SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of November 17, 2014 (this “Agreement”), is entered into among Phillips Edison – ARC Shopping Center Operating Partnership, L.P., a Delaware limited partnership (the “Borrower”), Phillips Edison – ARC Shopping Center REIT Inc. (the “Parent Entity”), the Lenders party hereto and Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

A.    The Borrower, the Parent Entity, the other guarantors party thereto, the Lenders and the Administrative Agent entered into that certain Credit Agreement, dated as of December 18, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”).

B.    The Borrower has notified that Administrative Agent and the Lenders that the calculation of Tangible Net Worth provided by the Borrower for the fiscal quarters ending December 31, 2013, March 31, 2014 and June 30, 2014 was inaccurate;

C.    The Borrower has requested that the Lenders agree to waive any Default or Event of Default arising from the provision of inaccurate calculations of Tangible Net Worth for the fiscal quarters ending December 31, 2013, March 31, 2014 and June 30, 2014 (the “Specified Events of Default”); and

D.    The Borrower has also requested that the Lenders agree to increase the Aggregate Revolving Commitments and make certain other amendments to the Credit Agreement.

E.    The Lenders have agreed to increase the Aggregate Revolving Commitments, waive the Specified Events of Default and make certain other amendments to the Credit Agreement, subject to the terms and conditions set forth herein.

F.    In consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows.

1.    Waiver. Subject to the other terms and conditions of this Agreement, the Lenders hereby agree to waive the Specified Events of Default. The above waiver shall not modify or affect the Loan Parties’ obligations to comply fully with the terms of Section 8.11(d) of the Credit Agreement for any future periods or any other duty, term, condition or covenant contained in the Credit Agreement or any other Loan Document. The waiver is a one-time waiver and limited solely to the specific waiver identified above and nothing contained in this Agreement shall be deemed to constitute a waiver of any other rights or remedies the Administrative Agent or any Lender may have under the Credit Agreement or any other Loan Document or under applicable law.

2.    Amendments. The Credit Agreement is hereby amended as follows:

(a)In the preamble to the Credit Agreement, the reference to “$350,000,000” is hereby replaced with a reference to “$700,000,000”.

(b)The definition of “Aggregate Revolving Commitments” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c)In the definition of “Capitalization Rate” in Section 1.01 of the Credit Agreement the reference to “seven and one-quarter percent (7.25%)” is hereby replaced with a reference to “seven percent (7.00%)”.

(d)The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(e)The definition of “Dividend Payout Ratio” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(f)The proviso at the end of the definition of “Eurodollar Base Rate” is hereby amended and restated in its entirety to read as follows:

“provided, that, (i) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied to the applicable Interest Period in a manner consistent with market practice; and provided, further, that, to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied to the applicable Interest Period as otherwise reasonably determined by the Administrative Agent and (ii) if the Eurodollar Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.”

(g)The definition of “Funds from Operations” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(h)The definition of “Tangible Net Worth” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(i)The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order:

(j)Each reference to “Investment Affiliate” in the Credit Agreement shall be replaced with a reference to “Unconsolidated Affiliate”.

(k)In Section 2.02(a) of the Credit Agreement:

(i)    In the fourth sentence, the reference to “$2,000,000” is hereby replaced with a reference to “$1,000,000” and the reference to “$500,000” is hereby replaced with a reference to “$100,000”.

(ii)    In the fifth sentence, the reference to “$500,000” is hereby replaced with a reference to “$100,000”.

(l)Section 2.05(a)(i)(C) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(C) any such prepayment of LIBOR Daily Floating Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding;”

(m)Section 2.05(a)(i)(D) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(D) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding.”

(n)In Section 2.16(a) of the Credit Agreement:

    

(i)In clause (ii) the reference to “$250,000,000” is hereby replaced with a reference to “$300,000,000”.

(ii)     In clause (iii) the reference to “$600,000,000” is hereby replaced with a reference to “$1,000,000,000”.

