gained as a result of the performance of services for the Company, a Parent or a Subsidiary, (e) a felony conviction or the failure to contest prosecution of a felony, (f) willful misconduct, dishonesty, misrepresentation, embezzlement, fraud, deceit or civil rights violations, or other unlawful acts, (g) gross negligence in performing assigned duties or responsibilities on behalf of the Company, a Parent or a Subsidiary (other than a failure resulting from Disability) after written notice thereof from the Company describing the failure to perform such duties or responsibilities and giving 30 days to correct such failure, (h) the violation of any federal, state, or local law or regulation applicable to the business of the Company, a Parent or a Subsidiary, or (i) being convicted of, or entering a plea of nolo contendere to, any crime or committing any act of moral turpitude, (j) substantial and repeated failure to perform duties as reasonably directed by the Board or Participant’s direct reports, as applicable, (k) gross negligence, willful misconduct or breach of fiduciary duty with respect to the Company, a Parent or a Subsidiary or any of their customers, suppliers, licensors, licensees, employees or other business relation, (l) reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other conduct causing the Company, a Parent or a Subsidiary substantial public disgrace or disrepute or substantial economic harm, (m) any act or omission aiding or abetting a competitor, supplier or customer of the Company, a Parent or a Subsidiary to the material disadvantage or detriment of the Company, a Parent or a Subsidiary or (n) a material
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failure to observe policies or standards regarding employment practices (including nondiscrimination and sexual harassment policies) as approved by the Board from time to time.
2.5Change of Control means either of the following:
(a)any transaction or series of transactions pursuant to which the Company sells, transfers, leases, exchanges or disposes of substantially all (i.e., at least eighty-five percent (85%)) of its assets for cash or property, or for a combination of cash and property, or for other consideration; provided, however, that with respect to any such sales, transfers, leases, exchanges, or dispositions of assets pursuant to a plan of liquidation by the Company, a Change of Control shall not have been deemed to occur until the Board has completed all required actions pursuant to such plan of liquidation and the winding up of the Company; or
(b)any transaction pursuant to which Persons who are not current Stockholders of the Company acquire by merger, consolidation, reorganization, division or other business combination or transaction, or by a purchase of an interest in the Company, an interest in the Company so that after such transaction, the Stockholders of the Company immediately prior to such transaction no longer have a controlling (i.e., 50% or more) voting interest in the Company;
However, notwithstanding the foregoing, in no event shall an Initial Public Offering of the Company’s common stock constitute a Change of Control. Notwithstanding any other provision of the Plan or a Stock Incentive Agreement to the contrary, to the extent that a Stock Incentive under the Plan constitutes nonqualified deferred compensation subject to Code §409A and is payable upon a Change of Control, an event shall not be considered to be a Change of Control under the Plan with respect to such Stock Incentive unless such event is also a “change in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Code §409A.
2.6Change of Control Value of a Share, with respect to a Change of Control, shall mean the Fair Market Value of a Share as of the date of such Change of Control as determined by the Board in its complete and absolute discretion; provided, however, in determining such Fair Market Value, the Board shall not take into account any “change of control consideration” which is escrowed and paid at a date later than the Change of Control or which is subject to an “earnout” provision with post-Change of Control performance contingencies. The intent is that in determining Change of Control Value, the Board may make a subjective determination of the Fair Market Value of a Share without taking into account amounts that may be paid for a Share at a point in time occurring later than the date of the Change of Control, which will eliminate issues associated with deferred compensation. For purposes of this Section 2.6, the term “change of control consideration” shall mean, with respect to a Change of Control, all cash, debt or equity securities and other property paid or issued by an acquiring Person to the Company and/or its Stockholders in consideration for such Change of Control.
2.7Code means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
2.8Committee means any committee appointed by the Board to administer the Plan, as specified in Section 5.3 hereof. Any such committee shall be comprised entirely of Directors.
2.9Company means CIM Real Estate Finance Trust, Inc., a Maryland corporation, and any successor to such organization.
2.10Confidential Information means (a) information of the Company, or any Parent or Subsidiary thereof, to the extent not considered a Trade Secret under applicable law, that (i) relates to the business of the Company, or any Parent or Subsidiary thereof, (ii) was disclosed to Participant or of which Participant became aware of as a consequence of Participant’s relationship with the Company, or any Parent or Subsidiary thereof, (iii) possesses an element of value to the Company, or any Parent or Subsidiary thereof, (iv) is not generally known to the Company’s competitors (or any competitor of any Parent or Subsidiary thereof), and (v) would damage the Company, or any Parent or Subsidiary thereof, if disclosed, and (b) information of any third party provided to the Company, or any Parent or Subsidiary thereof, which the Company, or any Parent or Subsidiary thereof, is obligated to treat as confidential, including, but not limited to, information provided to the Company, or any Parent or Subsidiary thereof, by its licensors, suppliers, Customers, or Prospective Customers. Confidential Information includes, but is not limited to, (i) future business plans, (ii) the composition, description, schematic or design of products, future products or equipment of the Company, or any Parent or Subsidiary thereof, or any third party, (iii) communication systems, audio systems, system designs and related documentation, (iv) advertising or marketing plans, (v) information regarding independent contractors, employees, clients, licensors, suppliers, Customers, Prospective Customers, or any third party, including, but not limited to, Customer lists and Prospective Customer lists compiled by the Company, or any Parent or Subsidiary thereof, and Customer and Prospective Customer information compiled by the Company, or any Parent or Subsidiary thereof, (vi) information concerning the Company’s, or any Parent or Subsidiary’s, or a third party’s financial structure and methods and procedures of operation, (vii) price
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lists, (viii) financial information and projections, (ix) personnel data, (x) any other document or information marked or otherwise identified as confidential or proprietary, and (xi) if so marked, any equity award of other agreement entered into by Participant pursuant to this Plan. Confidential Information includes information developed by the Participant in the course of his employment by the Company or any Parent or Subsidiary thereof as if the Company furnished the same Confidential Information to the Participant in the first instance. Confidential Information shall not include any information that (i) is or becomes generally available to the public other than as a result of an unauthorized disclosure, (ii) has been independently developed and disclosed by others without violating this Plan or the legal rights of any party, or (iii) otherwise enters the public domain through lawful means.
2.11Contact means, with respect to a Participant, any interaction between such Participant and a Customer or Prospective Customer which takes place in an effort to establish, maintain, and/or further a business relationship on behalf of the Company, or any Parent or Subsidiary thereof.
2.12Continuous Service means the absence of any interruption or termination of service as an Employee or Key Person. Continuous Service shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence as approved by the Board or the chief executive officer of the Company, or any Parent or Subsidiary thereof, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company, or any Parent or Subsidiary thereof, policy adopted from time to time; or (iv) transfers between locations of the Company, or any Parent or Subsidiary thereof, or between Company, a Parent, or a Subsidiary, or any successors to such organization. However, notwithstanding anything in the foregoing to the contrary, the Board shall have complete and absolute discretion to determine whether an Employee or Key Person is in the Continuous Service of the Company, a Parent, or Subsidiary at any time.
2.13Customer means any Person to whom the Company, or any Parent or Subsidiary thereof, has sold its products or services.
2.14Deferred Stock Unit means a contractual right granted to a Participant under this Plan to receive a Share that is subject to restrictions of this Plan and the applicable Stock Incentive Agreement.
2.15Disability means a “disability” within the meaning of Code §22(e)(3), provided that the Board shall have complete and absolute discretion to determine whether a Participant incurs a Disability. Notwithstanding the foregoing, for Stock Incentives that are subject to Code §409A, Disability shall mean that a Participant is disabled under Code §409A (a)(2)(C)(i) or (ii).
2.16Director means a member of the Board.
2.17Effective Date means the “Effective Date” as set forth in Section 4 of this Plan.
2.18Eligible Recipient means an Employee and/or a Key Person.
2.19Employee means a common law employee of the Company, a Subsidiary or a Parent.
2.20Exchange Act means the Securities Exchange Act of 1934, as amended.
2.21Exercise Price means the price that shall be paid to purchase one (1) Share upon the exercise of an Option granted under this Plan.
2.22Fair Market Value of each Share on any given date means the price determined below as of the close of business on such date (provided, however, if for any reason, the Fair Market Value per Share cannot be ascertained or is unavailable for such date, the Fair Market Value per Share shall be determined as of the nearest preceding date on which such Fair Market Value can be ascertained):
(a)If the Share is listed or traded on any established stock exchange or a national market system, including without limitation the National Market of the National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, its Fair Market Value shall be the closing sale price for the Share (or the mean of the closing bid and ask prices, if no sales were reported), on such exchange or system on the date of such determination or, if the stock exchange or national market on which the Shares trade is not open on the date of determination, the last business day prior to the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or
(b)If the Share is not listed or traded on any established stock exchange or a national market system, its Fair Market Value shall be the average of the closing dealer “bid” and “ask” prices of a Share as reflected on the NASDAQ interdealer quotation system of the National Association of Securities Dealers, Inc. on the date of such determination; or
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(c)In the absence of an established public trading market for the Share, the Fair Market Value of a Share shall be determined in good faith by the Board.
2.23Forfeiture Activities means, with respect to a Participant, any of the following:
(a)Trade Secrets & Confidential Information. Such Participant (i) uses, discloses, or reverse engineers, divulges, sells, exchanges, furnishes, gives away, or transfers in any way the Trade Secrets or the Confidential Information for any purpose other than the Company’s Business, or the Business of any Parent or Subsidiary thereof, except as authorized in writing by the Company, or any Parent or Subsidiary thereof; (ii) during the Participant’s employment or other service with the Company, or any Parent or Subsidiary thereof, uses, discloses, reverse engineers, divulges, sells, exchanges, furnishes, gives away, or transfers in any way (a) any Confidential Information or Trade Secrets of any former employer or third party, or (b) any works of authorship developed in whole or in part by the Participant during any former employment or for any other party, unless authorized in writing by the former employer or third party; or (iii) after the Participant’s cessation of services for the Company, or any Parent or Subsidiary thereof, (a) retains any Trade Secrets or Confidential Information, including any copies existing in any form (including electronic form), which are in Participant’s possession or control, or (b) destroys, deletes, or alters any Trade Secrets or Confidential Information without the Company’s (or any Parent’s or Subsidiary’s) prior written consent. The Forfeiture Activities under this subsection (a) shall: (i) with regard to the Trade Secrets, remain in effect and be applicable as long as the information constitutes a Trade Secret under applicable law, and (ii) with regard to the Confidential Information, remain in effect for so long as such information constitutes Confidential Information as defined in this Plan. The confidentiality, property, and proprietary rights protections available in this Plan are in addition to, and not exclusive of, any and all other rights to which the Company, or any Parent or Subsidiary thereof, is entitled under federal and state law, including, but not limited to, rights provided under copyright laws, trade secret and confidential information laws, and laws concerning fiduciary duties.
(b)Solicitation of Customers. During the Forfeiture Period of such Participant, the Participant directly or indirectly, solicits, contacts, or attempts to solicit or contact, any Customer for the purpose of selling or providing any products or services competitive with the Business, provided that such Participant had Contact with such Customer at any time during the period in which the Participant was employed by or performed services for the Company, or any Parent or Subsidiary thereof. Nothing in this subsection (b) shall be construed to include any Customer of the Company, or any Parent or Subsidiary thereof (i) to which such Participant never sold or provided any products or services while employed by or providing services to the Company, or any Parent or Subsidiary thereof, (ii) that explicitly severed its business relationship with the Company, or any Parent or Subsidiary thereof, unless such Participant, directly or indirectly, caused or encouraged the Customer to sever the relationship, or (iii) to which Participant is selling or providing products or services the Company, or any Parent or Subsidiary thereof, no longer offers.
(c)Solicitation of Prospective Customers. During the Forfeiture Period of such Participant, the Participant, directly or indirectly, solicits any Prospective Customer of the Company, or any Parent or Subsidiary thereof, for the purpose of selling or providing any products or services competitive with the Business, provided that such Participant had Contact with such Prospective Customer during the last year of the period in which Participant was employed by or performed services for the Company, or any Parent or Subsidiary thereof (or during such period if employed or providing services for less than a year). Nothing in this subsection (c) shall be construed to include Prospective Customers of the Company, or any Parent or Subsidiary thereof, to which Participant is selling or providing any products or services which the Company, or any Parent or Subsidiary thereof, no longer offers.
(d)Solicitation of Forfeiture Period Employees. During the Forfeiture Period of such Participant, the Participant, directly or indirectly, solicits, recruits or induces any Forfeiture Period Employee to (a) terminate his employment or service relationship with the Company, or any Parent or Subsidiary thereof, or (b) work for any other Person engaged in the Business. This subsection (d) shall only apply to Forfeiture Period Employees (i) with whom such Participant had Material Interaction, or (ii) such Participant, directly or indirectly, supervised.
(e)Non-Disparagement. During the Forfeiture Period of such Participant, the Participant makes any disparaging or defamatory statements, whether written or oral, regarding the Company, or any Parent or Subsidiary thereof. This shall not preclude the Participant from responding truthfully to questions or requests for information to the government, a regulator or in a court of law in connection with a legal or regulatory investigation or proceeding.
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2.24Forfeiture Period means, with respect to a Participant, the time period during which such Participant is employed with, or is performing services for, the Company, or any Parent or Subsidiary thereof, and for a period of two (2) years thereafter.
2.25Forfeiture Period Employee means any Person who (a) is employed by or providing services to the Company, or any Parent or Subsidiary thereof, at the time Participant ceases to perform services for the Company, or any Parent or Subsidiary thereof, or (b) was employed by or providing services to the Company, or any Parent or Subsidiary thereof, during the last year in which Participant performed services for the Company, or any Parent or Subsidiary thereof (or during the period in which the Participant performed services for the Company, or any Parent or Subsidiary thereof, if the Participant performed services for the Company, or any Parent or Subsidiary thereof, for less than a year).
2.26Good Reason shall be defined as set forth in a written employment agreement between the Participant and the Company, a Parent or a Subsidiary in existence as of the grant date, or, if no such written agreement exists or if “Good Reason” is not defined in such written employment agreement, “Good Reason” shall exist if (i) the Company, or any Parent or Subsidiary thereof, without the consent of a Participant who is performing services for the Company, or any Parent or Subsidiary thereof, materially (a) diminishes such Participant’s base compensation, (b) diminishes such Participant’s authority, duties or responsibilities, (c) changes the geographic location at which such Participant must perform the services, or (d) breaches, whether by action or inaction, the agreement under which such Participant provides services; (ii) such Participant provides written notice to the Company, or any Parent or Subsidiary thereof, of the existence of such condition described in subsection (i) of this paragraph within thirty (30) days of the initial existence of such condition and provides the Company, or any Parent or Subsidiary thereof, with thirty (30) days to remedy such condition (the “Cure Period”); (iii) the Company, or any Parent or Subsidiary thereof, fails to remedy such condition within the Cure Period; and (iv) Participant elects to resign within thirty (30) days of the expiration of the Cure Period.
2.27Initial Public Offering means the closing of the Company’s initial public offering of any class or series of the Company’s equity securities pursuant to an effective registration statement filed by the Company under the Securities Act.
2.28Insider means an individual who is, on the relevant date, an officer, Director or ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.
2.29ISO or Incentive Stock Option means an option granted under this Plan to purchase Shares that is intended by the Company to satisfy the requirements of Code §422 as an incentive stock option.
2.30Key Person means (a) a member of the Board who is not an Employee, or (b) a consultant or advisor of the Company or its Parent or Subsidiary; provided, however, that any such consultant or advisor must be a Person who is providing or will be providing bona fide services to the Company, a Subsidiary or, as applicable, a Parent, with such services (i) not being in connection with the offer or sale of securities in a capital-raising transaction, and (ii) not directly or indirectly promoting or maintaining a market for securities of the Company, a Subsidiary or a Parent, within the meaning of Section 701 of the Securities Act.
2.31Material Interaction means, with respect to a Participant, any interaction between such Participant and a Forfeiture Period Employee which relates or related, directly or indirectly, to the performance of such Participant’s duties or the Forfeiture Period Employee’s duties for the Company, and any Parent or Subsidiary thereof.
2.32NQSO or Non-Qualified Stock Option means an option granted under this Plan to purchase Shares that is not intended by the Company to satisfy the requirements of Code §422.
2.33Option means a right to purchase Shares pursuant to the terms of the Plan at a stated price for a specified period of time. For purposes of the Plan, an Option may be either an ISO or a NQSO.
2.34Outside Director means a Director who is not an Employee and who qualifies as (a) a “non-employee director” under Rule 16b-3(b)(3) under the Exchange Act, as amended from time to time, and (b) an “outside director” under Code §162(m) and the regulations promulgated thereunder.
2.35Parent means any entity (other than the entity employing a Participant or for which a Participant is performing services) in an unbroken chain of entities ending with the entity employing a Participant or for which a Participant is performing services if, at the time of the granting of the Stock Incentive, each of the entities other than the entity employing the Participant or for which a Participant is performing services owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other entities in such chain. However, for purposes of interpreting any Stock Incentive Agreement issued under this Plan as of a date of determination, Parent shall mean any entity (other than the entity employing a Participant or for which a Participant
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is performing services) in an unbroken chain of entities ending with the entity employing a Participant or for which a Participant is performing services if, at the time of the granting of the Stock Incentive and thereafter through such date of determination, each of the entities other than the entity employing the Participant or for which a Participant is performing services owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other entity in such chain.
2.36Participant means an individual who receives a Stock Incentive hereunder.
2.37Person means an individual or entity.
2.38Plan means this Amended and Restated CIM Real Estate Finance Trust, Inc. 2022 Equity Incentive Plan, as may be amended from time to time.
2.39Prospective Customer means any Person to which the Company, or any Parent or Subsidiary thereof, has solicited to sell its products or services.
2.40Restricted Stock Award means an award of Shares granted to a Participant under this Plan whereby the Participant has immediate rights of ownership in the Shares underlying the award, but such Shares are subject to restrictions in accordance with the terms and provisions of this Plan and the Stock Incentive Agreement pertaining to the award and may be subject to forfeiture by the Participant until the earlier of (a) the time such restrictions lapse or are satisfied, or (b) the time such Shares are forfeited, pursuant to the terms and provisions of the Stock Incentive Agreement pertaining to the award.
2.41SAR Exercise Price means the amount per Share specified in a Stock Incentive Agreement with respect to a Stock Appreciation Right, which when subtracted from the Fair Market Value of a Share on exercise of such Stock Appreciation Right, determines the payment which the holder of such Stock Appreciation Right may be entitled to receive.
2.42Securities Act means the Securities Act of 1933, as amended.
2.43Separation from Service means a “separation from service” within the meaning of Treas. Reg. §1.409A-1(h) (without giving effect to any elective provisions that may be available under such provisions).
2.44Share means one share of common stock of the Company, and any other securities or property issued in exchange therefor or in lieu thereof as provided herein.
2.45Specified Employee means a “specified employee” as defined in Treas. Reg. §1.409A-1(i) using the identification methodology selected by the Company from time to time.
2.46Stock Appreciation Right means a right granted to a Participant pursuant to the terms and provisions of this Plan whereby the Participant, without payment to the Company (except for any applicable withholding or other taxes), receives cash, Shares, a combination thereof, or such other consideration as the Board may determine, in an amount equal to the excess of the Fair Market Value per Share on the date on which the Stock Appreciation Right is exercised over the SAR Exercise Price noted in the Stock Appreciation Right for each Share subject to the Stock Appreciation Right.
2.47Stock Incentive means an ISO, a NQSO, a Restricted Stock Award, a Deferred Stock Unit, or a Stock Appreciation Right.
2.48Stock Incentive Agreement means an agreement between the Company and a Participant evidencing an award of a Stock Incentive.
2.49Stockholder means a Person who owns stock of the Company.
2.50Stockholder Approval Date means the date that the Stockholders approve this amended and restated Plan, as described in Section 4.
2.51Subsidiary means any entity (other than the entity employing such Participant or for which such Participant is performing services) in an unbroken chain of entities beginning with the entity employing such Participant if, at the time of the granting of the Stock Incentive, each of the entities other than the last entity in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other entities in such chain. However, for purposes of interpreting any Stock Incentive Agreement issued under this Plan as of a date of determination, Subsidiary shall mean any entity (other than the entity employing such Participant or for which such Participant is performing services) in an unbroken chain of entities beginning with the entity employing such Participant if, at the time of the granting of the Stock Incentive and thereafter through such date of determination, each of the entities other than the last entity in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other entities in such chain.
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2.52Ten Percent Shareholder means a Person who owns (after taking into account the attribution rules of Code §424(d)) more than ten percent (10%) of the total combined voting power of all classes of stock of either the Company, a Subsidiary or a Parent. For purposes of the preceding sentence, stock owned (directly or indirectly) by or for a Person’s brothers and sisters (whether by the whole or half-blood), spouse, ancestors and lineal descendants will be considered to be owned by the Person, and if a domestic or foreign corporation, partnership, estate or trust owns (directly or indirectly) stock, those shares are considered to be owned proportionately by or for the Stockholders, partners, or beneficiaries of the corporation, partnership, estate or trust. The extent to which stock held by a Person as a trustee of a voting trust is considered owned by such Person is determined under all of the facts and circumstances. Stock that a Person may purchase under outstanding options is not treated as stock owned by such Person. In interpreting the foregoing, the provisions of Treas. Reg. §1.422-2(f)(2) shall govern.
2.53Trade Secrets means information of the Company, or any Parent or Subsidiary thereof, and its licensors, suppliers, clients and customers, without regard to form, including, but not limited to, technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, a list of actual Customers, clients, licensors, or suppliers, or a list of Prospective Customers, clients, licensors, or suppliers which is not commonly known by or available to the public and which information (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other Persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
3Shares Subject to Stock Incentives
3.1Maximum Aggregate Shares Issuable Pursuant to Stock Incentives. The total number of Shares that may be issued pursuant to Stock Incentives under this Plan shall not exceed Two Hundred and Fifty Thousand (250,000) Shares, as adjusted pursuant to Section 10. This limit shall include (a) the number of Shares available for issuance as of immediately prior to the amendment and restatement of this Plan, plus (b) those Shares issued under this Plan prior to its amendment and restatement that are forfeited or repurchased by the Company. Such Shares shall be reserved, to the extent that the Company deems appropriate, from authorized but unissued Shares, from Shares which have been reacquired by the Company, from Shares paid to the Company pursuant to the exercise of Stock Incentives issued under the Plan, or from Shares withheld by the Company for payment of taxes.
3.2Determination of Maximum Aggregate Shares Issuable. Any Shares subject to a Stock Incentive that remain un-issued after the cancellation, expiration, lapse or exchange of such Stock Incentive thereafter shall again become available for use under this Plan. Only the net number of Shares that are issued pursuant to the exercise of an Option shall be counted as issued in applying the provisions of Section 3.1 above in the case of an Option which is exercised through a “cashless” or “net share” exercise as described in Section 7.2(e).
3.3Maximum Aggregate Shares Issuable ISO Limitation. The total maximum number of Shares that may be issued pursuant to the exercise of ISOs under this Plan shall at all times be exactly the same as the total maximum number of Shares that may be issued pursuant to Stock Incentives under this Plan pursuant to the preceding Sections of this Section 3.
4Effective Date
The Effective Date of this Plan shall be the date it is adopted by the Board (the “Adoption Date”), or such delayed effective date as the Board may specify, as noted in resolutions effectuating such adoption. This Plan shall be subject to the approval of the Stockholders of the Company within twelve (12) months after the date on which this Plan is adopted by the Board, disregarding any contingencies or delayed effective date relative to such adoption. In the event that Stockholder approval of this Plan is not obtained, or in the event that this Plan is not subjected to the approval of the Stockholders, then any Stock Incentives granted under this Plan shall nonetheless be deemed granted pursuant to the authority of the Board; provided, however, any such Option granted which was intended to be an ISO shall instead be a NQSO. Should this Plan be rejected by the Stockholders after being submitted to the Stockholders for their approval, the Plan shall immediately terminate at that time, and no further grants shall be made under this Plan thereafter. Notwithstanding the foregoing, no ISO shall be exercisable prior to the Stockholder Approval Date unless the Participant receiving such ISO agrees that the ISO shall instead be treated as a NQSO for all purposes, and any exercise of an ISO by a Participant prior to the date that Stockholder approval of this Plan is obtained shall automatically be deemed to be such an agreement by the exercising Participant.
5Administration
5.1General Administration. This Plan shall be administered by the Board. The Board, acting in its complete and absolute discretion, shall exercise all such powers and take all such action as it deems necessary or desirable to carry out the purposes of this Plan. The Board shall have the power to interpret this Plan and, subject to the terms and provisions of this Plan, to take such other action in the administration and operation of the Plan as it deems
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equitable under the circumstances. The Board’s actions shall be binding on the Company, or any Parent or Subsidiary thereof, on each Participant, and on each other Person directly or indirectly affected by such actions.
5.2Authority of the Board. Except as limited by law or by the Articles of Incorporation or Bylaws of the Company, and subject to the provisions herein, the Board shall have full power to select Participants who shall participate in the Plan, to determine the sizes and types of Stock Incentives in a manner consistent with the Plan, to determine the terms and conditions of Stock Incentives in a manner consistent with the Plan, to construe and interpret the Plan and any agreement or instrument entered into under the Plan, to establish, amend or waive rules and regulations for the Plan’s administration, and to amend the terms and conditions of any outstanding Stock Incentives as allowed under the Plan and such Stock Incentives. Further, the Board may make all other determinations that may be necessary or advisable for the administration of the Plan.
5.3Delegation of Authority. The Board may delegate its authority under the Plan, in whole or in part, to a Committee appointed by the Board consisting of not less than one (1) Director or to one or more other Persons to whom the powers of the Board hereunder may be delegated in accordance with applicable law. The members of the Committee and any other Persons to whom authority has been delegated shall be appointed from time to time by, and shall serve at the discretion of, the Board. The Committee or other delegate (if appointed) shall act according to the policies and procedures set forth in the Plan and to those policies and procedures established by the Board, and the Committee or other delegate shall have such powers and responsibilities as are set forth by the Board. Reference to the Board in this Plan shall specifically include reference to the Committee or other delegate where the Board has delegated its authority to the Committee or other delegate, and any action by the Committee or other delegate pursuant to a delegation of authority by the Board shall be deemed an action by the Board under the Plan. Notwithstanding the above, the Board may assume the powers and responsibilities granted to the Committee or other delegate at any time, in whole or in part. With respect to Committee appointments and composition, only a Committee comprised solely of Outside Directors may grant Stock Incentives to Insiders that will be exempt from Section 16(b) of the Exchange Act.
5.4Decisions Binding. All determinations and decisions made by the Board (or its delegate) pursuant to the provisions of this Plan and all related orders and resolutions of the Board shall be final, conclusive and binding on all Persons, including the Company, or any Parent or Subsidiary thereof, its Stockholders, Directors, Participants, and their estates and beneficiaries.
5.5Indemnification for Decisions. No member of the Board or the Committee (or a subcommittee thereof) shall be liable in connection with or by reason of any act or omission performed or omitted to be performed on behalf of the Company in such capacity, provided, that the Board has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company. Service on the Committee (or a subcommittee thereof) shall constitute service as a Director of the Company, so that the members of the Committee (or a subcommittee thereof) shall be entitled to indemnification and reimbursement as Directors of the Company pursuant to its articles of incorporation, bylaws and applicable law. In addition, the members of the Board, or the Committee (or a subcommittee thereof) shall be indemnified by the Company against the following losses or liabilities reasonably incurred in connection with or by reason of any act or omission performed or omitted to be performed on behalf of the Company in such capacity, provided, that the Board has determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of the Company: (a) the reasonable expenses, including attorneys’ fees actually and necessarily incurred in connection with the defense of any action, suit or proceeding, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, any Stock Incentive granted hereunder, and (b) against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such individual is liable for gross negligence or misconduct in the performance of his duties, provided that within 60 days after institution of any such action, suit or proceeding a Committee member or delegatee shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. The Company shall not indemnify or hold harmless the member of the Board or the Committee (or a subcommittee thereof) if: (a) in the case of a Director (other than an independent Director of the Company), the loss or liability was the result of negligence or misconduct by the Director, or (b) in the case that the Director is an independent Director of the Company, the loss or liability was the result of gross negligence or willful misconduct by the Director or would not be allowed under applicable law. Any indemnification of expenses or agreement to hold harmless may be paid only out of the net assets of the Company, and no portion may be recoverable from the Stockholders of the Company.
5.6Majority Rule. A majority of the members of the Board (or its delegate) shall constitute a quorum, and any action taken by a majority at a meeting at which a quorum is present, or any action taken without a meeting
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evidenced by a writing executed by all the members of the Board (or its delegate), shall constitute action of the Board.
6Eligibility
Eligible Recipients selected by the Board shall be eligible for the grant of Stock Incentives under this Plan, but no Person shall have the right to be granted a Stock Incentive under this Plan merely as a result of his or her status as an Eligible Recipient. Only Employees shall be eligible to receive a grant of ISOs.
7Terms of Stock Incentives
7.1Terms & Conditions of All Stock Incentives.
(a)Grants of Stock Incentives. The Board, in its complete and absolute discretion, shall grant Stock Incentives under this Plan from time to time and, to the extent allowed by Sections 7.2(j) and 7.3(g) herein, shall have the right to grant new Stock Incentives in exchange for outstanding Stock Incentives, including, but not limited to, exchanges of Options for the purpose of achieving a lower Exercise Price. Stock Incentives shall be granted to Eligible Recipients selected by the Board, and the Board shall be under no obligation whatsoever to grant any Stock Incentives, or to grant Stock Incentives to all Eligible Recipients, or to grant all Stock Incentives subject to the same terms and conditions. The conditions and restrictions for a Stock Incentive need not be uniform among all Stock Incentives issued pursuant to the Plan.
(b)Shares Subject to Stock Incentives. The number of Shares as to which a Stock Incentive shall be granted shall be determined by the Board in its complete and absolute discretion, subject to the provisions of Section 3 as to the total number of Shares available for grants under the Plan.
(c)Stock Incentive Agreements. Each Stock Incentive shall be evidenced by a Stock Incentive Agreement executed by the Company, a Parent or a Subsidiary, and the Participant, which shall be in such form and contain such terms and conditions as the Board in its complete and absolute discretion may, subject to the provisions of the Plan and applicable law, from time to time determine.
(d)Date of Grant. The date a Stock Incentive is granted shall be the date on which the Board (1) has approved the terms and conditions of the Stock Incentive Agreement, (2) has determined the recipient of the Stock Incentive and the number of Shares covered by the Stock Incentive, (3) has taken all such other action necessary to direct the grant of the Stock Incentive, and (4) if applicable, any conditions imposed on such grant by the Board have been fulfilled. ISOs under this Plan must be granted within ten (10) years from the earlier of the Adoption Date and the Stockholder Approval Date.
7.2Terms & Conditions of Options.
(a)Grant of Options. Each grant of an Option shall be evidenced by a Stock Incentive Agreement that shall specify whether the Option is an ISO or NQSO, and incorporate such other terms and conditions as the Board, acting in its complete and absolute discretion, deems consistent with the terms of this Plan and applicable law (including Code §409A and in the case of ISOs, Code §422), including (without limitation) a restriction on the number of Shares subject to the Option that first become exercisable during any calendar year. If an Option is not specifically designated as an ISO, then the Option shall be a NQSO. The Board and/or the Company shall have complete and absolute discretion to modify the terms and provisions of an Option in accordance with Section 12 of this Plan even though such modification may change the Option from an ISO to a NQSO.
(b)Determining Optionees. In determining Eligible Recipient(s) to whom an Option shall be granted and the number of Shares to be covered by such Option, the Board may take into account the recommendations of the Chief Executive Officer of the Company, or any Parent or Subsidiary thereof, and its other officers, the duties of the Eligible Recipient, the present and potential contributions of the Eligible Recipient to the success of the Company, or any Parent or Subsidiary thereof, and other factors deemed relevant by the Board, in its complete and absolute discretion, in connection with accomplishing the purpose of this Plan. A Participant who has been granted an Option to purchase Shares, whether under this Plan or otherwise, may be granted one or more additional Options. If the Board grants an ISO and a NQSO to a Participant on the same date, the right of the Participant to exercise one such Option shall not be conditioned on his or her failure to exercise the other such Option.
(c)Exercise Price. Subject to adjustment in accordance with Section 10 and the other provisions of this Section, the Exercise Price shall be as set forth in the applicable Stock Incentive Agreement. With respect to each grant of an ISO to a Participant who is not a Ten Percent Shareholder, the Exercise Price shall not be less than the Fair Market Value of a Share on the date the ISO is granted. With respect to each grant of an ISO to a Participant who is a Ten Percent Shareholder, the Exercise Price shall not be less than one hundred ten
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percent (110%) of the Fair Market Value of a Share on the date the ISO is granted. If an Option is a NQSO, the Exercise Price of a Share shall be no less than (1) the minimum price required by applicable state law, or (2) the minimum price required by the Company’s governing instrument, or (3) $0.01, whichever price is greatest. Any Option that is intended to avoid taxation under Code §409A as a “nonqualified deferred compensation plan” must be granted with an Exercise Price equivalent to or greater than the Fair Market Value of a Share determined as of the date of such grant, consistent with Treas. Reg. §1.409A-1(b)(5)(iv), and any other applicable guidance or regulations issued by the Internal Revenue Service. Notwithstanding the foregoing, the Exercise Price of an Option granted in substitution of an existing Option pursuant to Treas. Reg. §1.424-1(a) or Treas. Reg. §1.409A-1(b)(5)(v)(D) may be established under the requirements of those provisions without regard to the foregoing (see subsection (h) below).
(d)Option Term. Each Option granted under this Plan shall be exercisable in whole or in part at such time or times as set forth in the related Stock Incentive Agreement, but no Stock Incentive Agreement shall:
(1)make an Option exercisable before the date such Option is granted; or
(2)make an Option exercisable after the earlier of:
(i)the date such Option is exercised in full; or
(ii)the date that is the tenth (10th) anniversary of the date such Option is granted, if such Option is a NQSO or an ISO granted to a non-Ten Percent Shareholder, or the date that is the fifth (5th) anniversary of the date such Option is granted, if such Option is an ISO granted to a Ten Percent Shareholder.
At the expiration of the term, all Options, whether vested or unvested, will be immediately forfeited and the Participant shall have no further rights therein. A Stock Incentive Agreement may provide for the exercise of an Option after the employment or service of a Participant has terminated for any reason whatsoever, including death or Disability. The Participant’s rights, if any, upon termination of employment or service will be set forth in the applicable Stock Incentive Agreement. If for any reason the period during which an ISO is exercisable extends beyond the maximum period permitted by Code §422, such Option shall automatically convert to a NQSO following the expiration of such maximum period. The exercise period of an Option shall be tolled during any period that the Option cannot be exercised because such an exercise would violate an applicable Federal, state, local or foreign law, or would jeopardize the ability of the Company to continue as a going concern; provided, however, the period during which the Option may otherwise be exercised shall be extended only thirty (30) days after the exercise of the Option first would no longer violate such applicable Federal, state, local or foreign laws or first would no longer jeopardize the ability of the Company to continue as a going concern.
(e)Payment. Options shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised accompanied by full payment for the Shares and applicable tax withholding described in this Plan and the Stock Incentive Agreement. Payment for Shares purchased pursuant to exercise of an Option shall be made in cash or, unless the Stock Incentive Agreement provides otherwise and subject to the discretion of the Board, by delivery to the Company of a number of Shares having an aggregate Fair Market Value equal to the amount to be tendered (including a “cashless” or “net share” exercise), or a combination thereof. In a “net share” exercise, the Company will reduce the number of Shares issued upon exercise by the largest whole number of Shares with a Fair Market Value that does not exceed the aggregate Exercise Price; provided, however, that the Company shall accept cash or other payment from the Optionee to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole Shares to be issued; and provided further, that Shares will no longer be outstanding under an Option and will not be exercisable thereafter to the extent that (A) Shares are used to pay the Exercise Price pursuant to the “net share” exercise, (B) Shares are delivered to the Optionee as a result of such exercise, and (C) Shares are withheld to satisfy tax withholding obligations. In addition, unless the Stock Incentive Agreement provides otherwise, the Option may be exercised through a brokerage transaction following registration of the Company’s equity securities under Section 12 of the Exchange Act as permitted under the provisions of Regulation T applicable to cashless exercises promulgated by the Federal Reserve Board, unless prohibited by Section 402 of the Sarbanes-Oxley Act of 2002. However, notwithstanding the foregoing, with respect to any Participant who is an Insider, a tender of shares or a “cashless” or “net share” exercise must (1) have met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) be a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless the Stock Incentive Agreement provides otherwise, the foregoing exercise payment methods shall be subsequent transactions approved by the original grant of an Option. Except as provided in
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subparagraph (f) below, payment shall be made at the time that the Option or any part thereof is exercised, and no Shares shall be issued or delivered upon exercise of an Option until full payment has been made by the Participant. The holder of an Option, as such, shall have none of the rights of a Stockholder. Notwithstanding the above and unless prohibited by the Sarbanes-Oxley Act of 2002, in the complete and absolute discretion of the Board, an Option may be exercised as to a portion or all (as determined by the Board) of the number of Shares specified in the Stock Incentive Agreement by delivery to the Company of a promissory note, such promissory note to be executed by the Participant and that shall include, with such other terms and conditions as the Board shall determine, provisions in a form approved by the Board under which: (i) the balance of the aggregate purchase price shall be payable in equal installments over such period and shall bear interest at such rate (that shall not be less than the prime bank loan rate as determined by the Board, that shall be established at the time of exercise, and that must be a market rate based on the rate environment at the date of exercise, taking into account the provisions of Code §7872) as the Board shall approve, and (ii) the Participant shall be personally liable for payment of the unpaid principal balance and all accrued but unpaid interest. Other methods of payment may also be used if approved by the Board in its complete and absolute discretion and provided for under the Stock Incentive Agreement.
(f)Conditions to Exercise of an Option. Each Option granted under the Plan shall vest and shall be exercisable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Board shall specify in the Stock Incentive Agreement; provided, however, that subsequent to the grant of an Option, the Board, at any time before complete termination of such Option, may accelerate the time or times at which such Option may vest or be exercised in whole or in part. The Board may impose such restrictions on any Shares acquired pursuant to the exercise of an Option as it may deem advisable, including, without limitation, vesting or performance-based restrictions, voting restrictions, investment intent restrictions, restrictions on transfer, rights of the Company to re-purchase Shares acquired pursuant to the exercise of an Option, “first refusal” rights of the Company to purchase Shares acquired pursuant to the exercise of an Option prior to their sale to any other Person, “drag along” rights requiring the sale of Shares to a third party purchaser in certain circumstances, “lock up” type restrictions in the case of an Initial Public Offering of the Company’s Shares, rights of the Company to re-purchase Shares acquired pursuant to the exercise of an Option, restrictions or limitations or other provisions that would be applied to Stockholders under any applicable agreement among the Stockholders, and restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and/or under any blue sky or state securities laws applicable to such Shares. The Board shall also require, as a condition for the acquisition of any Shares by a Participant or other Option holder pursuant to the exercise of an Option, that the Participant or Option holder execute an agreement by which the Participant or Option holder agrees to be bound by, and subject to, any agreement(s) among the Company’s Stockholders then in effect.
(g)Transferability of Options. An Option shall not be transferable or assignable except by will or by the laws of descent and distribution and shall be exercisable, during the Participant’s lifetime, only by the Participant; provided, however, that in the event the Participant is incapacitated and unable to exercise his or her Option, if such Option is a NQSO, such Option may be exercised by such Participant’s legal guardian, legal representative, or other representative whom the Board deems appropriate based on applicable facts and circumstances. The determination of incapacity of a Participant and the determination of the appropriate representative of the Participant who shall be able to exercise the Option if the Participant is incapacitated shall be determined by the Board in its complete and absolute discretion. Notwithstanding the foregoing, except as otherwise provided in the Stock Incentive Agreement, a NQSO may also be transferred by a Participant as a bona fide gift or through a domestic relations order to any “family member” (as that term is defined in Section 701 of the Securities Act) of the Participant, and in each case the transferee shall be subject to all provisions of the Plan, the Stock Incentive Agreement and other agreements with the Participant in connection with the exercise of the Option and purchase of Shares. In the event of such a gift or transfer by domestic relations order, the Participant shall promptly notify the Board of such transfer and deliver to the Board such written documentation as the Board may in its complete and absolute discretion request, including, without limitation, the written acknowledgment of the donee that the donee is subject to the provisions of the Plan, the Stock Incentive Agreement and other agreements with the Participant. Notwithstanding the foregoing, a Stock Incentive Agreement may provide for more limited transferability than is described above.
(h)Special Provisions for Certain Substitute Options. Notwithstanding anything to the contrary in this Section, any Option granted in substitution for an Option previously issued by another entity, which substitution occurs in connection with a transaction to which Code §424(a) is applicable, may provide for an exercise price computed in accordance with Code §§ 424(a) and 409A and the regulations thereunder and may contain such other terms and conditions as the Board may prescribe to cause such substitute Option to contain
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as nearly as possible the same terms and conditions (including the applicable vesting and termination provisions) as those contained in the previously issued Option being replaced thereby.
(i)ISO Tax Treatment Requirements. With respect to any Option that purports to be an ISO, to the extent that the aggregate Fair Market Value (determined as of the date of grant of such Option) of Shares with respect to which such Option is exercisable for the first time by any individual during any calendar year exceeds one hundred thousand dollars ($100,000.00), such Option shall not be treated as an ISO in accordance with Code §422(d). The rule of the preceding sentence is applied in the order in which Options are granted. Also, with respect to any Option that purports to be an ISO, such Option shall not be treated as an ISO if the Participant disposes of Shares acquired thereunder within two (2) years from the date of the granting of the Option or within one (1) year of the exercise of the Option, or if the Participant has not met the requirements of Code §422(a)(2).
(j)Potential Repricing of Stock Options. With respect to any one or more Options granted pursuant to, and under, this Plan, the Board may determine that the repricing of all or any portion of such existing outstanding Options is appropriate without the need for any additional approval of the Stockholders of the Company. For this purpose, “repricing” of Options shall include, but not be limited to, any of the following actions (or any similar action): (1) lowering the Exercise Price of an existing Option; (2) any action which would be treated as a “repricing” under generally accepted accounting principles; or (3) canceling of an existing Option at a time when its Exercise Price exceeds the Fair Market Value of the underlying Shares subject to such Option, in exchange for another Option, a Restricted Stock Award, or other equity in the Company. The Board shall have the unilateral right, without the need for any consent or acquiescence by a Participant holding an Option, to reduce the Exercise Price of such Option so long as no other terms and conditions of such Option are modified and the Participant is notified in writing of the Exercise Price reduction. Any repricing of an Option shall comply with applicable law, including the Exchange Act and Code §§ 422 and 409A if applicable.
7.3Terms and Conditions of Stock Appreciation Rights.
(a)Grants of Stock Appreciation Rights. Each grant of a Stock Appreciation Right shall be evidenced by a Stock Incentive Agreement that shall specify the terms, conditions and restrictions regarding the Stock Appreciation Right awarded to a Participant, and shall incorporate such other terms and conditions as the Board, acting in its complete and absolute discretion, deems consistent with the terms of this Plan and applicable law (including Code §409A). The Board shall have complete and absolute discretion to modify the terms and provisions of a Stock Appreciation Right in accordance with Section 12 of this Plan. A Stock Appreciation Right may be granted in connection with all or any portion of a previously or contemporaneously granted Option or not in connection with an Option. A Stock Appreciation Right shall entitle the Participant to receive upon exercise or payment the excess of the Fair Market Value of a specified number of Shares at the time of exercise, over a SAR Exercise Price that shall be not less than the SAR Exercise Price for that number of Shares in the case of a Stock Appreciation Right granted in connection with a previously or contemporaneously granted Option, or in the case of any other Stock Appreciation Right, not less than eighty-five percent (85%) of the Fair Market Value of that number of Shares at the time the Stock Appreciation Right was granted. Any Stock Appreciation Right that is intended to avoid taxation under Code §409A as a “nonqualified deferred compensation plan” must be granted with a SAR Exercise Price equivalent to or greater than the Fair Market Value of a Share determined as of the date of such grant, consistent with Treas. Reg. §1.409A-1(b)(5)(iv), and any other applicable guidance or regulations issued by the Internal Revenue Service. The exercise of a Stock Appreciation Right shall result in a pro rata surrender of the related Option to the extent the Stock Appreciation Right has been exercised.
(b)Payment. Vested Stock Appreciation Rights may be exercised in whole or in part at any time during the term by: (1) giving written notice of exercise (in a form and manner designated by the Company) to the Company specifying the number of Stock Appreciation Rights to be exercised, and (2) paying the applicable tax withholding as described in Section 13.3. Upon exercise or payment of a Stock Appreciation Right, the Company shall pay to the Participant the appreciation in cash or Shares (at the aggregate Fair Market Value on the date of payment or exercise) or a combination thereof as provided in the Stock Incentive Agreement or, in the absence of such provision, as the Board may determine. To the extent that a Stock Appreciation Right is paid in cash, it shall nonetheless be deemed paid in Shares for purposes of Section 3 hereof.
(c)Conditions to Exercise. Each Stock Appreciation Right granted under the Plan shall be exercisable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Board shall specify in the Stock Incentive Agreement; provided, however, that subsequent to the grant of a Stock Appreciation Right, the Board, at any time before complete termination of such Stock Appreciation Right, may accelerate the time or times at which such Stock Appreciation Right may be exercised in whole or in part. The exercise period of a Stock Appreciation Right shall be tolled during any period that the Stock
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Appreciation Right cannot be exercised because such an exercise would violate an applicable Federal, state, local or foreign law, or would jeopardize the ability of the Company to continue as a going concern; provided, however, the period during which the Stock Appreciation Right may otherwise be exercised shall be extended only thirty (30) days after the exercise of the Stock Appreciation Right first would no longer violate such applicable Federal, state, local or foreign laws or first would no longer jeopardize the ability of the Company to continue as a going concern.
(d)Restrictions on Shares Awarded. Shares awarded pursuant to Stock Appreciation Rights shall be subject to such restrictions as determined by the Board for periods determined by the Board. The Board may impose such restrictions on any Shares acquired pursuant to a Stock Appreciation Right as it may deem advisable, including, without limitation, vesting or performance-based restrictions, voting restrictions, investment intent restrictions, restrictions on transfer, rights of the Company to re-purchase Shares acquired pursuant to the Stock Appreciation Rights, “first refusal” rights of the Company to purchase Shares acquired pursuant to the Stock Appreciation Rights prior to their sale to any other Person, “drag along” rights requiring the sale of Shares to a third party purchaser in certain circumstances, “lock up” type restrictions in connection with an Initial Public Offering of the Company’s Shares, restrictions or limitations or other provisions that would be applied to Stockholders under any applicable agreement among the Stockholders, and restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and/or under any blue sky or state securities laws applicable to such Shares. The Board shall also require, as a condition for the acquisition of any Shares by a Participant pursuant to the exercise of a Stock Appreciation Right, that the Participant execute an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s Stockholders then in effect.
(e)Transferability of Stock Appreciation Rights. No Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, except as otherwise provided in a Participant’s Stock Incentive Agreement, all Stock Appreciation Rights granted to a Participant under the Plan shall be exercisable, during the Participant’s lifetime, only by the Participant, except that in the event the Participant is incapacitated and unable to exercise his or her Stock Appreciation Right, such Stock Appreciation Right may be exercised by such Participant’s legal guardian, legal representative, or other representative whom the Board deems appropriate based on applicable facts and circumstances. The determination of incapacity of a Participant and the determination of the appropriate representative of the Participant shall be determined by the Board in its complete and absolute discretion. Notwithstanding the foregoing, except as otherwise provided in the Stock Incentive Agreement, (A) a Stock Appreciation Right which is granted in connection with the grant of a NQSO may be transferred, but only with the NQSO, and (B) a Stock Appreciation Right which is not granted in connection with the grant of a NQSO, may be transferred by the Participant as a bona fide gift or through a domestic relations order to any “family member” (as that term is defined in Section 701 of the Securities Act) of the Participant, and in each case the transferee shall be subject to all provisions of the Plan, the Stock Incentive Agreement and other agreements with the Participant in connection with the exercise of the Stock Appreciation Right. In the event of such a gift or transfer by domestic relations order, the Participant shall promptly notify the Board of such transfer and deliver to the Board such written documentation as the Board may in its complete and absolute discretion request, including, without limitation, the written acknowledgment of the donee that the donee is subject to the provisions of the Plan, the Stock Incentive Agreement and other agreements with the Participant in connection with the exercise of the Stock Appreciation Right. Notwithstanding the foregoing, a Stock Incentive Agreement may provide for more limited transferability than is described above.
(f)Special Provisions for Tandem SARs. A Stock Appreciation Right granted in connection with an Option may only be exercised to the extent that the related Option has not been exercised. A Stock Appreciation Right granted in connection with an ISO (1) will expire no later than the expiration of the underlying ISO, (2) may be for no more than the difference between the Exercise Price of the underlying ISO and the Fair Market Value of the Shares subject to the underlying ISO at the time the Stock Appreciation Right is exercised, (3) may be transferable only when, and under the same conditions as, the underlying ISO is transferable, and (4) may be exercised only (i) when the underlying ISO could be exercised and (ii) when the Fair Market Value of the Shares subject to the ISO exceeds the Exercise Price of the ISO.
(g)Potential Repricing of SARs. With respect to any one or more Stock Appreciation Rights granted pursuant to, and under, this Plan, the Board may determine that the repricing of all or any portion of such existing outstanding Stock Appreciation Rights is appropriate without the need for any additional approval of the Stockholders of the Company. For this purpose, “repricing” of Stock Appreciation Rights shall include, but not be limited to, any of the following actions (or any similar action): (1) lowering the SAR Exercise Price of an existing Stock Appreciation Right; (2) any action which would be treated as a “repricing” under generally accepted accounting principles; or (3) canceling of an existing Stock Appreciation Right at a time when its SAR
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Exercise Price exceeds the Fair Market Value of the underlying Shares subject to such Stock Appreciation Right, in exchange for another Stock Appreciation Right, a Restricted Stock Award, or other equity in the Company. The Board shall have the unilateral right, without the need for any consent or acquiescence by a Participant holding a Stock Appreciation right, to reduce the SAR Exercise Price of such Stock Appreciation Right so long as no other terms and conditions of such Stock Appreciation Right are modified and the Participant is notified in writing of the SAR Exercise Price reduction. Any repricing of a Stock Appreciation Right shall comply with applicable law, including the Exchange Act and Code §§ 422 and 409A if applicable.
7.4Terms & Conditions of Restricted Stock Awards.
(a)Grants of Restricted Stock Awards. Each grant of a Restricted Stock Award shall be evidenced by a Stock Incentive Agreement that shall specify the terms, conditions and restrictions regarding the Restricted Stock Award awarded to a Participant, and shall incorporate such other terms and conditions as the Board, acting in its complete and absolute discretion, deems consistent with the terms of this Plan and applicable law. The Board shall have complete and absolute discretion to modify the terms and provisions of Restricted Stock Awards in accordance with Section 12 of this Plan. Restricted Stock Awards awarded pursuant to this Plan shall be subject to such restrictions (if any) as determined by the Board for periods determined by the Board.  Restricted Stock Awards issued under the Plan may have restrictions which lapse based upon the service of a Participant, or based upon the attainment (as determined by the Board) of performance goals established pursuant to business or other criteria that the Board may determine to be appropriate. Any Restricted Stock Award with restrictions that lapse based on the attainment of performance goals must be granted by a Committee, and must have its performance goals determined by such a Committee based upon one or more business or other criteria determined to be appropriate by the Board. Shares awarded pursuant to a Restricted Stock Award may be forfeited to the extent that a Participant fails to satisfy the applicable conditions or restrictions during the period of restriction. The Company may retain the certificates representing Shares subject to a Restricted Stock Award in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied. The Board may require a cash payment from the Participant in exchange for the grant of a Restricted Stock Award or may grant a Restricted Stock Award without the requirement of a cash payment.
(b)Acceleration of Award. The Board shall have the power to permit, in its complete and absolute discretion, an acceleration of the expiration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Shares awarded to a Participant as part of a Restricted Stock Award.
(c)Restrictions on Shares Awarded. Shares awarded pursuant to Restricted Stock Awards shall be subject to such restrictions as determined by the Board for periods determined by the Board. The Board may impose such restrictions on any Shares acquired pursuant to a Restricted Stock Award as it may deem advisable, including, without limitation, vesting or performance-based restrictions, voting restrictions, investment intent restrictions, restrictions on transfer, rights of the Company to re-purchase Shares acquired pursuant to the Restricted Stock Award, “first refusal” rights of the Company to purchase Shares acquired pursuant to the Restricted Stock Award prior to their sale to any other Person, “drag along” rights requiring the sale of Shares to a third party purchaser in certain circumstances, “lock up” type restrictions in connection with an Initial Public Offering of the Company’s stock, restrictions or limitations or other provisions that would be applied to Stockholders under any applicable agreement among the Stockholders, and restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and/or under any blue sky or state securities laws applicable to such Shares. The Board shall also require, as a condition for the acquisition of any Shares pursuant to a Restricted Stock Award held by a Participant, that the Participant execute an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s Stockholders then in effect.
(d)Transferability of Restricted Stock Awards. A Restricted Stock Award may not be transferred by the holder Participant, except, subject to applicable law and other applicable restrictions: (A) upon the death of the holder Participant, a Restricted Stock Award may be transferred by will or by the laws of descent and distribution, (B) a Restricted Stock Award may, unless the applicable Stock Incentive Agreement provides otherwise, be transferred at any time as a bona fide gift or through a domestic relations order to any “family member” (as that term is defined in Section 701 of the Securities Act) of the Participant; provided, however, that the transferee must be bound by all terms and provisions of the underlying Restricted Stock Award, and (C) a Restricted Stock Award may be transferred at any time following the lapse of all restrictions on transferability of the Restricted Stock Award. Notwithstanding the foregoing, a Stock Incentive Agreement may provide for more limited transferability than is described above.
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(e)Voting, Dividend & Other Rights. Each Participant receiving a Restricted Stock Award will, during the period of restriction, be the beneficial and record owner of such restricted shares and will have full voting rights with respect thereto. Unless the Board determines otherwise in a Stock Incentive Agreement, so long as the restrictions placed upon the Shares pursuant to the Restricted Stock Award constitute a “substantial risk of forfeiture” for purposes of Treas. Reg. §1.409A-1(d), then, during the period of restriction, all dividends (whether ordinary or extraordinary and whether paid in cash, additional Shares or other property) or other distributions paid upon any Restricted Stock Award Shares will be retained by the Company for the account of the relevant Participant. Such dividends or other distributions will revert back to the Company if for any reason the restricted share upon which such dividends or other distributions were paid reverts back to the Company. Upon the expiration of the period of restriction, all such dividends or other distributions made on such restricted share and retained by the Company will be paid to the relevant Participant (without interest). If the restrictions placed upon the Shares pursuant to the Restricted Stock Award do not constitute a “substantial risk of forfeiture” for purposes of Treas. Reg. §1.409A-1(d), then such dividends or other distributions will not be paid to the Participant unless the Award Agreement specifies the terms and conditions that will be applicable to such payment.
7.5Terms & Conditions of Deferred Stock Units.
(a)Grants of Deferred Stock Units. Each grant of a Deferred Stock Unit shall be evidenced by a Stock Incentive Agreement that shall specify the terms, conditions and restrictions regarding the Deferred Stock Unit awarded to a Participant, and shall incorporate such other terms and conditions as the Board, acting in its complete and absolute discretion, deems consistent with the terms of this Plan and applicable law (including Code §409A). The Board shall have complete and absolute discretion to modify the terms and provisions of a Deferred Stock Unit in accordance with Section 12 of this Plan. A Deferred Stock Unit shall entitle the Participant to receive one Share at such future time and upon such terms as specified by the Board in the Stock Incentive Agreement evidencing such award. Deferred Stock Units issued under the Plan may have restrictions which lapse based upon the service of a Participant, based upon the attainment (as determined by the Board) of performance goals, or based upon other criteria that the Board may determine appropriate. The Board may require a cash payment from the Participant in exchange for the grant of Deferred Stock Units or may grant Deferred Stock Units without the requirement of a cash payment. A Participant’s right to Shares based upon Deferred Stock Units shall be an unfunded, unsecured obligation of the Company until such time as Shares are actually issued to the Participant pursuant to the terms and provisions of the Stock Incentive Agreement evidencing such Deferred Stock Units, and such Participant shall have no right to any specific assets of the Company prior thereto.
(b)Vesting of Deferred Stock Units. The Board may establish a vesting schedule applicable to a Deferred Stock Unit and may specify the times, vesting and performance goal requirements that may be applicable to a Deferred Stock Unit. Until the end of the period(s) of time specified in any such vesting schedule and/or the satisfaction of any such performance criteria, the Deferred Stock Units subject to such Stock Incentive Agreement shall remain subject to forfeiture.
(c)Acceleration of Award. The Board shall have the power to permit, in its complete and absolute discretion, an acceleration of the applicable restrictions or the applicable period of such restrictions with respect to any part or all of the Deferred Stock Units awarded to a Participant.
(d)Transferability of Deferred Stock Units. Except as otherwise provided in a Participant’s Stock Incentive Agreement, no Deferred Stock Unit granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by the holder Participant, except upon the death of the holder Participant by will or by the laws of descent and distribution. Notwithstanding the foregoing, a Stock Incentive Agreement may provide for more limited transferability than is described above.
(e)Voting, Dividend & Other Rights. Unless the applicable Stock Incentive Agreement provides otherwise, holders of Deferred Stock Units shall not be entitled to vote or to receive dividends until they become owners of the Shares pursuant to their Deferred Stock Units.
(f)Dividend Equivalent Rights. The Board may include in the Stock Incentive Agreement with respect to any Deferred Stock Units a dividend equivalent right entitling the Participant to receive amounts equal to all or any portion of the regular cash dividends that would be paid on the Shares covered by such Deferred Stock Units if such Shares had been delivered pursuant to such award. The Participant holding a dividend equivalent right will have only the rights of a general unsecured creditor of the Company until payment of such amounts is made as specified in the applicable Stock Incentive Agreement. In the event such a provision is included in a Stock Incentive Agreement, the Board will determine whether such payments will be made in cash, in Shares or in another form, whether they will be conditioned upon the vesting of the Deferred
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Stock Units to which they relate, the time or times at which they will be made, and such other terms and conditions as the Board will deem appropriate. Notwithstanding the foregoing, a dividend equivalent right must be exempt from Code §409A or meet certain restrictions contained in Code §409A if it is to avoid taxation under Code §409A as a “nonqualified deferred compensation plan.” Grants of dividend equivalent rights under this Plan should be made with consideration of the impact of Code §409A with respect to such grant upon both the Company and the Participant of the dividend equivalent right.
(g)Code §409A Requirements. A Deferred Stock Unit must meet certain restrictions contained in Code §409A if it is to avoid taxation under Code §409A as a “nonqualified deferred compensation plan.” Grants of Deferred Stock Units under this Plan should be made with consideration of the impact of Code §409A with respect to such grant upon both the Company and the recipient of the Deferred Stock Unit.
(h)No ERISA Employee Benefit Plan Created. Except to the extent that the Board expressly determines otherwise in resolutions, a Deferred Stock Unit must contain terms and provisions designed to ensure that the Deferred Stock Unit will not be considered an “employee benefit plan” as defined in §3(3) of the Employee Retirement Income Security Act of 1974, as amended.
(i)Restrictions on Shares Awarded. Shares awarded pursuant to Deferred Stock Units shall be subject to such restrictions as determined by the Board for periods determined by the Board. The Board may impose such restrictions on any Shares acquired pursuant to a Deferred Stock Unit as it may deem advisable, including, without limitation, vesting or performance-based restrictions, voting restrictions, investment intent restrictions, restrictions on transfer, rights of the Company to re-purchase Shares acquired pursuant to the Deferred Stock Units, “first refusal” rights of the Company to purchase Shares acquired pursuant to the Deferred Stock Units prior to their sale to any other Person, “drag along” rights requiring the sale of Shares to a third party purchaser in certain circumstances, “lock up” type restrictions in connection with an Initial Public Offering of the Company’s Shares, restrictions or limitations or other provisions that would be applied to Stockholders under any applicable agreement among the Stockholders, and restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and/or under any blue sky or state securities laws applicable to such Shares. The Board shall also require, as a condition for the grant of any Shares to a Participant pursuant to Deferred Stock Units, that the Participant execute an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s Stockholders then in effect.
8Securities Regulation
8.1Notwithstanding anything to the contrary contained herein, a Participant may not be granted a Stock Incentive unless the Shares issuable under such award is then registered under the Securities Act or, if such Shares are not then so registered, the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act or the Participant has provided to the Company an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required. Each Stock Incentive Agreement may provide that, upon the receipt of Shares as a result of the exercise of a Stock Incentive or otherwise, the Participant shall, if so requested by the Company, hold such Shares for investment and not with a view of resale or distribution to the public and, if so requested by the Company, shall deliver to the Company a written statement satisfactory to the Company to that effect. Each Stock Incentive Agreement may also provide that, if so requested by the Company, the Participant shall make a written representation to the Company that he or she will not sell or offer to sell any of such Shares unless a registration statement shall be in effect with respect to such Shares under the Securities Act, and any applicable state securities law or, unless he or she shall have furnished to the Company an opinion, in form and substance satisfactory to the Company, of legal counsel acceptable to the Company, that such registration is not required. The Company shall not be required to issue any Shares under any Stock Incentive if the issuance of such Shares would constitute a violation by the Participant, the Company or any other Person of any provisions of any law or regulation of any governmental authority, including any federal or state securities laws or regulations. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the issuance of Shares pursuant hereto or pursuant to a grant of a Stock Incentive to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that Shares may not be issued pursuant to a Stock Incentive unless and until the Shares covered by such grant are registered or are exempt from registration, the issuance of Shares pursuant to such grant (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.
8.2Certificates representing the Shares transferred upon the exercise, vesting or lapse of restrictions of a Stock Incentive granted under this Plan may at the complete and absolute discretion of the Company bear a
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legend to the effect that such Shares have not been registered under the Securities Act or any applicable state securities law and that such Shares may not be sold or offered for sale in the absence of an effective registration statement as to such Shares under the Securities Act and any applicable state securities law or an opinion, in form and substance satisfactory to the Company, of legal counsel acceptable to the Company, that such registration is not required. The Company shall issue Shares upon the exercise, vesting or lapse of restrictions of a Stock Incentive either in certificate form or in book entry form, registered in the name of the Participant.
9Life of Plan
No Stock Incentive shall be granted under this Plan on or after the earlier of:
9.1the tenth (10th) anniversary of the Effective Date of this Plan (or the tenth (10th) anniversary of the Amendment Date of any subsequent amendment to this Plan if such amendment would require the approval of the Stockholders pursuant to Treas. Reg. §1.422-2(b)(2) and such approval was obtained), or
9.2the date on which all of the Shares available for issuance under Section 3 of this Plan have (as a result of the exercise of Options or Stock Appreciation Rights granted under this Plan, lapse of all restrictions under Restricted Stock Awards granted under this Plan, or vesting and payment of all Deferred Stock Units granted under this Plan) been issued or no longer are available for use under this Plan.
After such date, this Plan shall continue in effect with respect to any then-outstanding Stock Incentives until (1) all then-outstanding Options and Stock Appreciation Rights have been exercised in full or are no longer exercisable, (2) all Restricted Stock Awards have vested or been forfeited, and (3) all Deferred Stock Units have vested and been paid or been forfeited.
10Adjustment
Notwithstanding anything in Section 12 to the contrary, the number of Shares reserved under Section 3 of this Plan, the limit on the number of Shares that may be granted during a calendar year to any Participant under Section 3 of this Plan, the number and type of Shares subject to Stock Incentives granted under this Plan, and the Exercise Price of any Options and the SAR Exercise Price of any Stock Appreciation Rights, may be adjusted (in a manner that satisfies the requirements of Code §424(a) and/or Treas. Reg. §1.409A-1(b)(5)(v)(D)) by the Board in its complete and absolute discretion in an equitable manner to reflect any change in the capitalization of the Company, including, but not limited to, such changes as stock dividends or stock splits; provided, however, that the Board shall be required to make such adjustments if such change in the capitalization of the Company constitutes an “equity restructuring” as defined in FASB ASC §718-10-20. Furthermore, the Board shall have the right to, and may in its complete and absolute discretion, adjust (in a manner that satisfies the requirements of Code §424(a) and/or Treas. Reg. §1.409A-1(b)(5)(v)(D)) the number of Shares reserved under Section 3, and the number of Shares subject to Stock Incentives granted under this Plan, and the Exercise Price of any Options and the SAR Exercise Price of any Stock Appreciation Rights in the event of any corporate transaction described in Code §424(a) and/or Treas. Reg. §1.409A-1(b)(5)(v)(D) that provides for the substitution or assumption of such Stock Incentives; provided, however, that the Board shall be required to make such adjustments if such corporate transaction constitutes an “equity restructuring” as defined in FASB ASC §718-10-20. If any adjustment under this Section creates a fractional Share or a right to acquire a fractional Share, such fractional Share shall be disregarded, and the number of Shares reserved under this Plan and the number subject to any Stock Incentives granted under this Plan shall be the next lower number of Shares, rounding all fractions downward. An adjustment made under this Section by the Board shall be conclusive and binding on all affected Persons and, further, shall not constitute an increase in the number of Shares reserved under Section 3.
11Change of Control of Company
11.1General Rule for Options. Except as otherwise provided in a Stock Incentive Agreement, if a Change of Control occurs, and if the agreements effectuating the Change of Control do not provide for the assumption or substitution of all Options granted under this Plan, with respect to any Option granted under this Plan that is not so assumed or substituted (a “Non-Assumed Option”), the Committee, in its complete and absolute discretion, may, with respect to any or all of such Non-Assumed Options (including the possibility of different treatment with respect to different Participants), take any or all of the following actions (subject to the requirements and limitations of Code §§409A and 424 if applicable) to be effective as of the date of the Change of Control (or as of any other date fixed by the Committee occurring within the twenty-five (25) day period ending on the date of the Change of Control, but only if such action remains contingent upon the effectuation of the Change of Control) (such date referred to as the “Action Effective Date”), notwithstanding any provision of Section 12.4 of this Plan:
(a)Accelerate in whole or in part the vesting and/or exercisability of any such Non-Assumed Option on or before a specified Action Effective Date; and/or
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(b)Unilaterally cancel all or any portion of any such Non-Assumed Option which has not vested and/or which has not become exercisable as of a specified Action Effective Date (regardless of whether such Non-Assumed Option has any intrinsic value); and/or
(c)Unilaterally cancel all or any portion of any such Non-Assumed Option as of a specified Action Effective Date in exchange for:
(1)whole and/or fractional Shares (or for whole Shares and cash in lieu of any fractional Share) that, in the aggregate, are equal in value to the excess of the Fair Market Value of the Shares that could be purchased subject to all or the portion of such Non-Assumed Option being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate Exercise Price for such Shares; and/or
(2)cash or other property equal in value to the excess of the Fair Market Value of any Shares (or fractional Shares) that could be purchased subject to all or the portion of such Non-Assumed Option being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate Exercise Price for such Shares; and/or
(d)Unilaterally cancel all or any portion of any such Non-Assumed Option as of a specified Action Effective Date in exchange for cash or other property equal in value to the excess of the Change of Control Value of any Shares (or fractional Shares) that could be purchased subject to all or the portion of such Non-Assumed Option being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate Exercise Price for such Shares; and/or
(e)Unilaterally cancel all or any portion of any such Non-Assumed Option after a specified Action Effective Date after providing the holder of such Non-Assumed Option with (1) an opportunity to exercise all or the portion of such Non-Assumed Option being cancelled to the extent vested and/or exercisable (taking into account vesting and/or exercisability as of the date of the Change of Control) on or before such Action Effective Date, and (2) reasonable notice of such opportunity to exercise prior to such Action Effective Date; and/or
(f)Unilaterally require the exercise of, and unilaterally cause the exercise of, all or a portion of any such Non-Assumed Option by a “cashless” or “net share” exercise (as described in Section 7.2(e) hereof) as of a specified Action Effective Date; and/or
(g)Unilaterally cancel all or any portion of any such Non-Assumed Option as of a specified Action Effective Date and notify the holder of such Non-Assumed Option of such action, but only if the Fair Market Value of the Shares that could be purchased subject to all or the portion of such Non-Assumed Option being cancelled determined as of such Action Effective Date (taking into account vesting and/or exercisability) does not exceed the aggregate Exercise Price for such Shares.
(h)In each case above where the Committee has a unilateral cancellation right with respect to an Non-Assumed Option, the Committee may require that the holder of such Non-Assumed Option execute a cancellation agreement with the Participant releasing claims against the Company and any Parent or Subsidiary thereof (and any successors thereto), and, if the Committee does so require, then any payment required under the foregoing provisions shall be contingent upon such execution occurring and not being revoked, and the cancellation shall occur regardless of whether such payment is made.
With respect to subsection (d) above, notwithstanding any provision of this Plan or any Stock Incentive Agreement to the contrary, unless prohibited by the Sarbanes-Oxley Act of 2002, the Committee may, in its complete and absolute discretion, allow the holder of any such Non-Assumed Option to exercise such Non-Assumed Option under the provisions of subsection (d) above with a promissory note which shall become due and payable as of, or shortly after, the date of the Change of Control on such terms and conditions as the Committee may determine, consistent with the requirements of Code §7872. However, notwithstanding the foregoing, to the extent that the Participant holding a Non-Assumed Option is an Insider, payment of cash in lieu of whole or fractional Shares or Shares of a successor may only be made to the extent that such payment (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless a Stock Incentive Agreement provides otherwise, the payment of cash in lieu of whole or fractional Shares or in lieu of whole or fractional Shares of a successor shall be considered a subsequent transaction approved by the original grant of an Option.
11.2General Rule for SARs. Except as otherwise provided in a Stock Incentive Agreement, if a Change of Control occurs, and if the agreements effectuating the Change of Control do not provide for the
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assumption or substitution of all Stock Appreciation Rights granted under this Plan, with respect to any Stock Appreciation Right granted under this Plan that is not so assumed or substituted (a “Non-Assumed SAR”), the Committee, in its complete and absolute discretion, may, with respect to any or all of such Non-Assumed SARs (including the possibility of different treatment with respect to different Participants), take any or all of the following actions (subject to the requirements and limitations of Code §§409A and 424 if applicable) to be effective as of the date of the Change of Control (or as of any other date fixed by the Committee occurring within the twenty-five (25) day period ending on the date of the Change of Control, but only if such action remains contingent upon the effectuation of the Change of Control) (such date referred to as the “Action Effective Date”), notwithstanding any provision of Section 12.4 of this Plan:
(a)Accelerate in whole or in part the vesting and/or exercisability of such Non-Assumed SAR on or before a specified Action Effective Date; and/or
(b)Unilaterally cancel all or any portion of any such Non-Assumed SAR which has not vested or which has not become exercisable as of a specified Action Effective Date (regardless of whether such Non-Assumed SAR has any intrinsic value); and/or
(c)Unilaterally cancel all or any portion of any such Non-Assumed SAR as of a specified Action Effective Date in exchange for:
(1)whole and/or fractional Shares (or for whole Shares and cash in lieu of any fractional Share) that, in the aggregate, are equal in value to the excess of the Fair Market Value of the Shares subject to such Non-Assumed SAR being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate SAR Exercise Price for such Shares subject to such Non-Assumed SAR; and/or
(2)cash or other property equal in value to the excess of the Fair Market Value of any Shares (or fractional Shares) subject to all or any portion of such Non-Assumed SAR being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate SAR Exercise Price for such Shares subject to such Non-Assumed SAR; and/or
(d)Unilaterally cancel all or any portion of any such Non-Assumed SAR as of a specified Action Effective Date in exchange for cash or other property equal in value to the excess of the Change of Control Value of any Shares (or fractional Shares) subject to all or the portion of such Non-Assumed SAR being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) minus the aggregate SAR Exercise Price for such Shares; and/or
(e)Unilaterally cancel all or any portion of such Non-Assumed SAR as of a specified Action Effective Date after providing the holder of such SAR with (1) an opportunity to exercise all or the portion of such Non-Assumed SAR being cancelled to the extent vested and/or exercisable (taking into account vesting and/or exercisability as of the date of the Change of Control) on or before such Action Effective Date, and (2) reasonable notice of such opportunity to exercise prior to such Action Effective Date; and/or
(f)Unilaterally require the exercise of, and unilaterally cause the exercise of, all or any portion of any such Non-Assumed SAR as of a specified Action Effective Date; and/or
(g)Unilaterally cancel all or any portion of such Non-Assumed SAR and notify the holder of such SAR of such action, but only if the Fair Market Value of the Shares subject to all or the portion of such Non-Assumed SAR being cancelled determined as of the Action Effective Date (taking into account vesting and/or exercisability) does not exceed the aggregate SAR Exercise Price for such Non-Assumed SAR.
(h)In each case above where the Committee has a unilateral cancellation right with respect to a Non-Assumed SAR, the Committee may require that the holder of such Non-Assumed SAR execute a cancellation agreement with the Company releasing claims against the Company and any Parent or Subsidiary thereof (and any successors thereto), and, if the Committee does so require, then any payment required under the foregoing provisions shall be contingent upon such execution occurring and not being revoked, and the cancellation shall occur regardless of whether such payment is made.
However, notwithstanding the foregoing, to the extent that the Participant holding a Non-Assumed SAR is an Insider, payment of cash in lieu of whole or fractional Shares or Shares of a successor may only be made to the extent that such payment (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless a Stock Incentive Agreement provides otherwise, the payment of cash in lieu of
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whole or fractional Shares or in lieu of whole or fractional Shares of a successor shall be considered a subsequent transaction approved by the original grant of a SAR.
11.3General Rule for Deferred Stock Units. Except as otherwise provided in a Stock Incentive Agreement, if a Change of Control occurs, and if the agreements effectuating the Change of Control do not provide for the assumption or substitution of all Deferred Stock Units granted under this Plan, with respect to any Deferred Stock Unit granted under this Plan that is not so assumed or substituted (a “Non-Assumed DSU”), the Committee, in its complete and absolute discretion, may, with respect to any or all of such Non-Assumed DSUs (including the possibility of different treatment with respect to different Participants), take any or all of the following actions to be effective as of the date of the Change of Control (or as of any other date fixed by the Committee occurring within the twenty-five (25) day period ending on the date of the Change of Control, but only if such action remains contingent upon the effectuation of the Change of Control) (such date referred to as the “Action Effective Date”) and only if such action does not cause the affected Non-Assumed DSU to fail to comply with Code §409A or to fail to be exempt from Code §409A, notwithstanding any provision of Section 12.4 of this Plan:
(a)Accelerate in whole or in part the vesting of such Non-Assumed DSU on or before a specified Action Effective Date; and/or
(b)Unilaterally cancel all or any portion of any such Non-Assumed DSU which has not vested as of a specified Action Effective Date (regardless of whether such Non-Assumed DSU has any intrinsic value); and/or
(c)Unilaterally cancel all or any portion of such Non-Assumed DSU as of a specified Action Effective Date and notify the holder of such Non-Assumed DSU of such action, but only if the Fair Market Value of the Shares that were subject to all or the portion of such Non-Assumed DSU being cancelled determined as of the Action Effective Date (taking into account vesting) is zero.
However, notwithstanding the foregoing, to the extent that the Participant holding a Non-Assumed DSU is an Insider, payment of cash in lieu of whole or fractional Shares or Shares of a successor may only be made to the extent that such payment (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless a Stock Incentive Agreement provides otherwise, the payment of cash in lieu of whole or fractional Shares or in lieu of whole or fractional Shares of a successor shall be considered a subsequent transaction approved by the original grant of a Deferred Stock Unit.
11.4General Rule for Other Stock Incentive Agreements. If a Change of Control occurs, then, except to the extent otherwise provided in the Stock Incentive Agreement pertaining to a particular Stock Incentive or as otherwise provided in this Plan, each Stock Incentive shall be governed by applicable law and the documents effectuating the Change of Control.
12Amendment or Termination
12.1Amendment of the Plan. This Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate; provided, however, Stockholder approval of an amendment to the Plan may be necessary (1) in order for the Plan to continue to be able to issue ISOs under Code §422 pursuant to Treas. Reg. §1.422-2(b)(2)(iii), and (2) in order for the Plan to comply with rules promulgated by an established stock exchange or a national market system if the Company is, or becomes, listed or traded on any such established stock exchange or national market system, and, in all cases, the Board shall determine whether approval by the Stockholders shall be requested and/or required in its complete and absolute discretion after due consideration of such matters. Any amendment of the Plan shall be applicable to outstanding Stock Incentives, except to the extent that such amendment diminishes the rights or benefits of a Participant under a Stock Incentive which has been granted prior to the date of such amendment (provided, however, that a modification, amendment or cancellation that results solely in a change in the tax consequences with respect to a Stock Incentive shall not be deemed as a diminishment of rights or benefits of such Stock Incentive), and to such extent, the amendment shall not be applicable to such Stock Incentive unless (a) the Participant holding such Stock Incentive consents in writing to such, (b) this Plan and/or such Stock Incentive expressly allows such to occur, or (c) the Company would otherwise have the right to make such amendment by applicable law.
12.2Implications of Stockholder Approval. In the event that this Plan is amended and such amendment is subjected to Stockholder approval (whether by the Board or by the terms and provisions of this Plan), then in the event that Stockholder approval of this Plan is not obtained, or in the event that this Plan is not subjected to the approval of the Stockholders, then any Stock Incentives granted under this Plan shall
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nonetheless be deemed granted pursuant to the authority of the Board; provided, however, any such Option granted which was intended to be an ISO shall instead be a NQSO. Should an amendment to this Plan be rejected by the Stockholders after being submitted to the Stockholders for their approval, the amendment of the Plan shall immediately terminate at that time notwithstanding anything to the contrary (the amendment having been considered to have been in existence only from its original date of Board approval or later effective date to such date of rejection by the Stockholders), and no grants made under this Plan thereafter shall be considered as being made from this Plan as so amended. Notwithstanding the foregoing, no ISO whose status as such is dependent upon an amendment to this Plan for which Stockholder approval is required shall be exercisable prior to the date that Stockholder approval of this Plan is obtained unless the Participant receiving such ISO agrees that the ISO shall instead be treated as a NQSO for all purposes if such Stockholder approval is not obtained, and any exercise of such an ISO by a Participant prior to the date that such Stockholder approval of this Plan is obtained shall automatically be deemed to be such an agreement by the exercising Participant.
12.3Suspension of Awards & Termination of Plan. The Board may suspend the granting of Stock Incentives under this Plan at any time and may terminate this Plan at any time. (See also Section 4 for a special provision providing for automatic termination of this Plan in certain circumstances.)
12.4Amendment of Outstanding Stock Incentives. The Company shall have the right to modify, amend or cancel any Stock Incentive after it has been granted in a manner that complies with applicable law if (a) the modification, amendment or cancellation does not diminish the rights or benefits of the Participant under the Stock Incentive (provided, however, that a modification, amendment or cancellation that results solely in a change in the tax consequences with respect to a Stock Incentive shall not be deemed as a diminishment of rights or benefits of such Stock Incentive), (b) the Participant consents in writing to such modification, amendment or cancellation, (c) there is a dissolution or liquidation of the Company, (d) this Plan and/or the Stock Incentive Agreement expressly provides for such modification, amendment or cancellation, or (e) the Company would otherwise have the right to make such modification, amendment or cancellation by applicable law. No modification, amendment or cancellation of an outstanding Stock Incentive which is expressly allowed under Section 11 shall be subject to the provisions of this Section 12.4.
13Miscellaneous
13.1Stockholder Rights. No Participant shall have any rights as a Stockholder of the Company as a result of the grant of a Stock Incentive to him or to her under this Plan or his or her exercise of such Stock Incentive until (i) the Shares subject to such Stock Incentive have been recorded on the Company’s official Stockholder records as having been issued and transferred to such Participant, and (ii) the Participant has executed an agreement by which the Participant agrees to be bound by, and subject to, any agreement(s) among the Company’s Stockholders then in effect. Upon the grant of a Stock Incentive or a Participant’s exercise of such Stock Incentive, the Company will have a reasonable period in which to issue and transfer the Shares to the Participant, and the Participant will not be treated as a Stockholder for any purpose whatsoever prior to such issuance and transfer.
13.2No Guarantee of Continued Relationship. The grant of a Stock Incentive to a Participant under this Plan shall not constitute a contract of employment or a contract to perform services and shall not confer on a Participant any rights upon his or her termination of employment or relationship with the Company, or any Parent or Subsidiary thereof, in addition to those rights, if any, expressly set forth in the Stock Incentive Agreement that evidences his or her Stock Incentive.
13.3Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, or any Parent or Subsidiary thereof, as a condition precedent for the fulfillment of any Stock Incentive, an amount sufficient to satisfy Federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan and/or any action taken by a Participant with respect to a Stock Incentive. Whenever Shares are to be issued to a Participant upon exercise of an Option or a Stock Appreciation Right, or satisfaction of conditions under a Deferred Stock Unit, or grant of (if a Code §83(b) election is properly made) or substantial vesting of a Restricted Stock Award, the Company, or any Parent or Subsidiary thereof, shall have the right to require the Participant to remit to the Company, or any Parent or Subsidiary thereof, as a condition of exercise of the Option or Stock Appreciation Right, or as a condition to the fulfillment of the Deferred Stock Unit, or as a condition to the grant (if a Code §83(b) election is properly made) or substantial vesting of the Restricted Stock Award, an amount in cash (or, unless the Stock Incentive Agreement provides otherwise, in Shares) sufficient to satisfy federal, state and local withholding tax requirements at the time of such exercise, satisfaction of conditions, or grant (if a Code §83(b) election is properly made) or substantial vesting. However, notwithstanding the foregoing, to the extent that a Participant is an Insider, satisfaction of withholding requirements by having the Company, or any Parent or Subsidiary thereof, withhold Shares may only be made
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to the extent that such withholding of Shares (1) has met the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless the Stock Incentive Agreement provides otherwise, the withholding of shares to satisfy federal, state and local withholding tax requirements shall be a subsequent transaction approved by the original grant of a Stock Incentive. Notwithstanding the foregoing, in no event shall payment of withholding taxes be made by a retention of Shares by the Company, or any Parent or Subsidiary thereof, unless the Company, or any Parent or Subsidiary thereof, retains only Shares with a Fair Market Value equal to or less than the minimum amount of taxes required to be withheld; provided, however, that the Company or any Parent or Subsidiary thereof may, in their sole discretion, retain Shares with a Fair Market Value up to the maximum individual statutory tax rate for each applicable tax jurisdiction in accordance with FASB ASC Topic 718.
13.4Notification of Disqualifying Dispositions of ISO Options. If a Participant sells or otherwise disposes of any of the Shares acquired pursuant to an Option that is an ISO on or before the later of (1) the date two (2) years after the date of grant of such Option, or (2) the date one (1) year after the exercise of such Option, then the Participant shall immediately notify the Company, or any Parent or Subsidiary thereof, in writing of such sale or disposition and shall cooperate with the Company, or any Parent or Subsidiary thereof, in providing sufficient information to the Company, or any Parent or Subsidiary thereof, for the Company, or any Parent or Subsidiary thereof, to properly report such sale or disposition to the Internal Revenue Service. The Participant acknowledges and agrees that he may be subject to federal, state and/or local tax withholding by the Company, or any Parent or Subsidiary thereof, on the compensation income recognized by Participant from any such early disposition, and agrees that he shall include the compensation from such early disposition in his gross income for federal tax purposes. Participant also acknowledges that the Company, or any Parent or Subsidiary thereof, may condition the exercise of any Option that is an ISO on the Participant’s express written agreement with these provisions of this Plan.
13.5Unfunded Plan. To the extent that cash or property is payable to a Participant under this Plan, such cash or property will be paid by the Company from its general assets, and any Person entitled to such a payment under the Plan will have no rights greater than the rights of any other unsecured general creditor of the Company. Shares to be distributed hereunder will be issued directly by the Company from its authorized but unissued or “treasury” stock or a combination thereof. The Company will not be required to segregate on its books or otherwise establish any funding procedure for the amount to be used for the payment of benefits under the Plan. If, however, the Company determines to reserve Shares or other assets to discharge its obligations hereunder, such reservation will not be deemed to create a trust or other funded arrangement.
13.6No Fiduciary Relationship. Nothing contained in this Plan and no action taken pursuant to the Plan shall create or be construed to create a trust of any kind or any fiduciary relationship between the Company, or any Subsidiary or Parent on the one hand, and any Participant or executor, administrator, or other personal representative or designated beneficiary of such Participant or any other Persons on the other hand.
13.7Relationship to Other Compensation Plans. The adoption of this Plan shall not affect any other stock option, incentive, or other compensation plans in effect for the Company, a Parent, or a Subsidiary, nor shall the adoption of this Plan preclude the Company or a Parent or Subsidiary from establishing any other form of incentive or other compensation plan for Employees or Key Persons of the Company or a Parent or Subsidiary.
13.8Successors. All obligations of the Company under the Plan with respect to Stock Incentives shall be binding on its successors, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the entity.
13.9Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
13.10Governing Law. The granting of Stock Incentives under this Plan, the exercisability of any Stock Incentives and the issuance of Shares shall be subject to all applicable laws, rules, and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required by applicable law. Specifically, the laws of the State of Maryland shall govern this Plan and any Stock Incentive Agreement issued hereunder. If Maryland’s conflict of law rules would apply another state’s laws, the laws of the State of Maryland shall still govern.
13.11Clawback/Recapture Policy. Stock Incentives under the Plan will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy and, in
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accordance with such policy, may be subject to the requirement that the Stock Incentive be repaid to the Company after they have been distributed to the Participant.
14Special Provisions Applicable to Deferred Compensation Awards
14.1Interpretation of Deferred Compensation Awards. A Stock Incentive granted under this Plan shall be interpreted and administered in a manner so that any amount or benefit payable thereunder shall be paid or provided in a manner that is exempt from Code §409A if at all possible. However, to the extent that a Stock Incentive granted under this Plan constitutes deferred compensation subject to Code §409A, the Stock Incentive Agreement shall be interpreted to be compliant with the requirements of Code §409A and applicable Internal Revenue guidance and Treasury Regulations issued thereunder. The term “payment” as used in this Section 14 shall refer to the exercise or disposition of any Option or Stock Appreciation Right, any lapse of a substantial risk of forfeiture with respect to a transfer of property which was subject to such a substantial risk of forfeiture, or any other transfer of cash or other consideration pursuant to the exercise or disposition of a Stock Incentive granted hereunder subject to federal income taxation.
14.2No Guarantee of Tax Treatment. The tax treatment of the benefits provided under any Stock Incentive granted under this Plan is not warranted or guaranteed. Neither the Company, nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by a Participant as a result of the application of the Code (including Code §409A) or any state tax law.
14.3Separation from Service Required. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, any payment of such deferred compensation that is required by reason of the termination of employment of, or the cessation of services by, such Participant, shall not be payable to the Participant by reason of such termination or cessation unless the circumstances giving rise to such termination or cessation constitute a Separation from Service of such Participant. If this Section 14.3 prevents the payment or distribution of any amount, such amount shall be paid on the date, if any, on which an event occurs that constitutes a Separation from Service, or such later date as may be required by Section 14.4 below.
14.4Six Month Delay for Specified Employees. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, any payment of such deferred compensation subject to Code §409A by reason of such Participant’s Separation from Service occurring during a period in which such Participant is a Specified Employee shall be subject to the following:
(a)Lump Sum Payments. If the payment is payable in a lump sum, the Participant’s right to receive the payment of such deferred compensation will be delayed until the earlier of the Participant’s death or the first day of the seventh (7th) month following the Participant’s Separation from Service.
(b)Payments over Time. If the payment is payable over time, the amount of such deferred compensation that would otherwise be payable during the six-month period immediately following the Participant’s Separation from Service will be accumulated and the Participant’s right to receive payment of such accumulated amount will be delayed until the earlier of (i) a date no later than thirty (30) days after the Participant’s death, or (ii) the first day of the seventh (7th) month following the Participant’s Separation from Service, whereupon the accumulated amount will be paid to the Participant on such date and the normal payment schedule for any remaining payments will resume.
14.5Series of Payments. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, any right to a series of installment payments under such Stock Incentive shall, for purposes of Code §409A, be treated as a right to a series of separate payments.
14.6No Acceleration of Payments. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, no amount that would be payable pursuant to the Stock Incentive and the terms of this Plan may be accelerated. The provisions of this Section 14.6 shall not preclude the acceleration of vesting of a Stock Incentive, nor the forfeiture of a Stock Incentive.
14.7Unfunded Unsecured Obligations. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, any obligation of
A-23


payment required with respect to such deferred compensation shall be a mere unfunded, unsecured obligation of the Company, and shall not provide any Participant a right to any specific asset of the Company.
14.8Application of Certain Plan Provisions. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, any provisions of this Plan (other than those set forth in this Section 14) that would modify the timing of a payment of such deferred compensation to such Participant holding such Stock Incentive shall be ignored and shall be deemed not applicable. For example, the provisions of this Plan (a) that are contrary to the exercise provisions of an Option or Stock Appreciation Right that provides for such deferred compensation, (b) that provide for exercise in certain situations following a Change of Control that are not allowed by the Stock Incentive (such as provisions in Section 11), (c) that would result in an acceleration of payment (for example, Sections 7.2(f) or 7.3(c) providing the Board the ability to accelerate the time at which an Option or Stock Appreciation Right may be exercised), or (d) that provide for transferability of an Option beyond that allowed by Section 14.9 below shall not be applicable to a Stock Incentive to the extent that it provides for deferred compensation subject to Code §409A notwithstanding any provision of this Plan or any Stock Incentive to the contrary. However, notwithstanding the foregoing, it is intended that the discretion of the Company pursuant to the provisions of Treas. Reg. §1.409A-3(j)(4)(ii) through (xiv) shall apply with respect to Stock Incentives granted under this Plan to a Participant to the extent that such Stock Incentives provide deferred compensation subject to Code §409A.
14.9Non-Transferable. To the extent that a Stock Incentive granted under this Plan to a Participant provides deferred compensation subject to Code §409A, then, notwithstanding anything in this Plan or in the Stock Incentive Agreement pertaining to such Stock Incentive to the contrary, such Stock Incentive may not be encumbered or transferred in any manner, other than by will or by the laws of descent and distribution.
15Special Provisions Applicable to California Options
The provisions of this Section 15 shall apply, and be reflected in any Stock Incentive Agreement pertaining to, any Stock Incentives granted hereunder to the extent required to comply with the Corporate Securities Law of 1968 of the State of California and the regulations promulgated thereunder. To the extent there is a conflict between any other terms of the Plan and the terms contained in this Section 15 of the Plan, the terms of this Section 15 shall be controlling, and any provision of the Plan that would be contrary to such California law shall not apply to the Options described in this Section. This Section 15 shall be construed in a manner consistent with the applicable provisions of the California Code of Regulations.
15.1Grant of Options. Each Option must be granted or issued under the Plan within ten (10) years from the Effective Date of this Plan or the date the Plan is approved by the Company’s Board, whichever is earlier.
15.2Exercise Period of Options. Each Option will have an exercise period of not more than 120 months from the date of grant.
15.3Exercise of Options Following Termination of Employment. Unless the Optionee’s employment is terminated for “cause” as defined in the Stock Incentive Agreement, the Optionee shall have the right to exercise the vested portion of the Option for: (i) at least six months from the date of termination of employment, if termination was caused by death or Disability; or (ii) at least thirty days from the date of termination of employment, if termination was caused by other than death or Disability.
15.4Nontransferability of Options. The right to acquire Stock pursuant to Options shall be nontransferable other than by will, by the laws of descent and distribution, to a revocable trust, or as permitted by Rule 701 promulgated under the Securities Act.
15.5Adjustments by the Board. Notwithstanding anything to the contrary in Section 10 of the Plan, the Board shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.
15.6Disclosure of Financial Information by the Company. The Company shall furnish financial statements at least annually to each California Participant; provided, however, the Company shall not be required to provide such information if (i) the issuance is limited to key persons whose duties in connection with the Company assure their access to equivalent information, or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the Securities Act of 1933, as amended, provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701.
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16Company Repurchase Option
16.1Repurchase Option. The Company shall have the option to repurchase any portion or all of a vested Stock Incentive, or any or all of the Shares of a Participant issued pursuant to a Stock Incentive granted under this Plan on the terms and conditions set forth in this Section 16 (the “Repurchase Option”) if a Participant should cease to perform services for the Company for any reason, or no reason, including, without limitation, the Participant’s death, Disability, voluntary resignation or termination by the Company with or without Cause.
16.2Right of Termination Unaffected. Nothing in this Plan or in any Stock Incentive Agreement shall be construed to limit or otherwise affect in any manner whatsoever the right or power of the Company to terminate a Participant’s services for the Company at any time, for any reason or no reason, with or without Cause.
16.3Exercise of Repurchase Option. At any time after the date on which a Participant ceases to be in the Continuous Service of the Company, or any Parent or Subsidiary (the Participant’s “Termination Date”), the Company may elect to repurchase any portion or all of a Stock Incentive, or any or all of the Shares of a Participant issued pursuant to a Stock Incentive granted under this Plan by giving the Participant written notice of exercise of the Repurchase Option. In the event that a Participant is choosing to exercise an Option to purchase Shares granted under this Plan, the Company may exercise its Repurchase Option simultaneously, with the issuance of the Shares so that the Participant will actually own the Shares only momentarily.
16.4Calculation of Repurchase Price.
(a)Cessation of Services Not for Cause. In the event that a Participant ceases performing services for the Company for any reason other than cessation of such services by the Company for Cause, the Company or its assignee shall have the option to repurchase from the Participant (or from the Optionee’s personal representative as the case may be) any or all of the Stock Incentives or Shares, as applicable, of such Participant issued pursuant to a Stock Incentive granted under this Plan at a price equal to the Fair Market Value of such Stock Incentive or Shares as of the date that the Company gives written notice of exercise of the Repurchase Option.
(b)Cessation of Services for Cause. In the event that a Participant ceases performing services for the Company because of the cessation of such services by the Company for Cause, the Company or its assignee shall have the option to repurchase from the Participant (or from the Optionee’s personal representative as the case may be) any or all of the Stock Incentives or Shares, as applicable, of such Participant issued pursuant to a Stock Incentive granted under this Plan at a price equal to the lesser of (i) the Fair Market Value of such Stock Incentive or Shares, as applicable, as of the date that the Company gives written notice of exercise of the Repurchase Option, or (ii) the amount paid by the Participant for such Shares.
16.5Payment of Repurchase Price. The repurchase price shall be payable, at the discretion of the Company or its assignee, by (a) check, (b) by cancellation of all or a portion of any outstanding indebtedness of the Participant to the Company or such assignee, (c) by delivery of a promissory note of the Company payable in equal annual installments over a period of years not to exceed ten from the date of repurchase at a per annum interest rate equal to the applicable federal rate (“AFR” rate) for such note, or (d) any combination of the foregoing.
16.6Termination of Repurchase Option. The Repurchase Option shall terminate as to any Shares issued to a Participant under this Plan ninety (90) days after an Initial Public Offering of such Shares.
            
APPROVED by the Board of Directors of the Company on April 27, 2022.
                                
APPROVED by the Stockholders of the Company on July 12, 2022.

A-25
Exhibit 10.6
Execution Version













LOAN AND SERVICING AGREEMENT

among

CMFT RE LENDING SUB MM HOLDCO, LLC,
as Holdings,

CMFT RE LENDING SUB MM, LLC,
as the Borrower,

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
and the other Lenders from time to time party hereto,

TRIMONT REAL ESTATE ADVISORS, LLC,
as the Administrative Agent,

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
as the Facility Servicer, and

CMFT RE LENDING SUB MM, LLC,
as the Portfolio Asset Servicer





Dated as of March 16, 2022



TABLE OF CONTENTS

Page




ARTICLE I. INTERPRETATION    1
SECTION 1.01    Certain Defined Terms    1
SECTION 1.02    Other Terms    25
SECTION 1.03    Computation of Time Periods    25
SECTION 1.04    Interpretation    26
SECTION 1.05    Advances to Constitute Loans    26
SECTION 1.06    Information as to Interest Rates    26
ARTICLE II. THE FACILITY    27
SECTION 2.01    Establishment of Term Loan Series; Advances    27
SECTION 2.02    Procedure for Advances    28
SECTION 2.03    Evidence of Debt    29
SECTION 2.04    Repayment; Prepayment; Termination of Commitments    29
SECTION 2.05    Interest and Fees    30
SECTION 2.06    Payments and Computations, Etc    31
SECTION 2.07    Collections and Allocations    32
SECTION 2.08    Remittance Procedures    33
SECTION 2.09    Grant of a Security Interest    37
SECTION 2.10    Sale of Loan Assets    38
SECTION 2.11    Release of Loan Assets    39
SECTION 2.12    Increased Costs    39
SECTION 2.13    Taxes    41
SECTION 2.14    Defaulting Lenders    44
SECTION 2.15    Valuation    45
SECTION 2.16    Benchmark Replacement    47
ARTICLE III. CONDITIONS PRECEDENT    48
SECTION 3.01    Conditions Precedent to Effectiveness    48
SECTION 3.02    Conditions Precedent to All Advances    49
i



Page
SECTION 3.03    Conditions to Transfers of Loan Assets    51
SECTION 3.04    Advances Do Not Constitute a Waiver.    51
ARTICLE IV. REPRESENTATIONS    52
SECTION 4.01    Representations of the Loan Parties    52
SECTION 4.02    Representations of the Borrower Relating to the Agreement and the
Collateral Portfolio    58
ARTICLE V. GENERAL COVENANTS    59
SECTION 5.01    Affirmative Covenants of the Loan Parties    59
SECTION 5.02    Negative Covenants of the Loan Parties    64
ARTICLE VI. EVENTS OF DEFAULT    66
SECTION 6.01    Events of Default    66
SECTION 6.02    Pledged Equity    68
SECTION 6.03    Additional Remedies    70
ARTICLE VII. THE ADMINISTRATIVE AGENT    71
SECTION 7.01    Appointment and Authority    71
SECTION 7.02    Exculpatory Provisions    71
SECTION 7.03    Reliance by Administrative Agent    72
SECTION 7.04    Delegation of Duties    72
SECTION 7.05    Resignation or Removal of Administrative Agent    73
SECTION 7.06    Non-Reliance on Agents and Other Lenders    74
SECTION 7.07    Administrative Agent May File Proofs of Claim    74
SECTION 7.08    Collateral Matters    74
SECTION 7.09    Erroneous Payments    75
SECTION 7.10    Payment Date Report.    77
SECTION 7.11    Custodial Agreement    77
ARTICLE VIII. ADMINISTRATION AND SERVICING OF COLLATERAL PORTFOLIO    78
SECTION 8.01    Appointment and Designation of the Applicable Servicer    78
SECTION 8.02    Duties of the Portfolio Asset Servicer    80
SECTION 8.03    Duties of the Facility Servicer.    83
SECTION 8.04    Authorization of the Portfolio Asset Servicer.    84
SECTION 8.05    Collection of Payments; Accounts    85
SECTION 8.06    Realization Upon Loan Assets    86
ii





Page
SECTION 8.07    Payment of Certain Expenses    86
SECTION 8.08    Reports    86
SECTION 8.09    Applicable Servicer Not to Resign    87
SECTION 8.10    Indemnification of the Facility Servicer    88
ARTICLE IX. INDEMNIFICATION    88
SECTION 9.01    Indemnities by the Borrower    88
SECTION 9.02    Legal Proceedings    89
ARTICLE X. MISCELLANEOUS    90
SECTION 10.01    Amendments and Waivers    90
SECTION 10.02    Notices, Etc.    91
SECTION 10.03    No Waiver Remedies    91
SECTION 10.04    Binding Effect; Assignability; Multiple Lenders    91
SECTION 10.05    Term of This Agreement    93
SECTION 10.06    GOVERNING LAW; JURY WAIVER    93
SECTION 10.07    Costs and Expenses    93
SECTION 10.08    Recourse Against Certain Parties    94
SECTION 10.09    Execution in Counterparts; Severability; Integration    95
SECTION 10.10    Consent to Jurisdiction; Service of Process    95
SECTION 10.11    Confidentiality    96
SECTION 10.12    Non-Confidentiality of Tax Treatment    97
SECTION 10.13    Waiver of Set Off    97
SECTION 10.14    Headings, Schedules and Exhibits    98
SECTION 10.15    Ratable Payments    98
SECTION 10.16    Failure of Borrower to Perform Certain Obligations    98
SECTION 10.17    Power of Attorney    98
SECTION 10.18    Delivery of Termination Statements, Releases, etc    100
SECTION 10.19    Post-Closing Performance Conditions    100
SECTION 10.20    PATRIOT Act    100






iii



LIST OF SCHEDULES AND EXHIBITS

SCHEDULES

SCHEDULE I    Term Loan Series 2022-1 Commitments SCHEDULE II    Initial Loan Assets
SCHEDULE III    Conditions Precedent Documents SCHEDULE IV    Notice Information
SCHEDULE V    Competitors EXHIBITS
EXHIBIT A    Form of Term Loan Series Notice
EXHIBIT B    Form of Term Loan Series Confirmation
EXHIBIT C    Form of Notice of Borrowing
EXHIBIT D    Form of Borrowing Base Certificate
EXHIBIT E    Form of Portfolio LTV Certificate
EXHIBIT F    Form of Loan Asset Certificate
EXHIBIT G    Form of Payment Date Report
EXHIBIT H    Form of Servicing Report
EXHIBIT I    Form of U.S. Tax Compliance Certificate




























iv





LOAN AND SERVICING AGREEMENT, dated as of March 16, 2022, among:

(1)CMFT RE LENDING SUB MM HOLDCO, LLC, a Delaware limited liability company (“Holdings”);

(2)CMFT RE LENDING SUB MM, LLC, a Delaware limited liability company (the “Borrower”);

(3)MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY and each of the other lenders from time to time party hereto, as Lenders (as defined herein);

(4)TRIMONT REAL ESTATE ADVISORS, LLC, a Georgia limited liability company, as the Administrative Agent (as defined herein);

(5)MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as the Facility Servicer (as defined herein); and

(6)CMFT RE LENDING SUB MM, LLC, a Delaware limited liability company, as the Portfolio Asset Servicer (as defined herein).

The Lenders have agreed, on the terms and conditions set forth herein, to provide a secured term loan facility that provides for Advances under applicable Term Loan Series from time to time in the amounts and in accordance with the terms set forth herein.

The proceeds of the Advances will be used to finance the origination or acquisition by the Borrower of Eligible Loan Assets and fund Delayed Draws.

Accordingly, the parties agree as follows:

ARTICLE I. INTERPRETATION

SECTION 1.01 Certain Defined Terms. As used in this Agreement and the exhibits, schedules and other attachments hereto (each of which is hereby incorporated herein and made a part hereof), the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

Account Bank” means JPMorgan Chase Bank, N.A., in its capacity as the depository pursuant to the Account Control Agreement, and each other Person acting in such capacity pursuant to any agreement replacing or substituting for the Account Control Agreement.

Account Control Agreement” means the account control agreement (or similar agreement) among the Borrower, the Account Bank and the Administrative Agent with respect to the Collection Account, the distributions therefrom and the perfection of the Administrative Agent’s Lien thereon, in accordance with this Agreement.

Administrative Agent” means Trimont Real Estate Advisors, LLC, in its capacity as administrative agent for the Lenders and collateral agent for the Secured Parties, together with its successors and permitted assigns, including any successor appointed pursuant to Article VII.




Advance” means each loan advanced by the Lenders to the Borrower under such Term Loan Series pursuant to Article II.

Advance Date” means, with respect to any Advance, the day on which such Advance is made.

Advance Rate” means (a) with respect to each Loan Asset included (or to be included) in the calculation of the Borrowing Base for Term Loan Series 2022-1 and listed on Schedule II, the percentage set forth as the Advance Rate for such Loan Asset on Schedule II and (b) with respect to each Loan Asset included (or to be included) in the calculation of the Borrowing Base for any other Term Loan Series, the percentage set forth as the Advance Rate for such Loan Asset on the Confirmation for such Term Loan Series.

Advances Outstanding” means, at any time of determination with respect to a Term Loan Series, the aggregate outstanding principal amount of all Advances made under such Term Loan Series at such time.

Affiliate” when used with respect to a Person, means any other Person Controlling, Controlled by or under common Control with such Person.

Agent Fee Letter” means, if applicable, any fee letter or letters between the Administrative Agent and the Borrower entered after the Closing Date and consented to by the Facility Servicer (such consent not to be unreasonably withheld, conditioned or delayed).

Agreement” means this Loan and Servicing Agreement.

Anti-Corruption Laws” means any and all Applicable Laws relating to bribery or corruption.

Anti-Money Laundering Law” means any and all applicable anti-money laundering, financial recordkeeping and reporting requirements of Applicable Law, including those of the Bank Secrecy Act (as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)) and any applicable anti-money laundering statutes of other jurisdictions, as well as the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency.

Applicable Law” means as of any date of determination, for any Person all existing laws, rules, regulations, statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and interpretations by any Governmental Authority applicable to such Person and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

Applicable Servicer” means the Facility Servicer or the Portfolio Asset Servicer, as the context may require.

Applicable Spread” means (a) with respect to Term Loan Series 2022-1, 2.00% and (b) with respect to any other Term Loan Series, the rate per annum set forth for such Term Loan Series on the Confirmation for such Term Loan Series.

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Assignment and Assumption Agreement” means an agreement among the Borrower (if required under Section 10.04), a Lender, the Administrative Agent and, unless executed in connection with an assignment under Section 10.04, the Majority Lenders in a form customarily provided by the Loan Syndications and Trading Association and delivered in connection with a Person becoming a Lender hereunder after the Closing Date.

Availability Period” means, with respect to a Term Loan Series, the date commencing on the Issuance Date for such Term Loan Series and ending on the earlier of (a) the Commitment Termination Date for such Term Loan Series and (b) the date the Commitments for such Term Loan Series are terminated or suspended (unless such Availability Period has been reinstated as set forth in Section 2.01(c)) in accordance with this Agreement.

Bankruptcy Event” is deemed to have occurred with respect to a Person if either:

(a)a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person under the Bankruptcy Laws, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or

(b)such Person shall commence a voluntary case or other proceeding under any Bankruptcy Laws now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or all or substantially all of its assets under the Bankruptcy Laws, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors or members shall vote to implement any of the foregoing.

Bankruptcy Laws” means the U.S. Bankruptcy Code, Title 11, United States Code, 11 U.S.C. §§
101 et seq., and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

Benchmark” means, initially LIBOR unless otherwise set forth in the Confirmation for a Term Loan Series; provided that if a replacement of the applicable Benchmark with respect to any Term Loan Series has occurred pursuant to Section 2.16, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” includes, as applicable, the published component used in the calculation thereof.

Benchmark Replacement” means, for any Benchmark:

(a)for purposes of Section 2.16(a), the sum of Term SOFR and 0.11%; and

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(b)for purposes of Section 2.16(b), the sum of (i) the alternate benchmark rate and (ii) an adjustment (which may be a positive or negative value or zero), in each case that has been selected by the Facility Servicer and the Borrower as the replacement for such Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by the Relevant Governmental Body, for U.S. dollar-denominated syndicated credit facilities at such time;

provided that, if the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor for any Term Loan Series, the Benchmark Replacement for such Term Loan Series will be deemed to be the Floor for such Term Loan Series for purposes of this Agreement and the other Transaction Documents.

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment notices, the applicability and length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Facility Servicer, after consultation with the Borrower, decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Facility Servicer in a manner substantially consistent with market practice (or, if the Facility Servicer decides that adoption of any portion of such market practice is not administratively feasible or if the Facility Servicer determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Facility Servicer decides is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).

Benchmark Transition Event” means, with respect to any then-current Benchmark (other than LIBOR) and each related Term Loan Series, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased or will cease on a specified date to provide such Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark or (b) such Benchmark is or will on a specified date no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored.

Borrower” has the meaning assigned to that term in the preamble hereto.

Borrowing Base” means, as of any date of determination with respect to a Term Loan Series, an aggregate amount for all Eligible Loan Assets Relating to such Term Loan Series (or, if an Eligible Loan Asset Relates to more than one Term Loan Series as provided by Section 3.03(a) and indicated on a Borrowing Base Certificate delivered in accordance with Section 2.02(a)(vii), the portion thereof Relating to such Term Loan Series) as of such date equal to (a)(i) the Advance Rate for each such Eligible Loan Asset multiplied by (ii) the Value of such Eligible Loan Asset plus (b) the amount of cash in the Collection Account

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or Collections received by Servicer not yet deposited into the Collection Account (other than Excluded Amounts).

Borrowing Base Certificate” means a certificate setting forth the calculation of the Borrowing Base for the applicable Term Loan Series as of the applicable date of determination, substantially in the form of Exhibit D, prepared by the Borrower.

Business Day” means a day of the year other than (a) Saturday or Sunday or (b) any other day on which commercial banks in New York, New York or the offices of the Administrative Agent, the Collateral Custodian or the Account Bank are authorized or required by applicable law, regulation or executive order to close; provided that, if any determination of a Business Day shall relate to an Advance bearing interest at LIBOR, the term “Business Day” also excludes any day on which banks are not open for dealings in U.S. dollar deposits in the London interbank market.

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

Change of Control” is deemed to have occurred if (a) the Sponsor fails to Control Holdings or the Borrower, (b) the Sponsor fails to own 100% of the limited liability company interests in Holdings, directly or indirectly through one or more wholly-owned Subsidiaries or (c) Holdings fails to own 100% of the limited liability company interests in the Borrower, directly.

Closing Date” means the date of this Agreement.

Code” means the Internal Revenue Code of 1986.

Collateral” has the meaning assigned to that term in Section 2.09(a).

Collateral Custodian” means Wells Fargo Bank, National Association, not in its individual capacity, in its capacity as collateral custodian for the Administrative Agent and the Lenders pursuant to the terms of the Custodial Agreement.

Collateral Portfolio” means all right, title and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in all assets of the Borrower securing the Obligations, including the property identified below in clauses (a) through (d), and all accounts, money, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, intellectual property, goods, equipment, fixtures, contract rights, general intangibles, documents, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, securities accounts, deposit accounts, inventory, investment property, letter-of-credit rights,

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software, supporting obligations, accessions or other property consisting of, arising out of, or related to any of the following:

(a)the Loan Assets and all funds due or to become due in payment under such Loan Assets on and after any related Cut-Off Date, including all Collections;

(b)the other Portfolio Assets with respect to the Loan Assets;

(c)the Collection Account; and

(d)all income and Proceeds of the foregoing.

Collection Account” means the deposit or securities account owned by the Borrower established with the Account Bank pursuant to the Account Control Agreement into which Collections shall be deposited in accordance with the terms of this Agreement and under the “control” (within the meaning of Section 9-104 of the UCC of the State of New York) of the Administrative Agent for the benefit of the Secured Parties; provided that, subject to the rights of the Administrative Agent hereunder with respect to such funds, the funds deposited therein from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Collection Account.

Collections” means all collections and other cash proceeds with respect to any Loan Asset or other Portfolio Asset (including payments on account of interest, principal, prepayments, fees, guaranty payments and all other amounts received in respect of such Loan Asset or Portfolio Asset), all Recoveries, all Insurance Proceeds and proceeds of any liquidations or Sales in each case, attributable to such Loan Asset or Portfolio Asset, and all other proceeds or other funds of any kind or nature received by the Borrower or any Underlying Servicer with respect to any Underlying Collateral, but not including any servicing fees retained from Collections by Underlying Servicer pursuant to the terms of the applicable Servicing Agreement.

Commitment” means, with respect to any Lender for any Term Loan Series, (a) during the Availability Period for such Term Loan Series, (i) with respect to Term Loan Series 2022-1, the amount set forth on Schedule I opposite such Lender’s name, or in the Assignment and Assumption Agreement or on the Assignment and Assumption Agreement relating to such Lender and such Term Loan Series and (ii) with respect to each other Term Loan Series, the amount set forth as such Lender’s “Commitment” on the Confirmation for such Term Loan Series or on the Assignment and Assumption Agreement relating to such Lender and such Term Loan Series and (b) after the end of the Availability Period for such Term Loan Series, such Lender’s Pro Rata Share of the aggregate Advances Outstanding for such Term Loan Series; provided (i) if there are no Advances Outstanding at the time of determination, then such Lender’s Commitment is determined under clause (a) above as of the end of the Availability Period for such Term Loan Series and (ii) if there are no Advances Outstanding with respect to a Term Loan Series and the Commitments have been terminated, then such Lender’s Pro Rata Share is determined as of the last date there were Advances Outstanding with respect to such Term Loan Series.

Commitment Termination Date” means, with respect to any Term Loan Series, the earliest to occur of (a) (i) the date that is four months after the Issuance Date for such Term Loan Series (or such later date as may be agreed upon by the Borrower and all Lenders under such Term Loan Series in their discretion and set forth in the Confirmation with respect thereto) or (ii) solely with respect to Advances

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to be used to fund a Delayed Draw under a Delayed Draw Loan Asset Relating to such Term Loan Series and identified as such by the Borrower on the Loan Asset Certificate for such Loan Asset, the earlier of the Final Maturity Date for such Term Loan Series and the date all Delayed Draws for such Loan Asset have been made, (b) the date the Lenders terminate or suspend the Commitments for such Term Loan Series after the occurrence of an Event of Default other than an Event of Default pursuant to Section 6.01(i) or such Commitments are automatically terminated upon the occurrence of an Event of Default pursuant to Section 6.01(i) (unless, in either such case, the Commitment Termination Date has been reinstated pursuant to Section 2.01(c)) and (c) the occurrence of the termination of this Agreement pursuant to Section 2.04(g).

Competitor” means each person listed on Schedule V together with any Affiliates of such Person, as such schedule may be modified from time to time with the consent of the Initial Lender and upon ten days’ prior written notice to the Initial Lender (such consent not to be unreasonably withheld).

Confirmation” means, for each Term Loan Series, the written confirmation for such Term Loan Series in the form of Exhibit B and signed by the Borrower and the Initial Lender and acknowledged by the Administrative Agent and the Facility Servicer.

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

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Any derivatives of the word “Control,” including “Controlling,” “Controlled,” or otherwise, have meanings correlative thereto.

Counterparty Lender” means, with respect to any Loan Asset that is a loan participation interest, the lender party to the related Loan Agreement and the related Participation Agreement.

Covered Entity” means each of (a) the Sponsor and the Loan Parties and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above. For purposes of this definition, control of a Person means the direct or indirect (i) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person or (ii) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.

Custodial Agreement” means the Custodial Agreement dated as of the Closing Date, among the Administrative Agent, the Borrower and the Collateral Custodian, and each other custodial or similar agreement that may replace such agreement pursuant to the terms hereof.

Cut-Off Date” means, with respect to a Loan Asset, the date (which may be the Closing Date) such Loan Asset is Transferred to the Borrower.

Default Rate” means, as of any date of determination, (a) with respect to Advances, a rate per annum equal to the interest rate that is or would be applicable to such Advances at such time plus 2.0% and (b) with respect to Obligations other than Advances, a rate per annum equal to the weighted average

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of the interest rates that are or would be applicable to Advances for the outstanding Term Loan Series at such time plus 2.0%.

Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has failed to (i) fund all or any portion of its Advances within two Business Days of the date such Advances were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or (ii) pay to the Administrative Agent or any Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, unless the subject of a good faith dispute, (b) has notified the Borrower and the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund an Advance hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent (acting in accordance with the written direction of the Initial Lender) or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Bankruptcy Law or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or has consented to, approved of or acquiesced in any such proceeding or appointment under this clause
(i)or clause (ii) above; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Borrower or the Majority Lenders 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 2.14(b)) upon delivery of written notice of such determination to the Borrower, the Administrative Agent and each Lender.

Delayed Draw” means, with respect to any Delayed Draw Loan Asset, the Borrower’s contractual obligation to provide funding with respect to such Loan Asset after the Cut-Off Date for such Loan Asset.

Delayed Draw Loan Asset” means a Loan Asset that requires the Borrower to provide additional funding thereunder after the Cut-Off Date for such Loan Asset.

Determination Date” means, for any Reporting Date, the date that is two Business Days prior to such Reporting Date.

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Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth Business Day after the date notice of such Early Opt-in Election is provided to the Lenders and the Administrative Agent, so long as the Administrative Agent has not received, by 5:00 p.m. on the fifth Business Day after the date notice of such Early Opt-in Election is provided to the Lenders and the Administrative Agent, written notice of objection to such Early Opt-in Election from Lenders comprising the Majority Lenders.

Early Opt-in Election” means, with respect to any Benchmark and each related Term Loan Series, the occurrence of the joint election by the Facility Servicer and the Borrower to trigger a fallback from such Benchmark and the provision by the Initial Lender of written notice of such election to the Administrative Agent and the Lenders.

Eligible Assignee” means (a) a Lender or any of its Affiliates, (b) any Person managed by a Lender or any of its Affiliates or (c) any financial or other institution reasonably acceptable to the Administrative Agent acting at the direction of the Majority Lenders (other than the Borrower or an Affiliate thereof).

Eligible Loan Asset” means (a) with respect to Term Loan Series 2022-1, each Loan Asset listed on Schedule II and (b) with respect to any other Term Loan Series, each Loan Asset approved in writing by the Initial Lender in its sole discretion and identified in the Confirmation for such Term Loan Series, in each case that satisfies the below criteria as of the applicable Cut-Off Date for the related Loan Asset (unless waived by the Initial Lender in its sole discretion):

(i)is a senior secured commercial loan;

(ii)is denominated and payable only in U.S. dollars;

(iii)the Loan Agreement or Participation Agreement relating thereto is governed by the laws of a State and the related Underlying Collateral is located in the United States;

(iv)for which no Underlying Obligor Default has occurred and is continuing thereunder or any other breach in any material respect of any other term set forth in the Loan Agreement therefor has occurred and is continuing;

(v)there are no proceedings pending or, to the Borrower’s knowledge, threatened in writing
(A)with respect to a Bankruptcy Event with respect to any applicable Obligor or (B) wherein any applicable Obligor, any governmental entity or other Person has alleged that such Loan Asset or its related Loan Agreement or any of its Required Loan Documents is illegal or unenforceable;

(vi)the Counterparty Lender to the Participation Agreement for such Loan Asset, if any, is the Sponsor or an Affiliate thereof;

(vii)is collaterally assignable (or the Participation Agreement with respect thereto, if any, is collaterally assignable) to the Administrative Agent, for the benefit of the Secured Parties, as Collateral as provided hereunder;

(viii)is not subject to any Liens other than Permitted Liens; and

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(ix)has not previously been Transferred to the Borrower and subsequently Sold during the term of this Agreement (unless the Initial Lender agrees, in its sole discretion, otherwise).

Environmental Laws” means any and all foreign, federal, State and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

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

ERISA Affiliate” means (a) any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as a specified Person, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with such Person, (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as such Person, any corporation described in clause (a) above or any trade or business described in clause (b) above or (d) a member of the same group of related business entities under Section 414(o) of the Code as such Person, any corporation described in clause (a) above, any trade or business described in clause (b) above or any member of any affiliated service group described in clause
(c) above.

Event of Default” has the meaning assigned to that term in Section 6.01.

Excluded Amounts” means, without duplication, (a) any amount received in the Collection Account with respect to any Loan Asset included as part of the Collateral Portfolio, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Loan Asset or on any Underlying Collateral and (b) any amount received in the Collection Account representing (i) any escrow payments, (ii) any amounts received on or with respect to a Loan Asset that is not a loan participation interest under any Insurance Policy that is required to be used to restore, improve or repair the related real estate or other assets of such Loan Asset or required to be paid to any Obligor under the Loan Agreement for such Loan Asset, (iii) any amount received in the Collection Account with respect to any Portfolio Asset that is otherwise Sold by the Borrower pursuant to Section 2.10, to the extent such amount is attributable to a time after the effective date of such Sale, (iv) reimbursement of expenses, including reimbursement of fees and expenses of Lender’s counsel in connection with a loan modification and (v) amounts deposited in the Collection Account which were not required to be deposited therein or were deposited in error.

Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient under any Transaction Document:
(a)Taxes imposed on (or measured by) net income (however denominated), franchise Taxes and any branch profits Taxes (i) imposed by the jurisdiction (or any political subdivision thereof) under the laws of which such Recipient is organized or in which such Recipient’s principal office is located or, in the case of any Lender, in which such Lender’s applicable lending office is located or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Advance or

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Commitment or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.13, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 2.13(e) or 2.13(f); and (d) any withholding Taxes imposed under FATCA.

Facility Servicer” means Massachusetts Mutual Life Insurance Company, not in its individual capacity, but in its capacity as facility servicer pursuant to terms of this Agreement, together with its successors and permitted assigns, including any successor appointed pursuant to Article VIII.

Facility Servicing Fee Letter” means any fee letter or letters between the Facility Servicer and the Borrower entered on or prior to the Closing Date.

Facility Termination Date” means the date on which the aggregate outstanding principal amount of the Advances have been repaid in full and all accrued and unpaid interest thereon, all Fees and all other Obligations (other than contingent indemnification obligations) have been paid in full, the Commitments of the Lenders hereunder have been terminated by the Borrower or the Majority Lenders in accordance with this Agreement and the Borrower has no further right to request any additional Advances.

FATCA” means Sections 1471 through 1474 of the Code as in effect on the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations promulgated thereunder or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date hereof (or any amended or successor version described above) and any intergovernmental agreements (or related rules, legislation or official administrative guidance) implementing such provisions of the Code or any non-U.S. laws implementing the foregoing.

FATCA Withholding Tax” means any withholding or deduction required pursuant to FATCA.

Federal Funds Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York sets forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0%.

Fee Letters” means the Agent Fee Letter, the Facility Servicing Fee Letter and each fee letter agreement entered into by and among the Borrower and any of the Administrative Agent, the Facility Servicer and any Lender in connection with the transactions contemplated by this Agreement.

Fees” means the fees payable to the Administrative Agent, the Facility Servicer, any Lender or any other applicable agent or party pursuant to the terms of the Fee Letters or the other Transaction Documents.

Final Maturity Date” means, for any Term Loan Series, the earliest to occur of (a) the Scheduled Maturity Date for such Term Loan Series, (b) the date of the declaration, or automatic occurrence, of the Final Maturity Date for such Term Loan Series upon the occurrence of an Event of Default and (c) the occurrence of the termination of this Agreement pursuant to Section 2.04(g).

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Floor” means, (a) with respect to Term Loan Series 2022-1, 0.10% and (b) with respect to any other Term Loan Series, the rate set forth for such Term Loan Series on the Confirmation for such Term Loan Series.

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

Governmental Authority” means, with respect to any Person, any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to a government and any court or arbitrator having jurisdiction over such Person (including any supra-national bodies such as the European Union or the European Central Bank).

Hazardous Materials” means all materials subject to any Environmental Law, including materials listed in 49 C.F.R. § 172.010, materials defined as hazardous pursuant to § 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, flammable, explosive or radioactive materials, hazardous or toxic wastes or substances, lead-based materials, petroleum or petroleum distillates or asbestos or material containing asbestos, polychlorinated biphenyls, radon gas, urea formaldehyde and any substances classified as being “in inventory”, “usable work in process” or similar classification that would, if classified as unusable, be included in the foregoing definition.

Holdings” has the meaning assigned to that term in the preamble hereto.

Indebtedness” means with respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than accounts payable incurred in the ordinary course of business and payable in accordance with customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument or other evidence of indebtedness customary for indebtedness of that type, (b) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (c) all indebtedness, obligations or liabilities of that Person in respect of derivatives and (d) all obligations under guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in clauses (a) through (c) above.

Indemnified Party” has the meaning assigned to that term in Section 9.01(a).

Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Obligor under this Agreement or Transaction Document and (b) to the extent not otherwise described in clause (a) above, Other Taxes.

Independent Manager” means the individual holding the Independent Manager position as provided for in the applicable Loan Party’s limited liability company agreement.

Initial Lender” means (a) so long as Massachusetts Mutual Life Insurance Company or any Affiliate of Massachusetts Mutual Life Insurance Company holds a Commitment or any portion of an Advance, Massachusetts Mutual Life Insurance Company and (b) otherwise, the Majority Lenders.

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Insurance Policy” means, with respect to any Loan Asset, an insurance policy covering liability and physical damage to, or loss of, the Underlying Collateral for such Loan Asset.

Insurance Proceeds” means any amounts received on or with respect to a Portfolio Asset under any Insurance Policy or with respect to any condemnation proceeding or award in lieu of condemnation in accordance with the related Loan Agreement or Participation Agreement.

Interest Collections” means, with respect to any Loan Asset, all Collections attributable to interest on such Loan Asset (including Collections attributable to the portion of the outstanding principal amount of a Loan Asset, if any, that represents interest which has accrued in kind and has been added to the principal balance of such Loan Asset), including all scheduled payments of interest and payments of interest relating to principal prepayments, all guaranty payments attributable to interest and proceeds of any liquidations, sales or dispositions attributable to interest on such Loan Asset.

Interest Period” means (a) if there are no Advances Outstanding prior to an Advance being made, the period commencing on (and including) the Advance Date for such Advance and ending on (but excluding) the next occurring Determination Date after such Advance Date and (b) otherwise, the period commencing on (and including) a Determination Date and ending on (but excluding) the next occurring Determination Date.

Issuance Date” means (a) with respect to Term Loan Series 2022-1, the Closing Date and (b) with respect to any other Term Loan Series, the date such Term Loan Series is established in accordance with Section 2.01(a).

Knowledge” means, with respect to any Person, (a) the actual knowledge of any officer or other individual of such Person or its Affiliates who have responsibility for day-to-day decision making or the legal affairs of such Person and (b) with respect to any representations, warranties, certifications or statements with respect to any Loan Asset, the actual knowledge of those individuals of such Person or its Affiliate who have responsibility for the origination or acquisition, as applicable, management or sale of such Loan Asset. Any derivatives of the word “Knowledge,” including “Know,” “Knew,” “Known,” “Knowingly” or otherwise, have meanings correlative thereto.

Lender” means collectively, (a) the Initial Lender and (b) any other Person to whom any Lender assigns any part of its rights and obligations under this Agreement and the other Transaction Documents in accordance with the terms of Section 10.04 and any other party that becomes a lender pursuant to an Assignment and Assumption Agreement.

LIBOR” means, for any Advance with respect to any Term Loan Series for which the Benchmark is designated as “LIBOR” for any Interest Period, the greater of (a) the rate per annum appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) as the London interbank offered rate for deposits in U.S. dollars for a one month period at approximately 11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period and (b) (i) with respect to Term Loan Series 2022-1, 0.10% and (ii) with respect to any other Term Loan Series, the rate set forth for such Term Loan Series on the Confirmation for such Term Loan Series.

Lien” means any mortgage or deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, preference, priority or other

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security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, lease or other title retention agreement, sale subject to a repurchase obligation, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing), or the filing of a financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction.

Loan Agreement” means the loan agreement, credit agreement or other agreement pursuant to which a Loan Asset or an Underlying Loan Obligation of a Loan Asset, as applicable, has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan Asset or Underlying Loan Obligation or of which the holders of such Loan Asset are the beneficiaries, including any co-lender or servicing agreement entered into by an applicable Counterparty Lender or Underlying Servicer.

Loan Asset” means any loan interest or loan participation interest Transferred to the Borrower, which loan interest or loan participation interest includes (a) the Loan Asset File therefor and (b) all right, title and interest in and to (i) such loan interest, the related Loan Agreement and any Underlying Collateral or (ii) such loan participation interest, the related Participation Agreement and, subject to the terms thereof, the related Loan Agreement and any Underlying Collateral.

Loan Asset Assignment” means an assignment, participation agreement or other agreement pursuant to which any Loan Asset not originated by the Borrower is Transferred to the Borrower (a) in a form substantially based upon the form document for loan assignments of the Loan Syndications and Trading Association or (b) in a form reasonably agreed to by the Borrower and the Administrative Agent (acting at the direction of the Initial Lender) on or prior to the Closing Date or Cut-Off Date for such Loan Asset, as the case may be.

Loan Asset Certificate” means, with respect to any Loan Asset, a completed certificate substantially in the form of Exhibit F, prepared by Borrower (or the Portfolio Asset Servicer on behalf of the Borrower) certifying, among other things, whether such Loan Asset is an Eligible Loan Asset.

Loan Asset Checklist” has the meaning assigned to that term in the Custodial Agreement and, if such term (or similar term) is not used therein, then, with respect to each Loan Asset, an electronic or hard copy, as applicable, of a checklist delivered by or on behalf of the Borrower to the Collateral Custodian and the Facility Servicer.

Loan Asset File” has the meaning assigned to that term in the Custodial Agreement and, if such term (or similar term) is not used therein, then, with respect to each Loan Asset, a file containing each of the agreements, instruments, certificates and other documents and items set forth on the Loan Asset Checklist with respect to such Loan Asset.

Loan Asset Schedule” means, for each Term Loan Series, a schedule of the Eligible Loan Assets Relating to such Term Loan Series and setting forth for each such Loan Asset (a) the Obligors for such Loan Asset, (b) the Outstanding Principal Balance of such Loan Asset or the Underlying Loan Obligation for such Loan Asset, as applicable, (c) the Loan Agreement and Participation Agreement, if any, for such Loan Asset and (d) any Loan Asset Assignment for such Loan Asset, as delivered by the Borrower to the Administrative Agent, the Collateral Custodian and the Facility Servicer and as updated from time to time as provided herein.

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Loan Parties” means, collectively, the Borrower and Holdings.

Majority Lenders” means, as of any date of determination, the Lenders having an aggregate of more than 50% of the aggregate Commitments for all outstanding Term Loan Series at such time. The Commitments of any Defaulting Lender shall be disregarded in determining Majority Lenders at any time.

Market Trigger Event” means, as of any date of determination, any of (a) the Portfolio LTV as of such date exceeds 85%, (b) an Underlying Obligor Default has occurred as of such date of determination with respect to (i) any Eligible Loan Asset if there are less than five Eligible Loan Assets in the Collateral Portfolio (across all Term Loan Series) at such time or (ii) more than one Eligible Loan Asset if there are five or more Eligible Loan Assets in the Collateral Portfolio (across all Term Loan Series) at such time or (c) despite using its commercially reasonable efforts, the Borrower is unable to deliver either the preliminary feedback or the final rating levels described in Section 5.01(g) or to restore the rating from the NRSRO that previously rated the facility evidenced by this Agreement, in each case within the timeframes set forth in Section 5.01(g) therefor. Once a Market Trigger Event has occurred, it is deemed to be continuing until (i) in the case of a Market Trigger Event specified in clause (a) above, the Portfolio LTV, as of a date of determination occurring after such Market Trigger Event is less than or equal to 85%, (ii) in the case of a Market Trigger Event specified in clause (b) above, the applicable Underlying Obligor Default has been cured in accordance with the terms of the applicable Loan Agreement or waived with the consent of the Majority Lenders as of such date of determination and (iii) in the case of a Market Trigger Event specified in clause (c) above, the Borrower has caused an NRSRO to provide an equivalent rating of BBB-, BBB(low) or Baa3 or higher on the credit facility evidenced by this Agreement (and has provided the Initial Lender with a copy of all rating letters issued to the Borrower in connection therewith).

Material Adverse Effect” means a material adverse effect on (a) the business, financial condition, operations, liabilities (actual or contingent), performance or properties of the Borrower, (b) the validity or enforceability of this Agreement or any other Transaction Document, (c) the rights and remedies of the Administrative Agent, the Facility Servicer, the Collateral Custodian, any Lender or any other Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of the Borrower to perform its obligations under this Agreement or any other Transaction Document or (e) the existence, perfection, priority or enforceability of the Administrative Agent’s Lien on the Collateral Portfolio; provided that, there shall be no Material Adverse Effect to the extent such Material Adverse Effect arises from the action (or inaction) of the Administrative Agent, the Facility Servicer, the Collateral Custodian or a Lender.

Material Modification” means any amendment or waiver of, or modification or supplement to, or termination, cancellation or release of, a Loan Agreement for a Loan Asset or for the Underlying Loan Obligation for a Loan Asset, as applicable, executed or effected on or after the Cut-Off Date for such Loan Asset that:

(a)forgives, excuses, reduces, waives or modifies such Loan Agreement or the related loan documents in a manner which would reduce the outstanding principal amount of the amount due thereunder, reduce the interest rate or reduce the amount of any prepayment premium or fees payable thereunder;

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(b)extends the scheduled date for payment of principal, interest, fees or other amounts payable under such Loan Agreement or the related loan documents for more than six months from the original scheduled date for such payment;

(c)extends by more than six months the scheduled date of expiration or termination of any commitment to make Delayed Draws with respect to such Loan Asset;

(d)increases the commitment to make Delayed Draws with respect to such Loan Asset;

(e)releases any Obligor from its obligations under such Loan Agreement or the related loan documents or permits an Obligor to assign or transfer its rights and obligations under such Loan Agreement or the related loan documents (other than as expressly contemplated by such loan documents);

(f)releases any material Underlying Collateral for such Loan Asset other than as set forth in such Loan Agreement or the related loan documents;

(g)changes any provision in the Loan Agreement or the related loan documents in a manner that would alter the pro rata sharing of payments required thereby in a manner that adversely impacts the holders of such Loan Asset; or

(h)subordinates the outstanding obligations payable to in respect of such Loan Asset under the applicable Loan Agreement or the related loan documents in right of payment to any other Indebtedness, or subordinates the Liens on the Underlying Collateral to any Lien securing other Indebtedness (other than Permitted Liens);

Notwithstanding the foregoing, if any applicable Material Modification subjects the consent of the lenders thereto to any consent or approval standard (e.g., that the lender will not unreasonably withhold, delay or condition its consent) in accordance with the express provisions of the related loan documents (collectively, a “Material Modification Standard”), then the Lenders are subject to the same Material Modification Standard as the Borrower with respect to its granting of consent with respect to any Material Modification pursuant to Section 5.01(e)(i).

Maximum Availability” means, with respect to a Term Loan Series at any time of determination, the lesser of (a) the Maximum Series Amount for such Term Loan Series at such time and (b) the Borrowing Base for such Term Loan Series at such time.

Maximum Series Amount” means (a) with respect to Term Loan Series 2022-1, $71,300,000 and
(b)with respect to any other Term Loan Series at any time, an amount equal to the aggregate Commitments of the Lenders for such Term Loan Series at such time.

Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate of the Borrower contributed or had any obligation to contribute on behalf of its employees at any time during the current year or the preceding five years.

Notice of Borrowing” means a written notice of borrowing from the Borrower to the Administrative Agent in the form of Exhibit C.

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Notice of Exclusive Control” means the notice required under the Account Control Agreement for the Administrative Agent to give instructions to the Account Bank with respect to the Collections Account.

NRSRO” means a Nationally Recognized Statistical Rating Organization, such as Moody’s Investors Service, Inc., Standard & Poor’s Financial Services LLC, a part of McGraw-Hill Financial, Fitch Inc., Kroll Bond Rating Agency, LLC, Egan-Jones Ratings Company or DBRS Morningstar.

Obligations” means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to the Lenders, the Administrative Agent, the Facility Servicer, the Collateral Custodian or any other Secured Party arising under this Agreement or any other Transaction Document and shall include all liability for principal of and interest on the Advances, Fees, indemnifications and other amounts due or to become due by the Borrower to the Lenders, the Administrative Agent, the Facility Servicer, the Collateral Custodian and any other Secured Party under this Agreement or any other Transaction Document, including any Fee Letter and costs and expenses payable by the Borrower to the Lenders, the Administrative Agent, the Facility Servicer, the Collateral Custodian or any other Secured Party, including reasonable attorneys’ fees, costs and expenses, including interest, fees and other obligations that accrue after the commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such insolvency proceeding).

Obligor” means, collectively, each Person obligated to make payments under a Loan Agreement, including any guarantor thereof.

OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

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

Other Taxes” has the meaning assigned to that term in Section 10.07(b).

Outstanding Principal Balance” means, at any time for any Loan Asset, the outstanding principal amount of such Loan Asset at such time, including any Delayed Draw for such Loan Asset that has been funded at such time.

Participant Register” has the meaning assigned to that term in Section 2.03(c).

Participation Agreement” means, for any Loan Asset that consists of a loan participation interest, the participation agreement or other agreement pursuant to which the Borrower participates in the Underlying Loan Obligation for such Loan Asset in a form reasonably agreed to by the Borrower and the Initial Lender on or prior to the Closing Date or Cut-Off Date for such Loan Asset, as the case may be.

Payment Date” means (a) the 18th day of each month or, if such day is not a Business Day, the next succeeding Business Day and (b) the Facility Termination Date.

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Payment Date Report” means a report from the Administrative Agent substantially in the form of Exhibit G.

Pension Plan” has the meaning assigned to that term in Section 4.01(r).

Permitted Liens” means any of the following: (a) Liens for Taxes if such Taxes shall not at the time be due or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which proper reserves in accordance with GAAP have been provided on the books of such Person; (b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith by appropriate proceedings and with respect to which proper reserves in accordance with GAAP have been provided on the books of the applicable Person; (c) Liens granted pursuant to or by the Transaction Documents; (d) judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default; (e) with respect to the Underlying Collateral for any Loan Asset,
(i)Liens in favor of the lenders, lead agent, administrative agent, collateral agent or similar agent for the benefit of all holders of indebtedness relating to such Loan Asset (or the Underlying Loan Obligation, as applicable) and (ii) “permitted liens” as defined in the Loan Agreement for such Loan Asset or such comparable definition in substance if “permitted liens” is not defined therein; (f) Liens routinely imposed on deposits and related assets by the Account Bank, any Underlying Servicer or any Counterparty Lender to the extent permitted under the Account Control Agreement or the related Loan Agreements or Participation Agreements and (g) Liens consisting of restrictions on transfer of a Loan Asset or rights of set-off or withholding set forth in the underlying loan agreement documents, the related Loan Agreements or Participation Agreements.

Person” means an individual, partnership, corporation (including a statutory or business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

Pledged Equity” has the meaning assigned to that term in Section 2.09(b).

Portfolio Asset Servicer” means CMFT RE Lending Sub MM, LLC, not in its individual capacity, in its capacity as Portfolio Asset Servicer pursuant to the terms of this Agreement, together with its successors and permitted assigns, including any successor appointed pursuant to Article VIII.

Portfolio Assets” means all Loan Assets owned by the Borrower, together with all proceeds thereof and other assets or property related thereto, including all right, title and interest of the Borrower in and to:

(a)subject to the terms of any applicable Participation Agreement, any amounts on deposit in any cash reserve, collection, custody or lockbox accounts securing the Loan Assets;

(b)all rights with respect to the Loan Assets to which the Borrower is entitled as lender under the applicable Loan Agreement or as a loan participant under the applicable Participation Agreement;

(c)subject to the terms of any applicable Participation Agreement, any Underlying Collateral securing the Loan Assets and all Recoveries related thereto, all payments paid in respect

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thereof and all monies due, to become due and paid in respect thereof accruing after the applicable Cut-Off Date and all net liquidation proceeds;

(d)the Loan Asset Files related to the Loan Assets, any Records, and the documents, agreements, and instruments included in such Loan Asset Files or Records;

(e)subject to the terms of any applicable Participation Agreement, all Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank accounts and property subject thereto from time to time purporting to secure or support payment of the Loan Assets (or the Underlying Loan Obligations, as applicable), together with all UCC financing statements, mortgages or similar filings signed or authorized by an Obligor relating thereto;

(f)each Loan Asset Assignment with respect to the Loan Assets (including any rights of the Borrower against the Transferor thereunder) and the assignment to the Administrative Agent, for the benefit of the Secured Parties, of all UCC financing statements, if any, filed by the Borrower against any Transferor under or in connection with such Loan Asset Assignment;

(g)the assignment to the Administrative Agent, for the benefit of the Secured Parties, of all UCC financing statements for the Loan Assets;

(h)all records (including computer records) with respect to the foregoing; and

(i)all Collections, income, payments, proceeds and other benefits of each of the foregoing.

Portfolio LTV” means, as of any date of determination, the ratio (expressed as a percentage rounded up to the nearest whole number) of (a) the aggregate amount of Advances Outstanding for all Term Loan Series as of such date to (b) the most recent Total Portfolio Value as of such date.

Portfolio LTV Certificate” means a certificate setting forth the calculation of Portfolio LTV and Total Portfolio Value as of the applicable date of determination, substantially in the form of Exhibit E, prepared by the Borrower.

Principal Collections” means Collections other than Interest Collections.

Pro Rata Share” means, with respect to any Lender as of any date of determination, (a) with respect to any Term Loan Series, the ratio of such Lender’s Commitment for such Term Loan Series to the aggregate Commitments of all Lenders for such Term Loan Series as of such date and (b) with respect to all outstanding Term Loan Series, the ratio of such Lender’s Commitment for all such Term Loan Series to the aggregate Commitments of all Lenders for such Term Loan Series as of such date.

Proceeds” means, with respect to the Collateral, all property that is receivable or received when such Collateral is collected, sold, liquidated, foreclosed, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral.

Recipient” means the Administrative Agent, any Lender or the Facility Servicer as applicable.

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Records” means all documents relating to the Loan Assets, including books, records and other information executed in connection with the Transfer of and maintenance of the Loan Assets in the Collateral Portfolio or maintained with respect to the Collateral Portfolio and the related Obligors that the Borrower or any Underlying Servicer has generated, or in which the Borrower has otherwise obtained an interest, including documents under which the Borrower has acquired an interest pursuant to a Loan Asset Assignment.

Recoveries” means, as of the time any Underlying Collateral for any Loan Asset is Sold, discarded or abandoned (after a determination by the Portfolio Asset Servicer or the Counterparty Lender or Underlying Servicer, as applicable, that such Underlying Collateral has little or no remaining value in accordance with Section 8.06) or otherwise determined to be fully liquidated by the Portfolio Asset Servicer or such Counterparty Lender or Underlying Servicer in accordance with Section 8.06, the proceeds from the Sale of such Underlying Collateral, the proceeds of any related Insurance Policy or any other recoveries (including interest proceeds recovered) with respect to such Underlying Collateral and amounts representing late fees and penalties, net of any amounts received that are required under the Loan Agreement for the applicable Loan Asset to be refunded to the related Obligor.

Register” has the meaning assigned to that term in Section 2.03(b).

Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

Relates” means, with respect to any Loan Asset and any Term Loan Series, that such Loan Asset was included in the Borrowing Base with respect to such Term Loan Series or acquired with Advances made under such Term Loan Series (or both); provided that if a Loan Asset Relates to more than one Term Loan Series as provided by Section 3.03(a) and as indicated on a Borrowing Base Certificate delivered in accordance with Section 2.02(a)(vii), only that portion of such Loan Asset that is included the Borrowing Base for a Term Loan Series or was acquired with the Advances made under a Term Loan Series (or both) “Relates” to such Term Loan Series. Any derivatives of the word “Relates,” including “Relating,” “Related,” or otherwise, have meanings correlative thereto.

Release Date” has the meaning assigned to that term in Section 2.10(b).

Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

Replacement Servicer” has the meaning assigned to that term in Section 8.01(c).

Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.

Reporting Date” means, for any Payment Date, the day that is two Business Days prior to such Payment Date.

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Required Loan Documents” means, for each Loan Asset or Underlying Loan Obligation, as applicable, the following documents or instruments, all as specified on the related Loan Asset Checklist, to the extent applicable for such Loan Asset or Underlying Loan Obligation: copies of the executed (a) loan, credit, note purchase or other similar agreement, (b) promissory notes, (c) guaranties, indemnities or other similar agreements, (d) security or pledge agreements and mortgage or deeds of trust and other similar instruments and (e) filed copies of UCC financing statements, fixture filings and other similar filings, in each case as identified on the related Loan Asset Checklist.

Responsible Officer” means (a) when used with respect to the Administrative Agent or the Collateral Custodian, any officer in the corporate trust office of the Administrative Agent or the Collateral Custodian, including any president, vice president, executive vice president, assistant vice president, treasurer, secretary, assistant secretary, corporate trust officer or any other officer thereof customarily performing functions similar to those performed by the individuals who at the time shall be such officers, respectively, or to whom any matter is referred because of such officer’s knowledge of or familiarity with the particular subject, and, in each case, having direct responsibility for the administration of this Agreement and the other Transaction Documents to which such Person is a party and (b) with respect to any other Person, any duly authorized officer of such Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

Restricted Junior Payment” means (a) any dividend or other distribution, direct or indirect, on account of any class of equity interests of the Borrower now or hereafter outstanding, except a dividend or other distribution paid solely in interests of that class of membership interests or in any pari passu or junior class of equity interests of the Borrower, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of equity interests of the Borrower now or hereafter outstanding or (c) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire equity interests of the Borrower now or hereafter outstanding.

Sale” has the meaning assigned to that term in Section 2.10(a). Any derivatives of the word “Sale,” including “Sold,” or otherwise, have meanings correlative thereto.

Sanctioned Country” means a country or territory subject to a sanctions program maintained under any Sanctions and Anti-Terrorism Law (at the time of this Agreement, Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine).

Sanctioned Person” means (a) any Person included on a list of designated or restricted Persons maintained by OFAC (including OFAC’s Specially Designated Nationals and Blocked Persons List and Sectoral Sanctions Identifications List), the U.S. Department of State, the United Nations Security Council, or any other relevant Governmental Authority, (b) any Person located, organized, or resident in a Sanctioned Country, or (c) any Person 50% or more owned, directly or indirectly, individually or in the aggregate, or controlled by any such Person or Persons described in clauses (a) or (b) above.

Sanctions and Anti-Terrorism Laws” means any and all Applicable Laws relating to terrorism and economic or financial sanctions or trade embargoes administered or enforced by the U.S. Government (including OFAC, the United Nations Security Council, or any other relevant Governmental Authority), and

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any regulation, order, or directive promulgated, issued or enforced pursuant to such applicable Laws, all as amended, supplemented or replaced from time to time.

Scheduled Maturity Date” means, for any Term Loan Series, the date that is five years after the expiration of the period described in clause (a)(i) of the definition of Commitment Termination Date with respect to such Term Loan Series (or such later date as may be agreed upon by the Borrower and all Lenders under such Term Loan Series in their discretion and set forth in the Confirmation with respect thereto).

Secured Party” means the Administrative Agent, the Facility Servicer, each Lender and each other Indemnified Party.

Servicer Termination Event” means, with respect to an Applicable Servicer, the occurrence of any one or more of the following events:

(a)a Bankruptcy Event shall occur with respect to such Applicable Servicer;

(b)such Applicable Servicer shall assign its rights or obligations as “Portfolio Asset Servicer” or “Facility Servicer” hereunder (other than as expressly provided herein);

(c)any failure in any material respect by such Applicable Servicer to observe or perform any covenant or other agreement of such Applicable Servicer set forth in this Agreement or the other Transaction Documents (other than actions with respect to which another clause of this definition expressly relates), which continues to be unremedied for a period of 30 days (if such failure can be remedied) after the earlier to occur of (i) the date on which written notice of such failure shall have been given to such Applicable Servicer by the Administrative Agent (acting at the written direction of the Majority Lenders) or the Borrower and (ii) the date on which a Responsible Officer of such Applicable Servicer acquires Knowledge thereof (or such extended period of time reasonably approved by the Borrower not to exceed 60 days in the aggregate provided that such Applicable Servicer is diligently proceeding in good faith to cure such failure or breach); and

(d)any representation, warranty or certification made by such Applicable Servicer in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made in any material respect, which materially and adversely affects the interests of the Administrative Agent, the Borrower or the Lenders.

Servicer Termination Notice” has the meaning assigned to that term in Section 8.01(b).

Servicing Report” has the meaning assigned to that term in Section 8.08(a).

Servicing Standard” means, with respect to any Loan Asset included in the Collateral Portfolio, to service and administer such Loan Asset on behalf of the Borrower in accordance with Applicable Law, the terms of this Agreement, the Loan Agreements and all customary and usual servicing practices for loans or loan participations like the Loan Assets.

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SOFR” means, for any U.S. Government Securities Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).

Sponsor” means CIM Real Estate Finance Trust, Inc., a Maryland corporation, and any other parallel fund of, or an alternate investment vehicle in relation to, the foregoing.

State” means one of the fifty states of the United States or the District of Columbia.

Subsidiary” means with respect to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

Taxes” means any present or future taxes, levies, imposts, duties, charges, deductions, withholdings (including backup withholding), assessments or fees of any nature (including interest, penalties, and additions thereto) that are imposed by any Governmental Authority.

Term Loan Series” has the meaning assigned to such term in Section 2.01(a).

Term Loan Series 2022-1” has the meaning assigned to such term in Section 2.01(a).

Term Loan Series Note” has the meaning assigned to such term in Section 2.03(a).

Term SOFR” means, for any Advance with respect to any Term Loan Series for which the Benchmark is designated as “Term SOFR” for any Interest Period, the greater of (a) the Term SOFR Reference Rate as such rate is published by the Term SOFR Administrator as of 5:00 p.m. New York City time, two U.S. Government Securities Business Days prior to the beginning of such Interest Period and (b) the Floor for the applicable Term Loan Series.

Term SOFR Administrator” means, CME Group Benchmark Administration Limited (CBA) or a successor administrator of the Term SOFR Reference Rate selected by Facility Servicer in its reasonable discretion.

Term SOFR Reference Rate” means, the forward-looking term rate based on the secured overnight financing rate.

Total Portfolio Value” means, as of any date of determination, the aggregate Value of all Eligible Loan Assets as of such date.

Transaction Documents” means this Agreement, any Term Loan Series Note, the Custodial Agreement, the Account Control Agreement, the Fee Letters, each Assignment and Assumption Agreement, each Participation Agreement, each Loan Asset Assignment, any account control agreement

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covering an Underlying Servicer Account in the event the applicable Underling Servicer is an Affiliate of the Borrower and each agreement, instrument, certificate or other document related to any of the foregoing.

Transfer” means (a) the acquisition by, or the transfer or assignment to, the Borrower of a Loan Asset or other Portfolio Asset pursuant to a Loan Asset Assignment or Participation Agreement or (b) the origination of a Loan Asset by the Borrower pursuant to a Loan Agreement.

Transferor” means any assignor of a Loan Asset under a Loan Asset Assignment.

UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

Underlying Collateral” means, with respect to a Loan Asset, any property or other assets pledged or mortgaged as collateral to secure repayment of such Loan Asset or the Underlying Loan Obligation for such Loan Asset, as applicable, including, mortgaged property and all proceeds from any sale or other disposition of such property or other assets.

Underlying Loan Obligation” means, with respect to a Loan Asset consisting of a loan participation, the obligations of any applicable Obligor under the applicable Loan Agreement and related loan documents in which such Loan Asset is participating.

Underlying Obligor Default” means, with respect to any Loan Asset following the Cut-Off Date relating thereto, the continuance of one or more of the following events (any of which, for the avoidance of doubt, may occur more than once):

(a)an Obligor payment default in respect of principal, interest or fees with respect to such Loan Asset (after giving effect to any grace or cure period set forth in the applicable Loan Agreement);

(b)any other Obligor event of default or similar event or circumstance under the Loan Agreement for such Loan Asset for which the Borrower (or agent or required lenders pursuant to the applicable Loan Agreement, as applicable) has elected to exercise its rights and remedies under or with respect to such Loan Asset (including the acceleration of the loan relating thereto, but excluding rights and remedies related to notices of default or reservation of rights, forbearances, imposition of reserves or any actions to perfect Liens on the Underlying Collateral); or

(c)a Bankruptcy Event with respect to any related Obligor.

Underlying Servicer” means, with respect to a Loan Asset, any agent, sub-agent or servicer appointed by the lender or lenders or the administrative agent or other similar agent for such lender or lenders, for such Loan Asset to administer and service such Loan Asset or the Underlying Loan Obligations for such Loan Asset.

Underlying Servicer Account” means the deposit or securities account owned by an Underlying Servicer, which may be, in the event that such Underlying Servicer is not an Affiliate of Borrower, a comingled account of Servicer, or otherwise, which shall be in the name of the Borrower into which

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Collections shall be deposited in accordance with the terms of this Agreement and under the “control” (within the meaning of Section 9-104 of the UCC of the State of New York) of the Administrative Agent for the benefit of the Secured Parties.

United States” means the United States of America.

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

U.S. Government Securities Business Day” means, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

Valuation Policy” means the Sponsor’s internal valuation policy with respect to loans such as the Loan Assets as of the Closing Date, as delivered pursuant to Section 3.01(a); provided that if the Sponsor changes, amends or otherwise modifies the Valuation Policy in any material respect after the Closing Date, such changes, amendments or modifications will not be applicable to determining Value for purposes of this Agreement unless the Initial Lender has consented to such changes, amendment or modifications.

Value” means, as of any date of determination for any Loan Asset, the lowest of (a) the Outstanding Principal Balance of such Loan Asset as of such date, (b) the most recent value for such Loan Asset as established by an independent third party and (c) the value of such Loan Asset as of such date as determined by the Sponsor pursuant to the Valuation Policy taking into account in such determination the value established by an independent third party as part of the Valuation Policy, in each case subject to adjustment in accordance with Section 2.15; provided that:

(i)if an Event of Default has occurred and is continuing, then, at the option of the Initial Lender, the value of each Loan Asset will be the median value established by independent third parties as part of the Valuation Policy (and may not be overridden by any other provision of the Valuation Policy) with respect to such Loan Asset and

(ii)for any Loan Asset with an Underlying Obligor Default, the value of such Loan Asset will be the lowest of (A) the most recent value for such Loan Asset as established by an independent third party after the date of such Underlying Obligor Default and (B) 50% of the lower of (1) the Outstanding Principal Balance of such Loan Asset as of such date and
(2) the value of such Loan Asset after the date of such Underlying Obligor Default as determined by the Sponsor pursuant to the Valuation Policy taking into account in such determination the value established by an independent third party as part of the Valuation Policy, in each case subject to adjustment in accordance with Section 2.15.

SECTION 1.02 Other Terms. All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.

SECTION 1.03 Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

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SECTION 1.04    Interpretation. In each Transaction Document, unless a contrary intention appears:

(a)the singular number includes the plural number and vice versa;

(b)reference to any Person includes such Person’s successors and assigns but only if such successors and assigns are not prohibited by the Transaction Documents;

(c)reference to any gender includes each other gender;

(d)reference to day or days without further qualification means calendar days;

(e)reference to any time means New York, New York time;

(f)the term “or” is not exclusive;

(g)reference to the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

(h)reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof; and

(i)reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any Applicable Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision.

SECTION 1.05 Advances to Constitute Loans. Notwithstanding any provision herein to the contrary, the parties hereto intend that the Advances made hereunder constitute a “loan” and not a “security” for purposes of Section 8-102(15) of the UCC of the State of New York and Delaware.

SECTION 1.06 Information as to Interest Rates. The interest rate on Advances may be determined by reference to a benchmark rate that is, or may in the future become, the subject to regulatory reform or cessation. Regulators have signaled the need to use alternative reference rates for some of these benchmark rates and, as a result, such benchmark rates may cease to comply with applicable laws and regulations, may be permanently discontinued or the basis on which they are calculated may change. The London interbank offered rate, which may be one of the benchmark rates with reference to which the interest rate on Advances may be determined, is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. Settings of the applicable Benchmark (including LIBOR, Term SOFR or any other Benchmark provided for in the Confirmation for any Term Loan Series) will be determined by the Facility Servicer, and such determination shall be conclusive absent manifest error. The Facility Servicer, upon determining the interest rate setting for any Advance, shall promptly notify the Borrower and the Administrative Agent thereof. Neither the Administrative Agent nor, except for complying with its notice and consultation obligations and the determination standards set forth herein, the Facility Servicer warrants or accepts responsibility for, and

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does not have any liability with respect to (a) the administration of, submission of, calculation of or any other matter related to any Benchmark (including LIBOR, Term SOFR or any other Benchmark provided for in the Confirmation for any Term Loan Series) or any component definition thereof, or rates referenced in the definition thereof, or any alternative, comparable or successor rate thereto (including any then- current Benchmark or any Benchmark Replacement), including whether the composition or characteristics of any such alternative, comparable or successor rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, any Benchmark (including LIBOR, Term SOFR or any other Benchmark provided for in the Confirmation for any Term Loan Series) or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Change, in each case, other than to the extent arising out of the bad faith, gross negligence or willful misconduct of the Facility Servicer.

ARTICLE II. THE FACILITY

SECTION 2.01 Establishment of Term Loan Series; Advances.

(a)On the terms hereinafter set forth, (i) on the Closing Date, the Borrower and the Lenders establish a series of term loans (such series of term loans, “Term Loan Series 2022-1”) and (ii) after the Closing Date, the Borrower may at its option, by delivery of a Term Loan Series Notice substantially in the form of Exhibit A to the Administrative Agent and the Lenders, from time to time on any Business Day request that the Lenders establish a new series of term loans hereunder (together with Term Loan Series 2022-1, each, a “Term Loan Series”), which Term Loan Series is on a pari passu basis with all other Term Loan Series and cross-collateralized and secured on a pari passu basis with the Collateral. Together with the Term Loan Series Notice, the Borrower shall deliver a Loan Asset Schedule of the Loan Assets to Relate to such proposed Term Loan Series to the Administrative Agent and the Lenders. The Lenders shall deliver a response to the Administrative Agent with respect to any requested Term Loan Series Notice no later than five Business Days after receipt of the related Term Loan Series Notice and to the extent any Lender fails to so respond, such Lender is deemed to have rejected such request. Each Lender must approve any requested Term Loan Series and each Lender’s Commitment with respect to such Term Loan Series must be the percentage interest as it owns in each other Term Loan Series outstanding at such time. Each Term Loan Series will have the name assigned thereto on the Confirmation for such Term Loan Series, be subject to the Applicable Spread and have such other terms and conditions as are specified on the Confirmation for such Term Loan Series, as amended or otherwise modified from time to time with only the consent of the Borrower and the Lenders. Term Loan Series 2022-1 will have the terms set forth for such Term Loan Series in this Agreement.

(b)With respect to each Term Loan Series and on the terms and conditions hereinafter set forth, the Borrower may at its option, from time to time on any Business Day during the Availability Period for such Term Loan Series, request that the Lenders make Advances to it in an amount which after giving effect to such Advances, would not cause the aggregate Advances Outstanding under such Term Loan Series to exceed the Maximum Availability for such Term Loan Series on such date (after giving effect to any Transfer effectuated from the use of proceeds thereof). Notwithstanding anything contained in this Section 2.01(b) or elsewhere in this Agreement to the contrary, no Lender is obligated to make any Advance under a Term Loan Series in an amount that would, after giving effect to such Advance, exceed such Lender’s Commitment for such Term Loan Series less the aggregate outstanding amount of any Advances funded by such Lender under such Term Loan Series. Each Advance to be made hereunder shall

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be made by the Lenders in accordance with their respective Pro Rata Shares for the Term Loan Series under which such Advance is made.

(c)If a Commitment Termination Date has occurred as a result of clause (b) of the definition thereof or the Availability Period has been terminated or suspended upon the occurrence of an Event of Default, the Commitment Termination Date pursuant to clause (b) of the definition thereof shall be deemed not to have occurred and the Availability Period will be reinstated once the Administrative Agent (acting at the written direction of the Majority Lenders) waives the Event of Default which gave rise to such termination or suspension in accordance with Section 10.01.

SECTION 2.02    Procedure for Advances.

(a)The Borrower shall request an Advance by delivery of a Notice of Borrowing to the Administrative Agent, with a copy to the Facility Servicer, no later than 2:00 p.m. two Business Days immediately prior to the proposed date of such Advance (or such shorter period of time agreed to by the Lenders and the Administrative Agent in their sole discretion); provided that if the proposed date of the initial Advance is the Closing Date, the Notice of Borrowing with respect to the initial Advance may be delivered on the Closing Date. Each Notice of Borrowing must be accompanied by (i) a duly completed Borrowing Base Certificate for the Term Loan Series under which the requested Advance is to be made,
(ii)a Portfolio LTV Certificate (each of the Borrowing Base Certificate and Portfolio LTV Certificate as giving pro forma effect to the Advance requested and the use of the proceeds thereof) and (iii) if the proceeds of such Advance are to be used in connection with the Transfer of a Loan Asset, a Loan Asset Certificate, and specify:

(i)the Term Loan Series under which such Advance is to be made;

(ii)the amount of such Advance, which must be at least equal to $1,000,000 (or, with respect to any Advance the proceeds of which are to be used to fund a Delayed Draw, $250,000);

(iii)the proposed date of such Advance (which must be a Business Day) and detailed instructions as to where the proceeds of such Advance are to be deposited or transferred;

(iv)with respect to any Advance, whether the proceeds of such Advance are to be used (A) to fund a Delayed Draw or (B) in connection with the Transfer of a Loan Asset and the payment of the fees of the Sponsor, Holdings and the Borrower with respect thereto as permitted by this Agreement;

(v)if the proceeds of such Advance are to be used to fund a Delayed Draw, the amount of such Delayed Draw and the Delayed Draw Loan Asset to which it applies;

(vi)if the proceeds of such Advance are to be used in connection with the Transfer of a Loan Asset (A) that such Loan Asset is an Eligible Loan Asset and (B) if such Eligible Loan Asset is proposed to be Related to more than one Term Loan Series, the Term Loan Series to which such Eligible Loan Asset is proposed to be Related and the portion of such Eligible Loan Asset to be allocated to each such Term Loan Series; and

(vii)that all conditions precedent for such Advance described in Article III have been satisfied or will be satisfied on the proposed date of such Advance.

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(b)Promptly upon receipt of a Notice of Borrowing, the Administrative Agent shall notify the Lenders of the requested Advance, and the Lenders shall make the Advance on the terms and conditions set forth herein. On the Advance Date of each Advance, upon satisfaction of the applicable conditions set forth in Article III, each Lender shall, in accordance with instructions received by the Administrative Agent from the Borrower, make available to the Borrower, in same day funds, an amount equal to such Lender’s Pro Rata Share (for the applicable Term Loan Series) of such Advance, by payment into the account which the Borrower has designated in writing.

(c)The obligation of each Lender to remit its Pro Rata Share (for the applicable Term Loan Series) of any Advance is several from that of each other Lender and the failure of any Lender to so make such amount available to the Borrower shall not relieve any other Lender of its obligations hereunder. In no event shall the Administrative Agent have any liability or obligation to fund any Advance.

SECTION 2.03    Evidence of Debt.

(a)Upon the request of any Lender, the Borrower shall prepare, execute and deliver to such Lender a promissory note of the Borrower (each, a “Term Loan Series Note”), in a form approved by the Initial Lender, payable to such Lender (or, if requested by such Lender, to such Lender and its registered and permitted assigns), which shall evidence such Lender’s Advances in addition to the records set forth in Section 2.03(b).

(b)The Administrative Agent shall maintain, solely for this purpose as the agent of the Borrower, at its address referred to in Section 10.02 a copy of each Assignment and Assumption Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders, the Term Loan Series in which such Lender participates and the Commitments of, and principal amounts of (and stated interest on) the Advances owing to each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent, each Lender and the other parties hereto shall treat each person whose name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.

(c)Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts of (and stated interest on) each participant’s interest in the loans or other obligations under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

SECTION 2.04    Repayment; Prepayment; Termination of Commitments.

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(a)The Borrower shall repay to the Lenders on the Final Maturity Date for a Term Loan Series the aggregate principal amount of all Advances Outstanding for such Term Loan Series, together with all accrued and unpaid interest thereon. The Borrower shall also repay the outstanding principal amount of the Advances as provided in Section 2.04(b) and Section 2.08.

(b)If on any Payment Date (after giving effect to the provisions of Section 2.08 on such date) the aggregate Advances Outstanding for a Term Loan Series exceeds the Maximum Availability for such Term Loan Series at such time, the Borrower shall repay the Advances Outstanding in an amount equal to such excess within twelve Business Days, whether or not a Unmatured Event of Default or an Event of Default has occurred.

(c)Except as provided in this Section 2.04, the Borrower may not voluntarily prepay the Advances Outstanding for any Term Loan Series, in whole or in part.

(d)On any date a Market Trigger Event specified in clause (a) of the definition thereof exists, the Borrower may, without penalty or premium, prepay Advances Outstanding with respect to a Term Loan Series to an amount where Portfolio LTV, when recalculated with respect to Advances Outstanding after giving effect to such prepayment, is equal to 85%. On any date a Market Trigger Event specified in clause (c) of the definition thereof exists, the Borrower may, without penalty or premium, prepay Advances Outstanding in full.

(e)If consent with respect to any Material Modification is not given as provided in Section 5.01(e)(i), then the Borrower may, without penalty or premium, prepay Advances Outstanding in an amount equal to the Advance Rate for the Loan Asset subject to (or which would be subject to) such Material Modification multiplied by the Value of such Loan Asset at such time.

(f)If, at any time after the third anniversary of the Closing Date, there are less than four Eligible Loan Assets in the Collateral Portfolio (across all Term Loan Series), then the Borrower may, without penalty or premium, prepay Advances Outstanding in full (but not in part).

(g)The Borrower may, at its option, terminate this Agreement and the other Transaction Documents upon 30 Business Days’ prior written notice to the Administrative Agent and the Lenders so long as all Advances Outstanding under each Term Loan Series have been paid in full at such time in accordance with the terms of this Agreement. The Majority Lenders may, at their option, terminate this Agreement and the other Transaction Documents upon 30 Business Days’ prior written notice to the Administrative Agent and the Borrower so long as all Advances Outstanding under each Term Loan Series have been paid in full and the Borrower has not requested a new Term Loan Series to be established in the 18 months prior to the date that such termination is requested. Any termination of this Agreement is subject to Article IX, Section 10.05, Section 10.07 and payment of all accrued and unpaid interest, all accrued and unpaid fees, costs and expenses of the Secured Parties and payment in full of all other Obligations (other than contingent obligations not then due and payable).

SECTION 2.05    Interest and Fees.

(a)(a) The Borrower shall pay interest on the Advances Outstanding under each Term Loan Series at a fluctuating rate per annum equal to the applicable Benchmark (and if the Benchmark is a term rate or has a set observation period of greater than one day, for the applicable Interest Period) initially set forth in the related Confirmation, as the same may be updated pursuant to Section 2.16, plus

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the Applicable Spread for such Term Loan Series. Interest is payable on each Payment Date as provided in Section 2.08. If the Benchmark is a term rate or has a set observation period of greater than one day, the Advances Outstanding are automatically continued in whole to the next applicable Interest Period upon the expiration of the then current Interest Period with respect thereto until paid in full.

(b)If any amount payable by the Borrower under this Agreement or any other Transaction Document is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at the Default Rate therefor. While any Event of Default exists, the Borrower shall pay interest on the principal amount of all Advances Outstanding hereunder at the Default Rate therefor.

(c)Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Advance, together with all fees, charges and other amounts that are treated as interest on such Advance under Applicable Law exceeds the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Advance in accordance with Applicable Law, the rate of interest payable in respect of such Advance hereunder, together with all charges payable in respect thereof, shall be limited to the Maximum Rate. To the extent lawful, the interest and charges that would have been paid in respect of such Advance but were not paid as a result of the operation of this Section 2.05(c) shall be cumulated and the interest and charges payable to such Lender in respect of other Advance or periods shall be increased (but not above the amount collectible at the Maximum Rate therefor) until such cumulated amount shall have been received by such Lender. Any amount collected by such Lender that exceeds the maximum amount collectible at the Maximum Rate shall be applied to the reduction of the principal balance of such Advance or refunded to the Borrower so that at no time shall the interest and charges paid or payable in respect of such Advance exceed the maximum amount collectible at the Maximum Rate.

(d)The Borrower shall pay the fees set forth in the Fee Letters or in any Confirmation on the terms and conditions provided therein.

(e)All computations of interest and all computations of interest and fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

(f)In no event shall either the Facility Servicer or the Administrative Agent be (i) responsible for making any decisions or determinations in connection with the availability or unavailability of LIBOR or any benchmark replacement or benchmark transition event or (ii) have any liability for any determination, decision or election made by or on behalf of the Borrower or the Majority Lenders in connection with availability or unavailability of LIBOR, the selection of any alternate benchmark rate, a benchmark transition event or a benchmark replacement, and the parties hereto waive and release any and all claims against the Facility Servicer and the Administrative Agent relating to any such determination, decision or election other than to the extent arising out of the bad faith, gross negligence or willful misconduct of the Administrative Agent or the Facility Servicer, as applicable.

SECTION 2.06 Payments and Computations, Etc.

(a)On the Determination Date for each Reporting Date, the Administrative Agent shall notify the Facility Servicer of the interest and fees payable hereunder on such Payment Date for each outstanding Term Loan Series and any such other information as reasonably requested by the Facility

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Servicer that is in the Administrative Agent’s control. All amounts to be applied by the Administrative Agent from amounts received from the Collection Account pursuant to Section 2.08, on the Borrower’s behalf, hereunder and in accordance with this Agreement shall be applied in accordance with the terms hereof so that funds are received by the applicable recipient thereof no later than 2:00 p.m. on the applicable Payment Date in lawful money of the United States in immediately available funds. Any Obligation hereunder shall not be reduced by any distribution of any portion of Collections if at any time such distribution is rescinded or required to be returned by any Lender to the Borrower, the Facility Servicer or any other Person for any reason.

(b)Other than as otherwise set forth herein, whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time is reflected in the computation of interest and fees.

(c)To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Bankruptcy Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred and (ii) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent.

(d)If the Borrower has designated a portion of a Loan Asset to two separate Term Loan Series as provided by Section 3.03(a) and indicated on a Borrowing Base Certificate delivered in accordance with Section 2.02(a), the treatment of any such Loan Asset with respect to such Term Loan Series (whether for Advances, payments, Collections or otherwise) will be done on a pro rata basis based on the initial designation.

SECTION 2.07 Collections and Allocations.

(a)The Borrower, or the Portfolio Asset Servicer on behalf of the Borrower, shall direct (i) the Obligor and any Underlying Servicer for any Loan Asset that is not a loan participation interest to remit all Collections with respect to such Loan Asset directly to the applicable Underlying Servicer Account, (ii) each Underlying Servicer to, within two Business Days after the identification and receipt of available funds thereof, remit Collections with respect to any Loan Asset from the applicable Underlying Servicer Account to the Collection Account and (iii) any Counterparty Lender to cause the Obligor (or, to the extent applicable, such Counterparty Lender or the Underlying Servicer) for any Loan Asset that is a loan participation interest to remit all Collections with respect to such Loan Asset directly to the Collection Account.

(b)The Borrower shall, and shall cause its Affiliates to, deposit all Collections received by the Borrower or its Affiliates with respect to the Collateral Portfolio to the Collection Account within two Business Days after identification and receipt thereof and shall, and shall cause its Affiliates to, hold in

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trust for the benefit of the Administrative Agent, for the benefit of the Secured Parties, all such Collections until so deposited.

(c)Upon receipt of Collections in the Collection Account, the Borrower shall, or shall cause the Underlying Servicers to, promptly identify any Collections received as being on account of Principal Collections, Interest Collections or Excluded Amounts and will identify the Term Loan Series from which such Collections or Excluded Amounts were received. The Borrower shall, or shall direct the Underlying Servicers to, further include a statement as to the amount of Principal Collections, Interest Collections and Excluded Amounts on deposit in the Collection Account (and the Term Loan Series from which such Principal Collections, Interest Collections and Excluded Amounts were received) on each Reporting Date (after giving effect to transfers made by the Underlying Servicers to such Collection Account on such date, if any) in the Servicing Report delivered pursuant to Section 8.08(a). The Borrower and the Portfolio Asset Servicer shall take commercially reasonable steps to confirm that only funds constituting Collections relating to Loan Assets are deposited into the Collection Account.

(d)Notwithstanding the fact that Excluded Amounts (other than items described in clauses
(iii)and (v) of the definition thereof) are part of the Collateral Portfolio and constitute Portfolio Assets, prior to the delivery of a Notice of Exclusive Control by the Administrative Agent to the Account Bank in accordance with the terms of the Account Control Agreement, the Facility Servicer shall (on behalf of the Borrower and at the direction of the Portfolio Asset Servicer) withdraw from the Collection Account any deposits thereto constituting Excluded Amounts if the Portfolio Asset Servicer has, prior to such withdrawal, identified to the Facility Servicer such Excluded Amounts and deliver such Excluded Amounts to the Borrower or as the Borrower may direct. After the delivery of a Notice of Exclusive Control in accordance with the terms of the Account Control Agreement, the Administrative Agent, upon written direction from the Majority Lenders, may withdraw from the Collection Account any deposits therein constituting Excluded Amounts.

(e)Neither the Borrower nor the Portfolio Asset Servicer has any rights of withdrawal with respect to amounts held in the Collection Account.

SECTION 2.08 Remittance Procedures. On each Payment Date, the Administrative Agent, on behalf of the Borrower, shall instruct the Account Bank to remit funds on deposit in the Collection Account as described in this Section 2.08 in accordance with the Payment Date Report for such Payment Date and, to the extent funds are remitted to the Administrative Agent, shall distribute such funds as described in this Section 2.08; provided that, at any time after delivery of a Notice of Exclusive Control pursuant to the terms of the Account Control Agreement, the Administrative Agent shall instruct the Account Bank to remit funds on deposit in the Collection Account as described in this Section 2.08.

(a)Interest Collections. So long as no Event of Default has occurred and is continuing, the Administrative Agent, on behalf of the Facility Servicer and the Borrower, shall (as directed pursuant to the first paragraph of this Section 2.08) instruct the Account Bank to transfer Interest Collections (with respect to all Term Loan Series) held by the Account Bank in the Collection Account in accordance with the Payment Date Report for such Payment Date, and shall distribute such funds, to the following Persons in the following amounts, calculated as of the most recent Determination Date, in the following order and priority:

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(i)first, to the Administrative Agent for ratable distribution to the Administrative Agent, the Collateral Custodian and the Facility Servicer (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) in payment in full of all accrued fees, expenses and indemnities due and payable to such party hereunder or under any other Transaction Document and under the Fee Letters;

(ii)second, to the Borrower for payment of taxes, registration and filing fees and operating expenses then due and owing by the Loan Parties that are attributable solely to the operations of the Loan Parties in an aggregate amount not to exceed (A) $25,000 in any calendar quarter and (B) $100,000 in any calendar year;

(iii)third, to the Administrative Agent for the ratable distribution to the Lenders (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) in payment in full for all accrued fees, expenses and indemnities due and payable to such party hereunder or under any other Transaction Document and under the Fee Letters;

(iv)fourth, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay such Lender’s Pro Rata Share (for all outstanding Term Loan Series) of accrued and unpaid interest owing to such Lender under this Agreement (including any such accrued and unpaid interest or fees from a prior period);

(v)fifth, to the Administrative Agent for distribution to each Secured Party (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay any other Obligations (other than the principal of the Advances Outstanding) that are then due and owing to such Secured Party;

(vi)sixth, if a Market Trigger Event has occurred and is continuing, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to repay such Lender’s Pro Rata Share (for each applicable Term Loan Series) of the Advances Outstanding for all outstanding Term Loan Series (pro rata across such outstanding Term Loan Series based on Advances Outstanding for such Term Loan Series) up to the excess available after giving effect to clauses (a)(i) through (a)(v), inclusive, above, until (A) with respect to a Market Trigger Event specified in clause (a) of the definition thereof, either (1) the Advances Outstanding are repaid to an amount where Portfolio LTV, when recalculated with such amount of Advances Outstanding, is equal to 85% or (2) such Advances Outstanding are repaid in full or (B) with respect to a Market Trigger Event specified in clauses (b) or (c) of the definition thereof, such Advances Outstanding are repaid in full; and

(vii)seventh, if (A) no Market Trigger Event has occurred and would be continuing after giving effect to the payments under clauses (a)(i) through (a)(vi) above, and (B) after giving effect to any such payments under this clause (a)(vii) the balance on deposit in the Collection Account is greater than any minimum balance requirement then applicable

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under the Account Control Agreement, which as of the date hereof is $1,000, to the Borrower or as the Borrower may direct (including as a Restricted Junior Payment).

(b)Principal Collections. So long as no Event of Default has occurred and is continuing, the Administrative Agent, on behalf of the Facility Servicer and the Borrower, shall (as directed pursuant to the first paragraph of this Section 2.08) instruct the Account Bank to transfer Principal Collections (with respect to all Term Loan Series) held by the Account Bank in the Collection Account in accordance with the Payment Date Report for such Payment Date, and shall distribute such funds, to the following Persons in the following amounts, calculated as of the most recent Determination Date, in the following order and priority:

(i)first, to the Administrative Agent for ratable distribution to the Administrative Agent, the Collateral Custodian and the Facility Servicer (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay amounts due under Section 2.08(a)(i) but not paid thereunder;

(ii)second, to the Borrower to pay amounts permitted under Section 2.08(a)(ii) but not paid thereunder;

(iii)third, to the Administrative Agent for the ratable distribution to the Lenders (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay amounts due under Section 2.08(a)(iii) but not paid thereunder;

(iv)fourth, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay amounts due under Section 2.08(a)(iv) but not paid thereunder;

(v)fifth, to the Administrative Agent for distribution to each Secured Party (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay amounts due under Section 2.08(a)(v) but not paid thereunder;

(vi)sixth, for Principal Collections with respect to a particular Loan Asset, to the Administrative Agent for distribution to each Lender of the Term Loan Series Relating to such Loan Asset (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person), to repay such Lender’s Pro Rata Share (for such Term Loan Series) of the Advances Outstanding of such Term Loan Series in an amount up to the greater of (A) an amount equal to the product of (1) the Advance Rate for such Loan Asset and (2) the amount of such Principal Collections (after giving effect to clauses (b)(i) through (b)(v), inclusive, above) and (B) the amount such that the Advances Outstanding under such Term Loan Series do not exceed the Borrowing Base for such Term Loan Series (as determined on the date of such repayment) up to the excess available after giving effect to clauses (b)(i) through (b)(v), inclusive, above;

(vii)seventh, if a Market Trigger Event has occurred and is continuing, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay amounts due under Section 2.08(a)(vi) but not paid thereunder up to the excess available after giving effect to clauses (b)(i) through (b)(vi), inclusive, above;

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(viii)eighth, if there are less than four Eligible Loan Assets in the Collateral Portfolio (across all Term Loan Series) on such on such Payment Date, all excess after giving effect to clauses (b)(i) through (b)(vii), inclusive, above, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to repay such Lender’s Pro Rata Share (for each applicable Term Loan Series) of the Advances Outstanding for all outstanding Term Loan Series (pro rata across such outstanding Term Loan Series based on Advances Outstanding for such Term Loan Series) until such Advances Outstanding are repaid in full; and

(ix)ninth, if (A) no Market Trigger Event has occurred and would be continuing after giving effect to the payments under clauses (b)(i) through (b)(viii) above, and (B) after giving effect to any such payments under this clause (b)(ix) the balance on deposit in the Collection Account is greater than any minimum balance requirement then applicable under the Account Control Agreement, which as of the date hereof is $1,000, to the Borrower or as the Borrower may direct (including as a Restricted Junior Payment).

(c)Insufficiency of Funds. If the funds on deposit in the Collection Account are insufficient to pay any amounts otherwise due and payable on a Payment Date or otherwise, the Borrower nevertheless remains responsible for, and shall pay when due, all amounts payable under this Agreement and the other Transaction Documents in accordance with the terms of this Agreement and the other Transaction Documents, together with interest accrued as set forth in Section 2.05(b) from the date when due until paid hereunder.

(d)Application of Payments after an Event of Default. Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall, at the direction of the Majority Lenders, instruct the Account Bank to transfer all Collections in the Collection Account to be applied in accordance with the Payment Date Report for such Payment Date in the following order and priority:

(i)first, to the Administrative Agent for the ratable distribution to the Administrative Agent, the Facility Servicer and the Collateral Custodian (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) in payment in full of all accrued fees, expenses and indemnities due and payable to such party hereunder or under any other Transaction Document and under the Fee Letters;

(ii)second, to the Administrative Agent for the ratable distribution to each Secured Party (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay any other Obligations (other than the Advances Outstanding and accrued and unpaid interest thereon) that are then due and payable to such Secured Parties person (other than with respect to interest or the repayment of Advances) under this Agreement and the other Transaction Documents;

(iii)third, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to pay such Lender’s Pro Rata Share (for all outstanding Term Loan Series) of accrued and unpaid interest owing to such Lender under this Agreement;

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(iv)fourth, to the Administrative Agent for distribution to each Lender (or, if directed by the Administrative Agent, to pay any such ratable amount directly to the applicable Person) to repay such Lender’s Pro Rata Share (for all outstanding Term Loan Series) of the Advances Outstanding for all Term Loan Series until paid in full; and

(v)fifth, the balance, if any, after all Obligations have been indefeasibly paid in full as set forth above (other than contingent indemnification obligations and other obligations that survive the termination of this Agreement, in each case, not then due and owing), to the Borrower or as otherwise required by Applicable Law.

(e)Instructions to the Account Bank. All instructions and directions given to the Account Bank by the Administrative Agent pursuant to this Section 2.08 shall be in writing (including instructions and directions transmitted to the Account Bank by e-mail) or pursuant to an electronic transmission system established between the Administrative Agent and the Account Bank on the Closing Date. The Administrative Agent shall transmit to the Facility Servicer and the Borrower by e-mail a copy of all instructions and directions given to the Account Bank by such party pursuant to this Section 2.08 concurrently with the delivery thereof.

(f)No Presentment. Payment by the Administrative Agent to the Lenders in accordance with the terms hereof shall not require presentment of any Term Loan Series Note.

SECTION 2.09    Grant of a Security Interest.

(a)To secure the prompt and complete payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed pursuant to this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, the Borrower hereby grants a security interest to the Administrative Agent, for the benefit of the Secured Parties, in all of the Borrower’s right, title and interest in, to and under the following, whether now owned or hereinafter acquired (collectively, the “Collateral”): (i) all accounts, money, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, intellectual property, goods, equipment, fixtures, contract rights, general intangibles, documents, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, securities accounts, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions or other property consisting of the Loan Assets, related Portfolio Assets and Collections (but excluding the obligations thereunder); (ii) all Records; (iii) all Proceeds of the foregoing; (iv) the Collection Account and each Underlying Servicer Account owned by or established in the name of the Borrower; and (v) all proceeds and products of the foregoing.

(b)To secure the prompt and complete payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed pursuant to this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, Holdings hereby grants a security interest to the Administrative Agent, for the benefit of the Secured Parties, in all of Holding’s right, title and interest in and to, whether now owned or hereinafter acquired (collectively, the “Pledged Equity”): (i) all investment property and general intangibles consisting of the ownership, equity or other similar interests in the Borrower; (ii) all certificates, instruments, writings and

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securities evidencing the foregoing; (iii) the operating agreement and other organizational documents of the Borrower and all options or other rights to acquire any membership or other interests under such operating agreement or other organizational documents; (iv) all dividends, distributions, capital, profits and surplus and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; (v) all books, records and other written, electronic or other documentation in whatever form maintained now or hereafter by or for Holdings in connection with, and relating to, the ownership of, or evidencing or containing information relating to, the foregoing; and (vi) all proceeds, supporting obligations and products of any of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing.

(c)Anything herein to the contrary notwithstanding, (i) the Borrower shall remain liable under the Collateral Portfolio and the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Administrative Agent, for the benefit of the Secured Parties, of any of its rights in the Collateral Portfolio, Collateral or the Pledged Equity does not release any Loan Party from any of its duties or obligations under the Collateral Portfolio, the Collateral or with respect to the Pledged Equity and (iii) none of the Administrative Agent, any Lender nor any other Secured Party shall have any obligations or liability under the Collateral Portfolio or Collateral by reason of this Agreement, nor shall the Administrative Agent, any Lender nor any other Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

SECTION 2.10 Sale of Loan Assets.

(a)Sales. The Borrower may sell or otherwise transfer or dispose of any Loan Asset (a “Sale”) so long as (i) no Event of Default or Unmatured Event of Default has occurred and is continuing, or would result from such Sale (unless any such Unmatured Event of Default would be cured by such sale), (ii) the net cash consideration in connection with such Sale are deposited in the Collection Account and (iii) the conditions set forth in Section 2.10(c) for such Sale are satisfied.

(b)Release of Lien. Upon confirmation by the Facility Servicer of the deposit of the amounts set forth in Section 2.10(a) in cash into the Collection Account and the fulfillment of the other terms and conditions set forth in this Section 2.10 for a Sale (such date of fulfillment, a “Release Date”), then the Loan Assets and related Portfolio Assets which are the subject of such Sale are removed from the Collateral Portfolio. Subject to compliance by the Borrower with the immediately prior sentence, on the Release Date of each subject Loan Asset and related Portfolio Assets, the Administrative Agent, for the benefit of the Secured Parties, shall automatically and without further action be deemed to have released all right, title and interest and any Lien of the Administrative Agent, for the benefit of the Secured Parties in, to and under such Loan Asset and related Portfolio Assets and all future monies due or to become due with respect thereto, without recourse, representation or warranty of any kind or nature.

(c)Conditions to Sales. Any Sale of a Loan Asset is subject to the satisfaction of the following conditions:

(i)the Borrower shall give the Administrative Agent and the Facility Servicer ten Business Days’ notice of such Sale;

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(ii)the Borrower shall deliver a list of all Loan Assets to be subject of a Sale and identify the Term Loan Series to which such Loan Asset relates;

(iii)the Borrower shall deliver a Borrowing Base Certificate for the Term Loan Series to which such Loan Asset Relates to the Administrative Agent and the Facility Servicer in connection with (and reflecting) such Sale and the aggregate Advances Outstanding for such Term Loan Series do not exceed the Maximum Availability for such Term Loan Series at such time (after giving effect to repayments made in connection with such Sale);

(iv)the net cash consideration in connection with such Sale is at least equal to:

(A)if either (1) Portfolio LTV, both as of the most recent date of determination pursuant to Section 5.01(p)(iii) and on a pro forma basis after giving effect to the Sale of the applicable Loan Asset, exceeds 75% or (2) such Sale is to a Person Controlling, Controlled by or under common Control with the applicable Borrower, then 95% of the Outstanding Principal Balance of the Loan Asset subject to such Sale at such time; or

(B)if clause (iv)(A) above is not applicable, then an amount equal to the Advance Rate for the Loan Asset subject to such Sale multiplied by the Outstanding Principal Balance of such Loan Asset at such time; and

(v)the Borrower shall notify the Administrative Agent and the Facility Servicer of any amount to be deposited into the Collection Account in connection with any Sale.

(d)Treatment of Amounts Deposited in the Collection Account. Amounts deposited by the Borrower or any Underlying Servicer in the Collection Account pursuant to this Section 2.10 on account of Loan Assets shall be treated as Collections for purposes of Section 2.08 and shall be applied as and when provided in Section 2.08.

SECTION 2.11 Release of Loan Assets. The Borrower may obtain the release from the Lien of the Administrative Agent granted under the Transaction Documents of (a) any Loan Asset (and the related Portfolio Assets pertaining thereto) removed from the Collateral Portfolio in accordance with the applicable provisions of Section 2.10 and (b) any Loan Asset (and the related Portfolio Assets pertaining thereto) that terminates or expires by its terms and for which all amounts in respect thereof have been paid in full by the related Obligors and deposited in the Collection Account. The Administrative Agent, for the benefit of the Secured Parties, shall at the sole expense of the Borrower and at the direction of the Facility Servicer, execute such documents and instruments of release as may be prepared by the Borrower and take other such actions as shall reasonably be requested by the Borrower to effect such release of the Lien created pursuant to this Agreement. Upon the release of the Administrative Agent’s Lien as described in the immediately preceding sentence, the applicable Loan Asset File will be returned to the Borrower as provided in the Custodial Agreement.

SECTION 2.12 Increased Costs.

(a)If any Change in Law shall:

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(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender which is not otherwise included in the definition of LIBOR or applicable successor rate hereunder;

(ii)subject any Lender to any Taxes (other than (A) Taxes indemnified under Section 2.13 (including Other Taxes) or (B) Excluded Taxes and (C) Connection Income Taxes) on its Advances, commitments or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

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

and the result of any of the foregoing shall be to increase the cost to such Lender of making, continuing or maintaining any Advance or of maintaining its obligation to make any such Advance or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, within twelve Business Days after the submission of the certificate contemplated by Section 2.12(c), the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Advances made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in Section 2.12(a) or (b) and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate on the next Payment Date that is not less than 10 days after receipt thereof.

(d)Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.12 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 2.12 for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

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SECTION 2.13    Taxes.

(a)Payments made by or on account of the Borrower (including those made by the Facility Servicer from the Collection Account on behalf of the Borrower to the extent amounts are available in the Collection Account) under this Agreement or any other Transaction Document will be made free and clear of and without deduction or withholding for or on account of any Taxes, except as required by Applicable Law (as determined in the good faith discretion of the Borrower or the Facility Servicer, as applicable). If any Taxes are required by Applicable Law to be withheld from any amounts payable to any Lender, the Administrative Agent or the Facility Servicer, if such tax is an Indemnified Tax, then the amount payable to such Person will be increased (the amount of such increase, the “Additional Amount”) such that the net amount of such payment after withholding for or on account of such Indemnified Taxes (including any Taxes required to be deducted or withheld in respect of such increase) is equal to the amount that would have been received had no such deduction or withholding been made. Any amounts deducted or withheld pursuant to this Section 2.13(a) will be timely paid by the applicable withholding agent to the applicable Governmental Authority in accordance with Applicable Law.

(b)The Borrower will indemnify each Lender and the Administrative Agent and the Facility Servicer for the full amount of Indemnified Taxes payable by such Person in respect of, or required to be withheld from (without duplication with Section 2.13(a)), payments made by or on behalf of the Borrower hereunder, including Indemnified Taxes imposed or assessed on or attributable to amounts payable under this Section 2.13 and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on behalf of a Lender, shall be conclusive absent manifest error. All payments in respect of this indemnification shall be made within 15 days from the date a written invoice therefor is delivered to the Borrower, with a copy to the Facility Servicer.

(c)Each Lender will indemnify the Administrative Agent and the Facility Servicer for (i) the full amount of Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent and the Facility Servicer for such Indemnified Taxes and without limiting or expanding any obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 2.03 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent and the Facility Servicer in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Lender by the Administrative Agent and the Facility Servicer is conclusive absent manifest error. All payments in respect of this indemnification shall be made within 15 days from the date a written invoice therefor is delivered to the applicable Lender.

(d)Within 15 days after the date of any payment by the Borrower or, at the direction of the Borrower, by the Facility Servicer from the Collection Account on behalf of the Borrower (to the extent amounts are available in the Collection Account) to the applicable Governmental Authority of any Taxes pursuant to this Section 2.13 or Section 10.07(b), the Borrower or the Facility Servicer, as applicable, will furnish to the Administrative Agent at the applicable address set forth on this Agreement, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of

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the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent to the extent received by the Facility Servicer or the Borrower, as applicable. For the avoidance of doubt, in no case or circumstance is the Facility Servicer liable to pay any Taxes under this Agreement, and if it pays any such amounts, it will solely be on behalf of the Borrower, from the Collection Account to the extent amounts are available therein.

(e)A Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement shall deliver to the Administrative Agent, the Borrower and the Facility Servicer, at the time or times prescribed by Applicable Law or reasonably requested by the Administrative Agent, the Borrower or the Facility Servicer, such properly completed and executed documentation or information prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate (or otherwise permit the Administrative Agent, the Borrower and the Facility Servicer to determine the applicable rate of withholding); provided that such Lender is legally entitled to complete, execute and deliver such documentation and, other than in the case of the forms and documentation specifically described in this Section 2.13(e) or in Section 2.13(f), in such Lender’s reasonable judgment such completion, execution or submission would not subject such Lender to any material unreimbursed cost or expense or would not materially prejudice the legal or commercial position of such Lender. Without limiting the generality of the foregoing, each Lender (including any assignee thereof) that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Administrative Agent, the Borrower and the Facility Servicer two properly completed and duly executed copies of whichever (if any) of the following is applicable for claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on any payment by the Borrower under this Agreement: (i) U.S. Internal Revenue Service Form W-8BEN or W-8BEN-E (claiming the benefits of an applicable tax treaty), W-8IMY, W-8EXP or W-8ECI or (ii) in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest” a statement substantially in the form of Exhibit I to the effect that such Lender is eligible for a complete exemption from withholding of U.S. taxes under Section 871(h) or 881(c) of the Code and a Form W-8BEN or W-8BEN-E, in each case (A) with any required attachments (including, with respect to any Lender that provides an U.S. Internal Revenue Service Form W-8IMY, any of the forms or other documentation described in clauses (i) and (ii) above for any of the direct or indirect owners of such Lender) and (B) any subsequent versions thereof or successors thereto. In addition, each Lender (including any assignee thereof) that is not a Non-U.S. Lender shall deliver to the Administrative Agent, the Borrower and the Facility Servicer two copies of U.S. Internal Revenue Service Form W-9, properly completed and duly executed and claiming complete exemption, or shall otherwise establish an exemption, from U.S. backup withholding. Such forms shall be delivered by each Lender five Business Days prior to the date it becomes a party to this Agreement. In addition, each Lender shall deliver such forms promptly upon becoming aware or receiving notice of the obsolescence, expiration or invalidity of any form previously delivered by such Lender. Each Lender shall promptly notify the Administrative Agent, the Borrower and the Facility Servicer at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Administrative Agent, the Borrower or the Facility Servicer (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Lender shall not be required to deliver any form pursuant to this paragraph that such Lender is not legally able to deliver. The Facility Servicer is entitled to withhold all amounts required to be withheld by Applicable Law from any payment hereunder to any Lender until such Lender shall have furnished to the Facility Servicer any requested forms, certificates, statements or documents. For the purposes of this Section 2.13(e), “Lender” shall

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include any other recipients of payments on the Collateral as directed by any Lender to the Facility Servicer.

(f)If a payment made to a Lender under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Administrative Agent, the Borrower and the Facility Servicer at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or Facility Servicer such documentation prescribed by law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Administrative Agent, the Borrower or the Facility Servicer as may be necessary for the Administrative Agent, the Borrower and the Facility Servicer to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this Section 2.13(f), “FATCA” shall include any amendments made to FATCA after the Closing Date.

(g)If any Lender determines, in its sole discretion, exercised in good faith, that it has received a refund of any Taxes for which it was indemnified by the Borrower, or the Facility Servicer on behalf of the Borrower, in each case, pursuant to this Section 2.13 or with respect to which the Borrower or the Facility Servicer on behalf of the Borrower, in each case, has paid Additional Amounts pursuant to this Section 2.13, it shall pay to the Borrower or the Facility Servicer, as applicable, an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or the Facility Servicer on behalf of the Borrower, in each case, under this Section 2.13 with respect to the Taxes or Additional Amounts giving rise to such refund), net of all reasonable out-of-pocket expenses (including additional Taxes, if any) of such Lender, as the case may be, incurred in obtaining such refund, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). The Borrower, upon the request of such Lender, shall repay to such Lender the amount paid over pursuant to this Section 2.13(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.13(g), in no event will the Lender be required to pay any amount to the Borrower pursuant to this Section 2.13(g) the payment of which would place the Lender in a less favorable net after-Tax position than the Lender would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any Lender to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

(h)Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.13 survive the termination of this Agreement.

(i)The Borrower hereby covenants with the Administrative Agent that the Borrower will provide the Administrative Agent with sufficient information so as to enable the Administrative Agent to determine whether or not the Administrative Agent is obliged to make any withholding, including FATCA Withholding Tax, in respect of any payments with respect to an Advance (and if applicable, to provide the necessary detailed information to effectuate any withholding, including FATCA Withholding Tax, such as

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setting forth applicable amounts to be withheld). For the avoidance of doubt, the term ‘applicable law’ for purposes of this Section 2.13(i) includes U.S. federal tax law and FATCA. Upon request from the Administrative Agent, the Borrower will provide such additional information that it may have to assist the Administrative Agent in making any withholdings or informational reports.

(j)If the Internal Revenue Service or any authority of the United States of America or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify the Administrative Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall indemnify promptly the Administrative Agent fully for all amounts paid, directly or indirectly, by such Person as tax or otherwise, including penalties and interest, together with all reasonable expenses incurred.

(k)The Lenders and any transferees or assignees thereof after the Closing Date will be required to provide to the Administrative Agent or its agents all information, documentation or certifications reasonably requested by the Administrative Agent to permit the Administrative Agent to comply with its tax reporting obligations under Applicable Laws, including any applicable cost basis reporting obligations.

SECTION 2.14 Defaulting Lenders.

(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Majority Lenders and Section 10.01.

(ii)Defaulting Lender Waterfall. 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, pursuant to Article VI or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.13 shall be applied at such time or times as may be determined by the Administrative Agent (acting in accordance with the written direction of the Initial Lender or, if the Initial Lender is a Defaulting Lender, Majority Lenders) as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent, the Facility Servicer or the Collateral Custodian in connection with this Agreement; second, as the Borrower may request (so long as no Unmatured Event of Default or Event of Default exists), to the funding of any Advance 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 in accordance with the written instructions of the Initial Lender (or Majority Lenders if the Initial Lender is the Defaulting Lender); third, if so determined by the Initial Lender (or Majority Lenders if the Initial Lender is the Defaulting Lender) and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Advances under this Agreement; fourth, as such amounts are provided to the Administrative Agent, to the payment of any amounts owing to the

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Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, as such amounts are provided to the Administrative Agent, so long as no Unmatured Event of Default or Event of 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 sixth, as such amounts are provided to the Administrative Agent, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (A) such payment is a payment of the principal amount of any Advances in respect of which such Defaulting Lender has not fully funded its appropriate share and (B) such Advances were made at a time when the conditions set forth in Section 3.02 were satisfied or waived, such payment shall be applied solely to pay the Advances of all Lenders that are not Defaulting Lenders at such time on a pro rata basis prior to being applied to the payment of any Advances of such Defaulting Lender until such time as all Advances are held by the Lenders pro rata in accordance with the Commitments. 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 pursuant to this Section 2.14 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(b)Defaulting Lender Cure. If the Borrower and (if not a Defaulting Lender) the Initial Lender agree in writing that a Lender is no longer a Defaulting Lender, the Borrower will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Advances of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Advances to be held pro rata by the Lenders in accordance with the Commitments, whereupon, such Lender will cease to be a Defaulting Lender; provided that (i) no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender and (ii) except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)Termination of Defaulting Lender. The Borrower may terminate the unused amount of the Commitment of any Lender that is a Defaulting Lender upon not less than ten Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders thereof), and in such event the provisions of Section 2.14(a)(ii) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided that (i) no Event of Default shall have occurred and be continuing and (ii) such termination shall not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent or any Lender may have against such Defaulting Lender.

SECTION 2.15    Valuation.

(a)The Borrower shall value the Loan Assets in accordance with, and as often as provided for by, the terms of the Valuation Policy and this Agreement. Without limiting the foregoing and in connection with the valuation of the Loan Assets, the Borrower shall conduct appraisals on the Underlying Collateral for such Loan Assets at the end of each calendar year (commencing, for any applicable Loan

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Asset, with the next succeeding calendar year to occur after the Cut-Off Date for such Loan Asset) and shall provide the Facility Servicer with a copy of such valuations promptly upon receipt thereof.

(b)If (i) the Initial Lender reasonably believes that the Value as determined by the Sponsor pursuant to the Valuation Policy is materially inaccurate with respect to any Loan Asset (unless such Value has been confirmed by KPMG or such other third party accountant as is reasonably acceptable to the Initial Lender or such Loan Asset is subject to a recent valuation established by an independent third party) or (ii) the Borrower fails to timely Value any Loan Asset in accordance with the Valuation Policy and such Loan Asset is not subject to a recent valuation established by an independent third party, the Initial Lender may request that such Loan Asset be independently valued by giving written notice thereof to the Borrower. Subject to the limits described below, the Initial Lender may make such a request at any time and there are no limits to the number of times the Initial Lender can make such a request. If the Initial Lender requests the independent valuation of a Loan Asset hereunder, such Loan Asset will be valued by an Approved External Appraiser (as defined below) selected by the Initial Lender. The Borrower shall pay the cost of any independent valuation other than as set forth below.

(c)In the case of a valuation requested in the circumstances described in Section 2.15(b)(i), if the difference between the Value of a Loan Asset determined by the Valuation Policy and the Value determined by the Approved External Appraiser is:

(i)less than 5% below the Value determined by the Valuation Policy therefor, then the Value determined by the Valuation Policy will be used (and the cost of such independent valuation will be at the expense of the Lenders unless an Event of Default has occurred and is continuing at such time);

(ii)between 5% and 20% below the Value determined by the Valuation Policy therefor, then Value for such Loan Asset will be the average of the Value determined by the Valuation Policy therefor and the value determined by the Approved External Appraiser therefor; and

(iii)greater than 20% below the Value determined by the Valuation Policy therefor, then the Borrower and the Initial Lender shall retain an additional Approved External Appraiser to value such Loan Asset and the Value for such Loan Asset will be the average of the three valuations (the Value determined by the Valuation Policy, the value determined by the Approved External Appraiser selected by the Initial Lender and the value determined by the Approved External Appraiser selected by the Borrower and the Initial Lender), and until such additional Approved External Appraiser has valued such Loan Asset, the Value for such Loan Asset will be the value determined by the Approved External Appraiser selected by the Initial Lender.

(d)In the case of a valuation requested in the circumstances described in Section 2.15(b)(ii), the Value of the Loan Asset determined by the Approved External Appraiser will be used.

The value of any Loan Asset for which an Approved External Appraiser’s value is used will be the midpoint of the range (if any) determined by such Approved External Appraiser. The Approved External Appraiser shall apply a recognized valuation methodology as set forth in the Valuation Policy for valuing portfolio investments of the type of the applicable Loan Asset. “Approved External Appraiser” means Chatham, CBRE, Duff & Phelps, Houlihan Lokey Howard & Zukin Capital, Inc., FTI Consulting, Inc., Murray, Devine

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and Company, Lincoln International LLC, Valuation Research Corporation or any other independent nationally recognized third-party appraisal firm mutually agreed to between the Borrower and the Initial Lender.

SECTION 2.16 Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Transaction Document:

(a)Replacing LIBOR. On March 5, 2021 the Financial Conduct Authority (“FCA”), the regulatory supervisor of LIBOR’s administrator (“IBA”), announced in a public statement the future cessation or loss of representativeness of one-month LIBOR tenor settings. On the earlier of (i) the date that LIBOR as determined hereunder has been permanently or indefinitely ceased to be provided by IBA or has been announced by the FCA pursuant to public statement or publication of information to be no longer representative and (ii) the Early Opt-in Effective Date, with respect to each Term Loan Series for which the then-current Benchmark is LIBOR, the Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of any setting of such Benchmark for each such Term Loan Series on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Transaction Document.

(b)Replacing Future Benchmarks. Upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, with respect to any then-applicable Benchmark with respect to any Term Loan Series, the Facility Servicer and the Borrower may amend this Agreement or any related Confirmations to replace the applicable Benchmark with a Benchmark Replacement. The Borrower and Facility Servicer shall notify the Administrative Agent of any such amendment and provide the Administrative Agent with copies thereof. Any such proposed amendment will become effective at 5:00
p.m. on the fifth Business Day after the Administrative Agent has posted such proposed amendment to all Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Majority Lenders. Any such amendment with respect to an Early Opt-in Election will become effective on the date that Lenders comprising the Majority Lenders have delivered to the Administrative Agent written notice that such Majority Lenders accept such amendment.

(c)Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement (including under Section 2.16(b)), the Facility Servicer will have the right to make Benchmark Replacement Conforming Changes (after consultation with the Borrower) from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, after consultation with the Borrower, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement. Notwithstanding anything to the contrary herein or in any other Transaction Document, no Benchmark Replacement or Benchmark Replacement Conforming Changes will become effective until the Administrative Agent confirms that it is capable of being operationally implemented by the Administrative Agent. In no event shall any changes pursuant to this Section 2.16, unless otherwise agreed by the Administrative Agent, affect the rights, indemnities or obligations of the Administrative Agent.

(d)Notices; Standards for Decisions and Determinations. The Facility Servicer will promptly notify the Borrower, the Administrative Agent and the Lenders of (i) any occurrence of a Benchmark

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Transition Event or an Early Opt-in Election, as applicable, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the removal or reinstatement of any tenor for a Benchmark that is a term rate. Any determination, decision or election that may be made by the Facility Servicer or, if applicable, the Borrower or any Lender (or group of Lenders) pursuant to this Section 2.16, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.16 and the related definitions.

ARTICLE III. CONDITIONS PRECEDENT

SECTION 3.01    Conditions Precedent to Effectiveness.

(a) This Agreement becomes effective upon, and no Lender is obligated to make any Advance, nor is any Lender, the Collateral Custodian, the Facility Servicer or the Administrative Agent obligated to take, fulfill or perform any other action hereunder or under the other Transaction Documents until, the satisfaction of the following conditions precedent:

(i)this Agreement, all other Transaction Documents and all other agreements, instruments, certificates and other documents listed on Schedule III have been duly executed by, and delivered to, the parties hereto and thereto;

(ii)the Collection Account has been established pursuant to the Account Control Agreement;

(iii)the Borrower shall have obtained an equivalent rating of BBB-, BBB(low) or Baa3 or higher on the credit facility evidenced by this Agreement from a NRSRO, and the Initial Lender shall have a received a copy of any rating letter issued in connection therewith;

(iv)all up-front expenses and fees (including reasonable legal fees and expenses and any fees and expenses required under the Fee Letters or the Custodial Agreement) that are required to be paid hereunder or by the Fee Letters or the Custodial Agreement have been paid in full;

(v)the Borrower has provided the Facility Servicer and the Initial Lender with a copy of the Valuation Policy as in effect on the Closing Date;

(vi)the representations contained in Sections 4.01 and 4.02 are true and correct;

(vii)the Borrower has received all material governmental, shareholder and third party consents and approvals necessary (or any other material consents as determined in the reasonable discretion of the Lenders) in connection with the transactions contemplated by this Agreement and the other Transaction Documents and all applicable waiting periods have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on the Borrower or such other transactions or that could seek or threaten any of the foregoing,

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and no law or regulation is applicable which in the reasonable judgment of the Lenders could reasonably be expected to have such effect;

(viii)no action, proceeding or investigation has been instituted, threatened in writing or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby, or which, in the Initial Lender’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby or thereby;

(ix)the Administrative Agent has received all documentation and other information requested by the Administrative Agent acting at the direction of the Majority Lenders or required by regulatory authorities with respect to any Loan Party under applicable “know your customer” and Anti-Money Laundering Laws, including the USA PATRIOT Act, all in form and substance reasonably satisfactory to the Administrative Agent and the Majority Lenders; and

(x)the Facility Servicer has received all documentation and other information requested by the Facility Servicer required by regulatory authorities with respect to Borrower, the Administrative Agent and the Lenders under applicable “know your customer” and Anti- Money Laundering Laws, including the USA Patriot Act, all in form and substance reasonably satisfactory to the Facility Servicer.

SECTION 3.02    Conditions Precedent to All Advances. Each Advance (including any initial Advance) is subject to the further conditions precedent that:

(a)On the Advance Date for an Advance the following conditions precedent have been satisfied (in addition to those conditions precedent set forth in Section 3.02(b)):

(i)with respect to an Advance to be made in connection with a Delayed Draw, (A) the Sponsor has made arrangements satisfactory to the Initial Lender to fund an equity contribution to the Borrower in an amount sufficient to make such Delayed Draw in a manner satisfactory to the Initial Lender and (B) the requested Advance does not exceed the Advance Rate (for such Delayed Draw Loan Asset) multiplied by the amount of such Delayed Draw; and

(ii)with respect to an Advance to be made in connection with the Transfer of Eligible Loan Assets (whether by origination, sale or contribution):

(A)the Loan Assets subject to such Transfer are Eligible Loan Assets;

(B)the Sponsor has made arrangements satisfactory to the Initial Lender to fund an equity contribution to the Borrower in an amount sufficient to acquire such Eligible Loan Assets as of the proposed Advance Date in a manner satisfactory to the Initial Lender;

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(C)simultaneously with the making of such Advance, the Borrower will obtain valid ownership interests in such Eligible Loan Assets and all actions required to be taken or performed under Section 3.03 with respect to the Transfer of such Eligible Loan Assets has been, or will be simultaneously with such Transfer, taken or satisfied; and

(D)such Advance Date occurs no more than ten Business Days after the Cut-Off Date for such Eligible Loan Asset.

(b)On the Advance Date of an Advance (including any initial Advance), the following statements are true and correct and the Borrower by accepting such Advance is deemed to have certified that:

(i)the Borrower has delivered to the Administrative Agent (A) a Notice of Borrowing, (B) a Borrowing Base Certificate for the Term Loan Series under which such Advance is made
(C) a Portfolio LTV Certificate and (D) if the proceeds of such Advance are to be used in connection with the Transfer of a Loan Asset, a Loan Asset Certificate, each as provided in Section 2.02(a);

(ii)the Borrower has provided to the Administrative Agent and the Facility Servicer (which may be provided electronically) a Loan Asset Schedule for the Term Loan Series under which such Advance is made as updated to include each of the Eligible Loan Assets included in the Borrowing Base Certificate delivered in connection with such Advance;

(iii)on and as of such Advance Date, after giving effect to such Advance and the transactions related thereto, including the use of proceeds thereof, the Advances Outstanding for the Term Loan Series under which such Advance is made do not exceed the Maximum Availability of such Term Loan Series on such Advance Date;

(iv)no Event of Default, Unmatured Event of Default or Market Trigger Event has occurred and is continuing, or would result from such Advance or application of proceeds therefrom;

(v)the representations contained in Sections 4.01 and 4.02 are true and correct in all material respects before and after giving effect to such Advance and to the application of proceeds therefrom, on and as of such day as though made on and as of such date (or, in the case of any such representation expressly stated to have been made as of a specific date, as of such specific date);

(vi)such Advance Date is prior to the Commitment Termination Date for the Term Loan Series under which such Advance is made;

(vii)with respect to the Transfer of any Loan Asset on such Advance Date, all actions required to be taken or performed under Section 3.03 with respect to such Transfer have been taken or satisfied; and

(viii)all expenses and fees (including reasonable legal fees and expense and any fees and expenses required under the Fee Letters or the Custodial Agreement) that are required

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to be paid hereunder or by the Fee Letters or the Custodial Agreement have been paid in full.

SECTION 3.03    Conditions to Transfers of Loan Assets. Each Transfer of a Loan Asset is subject to the further conditions precedent that:

(a)the Borrower has delivered to the Administrative Agent (with a copy to the Facility Servicer) no later than 2:00 p.m. on the date that is three Business Days prior to the related Cut-Off Date:

(i)a Loan Asset Certificate for such Loan Asset, which identifies the Term Loan Series to which such Loan Asset will Relate (and if the Borrower wishes to designate a portion of such Loan Asset to two separate Term Loan Series, the proportion of such Loan Asset to be allocated thereto) and certifies, among other things, whether such Loan Asset is an Eligible Loan Asset;

(ii)a Borrowing Base Certificate and a Portfolio LTV Certificate, each giving pro forma effect to such Transfer and proposed Advances relating thereto, and if such Advances would cause the aggregate Advances Outstanding under such Term Loan Series to exceed the Maximum Availability for such Term Loan Series as of the proposed Cut-Off Date, such Borrowing Base Certificate shall include any scheduled or intended unscheduled repayments of Advances in accordance with the terms hereof which would result in such Advances Outstanding not exceeding the Maximum Availability for such Term Loan Series as of such date; and

(iii)a Loan Asset Schedule for the Term Loan Series to which such Loan Asset Relates and reflecting the Transfer of such Loan Asset;

(b)the Borrower (or the Portfolio Asset Servicer on its behalf) has delivered to the Facility Servicer and the Initial Lender electronic copies of the Required Loan Documents and the Loan Asset Checklist and Loan Asset Certificate pertaining to each such Loan Asset at least five Business Days prior to the Cut-Off Date pertaining to such Loan Asset or such later date as the Initial Lender may agree;

(c)if the Cut-Off Date for such Loan Asset will be after the Commitment Termination Date for the Term Loan Series to which such Loan Asset will Relate, the Initial Lender has consented in writing to such Transfer;

(d)all actions required to be taken or performed (including the filing of UCC financing statements) to give the Administrative Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in such Loan Asset and the Portfolio Assets related thereto and the proceeds thereof have been taken or performed; and

(e)no Event of Default exists or would result from such Transfer.

Each Transfer of a Loan Asset pursuant to this Section 3.03 is deemed a representation by the Borrower that the conditions specified in this Section 3.03 have been met.

SECTION 3.04    Advances Do Not Constitute a Waiver. No Advance made hereunder constitutes a waiver of any condition to any Lender’s obligation to make such an Advance unless such waiver is in writing and

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executed by such Lender. For purposes of determining whether the conditions specified in this Article III have been satisfied on the Closing Date each Lender is deemed to have received, consented to, approved or accepted, or to be satisfied with, each document or other matter required hereunder to be received, consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender, as the case may be.


ARTICLE IV. REPRESENTATIONS

SECTION 4.01 Representations of the Loan Parties. Each Loan Party hereby represents to the Secured Parties as follows:

(a)Organization, Good Standing and Due Qualification. Each Loan Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, with all requisite organizational power and authority necessary to own the Loan Assets and the Collateral Portfolio and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement and the other Transaction Documents to which it is a party. Each Loan Party is duly qualified to do business, and has obtained all licenses and approvals, under the laws of its jurisdiction of organization and in all other jurisdictions necessary to own its assets and to transact the business in which it is engaged, and is duly qualified and in good standing under the laws of its jurisdiction of organization and in each other jurisdiction where the transaction of such business or its ownership of the Loan Assets and the Collateral Portfolio and the conduct of its business requires such qualification, license or approval, except as could not reasonably be expected to have a Material Adverse Effect.

(b)Power and Authority; Due Authorization; Execution and Delivery. Each Loan Party (i) has the power, authority, and legal right to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (B) perform and carry out the terms of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated thereby and (ii) has taken all necessary action to (A) authorize the execution, delivery and performance of this Agreement and each of the other Transaction Documents to which it is a party, (B) grant to the Administrative Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collateral on the terms and conditions of this Agreement and the other Transaction Documents, subject only to Permitted Liens, and
(C)authorize the Facility Servicer and the Collateral Custodian to perform the actions contemplated herein and the other Transaction Documents. This Agreement and each other Transaction Document have been duly executed and delivered by each Loan Party thereto.

(c)Binding Obligation. This Agreement and each of the other Transaction Documents to which each Loan Party is a party constitutes the legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity.

(d)All Consents Required. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the execution, delivery or performance by the Borrower of this Agreement or any Transaction Document to which it is a party or the validity or enforceability of this Agreement or any such Transaction Document or the grant of a security interest in the Collateral, other than such as have

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been met or obtained and are in full force and effect. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the transfer of an ownership interest in the Loan Assets other than where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(e)No Violation. The execution, delivery and performance of this Agreement and the other Transaction Documents and all other agreements and instruments executed and delivered or to be executed and delivered in connection with the Transfer of any Loan Asset will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, each Loan Party’s organizational documents, (ii) result in the creation or imposition of any Lien on the Collateral other than Permitted Liens, (iii) violate any Applicable Law in any material respect or (iv) violate any material contract or other material agreement to which each Loan Party is a party or by which any property or assets of the Borrower are bound.

(f)No Proceedings; No Injunctions. There is no litigation, proceeding or investigation pending or, to the Knowledge of a Loan Party, threatened in writing against a Loan Party or any properties of a Loan Party, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document or (iii) that could reasonably be expected to be adversely determined, and, if so determined, either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. No injunction, writ, restraining order or other order of any nature adversely affects, in any material respect, any Loan Party’s performance of its obligations under this Agreement or any Transaction Document to which a Loan Party is a party.

(g)No Liens. The Collateral is owned by the applicable Loan Party free and clear of any Liens except for Permitted Liens.

(h)Transfer of Collateral Portfolio. Except as otherwise expressly permitted by the terms of this Agreement, no item of Collateral Portfolio has been Sold, assigned or pledged by any Loan Party to any Person, other than in accordance with Article II and the grant of a security interest therein to the Administrative Agent, for the benefit of the Secured Parties, pursuant to the terms of this Agreement.

(i)Sole Purpose. The Borrower has been formed solely for the purpose of, and has not engaged in any business activity other than, the acquisition of commercial loans, the pledge and financing thereof and transactions incidental thereto and activities of the type expressly permitted under Section 5.01(a). The Borrower is not party to any agreements other than this Agreement and the other Transaction Documents to which it is a party and the Required Loan Documents and other agreements listed on the Loan Asset Checklist for each Loan Asset in respect of which the Borrower is a lender or loan participant.

(j)Separate Entity. Each Loan Party is operated as an entity with assets and liabilities distinct from those of the Sponsor and any Affiliates thereof, and each Loan Party hereby acknowledges that the Administrative Agent and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon each Loan Party’s identity as a separate legal entity from the Sponsor and from each such other Affiliate of the Sponsor.

(k)Taxes. All tax returns (including all foreign, federal, State, local and other tax returns whether filed on a standalone or group basis) required to be filed by, on behalf of or with respect to the

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income and assets of the Borrower (Including the Collateral Portfolio) have been timely filed and no Loan Party is liable for Taxes payable by any other Person, except as could not reasonably be expected to have a Material Adverse Effect. Each Loan Party have paid or made adequate provisions for the payment of all Taxes, assessments and other governmental charges made against it or any of its property (including the Collateral Portfolio) except for those Taxes being contested in good faith by appropriate proceedings and in respect of which it has established proper reserves in accordance with GAAP on its books or as could not reasonably be expected to have a Material Adverse Effect. No Tax lien (other than a Permitted Lien) or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax, assessment or other governmental charge.

(l)Location. Except as permitted pursuant to Section 5.02(l), each Loan Party’s location (within the meaning of Article 9 of the UCC of the State of New York) is the State of Delaware and, except as permitted pursuant to Section 5.02(l), no Loan Party has changed its jurisdiction of formation. Except as permitted pursuant to Section 5.02(l), the principal place of business and chief executive office of each Loan Party (and the location of the Loan Party’s records regarding the Collateral (other than those delivered to the Collateral Custodian pursuant to this Agreement and the Custodial Agreement)) is located at the address set forth under its name in Section 10.02.

(m)Tradenames. Except as permitted pursuant to Section 5.02(l), each Loan Party’s legal name is as set forth in this Agreement. Except as permitted pursuant to Section 5.02(l), no Loan Party has changed its name since its formation and neither has tradenames, fictitious names, assumed names or “doing business as” names.

(n)No Subsidiaries. The Borrower does not own or hold the equity interests in any other Person and Holdings does not own or hold the equity interest in any Person other than Borrower.

(o)Reports Accurate. All Notices of Borrowing, Borrowing Base Certificates, Portfolio LTV Certificates, Loan Asset Certificates and other written or electronic information, exhibits, financial statements, documents, books, records or reports furnished by a Loan Party to the Administrative Agent, the Facility Servicer or the Collateral Custodian in connection with this Agreement and the other Transaction Documents (as modified or supplemented by other information so furnished at that time), taken as a whole, are accurate, true and correct in all material respects, and no such document contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein, taken as a whole, in light of the circumstances under which they were made, not materially misleading; provided that (i) solely with respect to written or electronic information furnished by the Borrower which was provided to the Borrower from an Obligor with respect to a Portfolio Asset (or derived thereof), such information need only be accurate, true and correct to the Knowledge of the Borrower and (ii) with respect to projected or pro forma financial information, the foregoing representation is only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation and delivery (it being understood that such projected information may vary from actual results and that such variances may be material).

(p)Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or in the other Transaction Documents (including the use of Proceeds from the sale of any item in the Collateral Portfolio) will violate or result in a violation of Section 7 of the United States Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, or Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. No Loan Party owns or

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intends to carry or purchase, and proceeds from the Advances will not be used to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purpose credit” within the meaning of Regulation U.

(q)Event of Default or Unmatured Event of Default. No event has occurred which constitutes an Event of Default or Unmatured Event of Default, in each case, which has not been previously disclosed to the Administrative Agent and the Lenders in writing.

(r)ERISA. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) the present value of all vested benefits under each “employee pension benefit plan” as such term is defined in Section 3(2) of ERISA, other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate of the Borrower or to which the Borrower or any ERISA Affiliate of the Borrower contributes or has an obligation to contribute, or has any liability (each, a “Pension Plan”), does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual valuation date for the Pension Plan) determined in accordance with the assumptions used for funding such Pension Plan pursuant to Sections 412 and 430 of the Code for the applicable plan year,
(ii)no failure by the Borrower to meet the minimum funding standard set forth in Sections 302(a) or 303 of ERISA and Sections 412(a) and 430 of the Code has occurred with respect to any Pension Plan,
(iii)neither the Borrower nor any ERISA Affiliate of the Borrower has withdrawn from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), (iv) no Reportable Event has occurred with respect to any Pension Plan,
(v) no notice of intent to terminate a Pension Plan has been filed by the plan administrator under Section 4041 of ERISA, nor has any Pension Plan been terminated under Section 4041 of ERISA and (vi) the Pension Benefit Guaranty Corporation has not instituted proceedings to terminate, or appointed a trustee to administer, a Pension Plan under Section 4042 of ERISA, and no event has occurred or condition exists which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.

(s)Instructions for Collections. The Collection Account is the only account to which the Obligors or any agent, administrative agent, Counterparty Lender, Underlying Servicer or issuer of any Loan Asset have been instructed by the Borrower or the Portfolio Asset Servicer on the Borrower’s behalf, to send Collections with respect to the Loan Assets. The Borrower has not granted any Person other than the Administrative Agent, for the benefit of the Secured Parties, a security interest in the Collection Account.

(t)Investment Company Act. No Loan Party is required to register as an “investment company” under the provisions of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder.

(u)Compliance with Applicable Law. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Loan Parties have complied with all Applicable Law to which it may be subject, and no item of the Collateral Portfolio contravenes any Applicable Law (including all applicable predatory and abusive lending laws, laws, rules and regulations relating to licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy).

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(v)Collections. All Collections received by the Loan Parties or their Affiliates with respect to the Collateral Portfolio are held in trust for the benefit of the Administrative Agent, for the benefit of the Secured Parties, until deposited into the Collection Account as provided herein.

(w)Set-Off etc. No Loan Asset has been compromised, adjusted, extended, satisfied, subordinated, rescinded, set-off or modified by the Borrower, or the Obligor thereof, and no item in the Collateral Portfolio is subject to compromise, adjustment, extension, satisfaction, subordination, rescission, set-off, counterclaim, defense, abatement, suspension, deferment, deduction, reduction, termination or modification, whether arising out of transactions concerning the Collateral Portfolio or otherwise, by the Borrower or the Obligor with respect thereto, except, in each case, for amendments, extensions and modifications, if any, permitted pursuant to Section 5.01(e)(i).

(x)Environmental. With respect to each item of Underlying Collateral, to the Knowledge of each Loan Party, except as expressly disclosed to the Initial Lender with respect to such Loan Asset prior to the Transfer thereof: (i) the related Obligor’s operations comply in all material respects with all applicable Environmental Laws; (ii) none of the related Obligor’s operations is the subject of a Federal or State investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Hazardous Materials into the environment; and (iii) the related Obligor does not have any material contingent liability in connection with any release of any Hazardous Materials into the environment. No Loan Party has received any written notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Underlying Collateral.

(y)Security Interest.

(i)This Agreement creates a valid and continuing security interest (as defined in the UCC of the State of New York) in the Collateral in favor of the Administrative Agent, on behalf of the Secured Parties, which security interest is prior to all other Liens (except for Permitted Liens), and is enforceable as such against creditors of and purchasers from the Loan Parties.

(ii)The Collateral Portfolio is comprised of “instruments”, “financial assets”, “security entitlements”, “general intangibles”, “chattel paper”, “accounts”, “certificated securities”, “uncertificated securities”, “securities accounts”, “deposit accounts”, “supporting obligations” or “insurance” (each as defined in the UCC of the State of New York), and the proceeds of the foregoing, or such other category of collateral under the UCC of the State of New York as to which the Borrower has complied with its obligations under this Section 4.01(y).

(iii)The Collection Account is not in the name of any Person other than the Borrower, subject to the lien of the Administrative Agent, for the benefit of the Secured Parties.

(iv)The Collection Account constitutes a “deposit account” as defined in the UCC of the State of New York.

(v)The Borrower, the Account Bank, the Facility Servicer and the Administrative Agent, on behalf of the Secured Parties, have entered into the Account Control Agreement.

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(vi)The Loan Parties have authorized the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral and that portion of the Loan Assets in which a security interest granted to the Administrative Agent, on behalf of the Secured Parties, under this Agreement may be perfected by filing; provided that filings in respect of real property shall not be required.

(vii)Other than as expressly permitted by the terms of the Transaction Documents (including Permitted Liens), this Agreement and the security interest granted to the Administrative Agent, on behalf of the Secured Parties, pursuant to this Agreement, no Loan Party has pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral. No Loan Party has authorized the filing of or is aware of any financing statements against a Loan Party that include a description of collateral covering the Collateral other than any financing statement (A) that has been terminated or fully and validly assigned to the Administrative Agent or (B) reflecting the transfer of assets on a Release Date pursuant to (and simultaneously with or subsequent to) the consummation of any transaction contemplated under (and in compliance with the conditions set forth in) Section 2.10. No Loan Party is aware of the filing of any judgment or Tax lien filings against a Loan Party, other than Permitted Liens.

(viii)None of the underlying promissory notes or related loan registers or Participation Agreements or related participation registers, as applicable, that constitute or evidence the Loan Assets has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Administrative Agent, on behalf of the Secured Parties.

(ix)With respect to any Collateral that constitutes a “certificated security,” such certificated security has been delivered to the Administrative Agent, on behalf of the Secured Parties and, if in registered form, has been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank by an effective indorsement (as specified in Section 8-102(a)(11) of the UCC of the State of New York) or has been registered in the name of the Administrative Agent, for the benefit of the Secured Parties, upon original issue or registration of transfer by the Loan Parties of such certificated security.

(x)With respect to any Collateral that constitutes an “uncertificated security,” the applicable Loan Party has caused the issuer of such uncertificated security to register the Administrative Agent, on behalf of the Secured Parties, as the registered owner of such uncertificated security.

(xi)The Pledged Equity issued by the Borrower has been duly and validly authorized and issued by the Borrower.

(xii)Holdings consents to the transfer of any Pledged Equity to the Administrative Agent or its designee, in connection with an exercise of remedies in accordance with Applicable Law following, and during the occurrence of, an Event of Default and to the substitution of the Administrative Agent or its designee as a member in the Borrower with all the rights and powers related thereto, subject to the terms of this Agreement.

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(xiii)The Pledged Equity shall not be represented by a certificate unless (A) the limited liability company agreement of the Borrower expressly provides that such interest shall be a “security” within the meaning of Article 8 of the UCC of the applicable jurisdiction and
(A)such certificate shall be delivered as provided in clause (xiv) below.

(xiv)If any portion of the Pledged Equity constitutes a “certificated security,” such certificated security has been delivered to the Administrative Agent, on behalf of the Secured Parties and, if in registered form, has been specially indorsed to the Administrative Agent, for the benefit of the Secured Parties, or in blank by an effective indorsement (as specified in Section 8-102(a)(11) of the UCC of the State of New York) or has been registered in the name of the Administrative Agent, for the benefit of the Secured Parties, upon original issue or registration of transfer by Holdings of such certificated security.

(xv)If any portion of the Pledged Equity constitutes an “uncertificated security”, Holdings has caused the Borrower of such uncertificated security to register the Administrative Agent, on behalf of the Secured Parties, as the registered holder of such uncertificated security.

(z)Anti-Money Laundering Laws. (i) No Covered Entity (A) is a Sanctioned Person; (B) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Sanctions and Anti-Terrorism Law; (C) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Sanctions and Anti-Terrorism Law; or (D) engages in any dealings or transactions prohibited by any Sanctions and Anti-Terrorism Law; (ii) the proceeds of the Advances will not be used by the Borrower, or to the Borrower’s actual knowledge by any other Person, to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Sanctions and Anti-Terrorism Law; (iii) the funds used to pay the Administrative Agent or the Facility Servicer, to the extent received from the Borrower, are not derived from any unlawful activity; and (iv) to the Loan Parties’ actual knowledge, each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any Sanctions and Anti-Terrorism Law.

(aa) Capitalization. The Borrower, in connection with the indemnity provided in Section 9.01, has access to sufficient capital to meet any and all indemnity obligations stated therein (provided that neither the Sponsor nor any of its Affiliates have any obligation to contribute capital to the Loan Parties in connection with the representation made in this Section 4.01(aa)).

SECTION 4.02    Representations of the Borrower Relating to the Agreement and the Collateral Portfolio. The Borrower hereby represents to the Secured Parties as follows:

(a)Eligibility of Collateral Portfolio. (i) Each Loan Asset Certificate, Loan Asset Schedule, Borrowing Base Certificate, Portfolio LTV Certificate and the information contained in each Notice of Borrowing is a true and correct listing of all the Loan Assets contained in the Collateral Portfolio as of the related Cut-Off Date or Advance Date, as applicable, and the information contained therein with respect to the identity of such item of Collateral Portfolio and the amounts owing thereunder is true and correct as of the related Cut-Off Date or Advance Date, as applicable, (ii) each Loan Asset designated on any Loan Asset Schedule or any Borrowing Base Certificate is an Eligible Loan Asset, (iii) the Borrower has complied in all material respects with the requirements of this Agreement with respect to each Loan Asset, including delivery to the Collateral Custodian of the Loan Asset File therefor as provided in Section 5.01(f) and (iv)

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with respect to each item of Collateral Portfolio, all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by the Borrower in connection with the grant of a security interest in each item of Collateral Portfolio to the Administrative Agent, for the benefit of the Secured Parties, have been duly obtained, effected or given and are in full force and effect.

(b)No Fraud. To the actual knowledge of the Borrower, each Loan Asset was originated without any fraud or misrepresentation on the part of the Obligor or Transferor, if any, of such Loan Asset.

ARTICLE V. GENERAL COVENANTS

SECTION 5.01 Affirmative Covenants of the Loan Parties. From the Closing Date until the Facility Termination Date:

(a)Organizational Procedures and Scope of Business. Each Loan Party shall observe in all material respects all organizational procedures required by its organizational documents and the laws of its jurisdiction of formation. Without limiting the foregoing, the Borrower shall limit the scope of its business to those set forth in its limited liability company agreement, including: (i) the acquisition and origination of and investments in Loan Assets and the ownership and management of the Portfolio Assets;
(ii) the Sale of Loan Assets as and when permitted under the Transaction Documents; (iii) entering into and performing under the Transaction Documents; (iv) consenting or withholding consent as to proposed amendments, waivers and other modifications of the Loan Agreements to the extent not in conflict with the terms of this Agreement or any other Transaction Document; (v) exercising any rights (including but not limited to voting rights and rights arising in connection with a Bankruptcy Event with respect to an Obligor or the consensual or non-judicial restructuring of the debt or equity of an Obligor) or remedies in connection with the Loan Assets and participating in the committees (official or otherwise) or other groups formed by creditors of an Obligor to the extent not in conflict with the terms of this Agreement or any other Transaction Document; (vi) acquiring Loan Assets directly from third-parties (other than Holdings); (vii) contracting with third–parties to provide services as may be required from time to time by the Borrower in connection with the Transaction Documents, including legal, investment, accounting, data processing, administrative and management services, and (viii) engaging in any activity and exercising any powers permitted to limited liability companies under the laws of the State of Delaware that are related or incidental to the foregoing and necessary, convenient or advisable to accomplish the foregoing.

(b)Special Purpose Entity Requirements. Each Loan Party shall at all times maintain at least one Independent Manager. The Borrower at all times shall comply in all material respects with the special purpose covenants set forth in Section 9(d) of its limited liability company agreement as in effect on the Closing Date and Holdings at all times shall comply in all material respects with the special purpose covenants set forth in Section 9(d) of its limited liability company agreement as in effect on the Closing Date. Each Loan Party shall at all times provide (and at all times such Loan Party’s organizational documents shall reflect) that the unanimous consent of all members (including the consent of the Independent Manager) is required for such Loan Party to (i) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (ii) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (iii) file a petition seeking or consent to reorganization or relief under any applicable federal or State law relating to bankruptcy or insolvency, (iv) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar

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official for such Loan Party, (v) make any assignment for the benefit of such Loan Party’s creditors or
(vi) admit in writing its inability to pay its debts generally as they become due.

(c)Preservation of Company Existence. Each Loan Party shall preserve and maintain its organizational existence, rights, franchises and privileges in the jurisdiction of its formation and shall promptly obtain and thereafter maintain qualifications to do business as a foreign entity in any other jurisdiction in which it does business and in which it is required to so qualify under Applicable Law except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

(d)Deposit of Misdirected Collections. The Borrower shall promptly (but in no event later than two Business Days after receipt and identification thereof) deposit or cause to be deposited into the Collection Account any and all Collections received by the Borrower.

(e)Material Modifications and Underlying Obligor Default.

(i)The Borrower shall give prior written notice to the Lenders of any proposed Material Modification with respect to any Loan Asset. If notified by the Borrower of a proposed Material Modification, the Majority Lenders will have (A) five Business Days with respect to all Material Modifications not relating to payment defaults and (B) ten Business Days with respect to all Material Modifications relating to all payment defaults to consent or decline to consent to such Material Modification. The Borrower shall not proceed with such Material Modification unless either (1) the Majority Lenders have consented to such Material Modification as provided above or (2) the Majority Lender have declined to consent to such Material Modification (or are deemed to have declined such consent) or the Borrower has prepaid the Advances Outstanding as provided by Section 2.04(e). For the avoidance of doubt, if the Majority Lenders do not respond to the request for consent for any proposed Material Modification within the five Business Day period or ten Business Day period, as the case may be, such consent shall be deemed to have been declined.

(ii)The Borrower shall give written notice to the Lenders, the Facility Servicer and the Collateral Custodian of any occurrence of any Underlying Obligor Default after the Closing Date with respect to any Loan Asset promptly after obtaining Knowledge thereof.

(f)Required Loan Documents. The Borrower (or the Portfolio Asset Servicer on its behalf) shall deliver to the Collateral Custodian hard copies of the Required Loan Documents and the Loan Asset Checklist and Loan Asset Certificate pertaining to each such Loan Asset in accordance with the Custodial Agreement within the timeframes set forth therein or, if no such timeframes are set forth, within five Business Days following the Cut-Off Date pertaining to such Loan Asset or such later date as the Initial Lender may agree.

(g)Maintenance of Credit Rating; Rating Agency Information. The Borrower shall, annually, cause an NRSRO to maintain an equivalent rating of BBB-, BBB(low) or Baa3 or higher on the credit facility evidenced by this Agreement and provide the Initial Lender with a copy of all rating letters issued to the Borrower in connection therewith. If the credit facility evidenced by this Agreement is downgraded to a rating lower than BBB-, BBB(low) or Baa3 or if the Borrower is unable to deliver the maintenance rating letter required by this Section 5.01(g) in a timely manner, then the Borrower, by not later than 15 Business Days after the date of such downgrade or the Borrower’s failure to deliver the maintenance rating letter

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when required by this Section 5.01(g), as applicable, shall use commercially reasonable efforts to either
(i)deliver preliminary feedback from another NRSRO that indicates that such NRSRO is prepared to issue a rating of BBB-, BBB(low) or Baa3 or higher with respect to the credit facility evidenced by this Agreement or (ii) cause the NRSRO that previously rated the credit facility evidenced by this Agreement to restore the rating of BBB-, BBB(low) or Baa3 or higher (including as a result of a prepayment in part or in whole of the Advances Outstanding). In the event the Borrower delivers preliminary feedback from another NRSRO that indicates that such NRSRO is prepared to issue a rating of BBB-, BBB(low) or Baa3 or higher with respect to the credit facility evidenced by this Agreement, then the Borrower, by not later than 45 days after the date of such preliminary feedback, shall use commercially reasonable efforts to deliver final rating levels from such other NRSRO indicating that it has issued an equivalent rating of BBB-, BBB(low) or Baa3 with respect to the credit facility evidenced by this Agreement. The Borrower shall provide any NRSRO that is then engaged by the Borrower to rate the credit facility evidenced by this Agreement with all available information that is reasonably requested by such NRSRO in connection with its rating of the credit facility evidenced by this Agreement. The Borrower shall pay all fees, costs and expenses of the applicable NRSRO required to comply with the provisions of this Section 5.01(g).

(h)Notices. The Borrower shall notify the Administrative Agent in writing, with a copy to Initial Lender, promptly (and in any event within five Business Days) following the Borrower obtaining Knowledge of the occurrence of:

(i)each Unmatured Event of Default or Event of Default and no later than three Business Days following such written notice, the Borrower shall provide to the Administrative Agent, with a copy to Initial Lender, a written statement of a Responsible Officer of the Borrower setting forth the details of such event and the action that the Borrower proposes to take with respect thereto;

(ii)any event or other circumstance that could reasonably be expected to result in a Material Adverse Effect;

(iii)the filing or commencement of any action, suit, investigation or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof, including pursuant to any applicable Environmental Laws, that could reasonably be expected to be adversely determined, and, if so determined, could reasonably be expected to result in liability of the Borrower in an aggregate amount exceeding $1,000,000;

(iv)any material Lien on the Collateral (other than Permitted Liens);

(v)the receipt of notice of the occurrence of any Reportable Event with respect to any Pension Plan except as could not reasonably be expected to result in a Material Adverse Effect and the Borrower shall provide the Administrative Agent with a copy of such notice;

(vi)any change in the accounting policies of the Borrower constituting a material deviation from GAAP; and

(vii)any material change in the Valuation Policy and the Borrower shall provide a written copy of such change within three Business Days of such change.

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(i)Additional Information; Additional Documents. The Loan Parties shall provide the Administrative Agent and the Initial Lender with any financial or other information reasonably requested by the Administrative Agent or the Initial Lender evidencing support for the representations set forth in this Agreement. Notwithstanding anything to the contrary in this provision, the Loan Parties and their Affiliates are not required to disclose, permit the inspection, examination or making copies or abstracts of, or discuss, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or agents) is prohibited by law or (iii) in such Loan Party’s or Affiliate’s reasonable judgment, would compromise any attorney-client privilege, privilege afforded to attorney work product or similar privilege; provided that the Loan Parties shall make available redacted versions of requested documents or, if unable to do so consistent with the preservation of such privilege, shall make commercially reasonable efforts to disclose information responsive to the requests of the Administrative Agent, any Lender or any of their respective representatives and agents, in a manner that will protect such privilege.

(j)Protection of Security Interest. Each Loan Party shall take all action that the Administrative Agent (acting at the direction of the Majority Lenders ) may reasonably request to perfect, protect and more fully evidence the first priority (subject to Permitted Liens) perfected security interest of the Administrative Agent, for the benefit of the Secured Parties, in the Collateral, or to enable the Administrative Agent to exercise or enforce any of its rights hereunder, including (i) with respect to the Loan Assets and that portion of the Collateral Portfolio in which a security interest may be perfected by filing, filing and maintaining (at the expense of the Loan Parties) effective financing statements against any Transferor which is an Affiliate of the Borrower in all necessary or appropriate filing offices (including any amendments thereto or assignments thereof) and filing continuation statements, amendments or assignments with respect thereto in such filing offices (including any amendments thereto or assignments thereof), (ii) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, (iii) at the expense of the Loan Parties, take all action necessary to cause a valid, subsisting and enforceable first priority perfected security interest, subject only to Permitted Liens, to exist in favor of the Administrative Agent (for the benefit of the Secured Parties) in the Loan Party’s interests in the Collateral, including the filing of a UCC financing statement in the applicable jurisdiction adequately describing the Collateral (which may include an “all assets” or “all assets and all proceeds thereof” filing), and naming such Loan Party as debtor and the Administrative Agent as the secured party, and filing continuation statements, amendments or assignments with respect thereto in such filing offices (including any amendments thereto or assignments thereof) and (iv) take all additional action that the Facility Servicer or Administrative Agent (acting at the written direction of the Majority Lenders) may reasonably request to perfect, protect and more fully evidence the respective first priority (subject to Permitted Liens) perfected security interests of the parties to this Agreement in the Collateral, or to enable the Administrative Agent to exercise or enforce any of its rights hereunder (on its own behalf or through the Facility Servicer). The Loan Parties shall defend the right, title and interest of the Administrative Agent, for the benefit of the Secured Parties, in, to and under the Collateral against all claims of third parties (other than with respect to Permitted Liens).

(k)Compliance with Applicable Law. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Loan Party shall at all times comply with all Applicable Law (including Environmental Laws and all federal securities laws).

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(l)Proper Records. Each Loan Party shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP and set aside on its books from its earning for each fiscal year all such proper reserves in accordance with GAAP. The Borrower shall account for the Transfer to it from the Transferor of the Loan Asset under each Loan Asset Assignment as a transfer of such Loan Asset in its books and records.

(m)Satisfaction of Obligations. Each Loan Party shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves with respect thereto have been provided on the books of such Loan Party.

(n)Payment of Taxes. Each Loan Party shall pay and discharge all material Taxes, levies, liens and other charges on it or its assets and on the Collateral, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.

(o)Access to Records. From time to time and, prior to the occurrence and continuance of an Unmatured Event of Default or Event of Default, upon not less than five Business Days advance notice, the Loan Parties shall permit the Administrative Agent or any Person designated by the Administrative Agent or the Initial Lender and at the sole cost and expense of the Loan Parties, to, during normal hours, visit and inspect at reasonable intervals its, and any Person to which it delegates any of its duties under the Transaction Documents (provided that the Loan Parties have a right to grant access with respect to such Person), books, records and accounts relating to its business, financial condition, operations and assets and its performance under the Transaction Documents, and to make copies thereof or abstracts therefrom, and to discuss the foregoing with its and such Person’s officers, partners, employees and accountants, all as often as the Administrative Agent or the Initial Lender may reasonably request; provided that (i) the Administrative Agent and the Initial Lender shall use all reasonable efforts to coordinate their inspections, (ii) so long as no Event of Default is continuing, the Loan Parties are not responsible for the cost and expense of more than one site visit in any calendar year and (iii) the Borrower shall not be obligated to disclose any information (A) that constitutes non-financial trade secrets or non- financial proprietary information (unless such information is material to a Loan Asset (or the performance thereof) or used in valuing the Loan Assets), (B) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or agents) is prohibited by law, (C) in the Borrower’s reasonable judgment, would compromise any attorney-client privilege, privilege afforded to attorney work product or similar privilege or is otherwise confidential in nature and outside of the scope of this Agreement or (D) the disclosure of which would violate any customary confidentiality agreement or restriction not entered into in contemplation of the provisions of this Section 5.01(o).

(p)Financial Reporting. The Borrower shall furnish to the Administrative Agent, the Facility Servicer and each Lender:

(i)within 120 days after the end of each fiscal year of the Sponsor, commencing with the fiscal year ended December 31, 2021, audited consolidated statements of the Sponsor of assets, liabilities and capital, and audited balance sheet, consolidated statements of operations and cash flow (and including a schedule of investments related to the

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Borrower as of the end of such fiscal year), audited by a firm of nationally recognized independent public accountants, as of the end of such fiscal year;

(ii)within 60 days after the end of each fiscal quarter of the Sponsor, (A) an unaudited financial report of the Sponsor containing a balance sheet, consolidated statement of assets, liabilities and capital, and a consolidated statement of operations (and including a schedule of investments related to the Borrower as of the end of such fiscal quarter) for the most recent fiscal quarter and (B) a copy of the Valuation Policy, including any changes, amendments or other modifications thereto since the Valuation Policy last provided to the Administrative Agent, the Facility Servicer and the Lenders, together with the values established by any independent third party for the Loan Assets as part of the Valuation Policy during such fiscal quarter; and

(iii)no later than the Reporting Date of each month, a Portfolio LTV Certificate setting forth the Portfolio LTV and Total Portfolio Value as of the last day of the prior month.

(q)Sanctions and Anti-Terrorism, Anti-Money Laundering and Anti-Corruption Compliance. Each Loan Party shall maintain in effect policies and procedures designed to ensure compliance by such Loan Party and its directors, officers, employees, and agents with applicable Sanctions and Anti-Terrorism Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.

SECTION 5.02    Negative Covenants of the Loan Parties. From the Closing Date until the Facility Termination Date:

(a)Protection of Title. Except as otherwise permitted under this Agreement, no Loan Party shall take any action which would directly or indirectly materially impair or adversely affect such Loan Party’s title to the Collateral Portfolio or the Pledged Equity, as applicable.

(b)Transfer Limitations. Except as permitted pursuant to Section 2.10, no Loan Party shall transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Collateral to any person other than the Administrative Agent for the benefit of the Secured Parties or in connection with Permitted Liens, or engage in financing transactions or similar transactions with respect to the Collateral with any person other than pursuant to this Agreement.

(c)Indebtedness; Liens. No Loan Party shall create, incur, assume or suffer to exist any Indebtedness for borrowed money other than the Obligations. No Loan Party shall create, incur or permit to exist any Lien in or on any of the Collateral other than Permitted Liens.

(d)Organizational Documents. No Loan Party shall modify or terminate any of its organizational or operational documents in any manner that would materially and adversely affect the interests of the Lenders.

(e)Merger, Acquisitions, Sales, etc. No Loan Party shall enter into any transaction of merger or consolidation or amalgamation or Sale (other than pursuant to Section 2.10), or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution).

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(f)Use of Proceeds. The Borrower shall not use the proceeds of the Initial Advance other than (i) to finance the acquisition, origination or investment by the Borrower in the initial Eligible Loan Assets (as set forth on Schedule II), (ii) to distribute such proceeds to the Sponsors (or an Affiliate thereof) for the reimbursement of the Transfer of such Loan Assets to the Borrower from the Sponsor (or such Affiliate) or (iii) to pay fees and expenses of the Sponsor, Holdings and the Borrower in connection with the transactions contemplated by this Agreement, including brokers fees. The Borrower shall not use the proceeds of any Advance (other than the Initial Advance) other than (A) to finance the acquisition, origination or investment by the Borrower in Eligible Loan Assets and to pay fees and expenses of the Sponsor, Holdings and the Borrower in connection with such acquisition, origination or investment, in each case as permitted by this Agreement, (B) to fund Delayed Draws as permitted by this Agreement or
(A)to distribute such proceeds to the Sponsor (or an Affiliate thereof) for the reimbursement of the Transfer of such Loan Assets to the Borrower from the Sponsor (or such Affiliate) or the making of such Delayed Draws by the Sponsor (or such Affiliate).

(g)Limited Assets. The Borrower shall not hold or own any assets that are not part of the Collateral Portfolio or as otherwise contemplated by Section 5.01(a).

(h)Tax Treatment. Neither Borrower nor any other Person on Borrower’s behalf shall make an election to be, or take any other action that is reasonably likely to result in the Borrower being treated as a corporation for U.S. federal income tax purposes and the Borrower shall take all steps necessary to avoid being treated as a corporation for U. S. federal income tax purposes. The Borrower shall not make any election to be, or take any other action that is reasonably likely to result in the Borrower being, treated as other than an entity disregarded from its owner under Treasury Regulation Section 301.7701-3(c).

(i)Restricted Junior Payments. The Borrower shall not distribute, transfer or dispose of Loan Assets except as expressly contemplated under Section 2.10. No Loan Party shall make any Restricted Junior Payment, except as expressly permitted under Section 2.08.

(j)ERISA Matters. Except as could not reasonably be expected to result in a Material Adverse Effect, the Borrower shall not (i) fail to meet the minimum funding standard set forth in Sections 302(a) and 303 of ERISA and Sections 412(a) and 430 of the Code with respect to any Pension Plan, (ii) fail to make any payments to a Multiemployer Plan that the Borrower may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto, (iii) terminate any Pension Plan so as to result, directly or indirectly in any liability to the Borrower or (iv) permit to exist any occurrence of any Reportable Event with respect to any Pension Plan.

(k)Instructions Regarding Payments. The Borrower (and the Portfolio Asset Servicer on its behalf) shall not make any change in its instructions to the Obligors or any agent, administrative agent, Counterparty Lender, Underlying Servicer or issuer of any Loan Asset, as applicable, regarding payments to be made with respect to the related Portfolio Asset to the Underlying Servicer Account or the Collection Account, as applicable, unless the Majority Lenders have directed, or otherwise have consented in writing to, such change.

(l)Change of Jurisdiction, Location, Names or Location of Loan Asset Files. No Loan Party shall change the jurisdiction of its formation, change the location of its principal place of business and chief executive office or make any change to its name or use any tradenames, fictitious names, assumed names, “doing business as” names or other names unless, prior to the effective date of any such change

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in the jurisdiction of its formation, change in location or name change or use, such Loan Party provides at least ten days prior written notice thereof and delivers to the Administrative Agent such financing statements as the Administrative Agent (acting at the direction of the Majority Lenders) may request to reflect such change in the jurisdiction of its formation, change in location or name change or use, together with any other documents and instruments as the Administrative Agent (acting at the direction of the Majority Lenders) may reasonably request in connection therewith. The Borrower shall not move, or consent to the Collateral Custodian moving, the Loan Asset Files from the locations provided thereof under the Custodial Agreement unless the Administrative Agent (acting at the direction of the Majority Lenders) consents to such move in writing.

(m)Loan Asset Assignments. The Borrower will not amend, modify, waive or terminate any provision of any Loan Asset Assignment in any manner that would adversely affect the interests of the Lenders without the prior written consent of the Lenders.

(n)No Changes in Fees. The Borrower shall not make any changes to the Fees or amend, restate, supplement or otherwise modify the Fee Letters in any material respect without the prior written approval of all Lenders.

(o)Sanctions and Anti-Terrorism, Anti-Money Laundering and Anti-Corruption Compliance. The Borrower shall not knowingly use the proceeds of any Advance, directly or indirectly, for any payments that could constitute a violation of any applicable Sanctions and Anti-Terrorism Laws, Anti- Money Laundering Laws or Anti-Corruption Laws or in any other manner that would constitute or result in a violation of Sanctions and Anti-Terrorism Laws, Anti-Money Laundering or Anti-Corruption Laws by any Person.

ARTICLE VI. EVENTS OF DEFAULT

SECTION 6.01 Events of Default. If any of the following events (each, an “Event of Default”) occurs:

(a)the Borrower fails to make any payment of (i) any Obligation (other than the payment of any amount upon the Final Maturity Date therefor) when due and such failure is not cured within five Business Days or (ii) any Obligation on the Final Maturity Date therefor;

(b)any failure on the part of a Loan Party to observe or perform any covenants or agreements of the Loan Parties set forth in Section 5.02;

(c)any failure on the part of a Loan Party to observe or perform any covenants or agreements of the Loan Parties set forth in Section 5.01(p) and the same continues unremedied for a period of ten Business Days (provided that such ten Business Day cure period may only be utilized twice in any calendar year);

(d)any failure on the part of a Loan Party to observe or perform any covenants or agreements of the Loan Parties set forth in Section 5.01 (other than as set forth in Section 6.01(c)) and the same continues unremedied for a period of 20 Business Days (if such failure can be remedied) after the earlier to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Borrower by the

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Administrative Agent or any Lender and (ii) the date on which a Responsible Officer of the Borrower acquires Knowledge thereof;

(e)any failure on the part of a Loan Party to observe or perform any of its covenants or agreements set forth in this Agreement or the other Transaction Documents to which it is a party (other than covenants or agreements with respect to which another clause of this Section 6.01 expressly relates, which shall not, on its own, constitute an Event of Default under this clause (c)) and the same continues unremedied for a period of 30 days (if such failure can be remedied) after the earlier to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Borrower by the Administrative Agent or any Lender and (ii) the date on which a Responsible Officer of the Borrower acquires Knowledge thereof;

(f)if the Portfolio Asset Servicer and the Borrower are the same Person, any failure on the part of the Portfolio Asset Servicer to observe or perform any of its covenants or agreements set forth Sections 8.05(a), Section 8.05(d), Section 8.06(a), Section 8.08(a), Section 8.08(b) or Section 8.08(c) and the same continues unremedied for a period of three Business Days (if such failure can be remedied) after the earlier to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Portfolio Asset Servicer by the Administrative Agent, the Facility Servicer or any Lender and (ii) the date on which a Responsible Officer of the Portfolio Asset Servicer acquires Knowledge thereof; provided that such three Business Day cure period may only be utilized four times during the term of this Agreement;

(g)any representation, warranty or certification made by a Loan Party in any Transaction Document or in any agreement, instrument, certificate or other document delivered pursuant to any Transaction Document shall prove to have been incorrect in any material respect when made (subject to any applicable notice and cure period provided therefor);

(h)any Change of Control shall occur without the written consent of all Lenders;

(i)the occurrence of a Bankruptcy Event relating to a Loan Party;

(j)the rendering of one or more final judgments, decrees or orders by a court or arbitrator of competent jurisdiction against the Borrower or Holdings for the payment of money in excess of $1,000,000 in the aggregate (unless such judgment is covered by third party insurance as to which the insurer has been notified of such judgment, decree or order and has not denied or failed to acknowledge coverage) where such Loan Party shall not have either (i) discharged or provided for the discharge of any such judgment, decree or order in accordance with its terms within 30 days or (ii) perfected a timely appeal, decree or order and caused the execution of the same to be stayed during the pendency of the appeal;

(k)the Borrower defaults in making any payment required to be made under one or more agreements for borrowed money to which it is a party in an aggregate principal amount in excess of $1,000,000, or an event of default is declared under any such agreement, in each case, and such default is not cured or remedied within the applicable cure period, if any, provided for under such agreement; or

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(l)(i) any Transaction Document, or any Lien or security interest granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of a Loan Party; provided that, there shall be no Event of Default under this clause (l)(i) to the extent such Event of Default arises solely from the action (or inaction) of the Administrative Agent, the Facility Servicer, the Collateral Custodian, the Account Bank or a Lender, (ii) a Loan Party, the Sponsor or any of their Affiliates shall, directly or indirectly, contest in writing in any manner the effectiveness, validity, binding nature or enforceability of any Transaction Document or any Lien or security interest thereunder or (iii) any security interest securing any obligation under any Transaction Document shall, in whole or in part, cease to be a first priority perfected security interest (subject to Permitted Liens) except as otherwise expressly permitted to be released in accordance with the applicable Transaction Document; provided that there shall be no Event of Default under this clause (l)(iii) to the extent such Event of Default arises from the action (or inaction) of the Administrative Agent, the Facility Servicer, the Collateral Custodian, the Account Bank or a Lender;

then the Administrative Agent shall, at the written direction of the Majority Lenders, or the Majority Lenders may, in each case by notice to the Borrower, declare the Final Maturity Date of any Term Loan Series to have occurred; provided that, in the case of any event described in Section 6.01(i), the Final Maturity Date for each Term Loan Series is deemed to have occurred automatically upon the occurrence of such event. Upon the occurrence and during the continuation of any Event of Default, (i) the Lenders may decline to make any Advance hereunder, terminate or suspend their Commitment, (ii) the Administrative Agent shall, at the written direction of the Majority Lenders, or the Majority Lenders may declare the Advances to be immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) and any other Obligations to be immediately due and payable; provided that, in the case of any event described in Section 6.01(i), the Commitments automatically terminate and the Advances and other Obligations become immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) without the need of any notice to the Borrower upon the occurrence of such event and (iii) the Administrative Agent shall, at the written direction of the Majority Lenders, instruct the Account Bank to distribute all amounts on deposit in the Collection Account as described in Section 2.08(d) (provided that the Borrower shall in any event remain liable to pay such Advances and all such amounts and Obligations immediately in accordance with Section 2.08(d)). In addition, upon the occurrence and during the continuation of any Event of Default, the Lenders and the Administrative Agent, on behalf of the Secured Parties, shall have, in addition to all other rights and remedies under this Agreement, the other Transaction Documents or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other Applicable Law, which rights shall be cumulative.

SECTION 6.02 Pledged Equity.

(a)Except as otherwise set forth in Section 6.02(b) or 6.02(c):

(i)Holdings shall be entitled to exercise any and all voting or other consensual rights and powers inuring to an owner of Pledged Equity or any part thereof and Holdings agrees that it shall exercise such rights for purposes consistent with the terms of this Agreement and the other Transaction Documents.

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(ii)Holdings shall be entitled to receive and retain any and all dividends and other distributions paid on or distributed in respect of the Pledged Equity (without any obligation to contribute such amounts to the Collection Account), to the extent and only to the extent that such dividends and other distributions are not prohibited by the terms and conditions of this Agreement and Applicable Law; provided that any noncash dividends or other distributions that would constitute Pledged Equity, shall be and become part of the Pledged Equity, and, if received by Holdings, shall not be commingled by Holdings with any of its other property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Administrative Agent and the Secured Parties and Holdings shall promptly take all steps reasonably necessary to ensure the validity, perfection and priority (subject to Permitted Liens), including promptly delivering the same to the Administrative Agent in the same form as so received (with any necessary endorsement reasonably requested by the Administrative Agent). So long as no Event of Default has occurred and is continuing, the Administrative Agent shall cooperate with Holdings with respect to making exchanges of Pledged Equity in connection with any exchange or redemption of such Pledged Equity not prohibited by this Agreement, which such cooperation shall include delivery of any such Pledged Equity in exchange for replacement Pledged Equity. For the avoidance of doubt, the Borrower agrees to reimburse the Administrative Agent for any costs or expenses incurred due to the provisions of this Section 6.02(a)(ii).

(b)Upon the occurrence and during the continuance of an Event of Default (and after the delivery of notice to Holdings) or upon the occurrence of any event described in Section 6.01(i) (without notice), all rights of Holdings to dividends or other distributions that Holdings is authorized to receive pursuant to Section 6.02(a)(ii) shall cease, and all such rights shall thereupon become vested in the Administrative Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends or other distributions during the continuance of such Event of Default. All dividends or other distributions received by Holdings contrary to the provisions of this Section 6.02(b) shall be held in trust for the benefit of the Administrative Agent, shall be segregated from other property or funds of Holdings and shall be promptly delivered to the Administrative Agent in the same form as so received (with any necessary endorsement reasonably requested by the Administrative Agent). Any and all money and other property paid over to or received by the Administrative Agent pursuant to the provisions of this Section 6.02(b) shall be retained by the Administrative Agent in the Collection Account and shall be applied in accordance with the terms of this Agreement. After all Events of Default have been waived or are no longer continuing, the Administrative Agent, upon written direction of the Majority Lenders, shall promptly repay to Holdings (without interest) all dividends or other distributions that Holdings would otherwise be permitted to retain pursuant to the terms of Section 6.02(a)(ii) and that remain in such account.

(c)Upon the occurrence and during the continuance of an Event of Default (and after the delivery of notice to Holdings) or upon the occurrence of any event described in Section 6.01(i) (without notice), then (i) all rights of Holdings to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 6.02(a)(i) shall cease, and all such rights shall thereupon become vested in the Administrative Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers acting at the written direction of the Majority Lenders; provided that, unless otherwise directed by the Majority Lenders, the Administrative Agent shall have the right from time to time following and during the continuance of an Event of Default to permit

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Holdings to exercise such rights and (ii) in order to permit the Administrative Agent to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder, Holdings shall promptly execute and deliver (or cause to be executed and delivered) to the Administrative Agent all proxies, dividend payment orders and other instruments as the Administrative Agent may from time to time reasonably request. After all Events of Default have been waived, Holdings shall have the exclusive right to exercise the voting or consensual rights and powers that Holdings would otherwise be entitled to exercise pursuant to the terms of Section 6.02(a)(i).

(d)Any notice given by the Administrative Agent to the Borrower under this Section 6.02 shall be given in writing.

SECTION 6.03    Additional Remedies.

(a)Upon the occurrence and during the continuation of an Event of Default, and without limiting the remedies provided in this Article VI, the Administrative Agent shall, at the direction of the Majority Lenders, (i) sell or otherwise dispose of any of the Collateral or the Pledged Equity at public or private sales and take possession of the proceeds of any such sale or disposition, (ii) instruct the obligor or obligors on any account, agreement, instrument or other obligation constituting Collateral or Pledged Equity to make any payment required by the terms of such account, agreement, instrument or other obligation to or at the direction of the Administrative Agent (acting at the direction of the Majority Lenders), (iii) give notice of sole control or any other instruction under the Account Control Agreement, any other account control agreement with respect to the Underlying Servicer Accounts and take any action therein with respect to Collateral subject thereto, (iv) in accordance with Section 6.02, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Equity, exchange certificates or instruments representing or evidencing Pledged Equity for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, including exchange, subscription or any other rights, privileges or options pertaining to any Pledged Equity, and otherwise act with respect to the Pledged Equity as though the Administrative Agent was the absolute owner thereof and (v) in accordance with Section 6.02, collect and receive all cash dividends, interest, principal and other distributions made on any Pledged Equity.

(b)Any Collateral or Pledged Equity to be sold or otherwise disposed of pursuant to this Article VI may be sold or disposed of in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice upon such terms and conditions as the Administrative Agent may deem commercially reasonable), for cash or on credit or for future delivery without assumption of any credit risk. Any sale or disposition of Collateral or Pledged Equity may be made without the Administrative Agent giving warranties of any kind with respect to such sale or disposition and the Administrative Agent may specifically disclaim any warranties of title or the like. The Administrative Agent may comply with any applicable State or federal law requirements in connection with a sale or disposition of the Collateral or Pledged Equity and compliance will not be considered to adversely affect the commercial reasonableness of any such sale or disposition. If any notice of a proposed sale or disposition of the Collateral or Pledged Equity is required by law, such notice is deemed commercially reasonable and proper if given at least ten days before such sale or disposition. The Administrative Agent has the right upon any public sale of Collateral or Pledged Equity and, to the extent permitted by law, upon any such private sale of Collateral or Pledged Equity, to purchase the whole or any part of the Collateral or Pledged Equity so sold or disposed of free of any right of equity redemption,

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which equity redemption the Borrower hereby waives. Upon any sale or disposition of Collateral or Pledged Equity, the Administrative Agent has the right to deliver and transfer to the purchaser or transferee thereof the Collateral or Pledged Equity so sold or disposed of.

(c)After the occurrence and during the continuance of an Event of Default, upon the written request of the Facility Servicer or the Administrative Agent (acting at the written direction of the Majority Lenders), the Borrower shall furnish the Facility Servicer and Administrative Agent, as applicable, with an appropriate power of attorney to send (at the written direction of the Majority Lenders) notification forms to the Obligors or any agent, administrative agent, Counterparty Lender, Underlying Servicer or issuer of a Portfolio Asset of the Administrative Agent’s interest in the Collateral and the obligation to make payments as directed by the Administrative Agent (acting at the written direction of the Majority Lenders).

(d)For the avoidance of doubt, this Agreement (including this Article VI) shall be subject to the special servicing activities provisions in Section 8.06.

ARTICLE VII.
THE ADMINISTRATIVE AGENT

SECTION 7.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints Trimont Real Estate Advisors, LLC to act on its behalf as the Administrative Agent hereunder and under the other Transaction Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article VII are solely for the benefit of the Administrative Agent, the Lenders and the other Secured Parties, and neither the Borrower nor Holdings shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Transaction Documents (or any other similar term) 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 such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SECTION 7.02 Exculpatory Provisions.

(a)The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Transaction Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i)shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default or Unmatured Event of Default has occurred and is continuing;

(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Transaction Documents that the Administrative Agent is required to exercise as directed in writing by the Majority Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Transaction Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Transaction Document or Applicable Law, including for the

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avoidance of doubt any action that may be in violation of the automatic stay under any Bankruptcy Law; and

(iii)shall not, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, Holdings or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b)The Administrative Agent shall not be liable for any action taken or not taken by it or errors in judgment made (i) with the consent or at the request of the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Article VI and Section 10.01), or
(ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall not be deemed to have knowledge of any Event of Default or Unmatured Event of Default unless and until notice describing such Event of Default or Unmatured Event of Default is given to the Administrative Agent in writing by a Loan Party, the Portfolio Asset Servicer, the Facility Servicer or a Lender.

(c)The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default or Unmatured Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

SECTION 7.03 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of an Advance that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Advance. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower or Holdings), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 7.04 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Transaction Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such

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sub-agents may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article VII shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 7.05 Resignation or Removal of Administrative Agent.

(a)The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Initial Lender shall have the right to appoint a successor with the consent of the Borrower (such consent not to be unreasonably withheld or delayed and such consent not being required if an Event of Default has occurred and is continuing). If no such successor shall have been so appointed by the Initial Lender and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Initial Lender) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date. Notwithstanding anything to the contrary contained herein, no Competitor shall be appointed as a successor Administrative Agent.

(b)The Initial Lender may, with 30 days’ notice to Administrative Agent, remove Administrative Agent (the “Removal Effective Date”). Upon receipt of any such notice of removal, the Initial Lender shall have the right to appoint a successor with the consent of the Borrower (such consent not to be unreasonably withheld or delayed and such consent not being required if an Event of Default has occurred and is continuing). If no such successor shall have been so appointed by the Initial Lender and shall have accepted such appointment prior to the Removal Effective Date, then the removed Administrative Agent may (but shall not be obligated to), on behalf of the parties hereto, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such removal shall become effective in accordance with such notice on the Removal Effective Date. Notwithstanding anything to the contrary contained herein, no Competitor shall be appointed as a successor Administrative Agent.

(c)With effect from the Resignation Effective Date or Removal Effective Date, as applicable,
(i)the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Secured Parties under any of the Transaction Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any fees, expenses and indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Initial Lender appoints a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent (other than any rights to fees, expenses and indemnity payments owed to the retiring Administrative Agent), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Transaction Documents. The fees payable by the

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Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Transaction Documents, the provisions of this Article VII and Section 10.07 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

SECTION 7.06 Non-Reliance on Agents and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Transaction Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 7.07 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Bankruptcy Law, the Administrative Agent (irrespective of whether the principal of any Advance shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Advances and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel and all other amounts due the Secured Parties under Section 10.07) allowed in such judicial proceeding; and

(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 10.07.

SECTION 7.08    Collateral Matters.

(a)Each Lender authorizes the Administrative Agent to release any Lien on any Collateral granted to or held by the Administrative Agent, for the benefit of the Secured Parties, under this Agreement or any other Transaction Document (i) as provided in Section 2.11 or (ii) if approved, authorized or ratified in writing in accordance with Section 10.01. Upon request by the Administrative

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Agent at any time, the Majority Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property. In each case as specified in this Section 7.08, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the Facility Servicer such documents as the Facility Servicer may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under this Agreement or the other Transaction Documents in accordance with the terms of the Transaction Documents and this Section 7.08.

(b)The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, for the legality, enforceability, effectiveness or sufficiency of the Transaction Documents, the existence, priority, creation, validity, enforceability or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by the Borrower, the Facility Servicer or the Portfolio Asset Servicer in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral or the Lien thereon.

(c)It is understood and agreed that the Administrative Agent (i) shall have no responsibility with respect to the determination of whether any Pledged Equity is certificated or uncertificated and (ii) the Administrative Agent shall only be responsible for holding Pledged Equity to the extent actually received.

(d)The Administrative Agent shall monitor any UCC financing statements filed by the Initial Lender in connection with this Agreement solely to the extent that the Initial Lender provides such financial statements to the Administrative Agent. The Administrative Agent shall notify the Initial Lender when the time-period to file continuation statements for such financing statements has commenced and at least 60 days prior to the date such financing statements would terminate; provided that the Administrative Agent shall have no liability or obligation to file any such continuation statements. The Administrative Agent shall have no other duty to see to, or be responsible for the correctness or accuracy of, any recording, filing or depositing of this Agreement or any agreement referred to herein, or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refilling or re-depositing of any thereof.

SECTION 7.09    Erroneous Payments.

(a)If the Administrative Agent or the Facility Servicer notifies a Lender or Secured Party, or any Person who has received funds on behalf of a Lender or Secured Party (any such Lender, Secured Party or other recipient, a “Payment Recipient”) that the Administrative Agent or the Facility Servicer has determined in its sole discretion (whether or not after receipt of any notice under Section 7.09(b)) that any funds received by such Payment Recipient from the Administrative Agent, the Facility Servicer or any of their Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient within the prior 30 day period (whether or not known to such Lender, Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent or the Facility Servicer, as applicable, and such Lender or Secured Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in

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no event later than two Business Day thereafter, return to the Administrative Agent or the Facility Servicer, as applicable, the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date the Administrative Agent or the Facility Servicer, as applicable, demands the return of such Erroneous Payment (or portion thereof) from such Payment Recipient to the date such amount is repaid to the Administrative Agent or the Facility Servicer, as applicable, in same day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent or the Facility Servicer, as applicable, in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent or the Facility Servicer to any Payment Recipient under this Section 7.09(a) is conclusive, absent manifest error.

(b)Without limiting Section 7.09(a), each Payment Recipient hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent, the Facility Servicer or any of their Affiliates (i) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent, the Facility Servicer or any of their Affiliates, as applicable, with respect to such payment, prepayment or repayment (a “Payment Notice”), (ii) that was not preceded or accompanied by a Payment Notice or (iii) that such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case:

(i)an error may have been made (in the case of immediately preceding clauses (a) or (b)) or an error has been made (in the case of immediately preceding clause (c)) with respect to such payment, prepayment or repayment; and

(ii)such Payment Recipient shall promptly (and, in all events, within one Business Day of its knowledge of such error) notify the Administrative Agent or the Facility Servicer of its receipt of such payment, prepayment or repayment, the details thereof and that it is so notifying the Administrative Agent or the Facility Servicer, as applicable, pursuant to this Section 7.09(b).

(c)Each Lender or Secured Party hereby authorizes the Administrative Agent and the Facility Servicer to set off, net and apply any and all amounts at any time owing to such Lender or Secured Party under any Loan Document, or otherwise payable or distributable by the Administrative Agent or the Facility Servicer to such Lender or Secured Party from any source, against any amount due to the Administrative Agent or the Facility Servicer, as applicable, under Section 7.09(a) or under the indemnification provisions of this Agreement.

(d)In the event an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent or the Facility Servicer for any reason, after demand therefor by the Administrative Agent or the Facility Servicer, as applicable, in accordance with Section 7.09(a), from any Lender that has received such Erroneous Payment (or portion thereof) (or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s or the Facility Servicer’s request to such Lender at any time, (i) such Lender shall be deemed to have assigned its Advances (but not its Commitments) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an amount equal to the Erroneous Payment Return Deficiency (such assignment of

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the Advances (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) at par plus any accrued and unpaid interest (with the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Assumption Agreement (or, to the extent applicable, an agreement incorporating an Assignment and Assumption Agreement by reference pursuant to an approved electronic platform as to which the Administrative Agent, the Facility Servicer and such parties are participants) with respect to such Erroneous Payment Deficiency Assignment, and such Lender shall deliver any promissory notes evidencing such Advances to the Borrower, the Administrative Agent or the Facility Servicer, as applicable, (ii) the Administrative Agent or the Facility Servicer, as applicable, as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment and (iii) upon such deemed acquisition, the Administrative Agent or the Facility Servicer, as applicable, as the assignee Lender shall become a Lender, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Agreement.

(e)The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrower or any other Loan Party for the purpose of making such Erroneous Payment.

(f)To the extent permitted by Applicable Law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent or the Facility Servicer for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.

(g)Each party’s obligations, agreements and waivers under this Section 7.09 survive the resignation or replacement of the Administrative Agent or the Facility Servicer, as applicable, any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Transaction Document.

SECTION 7.10 Payment Date Report. On each Reporting Date, the Administrative Agent shall prepare and provide to the Facility Servicer and the Account Bank a Payment Date Report containing the information set forth therein and including the amounts to be remitted pursuant to Section 2.08 to the applicable Persons thereunder on the related Payment Date.

SECTION 7.11 Custodial Agreement.

(a)The Administrative Agent shall promptly notify the Facility Servicer of its receipt of any Request for Release under, and as defined in, the Custodial Agreement. The Administrative Agent shall

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not acknowledge any such Request of Release unless it is made in accordance with Section 2.10 and Section 2.11 or has otherwise been consented to by the Majority Lenders.

(b)The Administrative Agent shall promptly notify the Facility Servicer of the resignation the Collateral Custodian under the Custodial Agreement and shall only appoint a successor custodian thereunder with the prior written approval of the Facility Servicer. The Administrative Agent shall not remove or discharge the Collateral Custodian under the Custodial Agreement without the prior written approval of the Facility Servicer and the Administrative shall remove and discharge the Collateral Custodian under the Custodial Agreement at the written direction of the Majority Lenders.

(c)At the reasonable request of the Facility Servicer, the Administrative Agent shall, in accordance with the terms, but subject to the conditions, of the Custodial Agreement, (i) examine, inspect and review the Loan Asset Files in the possession of or under the control of the Collateral Custodian and
(ii) request copies of the documents, records and other instruments or information in the possession of or under the control of Collateral Custodian relating to any or all of the Loan Assets.

ARTICLE VIII.
ADMINISTRATION AND SERVICING OF COLLATERAL PORTFOLIO

SECTION 8.01    Appointment and Designation of the Applicable Servicer.

(b)Initial Applicable Servicer.

(i)The Borrower and the Lenders hereby appoint Massachusetts Mutual Life Insurance Company, pursuant to the terms and conditions of this Agreement, as Facility Servicer, with the authority to service, administer and exercise rights and remedies, on behalf of the Borrower, in respect of the Collection Account, and to take the actions required of it hereunder and under the other Transaction Documents. Massachusetts Mutual Life Insurance Company hereby accepts such appointment and agrees to perform the duties and responsibilities of the Facility Servicer pursuant to the terms hereof until such time as it resigns or is removed as Facility Servicer pursuant to the terms hereof. The Facility Servicer and the Borrower hereby acknowledge that the Administrative Agent and the Secured Parties are third party beneficiaries of the obligations undertaken by the Facility Servicer hereunder.

(ii)The Facility Servicer and the Lenders hereby appoint the Borrower, pursuant to the terms and conditions of this Agreement, as Portfolio Asset Servicer, with the authority to oversee and supervise the Underlying Servicers, in respect of the payments to the Borrower under the Collateral Portfolio that are to be Collections, and to take the actions required of it hereunder and under the other Transaction Documents. The Borrower hereby accepts such appointment and agrees to perform the duties and responsibilities of the Portfolio Asset Servicer pursuant to the terms hereof until such time as it resigns or is removed as Portfolio Asset Servicer pursuant to the terms hereof. The Portfolio Asset Servicer and the Borrower hereby acknowledge that the Administrative Agent and the Secured Parties are third party beneficiaries of the obligations undertaken by the Portfolio Asset Servicer hereunder.

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(c)Servicer Termination Notice. The Borrower, each Applicable Servicer and the Administrative Agent hereby agree that, upon the occurrence of a Servicer Termination Event, the Administrative Agent, by written notice to an Applicable Servicer (a “Servicer Termination Notice”), shall, upon the written direction of the Majority Lenders, terminate all of the rights, obligations, power and authority of such Applicable Servicer under this Agreement. On and after the receipt by such Applicable Servicer of a Servicer Termination Notice pursuant to this Section 8.01(b), such Applicable Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Servicer Termination Notice or otherwise specified by the Administrative Agent (upon the written direction of the Majority Lenders) in writing or, if no such date is specified in such Servicer Termination Notice or otherwise specified by the Administrative Agent (upon written direction of the Majority Lenders), until a date mutually agreed upon by such Applicable Servicer and the Administrative Agent (upon written direction of the Majority Lenders). If such Applicable Servicer is the Facility Servicer, such Applicable Servicer shall be entitled to receive, to the extent of funds available therefor pursuant to Section 2.08, the fees accrued until such termination date as well as any other fees, amounts, expenses or indemnities it is entitled to pursuant to the provisions of this Agreement and the Facility Servicing Fee Letter (collectively, the “Servicer Termination Expenses”). To the extent amounts held in the Collection Account and paid in accordance with Section 2.08 are insufficient to pay the Servicer Termination Expenses, the Borrower (and to the extent the Borrower fails to so pay, the Lenders based on their Pro Rata Share) agree to pay the Servicer Termination Expenses within ten Business Days of receipt of an invoice therefor. On the termination date specified in this Section 8.01(b), such Applicable Servicer agrees that it will terminate its activities as Facility Servicer or Portfolio Asset Servicer, as applicable, hereunder in a manner that the Administrative Agent (acting at the direction of the Majority Lenders) and, if no Event of Default has occurred and is continuing at such time, the Borrower, believes will facilitate the transition of the performance of such activities to a Replacement Servicer, and the Replacement Servicer shall assume each and all of such Applicable Servicer’s obligations under this Agreement and the other Transaction Documents, on the terms and subject to the conditions herein set forth, and such Applicable Servicer shall use its commercially reasonable efforts to assist the Replacement Servicer in assuming such obligations.

(d)Appointment of Replacement Servicer. At any time following the delivery of a Servicer Termination Notice with respect to the Facility Servicer or receipt of any notice of resignation of the Facility Servicer under Section 8.09, the Administrative Agent (acting at the direction of the Majority Lenders) shall, with the consent of the Borrower (such consent not to be unreasonably withheld or delayed and such consent not being required if an Event of Default has occurred and is continuing), appoint a new Facility Servicer (the “Replacement Facility Servicer”), which appointment shall take effect upon the Replacement Facility Servicer accepting such appointment by a written assumption in a form satisfactory to the Administrative Agent (acting at the direction of the Majority Lenders) and, if no Event of Default has occurred and is continuing at such time, the Borrower (such approval not to be unreasonably withheld or delayed). Provided no Event of Default has occurred and is then continuing, following the delivery of a Servicer Termination Notice with respect to the Portfolio Asset Servicer or receipt of any notice of resignation of the Portfolio Asset Servicer under Section 8.09, the Borrower shall, with the consent of Administrative Agent (acting at the direction of the Majority Lenders) (such consent not to be unreasonably withheld or delayed), appoint a new Portfolio Asset Servicer (the “Replacement Portfolio Asset Servicer;” the Replacement Portfolio Asset Servicer and the Replacement Facility Servicer are each a “Replacement Servicer”), which appointment shall take effect upon the Replacement Portfolio Asset Servicer accepting such appointment by a written assumption in a form satisfactory to the Administrative Agent (acting at the direction of the Majority Lenders) and, the Borrower (such approval not to be unreasonably withheld or delayed). Upon the occurrence of an Event of Default, the

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Administrative Agent (acting at the direction of the Majority Lenders) may exercise the foregoing appointment rights with respect to the Replacement Portfolio Asset Servicer on behalf of the Borrower. Any Replacement Servicer shall be an established financial institution, having a net worth of not less than
$50,000,000 and whose regular business includes the servicing of assets similar to the Collateral Portfolio; provided that in no event shall any such Replacement Servicer be a Competitor.

(e)Liabilities and Obligations of Replacement Servicer. Upon its appointment, any Replacement Servicer shall be the successor in all respects to such Applicable Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on such Applicable Servicer by the terms and provisions hereof, and all references in this Agreement to such Applicable Servicer shall be deemed to refer to the Replacement Servicer; provided that any Replacement Servicer shall have (i) no liability with respect to any action performed by the prior Applicable Servicer prior to the date that the Replacement Servicer becomes the successor to such Applicable Servicer or any claim of a third party based on any alleged action or inaction of the prior Applicable Servicer, (ii) no obligation with respect to any Taxes on behalf of the Borrower, except for any payment made out of the Collection Account as provided in Section 2.13, (iii) no obligation to pay any of the fees and expenses of any other party to the transactions contemplated hereby and
(iv) no liability or obligation with respect to any prior Applicable Servicer indemnification obligations of any prior Applicable Servicer. The indemnification obligations of the Replacement Servicer upon becoming an Applicable Servicer, are expressly limited to those arising on account of its gross negligence or willful misconduct, or the failure to perform materially in accordance with its duties and obligations set forth in this Agreement.

(f)Authority and Power. All authority and power granted to an Applicable Servicer under this Agreement shall automatically cease and terminate on the Facility Termination Date and shall pass to and be vested in the Borrower thereafter. Each Applicable Servicer agrees to cooperate with the Borrower in effecting the termination of the responsibilities and rights of each Applicable Servicer to conduct servicing of this Agreement (including the right to direct remittances out of the Collection Accounts).

(g)Subcontracts. The Facility Servicer may subcontract with any other Person for servicing and administering in respect of the payments to the Borrower or the Portfolio Asset Servicer under the Collateral Portfolio that are to be Collections under this Agreement; provided that (A) the Facility Servicer shall select any such Person with reasonable care and shall be solely responsible for the fees and expenses payable to any such Person, (B) the Facility Servicer shall not be relieved of, and shall remain liable for, the performance of the duties and obligations of the Facility Servicer pursuant to the terms hereof without regard to any subcontracting arrangement and (C) any such subcontract shall be terminable upon the occurrence of a Servicer Termination Event. The Facility Servicer shall not be responsible for the negligence or misconduct of any sub-agent or attorney in fact that it selects with reasonable care.

SECTION 8.02    Duties of the Portfolio Asset Servicer.

(a)Duties. The Portfolio Asset Servicer shall take or cause to be taken all such actions as may be necessary or advisable to oversee and administer the Underlying Servicers in respect of the payments to the Borrower under the Collateral Portfolio from time to time that are to be Collections, all in accordance with Applicable Law and the Servicing Standard and to take the actions of the Portfolio Asset Servicer under this Agreement and the other Transaction Documents. Without limiting the foregoing, the duties of the Portfolio Asset Servicer shall include the following:

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(i)maintaining or causing the Underlying Servicers to maintain the following records for each Loan Asset:

a.any Loan Asset Assignment;

b.the instructions from the Borrower (or the Portfolio Asset Servicer on the Borrower’s behalf) to the Obligors, Underlying Servicers or Counterparty Lenders to make all payments in respect of such Loan Asset directly to the Underlying Servicer Account or the Collection Account;

c.as applicable, any Participation Agreement, any related supplement to such Participation Agreement and the related direction from the related Counterparty Lender to the related Obligor or Underlying Servicer (1) to make all payments in respect of such Loan Asset directly to the Underlying Servicer Account or the Collection Account and (2) to deliver to the Portfolio Asset Servicer a copy of all requests, notices and reports required to be delivered by such Counterparty Lender or such Underlying Servicer to the Borrower under such Participation Agreement, in each case, acknowledged by such Underlying Servicer;

d.the related Loan Asset Checklist or a supplement thereto, copies of the related Loan Agreement and each other agreement instrument or certificate and other document identified in such Loan Asset Checklist, and copies of any amendment, waiver, supplement or modification of any thereof that is delivered to the Portfolio Asset Servicer;

e.each material request, notice and report delivered by an Obligor, Counterparty Lender or Underlying Servicer to the Portfolio Asset Servicer, to the extent received by the Portfolio Asset Servicer hereunder, and all requests, notices and other correspondence delivered by the Portfolio Asset Servicer, under a Loan Agreement or Participation Agreement; and

f.all account statements, reports and other material documents and correspondence received by the Portfolio Asset Servicer from the Collection Account.

(ii)maintaining or causing the Underlying Servicers to maintain all necessary servicing records with respect to the Collateral Portfolio and providing such records to the Administrative Agent and each Lender (with a copy to the Collateral Custodian) together with such other information with respect to the Collateral Portfolio (including information relating to the Portfolio Asset Servicer’s performance under this Agreement) as may be required hereunder or as the Administrative Agent, the Initial Lender or the Majority Lenders may reasonably request, including but not limited to:

a.causing the Underlying Servicers to deliver on a monthly basis, as soon as available, but no later than when sent to the Borrower, a remittance report for each Loan Asset showing the date any payments are or were required to be made with respect to such Loan Asset during such month and a description of the type

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of payment (for example, Principal Collections, Interest Collections or a combination thereof) to be made on such date;

b.causing the Underlying Servicers to deliver the financial reporting package and all other servicing and other reports for each Obligor and Loan Asset described in Section 8.08(b); and

c.causing the Underlying Servicers to deliver any Underlying Obligor Default and the nature thereof.

(iii)maintaining and implementing administrative and operating procedures (including an ability to recreate servicing records received from the Underlying Servicers evidencing the Collateral Portfolio in the event of the destruction of the originals thereof) and keeping and maintaining all documents, books, records and other information received from the Underlying Servicers or pursuant to this Agreement reasonably necessary or advisable for the collection of the Collateral Portfolio;

(iv)promptly delivering to the Administrative Agent (which may be done through an online file sharing platform that is reasonably acceptable to the Administrative Agent and the Initial Lender), from time to time, such information and servicing records (to the extent received by the Portfolio Asset Servicer), including information relating to the Portfolio Asset Servicer’s performance under this Agreement, as the Administrative Agent may from time to time reasonably request;

(v)notifying a Responsible Officer of the Administrative Agent of any material action, suit, proceeding, dispute, offset, deduction, defense or counterclaim that is or is threatened to be asserted by an Obligor with respect to any Loan Asset (or portion thereof) of which it has knowledge or has received notice;

(vi)monitoring and recording in the records for the Collateral Portfolio any interest rate adjustments in connection with the Loan Agreements to the extent notice thereof is provided by the Underlying Servicers;

(vii)monitoring and recording in the records for the Collateral Portfolio any Tax and insurance escrows and payment with respect to the Underlying Collateral to the extent such information is received from the Underlying Servicers;

(viii)monitoring and recording in the records for the Collateral Portfolio any casualty losses or condemnation proceedings in respect of any related Underlying Collateral and administering any proceeds related thereto in accordance with the applicable Loan Agreements, in each case to the extent such information is provided to the Portfolio Asset Servicer;

(ix)monitoring all payments made with respect to the Loan Assets; and

(x)identifying Principal Collections, Interest Collections and Excluded Amounts and preparing (or causing the Underlying Servicers to prepare) statements with respect to Collections, all as required by this Agreement.

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(b)Notwithstanding anything to the contrary contained herein, the exercise by the Administrative Agent and the Secured Parties of their rights hereunder shall not release the Portfolio Asset Servicer or the Borrower from any of their duties or responsibilities with respect to the Collateral Portfolio. The Secured Parties shall not have any obligation or liability with respect to any Collateral Portfolio, nor shall any of them be obligated to perform any of the obligations of the Portfolio Asset Servicer or the Borrower hereunder.

SECTION 8.03    Duties of the Facility Servicer.

(a)The Facility Servicer shall take or cause to be taken all such actions as may be necessary or advisable to service, administer and collect on this Agreement from time to time, all in accordance with Applicable Law.

(b)The Facility Servicer is not required to take any action under this Agreement or any other Transaction Document that, in its opinion, could reasonably be likely to expose the Facility Servicer to liability or that is contrary to any Transaction Document or Applicable Law. The Facility Servicer shall not be liable for any action taken or not taken by it under this Agreement or any other Transaction Document with the consent or at the request of the Borrower, the Administrative Agent or the Majority Lenders (or all Lenders, as applicable and as set forth in Sections 6.01 and 10.01). In the event the Facility Servicer requests the consent of a Lender pursuant to the foregoing provisions and the Facility Servicer does not receive a response (either positive or negative) from such Person within ten Business Days of such Person’s receipt of such request, then such Lender shall be deemed to have declined to consent to the relevant action.

(c)The Facility Servicer shall not be liable for any action taken or omitted to be taken by it under or in connection with this Agreement or any of the other Transaction Documents in the absence of its own gross negligence or willful misconduct as determined in a final and nonappealable judgment of a court of competent jurisdiction. Without limiting the foregoing, the Facility Servicer (i) may consult with legal counsel (including counsel for the Borrower, the Administrative Agent or the Facility Servicer), 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, (ii) shall not be responsible for or have any duty to ascertain or inquire into (A) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (B) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith (other than by the Facility Servicer), (C) except as otherwise expressly provided herein, the performance or observance by any party (other than the Facility Servicer) of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Event of Default or Unmatured Event of Default, (D) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document or (E) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Facility Servicer (if any) and (iii) shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents for relying on any notice (including notice by telephone), consent, certificate or other instrument or writing believed by it to be genuine and signed or sent by the proper party or parties.

(d)The Facility Servicer shall be entitled to rely conclusively upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, opinion, statement, instrument,

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document or other writing (including any electronic message, internet or intranet website posting or other distribution) reasonably believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person, or to inquire as to or verify the veracity of any information or statement made or contained therein. The Facility Servicer also may rely upon any statement made to it orally or by telephone and reasonably believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. The Facility Servicer may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in good faith in accordance with the advice of any such counsel, accountants or experts. As to any matters not expressly provided for by any Transaction Document, the Facility Servicer shall in all cases be fully protected in acting, or in refraining from acting, under any Transaction Document in accordance with instructions given by the Administrative Agent, the Initial Lender or, if provided in this Agreement, in accordance with the instructions given by the Majority Lenders or all Lenders as is required in such circumstance, and such instructions of such Lenders and any action taken or failure to act pursuant to such instructions shall be binding on all of the Lenders.

SECTION 8.04 Authorization of the Portfolio Asset Servicer.

(a)Each of the Administrative Agent, the Facility Servicer and each Lender hereby authorizes the Portfolio Asset Servicer (including any successor thereto) to take any and all reasonable steps in its name and on its behalf necessary or desirable in the determination of the Portfolio Asset Servicer and not inconsistent with the security interest of the Administrative Agent, for the benefit of the Secured Parties, in the Collateral, to cause the Underlying Servicers to collect all amounts due under the Collateral Portfolio, including endorsing any of their names on checks and other instruments representing Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Collateral Portfolio and, after the delinquency of any Loan Asset, and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof. The Borrower and the Administrative Agent on behalf of the Secured Parties shall furnish the Portfolio Asset Servicer (and any successors thereto) with any powers of attorney and other documents necessary or appropriate to enable the Portfolio Asset Servicer to carry out its servicing and administrative duties hereunder, and shall cooperate with the Portfolio Asset Servicer as reasonably requested, at the sole cost and expense of the Borrower, in order to facilitate the collectability of the Collateral Portfolio. In no event shall the Portfolio Asset Servicer be entitled to make the Secured Parties, the Administrative Agent or any Lender a party to any litigation without such party’s express prior written consent, or to make the Borrower a party to any litigation (other than any routine foreclosure or similar collection procedure) without the Administrative Agent’s (at the direction of the Majority Lenders) consent. In the performance of its obligations hereunder, the Portfolio Asset Servicer shall not be obligated to take, or to refrain from taking, any action which the Borrower or any Lender requests that the Portfolio Asset Servicer take or refrain from taking to the extent that the Portfolio Asset Servicer determines in its reasonable and good faith judgment that such action or inaction (i) may cause a violation of applicable laws, regulations, codes, ordinances, court orders or restrictive covenants with respect to any Loan Asset, the Borrower or any Obligor, (ii) may cause a violation of any provision of this Agreement, a Fee Letter or a Required Loan Document or any other Transaction Document or (iii) may be a violation of the Servicing Standard.

(b)After the Final Maturity Date for the applicable Term Loan Series to which such Loan Assets Relate, at the direction of the Administrative Agent (acting at the written direction of the Majority Lenders), the Portfolio Asset Servicer shall cause the Underlying Servicers to take such action as the

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Majority Lenders may deem necessary or advisable to enforce collection of the Loan Assets; provided that the Administrative Agent may (at the written direction of the Majority Lenders), at any time that an Event of Default has occurred and is continuing, notify the Obligor, agent, administrative agent, Counterparty Lender or Underlying Servicer, as applicable, with respect to any Loan Asset of the assignment of such Loan Asset to the Administrative Agent for the benefit of the Secured Parties and direct that payments of all amounts due or to become due thereunder be made directly to the Administrative Agent or any servicer, collection agent or account designated by the Administrative Agent and, upon such notification and at the expense of the Borrower, the Administrative Agent (acting at the written direction of the Majority Lenders) may enforce collection of any such Loan Asset, and adjust, settle or compromise the amount or payment thereof.

SECTION 8.05 Collection of Payments; Accounts.

(a)Collection Efforts, Modification of Collateral Portfolio. The Portfolio Asset Servicer shall use commercially reasonable efforts to collect or cause to be collected, all payments called for under the terms and provisions of the Loan Assets included in the Collateral Portfolio as and when the same become due, all in accordance with the Servicing Standard. The Portfolio Asset Servicer may not waive, modify or otherwise vary any provision of a Loan Asset in any manner contrary to the Servicing Standard. If the Portfolio Asset Servicer does not receive from the related Underlying Servicer, Counterparty Lender or Obligor the payments to be paid to the Borrower or the Portfolio Asset Servicer as Collections on the date when such payments are scheduled to be made (to the extent the Portfolio Asset Servicer has received such payment information from the Underlying Servicer), the Portfolio Asset Servicer shall promptly notify the Borrower and such Underlying Servicer, Counterparty Lender or Obligor.

(b)Collection Account. Each of the parties hereto hereby agrees that (i) the Collection Account is intended to be a “deposit account” within the meaning of the UCC of the State of New York and (ii) only the Administrative Agent and the Account Bank shall be entitled to exercise the rights with respect to the Collection Account and only the Administrative Agent has the right to direct the disposition of funds in the Collection Account in accordance with Section 2.08. Each of the parties hereto hereby agrees to cause the Account Bank to agree with the parties hereto that regardless of any provision in any other agreement, for purposes of the UCC of the State of New York, with respect to the Collection Account, New York shall be deemed to be the Account Bank’s jurisdiction (within the meaning of Section 9-304 of such UCC). The Borrower shall provide the Facility Servicer with online “read-only” access to the Collection Account and ensure that such access remains in effect until the Facility Termination Date.

(c)Loan and Participation Agreements. Notwithstanding any term hereof to the contrary, none of the Administrative Agent or the Collateral Custodian shall be under any duty or obligation in connection with the acquisition by the Borrower of, or the grant of a security interest by the Borrower to the Administrative Agent in, any Loan Asset to examine or evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Borrower under the related Loan Agreements or Participation Agreements, or otherwise to examine the Loan Agreements and Participation Agreements, in order to determine or compel compliance with any applicable requirements of or restrictions on transfer (including any necessary consents).

(d)Adjustments. If (i) the Portfolio Asset Servicer makes a deposit into the Collection Account in respect of a Collection of a Loan Asset and such Collection was received by the Portfolio Asset Servicer in the form of a check that is not honored for any reason or (ii) the Portfolio Asset Servicer makes a mistake

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with respect to the amount of any Collection and deposits an amount that is less than or more than the actual amount of such Collection, the Portfolio Asset Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any payment required to be made by an Obligor on a Loan Asset or Underlying Loan Obligation, as applicable, in respect of which a dishonored check is received shall be deemed not to have been paid.

SECTION 8.06 Realization Upon Loan Assets.

(a)Consistent with the applicable Loan Agreement or Participation Agreement, the Portfolio Asset Servicer will monitor efforts of each Counterparty Lender or Underlying Servicer with respect to any Loan Asset as to which no satisfactory arrangements can be made for collection of delinquent payments, and any analysis by such Counterparty Lender or Underlying Servicer proposing a course of action to maximize value with respect to any related Underlying Collateral, including whether to hold for value, sell or transfer any equity or other securities it has received in connection with a default, workout, restructuring or plan of reorganization with respect to the related Underlying Loan Obligations. After the occurrence and during the continuance of an Event of Default, the Portfolio Asset Servicer will comply with the applicable Loan Agreement and Participation Agreement and Applicable Law in directing a Counterparty Lender or Underlying Servicer to realize upon Underlying Collateral, and employ practices and procedures, to direct the related Counterparty Lender or Underlying Servicer to enforce the obligations of Obligors by foreclosing upon, repossessing and causing the sale of such Underlying Collateral at public or private sale.

(b)Notwithstanding anything to the contrary herein, the Facility Servicer shall not take any action with respect to the Collateral Portfolio, nor shall it be required to take any actions, relating to any special servicing activities (it being understood and agreed that the Facility Servicer shall determine whether any obligations or actions of the Facility Servicer expressly set forth in this Agreement or the other Transaction Documents shall constitute special servicing activities), except to the extent (i) agreed to between the Loan Parties, the Lenders and the Facility Servicer, pursuant to a separate fee letter agreement and (ii) the parties to such fee agreement agree to address any conflicts presented by such performance of special servicing activities reasonably requested by the Facility Servicer.

SECTION 8.07 Payment of Certain Expenses. The Borrower (or the Facility Servicer on its behalf to the extent amounts are available in the Collection Account), shall be required to pay all fees and expenses owing to any financial institution in connection with the maintenance of the Collection Account. The Facility Servicer shall be reimbursed for any reasonable out-of-pocket expenses incurred hereunder (including reasonable out-of-pocket expenses paid by the Facility Servicer on behalf of the Borrower), subject to the availability of funds pursuant to Section 2.08; provided that, to the extent funds are not available for such reimbursement, the Facility Servicer shall be entitled to repayment of such expenses from the Borrower and if the Borrower fails to so reimburse the Facility Servicer, the Facility Servicer shall be entitled to be reimbursed by the Lenders (and each Lender hereby agrees to so reimburse the Facility Servicer as provided herein) within ten Business Days of receipt of an invoice therefor.

SECTION 8.08 Reports.

(a)Servicing Report. On each Reporting Date, the Portfolio Asset Servicer shall provide (or cause the Underlying Servicers to provide) to the Borrower, the Administrative Agent and the Facility Servicer a monthly report (a “Servicing Report”) containing the information set forth on (and substantially

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in the form of) Exhibit H, including (i) a certification from the Portfolio Asset Servicer that a copy of each amendment, restatement, supplement, waiver or other modification to the Loan Agreement of any Loan Asset has been provided in accordance with Section 8.08(c), (ii) the Outstanding Principal Balance of all Loan Assets as of such Reporting Date, (iii) the identification of Principal Collections, Interest Collections or Excluded Amounts as of such Reporting Date (after giving effect to transfers made by the Underlying Servicers to such Collection Account on such date, if any), and (iv) the amounts to be transferred from the Collection Account pursuant to Section 2.08(a)(i).

(b)Obligor Financial Statements; Valuation Reports; Other Reports. The Portfolio Asset Servicer shall, with respect to each Obligor for each Loan Asset that was an Eligible Loan Asset at any time during the applicable fiscal quarter, make available or cause the Underlying Servicers to make available to the Administrative Agent and the Facility Servicer (which may be done through an online file sharing platform that is reasonably acceptable to the Administrative Agent and the Initial Lender or deliver via email to the Administrative Agent and the Facility Servicer) (i) within 60 days after the end of each fiscal quarter of such Obligor (as the same may be extended if a later date is specified in the applicable Loan Agreement), financial reporting packages (including applicable financial statements) delivered by such Obligor pursuant to the applicable Loan Agreement to the extent such financial reporting packages have been received by the Portfolio Asset Servicer or Underlying Servicer during such quarter and (ii) within 30 days of receipt thereof, each servicing report and such other reports in respect of the Loan Agreements prepared by an Underlying Servicer with respect to an Eligible Loan Asset to the extent such reports have been received by the Portfolio Asset Servicer (in each case, all to the extent received by the Portfolio Asset Servicer).

(c)Amendments to Loan Assets. The Portfolio Asset Servicer will deliver or cause the Underlying Servicers to deliver to the Administrative Agent, the Facility Servicer and the Collateral Custodian a copy of any amendment, restatement, supplement, waiver or other modification to the Loan Agreement of any Loan Asset (along with any internal documents that are not privileged prepared by its investment committee (or prepared by the Counterparty Lender and provided to the Counterparty Lender’s investment committee) in connection with such amendment, restatement, supplement, waiver or other modification) (i) with respect to any Material Modification, promptly after receipt thereof and
(ii) with respect to any amendment, restatement, supplement, waiver or other modification which is not a Material Modification, within 30 days after the end of each quarter (in each case, to the extent received by the Portfolio Asset Servicer or the applicable Underlying Servicer). The Portfolio Asset Servicer shall also deliver or cause the Underlying Servicers to deliver to the Administrative Agent any notice or other correspondence that it receives hereunder or with respect to any Eligible Loan Asset, in each case, to the extent it deems such notice or other correspondence material, promptly upon receipt thereof. The provisions of this Section 8.08(c) are in addition to the delivery requirements under the Custodial Agreement.

(d)Delivery Methods. Notwithstanding anything to the contrary contained herein, information required to be delivered or submitted to any Secured Party pursuant to this Agreement shall be deemed to have been delivered on the date upon which such information is received through e-mail or an online file sharing platform acceptable to the Administrative Agent and the Facility Servicer.

SECTION 8.09    Applicable Servicer Not to Resign. An Applicable Servicer shall not resign from the obligations and duties hereby imposed on it except (a) upon such Applicable Servicer’s determination that
(i)the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii)

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there is no reasonable action that such Applicable Servicer could take to make the performance of its duties hereunder permissible under Applicable Law or (b) upon at least 60 days’ prior notice to the other parties hereto. If no Replacement Servicer shall have been appointed and an instrument of acceptance by a Replacement Servicer shall not have been delivered to such Applicable Servicer within 30 days after the giving of such notice of resignation, the resigning Applicable Servicer may petition any court of competent jurisdiction for the appointment of a Replacement Servicer. No such resignation shall become effective until a Replacement Servicer shall have assumed the responsibilities and obligations of such Applicable Servicer in accordance with Section 8.01. Any Fees then due and owing to such Applicable Servicer and accrued through such date, including any expenses or indemnities it is entitled to pursuant to the provisions of this Agreement and any Fee Letter, shall be due and payable on such discharge date and shall be paid from amounts in the Collection Account in accordance with Section 2.08 and if such amounts are insufficient to pay such amounts then due and owing, shall be paid by the Borrower (or the Lenders if the Borrower fails to so pay such amounts) within ten Business Days of receipt of an invoice therefor.

SECTION 8.10 Indemnification of the Facility Servicer. Each Lender agrees to indemnify the Facility Servicer 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 be imposed on, incurred by, or asserted against the Facility Servicer in any way relating to or arising out of this Agreement or any of the other Transaction Documents, or any action taken or omitted by the Facility Servicer hereunder or thereunder; provided that (a) the Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Facility Servicer’s gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction and (b) no action taken in accordance with the directions of the Majority Lenders, Lenders or the Borrower shall be deemed to constitute gross negligence or willful misconduct for purposes of this Article VIII. Without limitation of the foregoing, each Lender agrees to reimburse the Facility Servicer, promptly upon demand, for any Fees due to it hereunder, out-of-pocket expenses (including reasonable fees of counsel) incurred by the Facility Servicer in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and the other Transaction Documents, to the extent that such expenses are incurred in the interests of or otherwise in respect of the Facility Servicer or Lenders hereunder or thereunder and to the extent that the Facility Servicer is not reimbursed for such expenses by the Borrower under Section 2.08.

ARTICLE IX. INDEMNIFICATION

SECTION 9.01    Indemnities by the Borrower.

(a)Without limiting any other rights which the Secured Parties or any of their respective Affiliates may have hereunder or under Applicable Law, the Borrower shall indemnify the Secured Parties and each of their respective Affiliates, assigns, officers, directors, employees and agents (each, an “Indemnified Party” for purposes of this Article IX) from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements and court costs (all of the foregoing being collectively referred to as “Indemnified Amounts”), incurred by or asserted against such Indemnified Party arising out of or as a result of (i) this Agreement or the other Transaction Documents or in respect of the transactions contemplated thereby or with respect to any of

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the Collateral, (ii) any actions taken or omitted to be taken by any Indemnified Party under this Agreement or any Transaction Document, (iii) any Advance or the use or proposed use of the proceeds therefrom,
(iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnified Party is a party thereto or (v) any action, claim or suit brought by an Indemnified Party to enforce its right to indemnification, excluding, however, Indemnified Amounts to the extent resulting from gross negligence, bad faith or willful misconduct on the part of an Indemnified Party as determined in a final decision by a court of competent jurisdiction. This Section 9.01(a) does not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(b)Any amounts subject to the indemnification provisions of this Section 9.01 shall be paid by the Borrower to the applicable Indemnified Party within 30 days following receipt by the Borrower of such Indemnified Party’s written demand therefor.

(c)If for any reason the indemnification provided above in this Section 9.01 is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless in respect of any losses, claims, damages or liabilities (in each case, other than as a result of the express limitations set forth therein), then the Borrower shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations.

(d)If the Borrower has made any payments in respect of Indemnified Amounts to an Indemnified Party pursuant to this Section 9.01 and such Indemnified Party thereafter collects any of such amounts from others, such Indemnified Party will promptly repay such amounts collected to the Borrower in an amount equal to the amount it has collected from others in respect of such Indemnified Amounts, without interest.

(e)The obligations of the Borrower under this Section 9.01 shall survive the resignation or removal of the Administrative Agent, the Facility Servicer, the Portfolio Asset Servicer or the Collateral Custodian or the termination or assignment of this Agreement.

SECTION 9.02 Legal Proceedings. In the event an Indemnified Party becomes involved in any action, claim, or legal, governmental or administrative proceeding (an “Action”) for which it seeks indemnification hereunder, the Indemnified Party shall promptly notify the other party or parties against whom it seeks indemnification (the “Indemnifying Party”) in writing of the nature and particulars of the Action; provided that its failure to do so shall not relieve the Indemnifying Party of its obligations hereunder except to the extent such failure has a material adverse effect on the Indemnifying Party. Upon written notice to the Indemnified Party acknowledging in writing that the indemnification provided hereunder applies to the Indemnified Party in connection with the Action, the Indemnifying Party may assume the defense of the Action at its expense with counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall have the right to retain separate counsel in connection with the Action, and the Indemnifying Party shall not be liable for the legal fees and expenses of the Indemnified Party after the Indemnifying Party has done so; provided that if the Indemnified Party determines in good faith that there may be a conflict between the positions of the Indemnified Party and the Indemnifying Party in connection with the Action,

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or that the Indemnifying Party is not conducting the defense of the Action in a manner reasonably protective of the interests of the Indemnified Party, the reasonable legal fees and expenses of the Indemnified Party shall be paid by the Indemnifying Party. If the Indemnifying Party elects to assume the defense of the Action, it shall have full control over the conduct of such defense; provided that the Indemnifying Party and its counsel shall, as reasonably requested by the Indemnified Party or its counsel, consult with and keep them informed with respect to the conduct of such defense. The Indemnifying Party shall not settle an Action without the prior written approval of the Indemnified Party unless such settlement provides for the full and unconditional release of the Indemnified Party from all liability in connection with the Action. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection with the defense of the Action. Each applicable Indemnified Party shall deliver to the Indemnifying Party within a reasonable time after such Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by such Indemnified Party relating to the claim giving rise to the Indemnified Amounts.

ARTICLE X. MISCELLANEOUS

SECTION 10.01 Amendments and Waivers.

(a)Except as set forth herein, (i) no amendment or modification of any provision of this Agreement or any other Transaction Document shall be effective without the written agreement of the Borrower and the Majority Lenders and, solely if such amendment or modification would adversely affect the rights or obligations of the Administrative Agent, the Facility Servicer or the Portfolio Asset Servicer, the written agreement of the Administrative Agent, the Facility Servicer or the Portfolio Asset Servicer, as applicable, and (ii) no termination or waiver of any provision of this Agreement or any other Transaction Document or consent to any departure therefrom by any Loan Party shall be effective without the written concurrence of the Majority Lenders. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. The reasonable cost of any such amendment shall be an expense of the Borrower; provided that Borrower shall not be responsible for the legal fees of more than one external counsel to Initial Lender or Lenders.

(b)Notwithstanding the provisions of Section 10.01(a), the written consent of all of the Lenders shall be required for any amendment, modification or waiver (i) reducing (without payment thereon) the principal amount due and owing under any outstanding Advance or the interest thereon,
(ii) postponing any date for any payment of any Advance or the interest thereon, (iii) modifying the provisions of this Section 10.01 or the definition of Majority Lenders or changing any other provision specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights or make any determination or grant any consent, (iv) extending any Scheduled Maturity Date or the Availability Period, (v) of any provision of Section 2.08, (vi) extending or increasing any Commitment of any Lender, (vii) changing Section 10.15 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby, (viii) waiving any condition set forth in Section 3.02 or (ix) consenting to the Borrower’s assignment or transfer of its rights and obligations under this Agreement or any other Transaction Document or releasing all or substantially all of the Collateral except as expressly authorized in this Agreement.

(c)Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment,

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waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (i) the Commitment (as defined in clause (i) of the definition thereof) of any Defaulting Lender may not be increased or extended, or the maturity of any of its Advances may not be extended, the rate of interest on any of its Advances may not be reduced and the principal amount of any of its Advances may not be forgiven, in each case without the consent of such Defaulting Lender and (ii) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

SECTION 10.02 Notices, Etc. All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (which shall include communication by e-mail) and e-mailed or delivered, to each party hereto, at its address set forth on Schedule IV or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by e-mail shall be effective when sent (and shall be followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received.

The Borrower will provide to any NRSRO (a) a copy of any amendments or waivers under Section 10.01,
(b)copies of each Servicing Report and (c) copies of any notices delivered by the Borrower to the Administrative Agent pursuant to Section 5.01(h), which delivery may through e-mail, or an online file sharing platform reasonably acceptable to the Administrative Agent and the Initial Lender.

SECTION 10.03 No Waiver Remedies. No failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 10.04 Binding Effect; Assignability; Multiple Lenders.

(a)This Agreement shall be binding upon and inure to the benefit of the Loan Parties, the Administrative Agent, each Lender, the Facility Servicer, the Portfolio Asset Servicer and their respective successors and permitted assigns. Each Lender and their respective successors and assigns may assign, or grant a security interest in, (i) this Agreement, the other Transaction Documents and such Lender’s rights and obligations hereunder and interest herein in whole or in part or (ii) any Advances or Commitment (or portion thereof) to any Eligible Assignee; provided that (A) any such assignment or grant of a security interest shall comply with Section 10.04(e) and (B) absent an Event of Default, the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed), shall be required for a Lender to assign to any Person that is not an Affiliate of such Lender. Any such assignee shall execute and deliver to the Borrower, the Administrative Agent and the Facility Servicer a fully-executed Assignment and Assumption Agreement. The parties to any such assignment shall execute and deliver to the Administrative Agent for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties and the Administrative Agent. Neither the Loan Parties, the Facility Servicer nor the Portfolio Asset Servicer may assign, or permit any Lien to exist upon (other than Permitted Liens), any of its rights or obligations hereunder or under any Transaction Document or any interest herein or in any Transaction Document without the prior written consent of the Lenders unless otherwise contemplated hereby. Each Lender may sell a participation in its interests hereunder as

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provided in Section 10.04(d). No assignment or sale of a participation under this Section 10.04 shall be effective unless and until properly recorded in the Register or Participant Register, as applicable, pursuant to Section 2.03.

(b)Notwithstanding any other provision of this Section 10.04, any Lender may at any time pledge or grant a security interest in all or any portion of its rights (including rights to payment of principal and interest) under this Agreement to secure obligations of such Lender to a Federal Reserve Bank, without notice to or consent of the Borrower or the Administrative Agent; provided that no such pledge or grant of a security interest shall release such Lender from any of its obligations hereunder, or substitute any such pledgee or grantee for such Lender as a party hereto.

(c)Each Indemnified Party shall be an express third party beneficiary of this Agreement.

(d)Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent (except as required under this Section 10.04(d)), sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrower or any of the Borrower’s Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights or obligations under this Agreement (including all or a portion of its Commitment or the Advances owing to it under any Term Loan Series); provided that (i) such sale of participations complies with Section 10.04(e), (ii) such Lender’s obligations under this Agreement shall remain unchanged, (iii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iv) the Borrower, the Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (v) such Lender shall register such participation in its Participant Register pursuant to Section 2.03(c). Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 10.01(b) that affects such Participant. Each Participant shall (i) comply with the requirements under Sections 2.13(e) and 2.13(f) (it being understood that the documentation required under Sections 2.13(e) and 2.13(f) shall be delivered to the participating Lender) and (ii) not be entitled to receive any greater payment under Section 2.12 or 2.13, with respect to any participation, than its participating Lender would have been entitled to receive.

(e)Notwithstanding anything to the contrary in this Section 10.04, if a Lender (i) assigns this Agreement, the other Transaction Documents or such Lender’s rights and obligations hereunder or interest herein or any Advances or Commitment (or portion thereof) to any Person pursuant to Section 10.04(a) or (ii) sells participations to any Person in all or a portion of such Lender’s rights or obligations under this Agreement (including all or a portion of its Commitment or the Advances owing to it under any Term Loan Series) pursuant to Section 10.04(d), in each case, such Lender must transfer, assign or sell, as applicable, the same pro rata percentage interest it owns in each outstanding Term Loan Series immediately before such transfer, assignment or sale and in any Term Loan Series established after the date of such transfer, assignment or sale to a Person as part of a single transaction so that such Person will at all times own the same percentage interest owned by such Lender in each outstanding Term Loan Series immediately before such transfer, assignment or sale and in any Term Loan Series established after the date of such transfer, assignment or sale.

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SECTION 10.05 Term of This Agreement. This Agreement remains in full force and effect until this Agreement has been terminated by the Borrower and the Facility Termination Date has occurred; provided that any representation made or deemed made hereunder survive the execution and delivery hereof and the provisions of Section 2.06, Section 2.12, Section 2.13, Section 10.07, Section 10.08 and Article VII, Article VIII and Article IX shall be continuing and shall survive any termination of this Agreement.

SECTION 10.06 GOVERNING LAW; JURY WAIVER. THIS AGREEMENT IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER.

SECTION 10.07 Costs and Expenses.

(a)In addition to the rights of indemnification hereunder, the Borrower shall pay on demand
(i) all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the Lenders, the Facility Servicer and the Collateral Custodian incurred in connection with the pre-closing due diligence, preparation, execution, delivery or syndication of this Agreement, the Transaction Documents and the other documents to be delivered hereunder or in connection herewith, including the reasonable fees, disbursements and other charges of rating agency and accounting costs and fees, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent, the Lenders, the Facility Servicer and the Collateral Custodian with respect thereto, (ii) all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the Lenders, the Facility Servicer and the Collateral Custodian incurred in connection with the post-closing due diligence, preparation, execution, delivery, administration, syndication, renewal, amendment or modification of, any waiver or consent issued in connection with, this Agreement, the Transaction Documents and the other documents to be delivered hereunder or in connection herewith, including the reasonable fees, disbursements and other charges of rating agency and accounting costs and fees, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent, the Lenders, the Facility Servicer and the Collateral Custodian with respect thereto, and with respect to advising the Administrative Agent, the Lenders, the Facility Servicer and the Collateral Custodian as to their respective rights and remedies under this Agreement, the other Transaction Documents and the other documents to be delivered hereunder or in connection herewith and (iii) all out-of-pocket costs and expenses, if any (including reasonable counsel fees and expenses), incurred by the Administrative Agent, the Lenders, the Account Bank, the Facility Servicer or the Collateral Custodian in connection with the enforcement or potential enforcement of its rights under this Agreement or any other Transaction Document and the other documents to be delivered hereunder or in connection herewith or in connection with the Advances made hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Advances.

(b)The Borrower shall pay promptly in accordance with Applicable Law any and all stamp, sales, excise and other Taxes and fees payable or determined to be payable to any Governmental Authority in connection with the execution, delivery, filing and recording of this Agreement, or any other Transaction Documents, except any such Taxes or fees that are imposed with respect to an assignment as the result of any other present or former connection between any Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest

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under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any loan made pursuant to this Agreement) (“Other Taxes”).

SECTION 10.08 Recourse Against Certain Parties.

(a)No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party as contained in this Agreement or any other agreement, instrument or document entered into by the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party pursuant hereto or in connection herewith shall be had against any administrator of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party or any incorporator, affiliate, stockholder, officer, employee or director of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that the agreements of each party hereto contained in this Agreement and all of the other agreements, instruments and documents entered into by the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party pursuant hereto or in connection herewith are, in each case, solely the corporate obligations of such party (and nothing in this Section 10.08 shall be construed to diminish in any way such corporate obligations of such party), and that no personal liability whatsoever shall attach to or be incurred by any administrator of the Administrative Agent, the Lenders or any Secured Party or any incorporator, stockholder, affiliate, officer, employee or director of the Lenders, the Facility Servicer, the Portfolio Asset Servicer, the Sponsor or the Administrative Agent or of any such administrator, as such, or any of them, under or by reason of any of the obligations, covenants or agreements of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party contained in this Agreement or in any other such instruments, documents or agreements, or are implied therefrom, and that any and all personal liability of every such administrator of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party and each incorporator, stockholder, affiliate, officer, employee or director of the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party or of any such administrator, or any of them, for breaches by the Facility Servicer, the Portfolio Asset Servicer, the Sponsor, the Administrative Agent, the Lenders or any Secured Party of any such obligations, covenants or agreements, which liability may arise either at common law or in equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.

(b)Notwithstanding any contrary provision set forth herein, no claim may be made by a party hereto against another party hereto or any Secured Party or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect to any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each party hereto hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected; provided that nothing contained in this sentence shall limit such Person’s indemnification obligations hereunder to the extent such damages are included in a third party claim in connection with which an indemnified party is entitled to indemnification hereunder.

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(c)No obligation or liability to any Obligor under any of the Loan Assets is intended to be assumed by the Facility Servicer, the Portfolio Asset Servicer, the Collateral Custodian, the Administrative Agent, the Lenders or any Secured Party under or as a result of this Agreement, the other Transaction Documents or the transactions contemplated hereby.

(d)The provisions of this Section 10.08 survive the termination of this Agreement.

SECTION 10.09 Execution in Counterparts; Severability; Integration. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by e-mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart of this Agreement. In the event that any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement and any agreements or letters (including Fee Letters) executed in connection herewith contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

This Agreement shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (a) an original manual signature; (b) a scanned or photocopied manual signature or (c) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act or any other relevant electronic signatures law, including any relevant provisions of the UCC of any relevant jurisdiction (collectively, “Signature Law”), in each case to the extent applicable. Each scanned or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any scanned or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC of the State of New York or other Signature Law due to the character or intended character of the writings.

SECTION 10.10 Consent to Jurisdiction; Service of Process.

(a)Each party hereto hereby irrevocably submits to the exclusive jurisdiction of any New York State or Federal court sitting in New York City in any action or proceeding arising out of or relating to the Transaction Documents, and each party hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

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(b)Each party hereto agrees that service of process may be effected by mailing a copy thereof by registered or certified mail, postage prepaid, to such party at its address specified in Section 10.02 or at such other address as the Administrative Agent shall have been notified in accordance herewith. Nothing in this Section 10.10 shall affect the right of the Lenders or the Administrative Agent to serve legal process in any other manner permitted by law.

SECTION 10.11 Confidentiality.

(a)Each of the Administrative Agent, the Lenders, the Facility Servicer and the Portfolio Asset Servicer shall maintain and shall cause each of its employees and officers to maintain the confidentiality of all Information (as defined below), including all Information regarding the business of the Borrower and the Portfolio Asset Servicer and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that Information may be disclosed (i) to its Affiliates, accountants, investigators, auditors, attorneys or other agents, including any rating agency or valuation firm engaged by such party in connection with any due diligence or comparable activities with respect to the transactions and Loan Assets contemplated herein, and the agents of such Persons, taxing authorities and governmental agencies (provided that each such Person is informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) as is required by Applicable Law, (iii) in accordance with the Servicing Standard, (iv) when required by any law, regulation, ordinance, court order or subpoena, (v) to the extent the Portfolio Asset Servicer is disseminating general statistical information relating to the commercial mortgage loans being serviced by the Portfolio Asset Servicer (including the Loan Assets) hereunder so long as the Portfolio Asset Servicer does not identify the Borrower, any Lender or the Obligors or (vi) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder.

(b)Anything herein to the contrary notwithstanding, the Borrower hereby consents to the disclosure of any Information with respect to it (i) to the Administrative Agent, the Lenders, the Facility Servicer or the Portfolio Asset Servicer by each other, (ii) by the Administrative Agent, the Lenders, the Facility Servicer and the Portfolio Asset Servicer to any prospective or actual assignee or participant of any of them provided such Person agrees to hold such Information confidential or (iii) by the Administrative Agent, the Lenders, the Facility Servicer and the Portfolio Asset Servicer to any rating agency, commercial paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Lender or any Person providing financing to, or holding equity interests in, any Lender, as applicable, and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such Information. In addition, the Lenders, the Administrative Agent, the Facility Servicer and the Portfolio Asset Servicer may disclose any such Information as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

(c)Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all Information that is or becomes publicly known, (ii) disclosure of any and all Information (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Lenders’, the Administrative Agent’s, the Facility Servicer’s or the Portfolio Asset Servicer’s business or that of their Affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or

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request of any court, regulatory authority, arbitrator or arbitration to which the Administrative Agent, any Lender, the Facility Servicer or the Portfolio Asset Servicer or an officer, director, employer, shareholder or affiliate of any of the foregoing is a party or (D) in any preliminary or final offering circular, registration statement or contract or other document approved in advance by the Borrower, (iii) any other disclosure authorized by the Borrower or (iv) disclosure of any and all Information that becomes available to the Administrative Agent, any Lender, the Facility Servicer or the Portfolio Asset Servicer on a nonconfidential basis from a source other than the Borrower who did not acquire such information as a result of a breach of this Section 10.11.

(d)The parties hereto may disclose the existence of the Agreement, but not the financial terms hereof, including all fees and other pricing terms, all Events of Default, Servicer Termination Events, and priority of payment provisions, in each case except in compliance with this Section 10.11.

(e)Information” means all information received from or on behalf of the Borrower relating to the Borrower or its businesses or the Loan Assets, other than any such information that is available to the Administrative Agent, the Facility Servicer, the Portfolio Asset Servicer or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 10.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 10.12 Non-Confidentiality of Tax Treatment. All parties hereto agree that each of them and each of their employees, representatives, and other agents may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure. “Tax treatment” and “tax structure” shall have the same meaning as such terms have for purposes of Treasury Regulation Section 1.6011-4; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, the provisions of this Section 10.12 shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby.

SECTION 10.13 Waiver of Set Off. If an Event of Default has occurred and is continuing, the Administrative Agent, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by the Administrative Agent, such Lender or any such Affiliate, to or for the credit or the account of the Borrower against any and all of the Obligations, irrespective of whether or not the Administrative Agent, such Lender or Affiliate shall have made any demand under this Agreement or any other Transaction Document and although such Obligations may be contingent or unmatured or are owed to a branch office or Affiliate of the Administrative Agent or such Lender different from the branch office or Affiliate holding such deposit or obligated on such indebtedness. Each party shall notify the Borrower and the Administrative Agent (if applicable) promptly after any such setoff and

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application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 10.14 Headings, Schedules and Exhibits. The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

SECTION 10.15 Ratable Payments. If any Lender, whether by setoff or otherwise, shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Advances owing to it under any Term Loan Series (other than pursuant to Section 2.12 or Section 2.13) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders of such Term Loan Series, such Lender shall forthwith purchase from the other Lenders such participations in the Advances owing to them under such Term Loan Series as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided that, if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (a) the amount of such Lender’s required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.

SECTION 10.16 Failure of Borrower to Perform Certain Obligations. If the Borrower fails to perform any of its agreements or obligations under Section 5.01(m), the Administrative Agent may (but shall not be required to, and in any case acting at the direction of the Initial Lender) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by the Borrower promptly upon the Administrative Agent’s demand therefore.

SECTION 10.17 Power of Attorney.

(a)Each Loan Party irrevocably authorizes the Facility Servicer and the Administrative Agent and appoints the Facility Servicer and the Administrative Agent, as applicable, as its attorney-in-fact to act on its behalf to file financing statements reasonably necessary or desirable (as determined and directed by the Initial Lender) to perfect and to maintain the perfection and priority of the interest of the Administrative Agent, for the benefit of the Secured Parties, in the Collateral. This appointment is coupled with an interest and is irrevocable until the termination of this Agreement.

(b)With effect after the occurrence and during the continuance of an Event of Default, each Loan Party hereby irrevocably constitutes and appoints the Administrative Agent (in such capacity, the “Attorney”) (and all officers, employees or agents designated by Attorney), solely in connection with the enforcement of the rights and remedies of the Administrative Agent, the Lenders and the other Secured Parties under this Agreement and the other Transaction Documents, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in such Loan Party’s place and stead and at such Loan Party’s expense and in such Loan Party’s name or in Attorney’s own name, to take any and all appropriate action and to execute and deliver any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement and the other Transaction

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Documents, and, without limiting the generality of the foregoing, hereby grants to Attorney the power and right, on its behalf (in all cases acting at the direction of the Majority Lenders when an Event of Default has occurred and is continuing), without notice to or assent by it, to do the following, each in accordance with this Agreement and the other Transaction Documents (provided, that Attorney shall not be obligated to take any such action): (a) open mail for the Borrower, and ask, demand, collect, give acquittances and receipts for, take possession of, or endorse and receive payment of, any checks, drafts, notes, acceptances, or other instruments for the payment of moneys due, and sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, and notices; (b) continue or obtain any insurance with respect to any of the Borrower’s assets and pay all or any part of the premiums therefor and costs thereof, and make, settle and adjust all claims under such policies of insurance, and make all determinations and decisions with respect to such policies; (c) pay or discharge any taxes, Liens, or other encumbrances levied or placed on or threatened against the Borrower or the Borrower’s property; (d) to the extent related to the Collateral and the transactions contemplated by the Transaction Documents, defend any suit, action or proceeding brought against the Borrower if the Borrower does not defend such suit, action or proceeding or if Attorney reasonably believes that it is not pursuing such defense in a manner that will maximize the recovery to Attorney, and settle, compromise or adjust any suit, action, or proceeding described above and, in connection therewith, give such discharges or releases as Attorney may deem appropriate; (e) to the extent related to the Collateral, file or prosecute any claim, litigation, suit or proceeding in any court of competent jurisdiction or before any arbitrator, or take any other action otherwise deemed appropriate by Attorney for the purpose of collecting any and all such moneys due to the Borrower whenever payable and to enforce any other right in respect of the Borrower’s property; (f) to the extent related to the Collateral, sell, transfer, pledge, make any agreement with respect to, or otherwise deal with, any of the Borrower’s property, and execute, in connection with such sale or action, any endorsements, assignments or other instruments of conveyance or transfer in connection therewith; (g) to give any necessary receipts or acquittance for amounts collected or received under the Loan and Servicing Agreement; (h) to make all necessary transfers of the Collateral in connection with any such sale or other disposition made pursuant to the Loan and Servicing Agreement; (i) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition of the Collateral, the Borrower hereby ratifying and confirming all that such Attorney (or any substitute) shall lawfully do or cause to be done hereunder and pursuant hereto; (j) to send such notification forms as the Attorney deems appropriate to give notice to Obligors of the Secured Parties’ interest in the Collateral Portfolio; (k) to sign any agreements, orders or other documents in connection with or pursuant to any Transaction Document; (l) to cause the certified public accountants then engaged by the Borrower to prepare and deliver to the Attorney at any time and from time to time, promptly upon Attorney’s request, any reports required to be prepared by or on behalf of the Borrower under the Transaction Documents, all as though Attorney were the absolute owner of the Borrower’s property for all purposes, and, to the extent set forth in the this Agreement, to do, at Attorney’s option and the Borrower’s expense, at any time or from time to time, all acts and other things that Attorney reasonably deems necessary to perfect, preserve or realize upon the Collateral and the Liens of the Administrative Agent, for the benefit of the Secured Parties, thereon (including the execution and filing of UCC financing statements and continuation statements as provided by the terms of the Loan and Servicing Agreement), all as fully and effectively as the Borrower might do, (m) to make all necessary transfers of the Pledged Equity in connection with any such sale or other disposition made pursuant to the Loan and Servicing Agreement; (n) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition of the Pledged Equity, Holdings hereby ratifying and confirming all that such Attorney (or any substitute) shall lawfully do or cause to be done hereunder and

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pursuant hereto; and (o) to sign any agreements, orders or other documents in connection with or pursuant to any Transaction Document to the extent related to the Pledged Equity, all as though Attorney were the absolute owner of the Pledged Equity for all purposes, and, to the extent set forth in the Loan and Servicing Agreement, to do, at Attorney’s option (acting at the written direction of the Majority Lenders) and Borrower’s expense, at any time or from time to time, all acts and other things reasonably necessary to perfect, preserve or realize upon the Pledged Equity and the Liens of the Administrative Agent, for the benefit of the Secured Parties, thereon, all as fully and effectively as Holdings might do. The Borrower hereby ratifies, to the extent permitted by law, all that said attorneys shall lawfully do or cause to be done by virtue hereof. No person to whom this power of attorney is presented, as authority for Attorney to take any action or actions contemplated hereby, shall inquire into or seek confirmation from such Loan Party as to the authority of Attorney to take any action described below, or as to the existence of or fulfillment of any condition to this power of attorney, which is intended to grant to Attorney unconditionally the authority to take and perform the actions contemplated herein, and such Loan Party irrevocably waives any claim against any person or entity that acts in reliance in good faith upon the authority granted under this power of attorney with respect to such reliance. The power of attorney granted hereby is coupled with an interest and may not be revoked or canceled by such Loan Party until the Facility Termination Date.

SECTION 10.18 Delivery of Termination Statements, Releases, etc. Upon the occurrence of the Facility Termination Date, the Administrative Agent shall, upon written direction, execute and deliver to the Portfolio Asset Servicer and the Borrower termination statements, reconveyances, releases and other documents and instruments of release as are necessary or appropriate to evidence the termination of the Liens securing the Obligations, all at the expense of the Borrower.

SECTION 10.19 Post-Closing Performance Conditions. The parties hereto agree to cooperate with reasonable requests made by any other party hereto after signing this Agreement to the extent reasonably necessary for such party to comply with laws and regulations applicable to financial institutions in connection with this transaction (e.g., the USA PATRIOT Act, OFAC and related regulations).

SECTION 10.20 PATRIOT Act. The parties hereto acknowledge that in accordance with the Customer Identification Program (CIP) requirements established under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107 56 (signed into law October 26, 2001) and its implementing regulations (collectively, USA PATRIOT Act), the Administrative Agent in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Administrative Agent. Each party hereby agrees that it shall provide the Administrative Agent with such information as the Administrative Agent may request from time to time in order to comply with any applicable requirements of the Patriot Act.


[Signature Pages Follow]
100


Executed as of the date first above written.


The Borrower:

CMFT RE LENDING SUB MM, LLC

By: /s/ Nathan DeBacker    
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasurer

Holdings:

CMFT RE LENDING SUB MM HOLDCO, LLC

By: /s/ Nathan DeBacker    
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasurer



The Initial Lender:

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY


By: /s/ Eric Partlan     Name: Eric Partlan
Title:    Head of Portfolio Management



Lender:

GREAT AMERICAN LIFE INSURANCE COMPANY


By: /s/ Eric Partlan    Name: Eric Partlan
Title:    Chief Investment Officer



The Administrative Agent:

TRIMONT REAL ESTATE ADVISORS, LLC,
in its capacity as Administrative Agent


By: /s/ Steven M. Lauer
Name: Steven M. Lauer
Title:    Authorized Signatory



The Facility Servicer:

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
in its capacity as Facility Servicer


By: /s/ Eric Partlan
Name: Eric Partlan
Title:    Head of Portfolio Management















































The Portfolio Asset Servicer:

CMFT RE LENDING SUB MM, LLC,
in its capacity as Portfolio Asset Servicer


By: /s/ Nathan DeBacker    
Name: Nathan DeBacker
Title: Vice President, Chief Financial Officer and Treasurer


Exhibit 31.1
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard S. Ressler, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of CIM Real Estate Finance Trust, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:August 12, 2022/s/ RICHARD S. RESSLER
Name:Richard S. Ressler
Title:Chief Executive Officer, President and Chairman of the Board of Directors
(Principal Executive Officer)



Exhibit 31.2
CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Nathan D. DeBacker, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of CIM Real Estate Finance Trust, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:August 12, 2022/s/ NATHAN D. DEBACKER
Name:Nathan D. DeBacker
Title:Chief Financial Officer and Treasurer
(Principal Financial Officer)



Exhibit 32.1
CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. § 1350)
Each of the undersigned officers of CIM Real Estate Finance Trust, Inc. (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:
(i)the accompanying Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/ Richard S. Ressler
Name:Richard S. Ressler
Title:Chief Executive Officer, President and Chairman of the Board of Directors
(Principal Executive Officer)
/s/ Nathan D. DeBacker
Name:Nathan D. DeBacker
Date:August 12, 2022Title:Chief Financial Officer and Treasurer
(Principal Financial Officer)
The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2022 pursuant to 18 U.S.C. § 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except to the extent the Company specifically incorporates this certification by reference.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.