(o)The following clause (h) is hereby added immediately following clause (g) in Section 3.01:

(p)Section 8.11(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(q)Schedule 2.01 to the Credit Agreement is hereby amended and restated in its entirety to read as shown on Schedule 2.01 attached hereto.

3.    Effectiveness; Conditions Precedent. This Agreement shall be effective as of the date hereof when all of the conditions set forth in this Section 3 shall have been satisfied in form and substance satisfactory to the Administrative Agent.

(a)    Execution and Delivery of Agreement.    The Administrative Agent shall have received copies of this Agreement duly executed by the Borrower, the Guarantors, the Required Lenders, each Lender that is providing a new Revolving Commitment or increasing its Revolving Commitment in connection with the increase to the Aggregate Revolving Commitments and the Administrative Agent.

(b)    Joinder Agreement. Receipt by the Administrative Agent of a joinder agreement duly executed by each Lender that is providing a new Revolving Commitment in connection with the increase to the Aggregate Revolving Commitments, in form and substance reasonably satisfactory to the Administrative Agent.

(c)    Opinions of Counsel. Receipt by the Administrative Agent of customary opinions of legal counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, dated as of the date hereof, and in form and substance reasonably satisfactory to the Administrative Agent.

(d)    Organization Documents, Resolutions, Etc. Receipt by the Administrative Agent of such certificates of resolutions or other action of each Loan Party as the Administrative Agent may require evidencing the capacity of each Loan Party to enter into this Agreement.

(e)    Fees/Expenses.    The Borrower shall have paid all fees and expenses, if any, owed by the Borrower to the Administrative Agent, its counsel or any Lender.

4.    Ratification of Credit Agreement. Each of the Loan Parties acknowledges and consents to the terms set forth herein and agrees that this Agreement does not impair, reduce or limit any of its obligations under the Loan Documents as amended hereby.

5.    Representations and Warranties. Each of the Loan Parties represents and warrants to the Lenders as follows:

(a)    It has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

(b)    This Agreement has been duly executed and delivered by such Person and constitutes such Person's legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights generally;

(c)    No material consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Agreement;

(d)    The execution and delivery of this Agreement does not (i) violate, contravene or conflict with any provision of such Person’s Organization Documents or (ii) violate, contravene or conflict with any Laws applicable to such Person except, in the case referred to in this clause (ii), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(e)    After giving effect to this Agreement, the representations and warranties of the Borrower and each other Loan Party set forth in Article VI of the Credit Agreement and the other Loan Documents are true and correct in all material respects (unless already qualified by materiality or Material Adverse Effect, in which case they shall be true and correct in all respects) as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless already qualified by materiality or Material Adverse Effect, in which case they shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4, the representations and warranties contained in subsections (a) and (b) of Section 6.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01 of the Credit Agreement; and

(f)    After giving effect to this Agreement, no event has occurred and is continuing which constitutes a Default or an Event of Default.

6.    Counterparts/Telecopy. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of executed counterparts of this Agreement by telecopy or .pdf shall be effective as an original.

7.    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

8.    Reference to and Effect on Credit Agreement. Except as specifically modified herein, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are each hereby ratified and confirmed. This Agreement shall be considered a Loan Document from and after the date hereof. The Loan Parties intend for the amendments to the Loan Documents set forth herein to evidence an amendment to the terms of the existing indebtedness of the Loan Parties to the Administrative Agent and the Lenders and do not intend for such amendments to constitute a novation in any manner whatsoever.

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

Title:

Title:

ADMINISTRATIVE

AGENT:            BANK OF AMERICA, N.A.,

as Administrative Agent

By:                    

Name:

Title:

LENDERS:            BANK OF AMERICA, N.A.,

as a Lender, L/C Issuer and Swing Line Lender

By:                    

Name:

Title:

__________________________________,

as a Lender

By:                    

Name:

Title: