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

 

Exhibit 10.1
 

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 1, 2009

AMONG

HOME PROPERTIES, L.P., the Borrower,

HOME PROPERTIES, INC., the Company,

THE LENDERS, Party Hereto,

MANUFACTURERS AND TRADERS TRUST COMPANY,
as Administrative Agent,

RBS CITIZENS, N.A., d/b/a CHARTER ONE,
as Documentation Agent,

CHEVY CHASE BANK, A DIVISION OF CAPITAL ONE, N.A.
and
BANK OF MONTREAL,
as Co-Agents,

U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent, Joint Lead Arranger and Joint Bookrunner

and

MANUFACTURERS AND TRADERS TRUST COMPANY,
as Joint Lead Arranger, Joint Bookrunner and Managing Agent

 
 
 
 

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

 
 
TABLE OF CONTENTS

ARTICLE I – DEFINITIONS
1
SECTION 1.01. DEFINED TERMS
1
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS
22
SECTION 1.03. TERMS GENERALLY
23
SECTION 1.04. ACCOUNTING TERMS: GAAP
23
   
ARTICLE II – THE CREDITS
24
SECTION 2.01. COMMITMENTS
24
SECTION 2.02. LOANS AND BORROWINGS
24
SECTION 2.03. REQUESTS FOR BORROWINGS
25
SECTION 2.04. LETTERS OF CREDIT
25
SECTION 2.05. FUNDING OF BORROWINGS
30
SECTION 2.06. INTEREST ELECTIONS
30
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS
31
SECTION 2.08. REPAYMENT OF LOANS, EVIDENCE OF DEBT
32
SECTION 2.09. PREPAYMENT OF LOANS
32
SECTION 2.10. FEES
34
SECTION 2.11. INTEREST
35
SECTION 2.12. ALTERNATE RATE OF INTEREST
36
SECTION 2.13. INCREASED COSTS
36
SECTION 2.14. BREAK FUNDING PAYMENTS
38
SECTION 2.15. TAXES
38
SECTION 2.16. PAYMENTS GENERALLY, PRO RATA TREATMENT, SHARING OF SET-OFFS
39
SECTION 2.17. MITIGATION OBLIGATIONS, REPLACEMENT OF LENDERS
41
SECTION 2.18. DEFAULTING LENDERS
41
SECTION 2.19. INACCURATE FINANCIAL STATEMENTS OR COMPLIANCE CERTIFICATES
43
   
ARTICLE III – REPRESENTATIONS AND WARRANTIES
43
SECTION 3.01. ORGANIZATION: POWERS
43
SECTION 3.02. AUTHORIZATION, ENFORCEABILITY
43
SECTION 3.03. GOVERNMENTAL APPROVALS, NO CONFLICTS
44
SECTION 3.04. FINANCIAL CONDITION: NO MATERIAL ADVERSE CHANGE
44
SECTION 3.05. PROPERTIES
45
SECTION 3.06. INTELLECTUAL PROPERTY
46
SECTION 3.07. LITIGATION AND ENVIRONMENTAL MATTERS
46
SECTION 3.08. COMPLIANCE WITH LAWS AND AGREEMENTS
47
SECTION 3.09. INVESTMENT COMPANY STATUS
47
SECTION 3.10. TAXES
47
SECTION 3.11. ERISA
48
SECTION 3.12. DISCLOSURE
48
SECTION 3.13. INSURANCE
48
SECTION 3.14. REIT STATUS
49
SECTION 3.15. SOLVENCY
49
SECTION 3.16. MARGIN REGULATIONS
49
SECTION 3.17. OFAC
49
SECTION 3.18. PATRIOT ACT
49
SECTION 3.19. REPRESENTATIONS AND WARRANTIES IN THE LOAN DOCUMENTS
50
SECTION 3.20. SENIOR DEBT STATUS
50
   
ARTICLE IV – CONDITIONS
50
SECTION 4.01. EFFECTIVE DATE
50
SECTION 4.02. EACH CREDIT EVENT
52
   
ARTICLE V – AFFIRMATIVE COVENANTS
53
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION
53
SECTION 5.02. NOTICES OF MATERIAL EVENTS
56
SECTION 5.03. EXISTENCE, CONDUCT OF BUSINESS
57
SECTION 5.04. PAYMENT OF OBLIGATIONS
57
SECTION 5.05. MAINTENANCE OF PROPERTIES, INSURANCE, MANAGEMENT
57
SECTION 5.06. BOOKS AND RECORDS, INSPECTION RIGHT
57
SECTION 5.07. COMPLIANCE WITH LAWS
58
SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT
58
SECTION 5.09. COMPANY STATUS
58
SECTION 5.10. OWNERSHIP OF PROJECTS AND PROPERTY: UNENCUMBERED ASSETS
58
SECTION 5.11. SHAREHOLDER COMMUNICATION, FILINGS, ETC.
58
SECTION 5.12. FURTHER ASSURANCES
58
SECTION 5.13. NEW GUARANTORS
58
SECTION 5.14. POST-CLOSING OBLIGATIONS
59
   
ARTICLE VI – NEGATIVE COVENANTS
60
SECTION 6.01. INDEBTEDNESS AND OTHER FINANCIAL COVENANTS
60
SECTION 6.02. LIENS
61
SECTION 6.03. FUNDAMENTAL CHANGE
61
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUSITION
62
SECTION 6.05. HEDGING AGREEMENTS
63
SECTION 6.06. TRANSACTIONS WITH AFFILIATES
63
SECTION 6.07. RESTRICTION ON FUNDAMENTAL CHANGE
63
SECTION 6.08. MARGIN REGULATIONS: SECURITIES LAWS
63
SECTION 6.09. RESTRICTED PAYMENTS
63
SECTION 6.10. NEGATIVE COVENANTS OF THE COMPANY AND THE QRS SUBSIDIARY
65
   
ARTICLE VII – EVENTS OF DEFAULT
66
   
ARTICLE VIII – THE ADMINSTRATIVE AGENT
69
   
ARTICLE IX – MISCELLANEOUS
71
SECTION 9.01. NOTICES
71
SECTION 9.02. WAIVERS, AMENDMENTS
71
SECTION 9.03. EXPENSES; INDEMNITY, DAMAGE WAIVER
72
SECTION 9.04. SUCCESSORS AND ASSIGNS
74
SECTION 9.05. SURVIVAL
76
SECTION 9.06. COUNTERPARTS, INTEGRATION, EFFECTIVENESS
76
SECTION 9.07. SEVERABILITY
77
SECTION 9.08. RIGHT OF SETOFF
77
SECTION 9.09. GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE OF PROCESS
77
SECTION 9.10. WAIVER OF JURY TRIAL
78
SECTION 9.11. HEADINGS
78
SECTION 9.12. CONFIDENTIALITY
78
SECTION 9.13. INTEREST RATE LIMITATION
79
SECTION 9.14. PATRIOT ACT
79

SCHEDULES:

Schedule 2.01                           Commitments
Schedule 2.04                           Existing Letters of Credit
Schedule 3.02                           Ownership Structure
Schedule 3.04                           Existing Indebtedness
Schedule 3.13                           Insurance

EXHIBITS:

Exhibit A                           Form of Assignment and Acceptance
Exhibit B                           Form of Guaranty
Exhibit C                           Form of Note
Exhibit D-1                           Form of Borrowing Request and Compliance
Certificate
Exhibit D-2                           Form of Notice of Issuance and Compliance
Certificate
Exhibit E                           Form of Opinion of Borrower’s Counsel
Exhibit F                           Form of Quarterly/Annual Compliance
Certificate

 
 

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

 
 
CREDIT AGREEMENT, dated as of September 1, 2009, among HOME PROPERTIES, L.P., a
New York limited partnership (the “Borrower”), HOME PROPERTIES, INC., a Maryland
corporation (the “Company”), the LENDERS party hereto, and MANUFACTURERS AND
TRADERS TRUST COMPANY, as Administrative Agent, U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent, Joint Lead Arranger and Joint Book Runner, RBS CITIZENS,
N.A., d/b/a CHARTER ONE, as Documentation Agent, CHEVY CHASE BANK, A DIVISION OF
CAPITAL ONE, N.A. and BANK OF MONTREAL, as Co-Agents, and MANUFACTURERS AND
TRADERS TRUST COMPANY, as Joint Lead Arranger, Joint Bookrunner, and Managing
Agent.

The parties hereto agree as follows:

ARTICLE I  − DEFINITIONS

SECTION 1.01. DEFINED TERMS.
As used in this Agreement, the following terms have the meanings specified
below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“ACCESSION AGREEMENT” means an Accession Agreement substantially in the form of
Annex I to the Guaranty.

“ADJUSTED EBITDA” means, for any period, the sum of NOI for such period for all
Projects plus management, development and other income of the Consolidated
Businesses for such period less the aggregate Capital Expenditure Reserve Amount
with respect to all Projects for such period.

“ADJUSTED LIBO RATE” means, for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a)(i) the LIBO Rate for such Interest Period multiplied by (ii) the Statutory
Reserve Rate and (b) 1.50%.

“ADJUSTED NOI” means, for any period with respect to a Project, NOI for such
period from such Project less the Capital Expenditure Reserve Amount with
respect to such Project for such period.

“ADJUSTED RECOURSE SECURED INDEBTEDNESS” means all Secured Indebtedness
affecting any Project which Secured Indebtedness is recourse (limited to the
amount of such Secured Indebtedness that is recourse) to the Company, the
Borrower or their Subsidiaries or Unconsolidated Affiliates (but solely with
respect to the Borrower’s pro rata share of such Secured Indebtedness of
Unconsolidated Affiliates), if either (i) the amount of such Secured
Indebtedness equals an amount greater than 60% of Total Property Value of such
Project or (ii) the ratio of Adjusted NOI for the Project affected by such
Secured Indebtedness to Debt Service of such Project is less than 1.4 to 1.0.

 
 

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

 
“ADJUSTED UNENCUMBERED NOI” means, for any period, NOI not subject to any Liens
for such period derived from an Unencumbered Eligible Project less the Capital
Expenditure Reserve Amount with respect to such Unencumbered Eligible Project
for such period.

“ADMINISTRATIVE AGENT” means The Manufacturers and Traders Trust Company, in its
capacity as administrative agent for the Lenders hereunder.

“ADMINISTRATIVE QUESTIONNAIRE” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“AFFILIATE” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.  In no event
shall the Administrative Agent or any Lender be deemed to be an Affiliate of the
Borrower, the Company or any other Guarantor.

“AGREEMENT” means this Credit Agreement dated as of the date hereof, by and
among the Borrower, the Company, the Lenders and the Administrative Agent, as
may be amended or supplemented from time to time.

“ALTERNATE BASE RATE” means, for any day, a fluctuating rate of interest that is
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the
one-month Adjusted LIBO Rate (taking into effect clause (b) of the definition
thereof) determined on a daily basis, plus 1.750%. Any change in the Alternate
Base Rate shall be effective on the opening of business on the day of such
change.

“ANNUAL COMPLIANCE CERTIFICATE” shall have the meaning set forth in Section
5.01(b)(ii).

“APPLICABLE PERCENTAGE” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

“APPLICABLE MARGIN” means, as of any date of determination, the percentage rate
set forth below corresponding to the ratio of Total Outstanding Indebtedness to
Total Value as determined in accordance with Section 6.01(a)(i):
 
 
 
2

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

 

 
Level
 
Ratio of Total Outstanding Indebtedness to Gross Asset Value
 
Applicable Margin for Eurodollar Loans
   
Applicable Margin for ABR Loans
    1  
Greater than .60 to 1.00
    3.250 %     1.500 %   2  
Greater than .55 to 1.00 but less than or equal to .60 to 1.00
    3.000 %     1.250 %   3  
Greater than .50 to 1.00 but less than or equal to .55 to 1.00
    2.750 %     1.000 %   4  
Greater than .45 to 1.00 but less than or equal to .50 to 1.00
    2.625 %     0.875 %   5  
Less than or equal to .45 to 1.00
    2.500 %     0.750 %

The Applicable Margin for Loans shall be determined by the Administrative Agent
from time to time, based on the ratio of Total Outstanding Indebtedness to Total
Value as set forth in the Quarterly Compliance Certificate or Annual Compliance
Certificate most recently delivered by the Borrower pursuant to
Section 5.01(a)(ii) or Section 5.01(b)(ii), as the case may be.  Any adjustment
to the Applicable Margin shall be effective as of the fifth Business Day
following the Administrative Agent’s receipt of the applicable Annual Compliance
Certificate or Quarterly Compliance Certificate, as the case may be.  If the
Borrower fails to deliver an Annual Compliance Certificate or a Quarterly
Compliance Certificate pursuant to Section 5.01, the Applicable Margin shall
equal the percentages corresponding to Level 1 from the date such compliance
certificate was to be delivered in accordance with the terms of this Agreement
until the fifth Business Day following the Administrative Agent’s receipt of the
applicable Annual Compliance Certificate or Quarterly Compliance Certificate, as
the case may be.  Notwithstanding the foregoing, for the period from the
Effective Date through but excluding the date which is the fifth Business Day
following the Administrative Agent’s receipt of the Annual Compliance
Certificate for the fiscal year ended December 31, 2009, the Applicable Margin
shall be determined based on Level 1.  As of the fifth Business Day following
the Administrative Agent’s receipt of the Annual Compliance Certificate for the
fiscal year ended December 31, 2009, the Applicable Margin shall be adjusted to
the Level corresponding to the ratio of Total Outstanding Indebtedness to Total
Value as set forth in the Annual Compliance Certificate delivered with respect
to the fiscal year ended December 31, 2009 and thereafter, such Applicable
Margin shall be adjusted from time to time as set forth in this definition.  The
provisions of this definition shall be subject to Section 2.19.

“ASSIGNMENT AND ACCEPTANCE” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
 

 
 
3

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

 
“AVAILABILITY PERIOD” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

“BANKRUPTCY CODE” shall have the meaning set forth in Section 3.15.

“BOARD” means the Board of Governors of the Federal Reserve System of the United
States of America.

“BOOK VALUE” means the value at which a Property is reported on the financial
statements of the Company in accordance with GAAP, less the amount of any
Indebtedness or Liens related to such Property.

“BORROWER” means Home Properties, L.P., a New York limited partnership.

“BORROWING” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

“BORROWING REQUEST” means a request by the Borrower for a Loan in accordance
with Section 2.03.

“BUSINESS DAY” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “BUSINESS DAY” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

“CAPITAL EXPENDITURE RESERVE AMOUNT” means, for any period, with respect to a
Project an amount equal to (i) $300 multiplied by the number of apartment units
contained in such Project multiplied by (ii) a fraction, the numerator of which
is equal to the number of days in such period and the denominator of which is
equal to 365.

“CAPITALIZATION RATE” means 7.75%; provided, however, that if the occupancy
level of any Unencumbered Eligible Project falls below 75%, the Capitalization
Rate used with respect to such Unencumbered Eligible Project for purposes of
determining the Total Unencumbered Property Value with respect to such
Unencumbered Eligible Project shall be 10.00%; provided further, however, that
the Capitalization Rate shall be reviewed from time to time at the request of
any Lender by the Administrative Agent and the Lenders and shall be subject to
adjustment from time to time by the Required Lenders, acting in their sole
discretion, based upon market conditions for comparable property types.

“CAPITAL LEASE OBLIGATIONS” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. §96011 ET SEQ., any amendments thereto, any
successor, statutes and any regulations or guidance promulgated thereunder.

“CHANGE IN CONTROL” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof), of shares representing more than 25% of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of the Company;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
board of directors of the Company nor (ii) appointed by directors so nominated;
or (c) the acquisition of direct or indirect Control of the Borrower or the
Company by any Person or group.

“CHANGE IN LAW” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

“CODE” means the Internal Revenue Code of 1986, as amended from time to time.

“COMMITMENT” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender’s Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders’ Commitments is $175,000,000.

“COMPANY” means Home Properties, Inc., a Maryland corporation.

“CONSOLIDATED BUSINESSES” means the Company, the Borrower, and each of their
respective Subsidiaries.
 

 
 
4

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

 
“CONTINGENT OBLIGATION” as to any Person means, without duplication, (a) any
contingent obligation of such Person required to be shown on such Person’s
balance sheet in accordance with GAAP, and (b) any obligation required to be
disclosed in the footnotes to such Person’s financial statements in accordance
with GAAP, guaranteeing partially or in whole any non-recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have not
yet been called on or quantified, of such Person or of any other Person. The
amount of any Contingent Obligation described in clause (b) shall be deemed to
be (i) with respect to a guaranty of interest or interest and principal, or
operating income guaranty, the sum of all payments required to be made
thereunder (which in the case of an operating income guaranty shall be deemed to
be equal to the debt service for the note secured thereby), calculated at the
interest rate applicable to such Indebtedness, through (A) in the case of an
interest or interest and principal guaranty, the stated date of maturity of the
obligation (and commencing on the date interest could first be payable
thereunder), or (B) in the case of an operating income guaranty, the date
through which such guaranty will remain in effect, and (ii) with respect to all
guarantees not covered by the immediately preceding clause (i) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such guaranty is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as recorded on the balance sheet and on the
footnotes to the most recent financial statements of such Person.
Notwithstanding anything contained herein to the contrary, (1) guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment has been made thereunder, at which time any such guaranty of
completion shall be deemed to be a Contingent Obligation in an amount equal to
any such claim and (2) Low Income Housing Credit Program Guarantees shall not be
deemed to be Contingent Obligations. Subject to the preceding sentence, (x) in
the case of a joint and several guaranty given by such Person and another Person
(but only to the extent such guaranty is recourse, directly or indirectly to
such Person), the amount of the guaranty shall be deemed to be 100% thereof
unless and only to the extent that (i) such other Person has delivered cash or
cash equivalents described herein in the definition of Permitted Investments to
secure all or any part of such Person’s guaranteed obligations or (ii) such
other Person holds an Investment Grade Credit Rating from either Moody’s or S&P,
and (y) in the case of a guaranty, (whether or not joint and several) of an
obligation otherwise constituting Indebtedness of such Person, the amount of
such guaranty shall be deemed to be only that amount in excess of the amount of
the obligation constituting Indebtedness of such Person.  Contingent Obligations
of any Person shall include such Person’s pro rata share of the Contingent
Obligations of any Unconsolidated Affiliate of such Person

“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.
“Controlling “and “Controlled” have meanings correlative thereto.

“DEBT SERVICE” means for any period the sum of (i) all interest obligations
accrued on all Indebtedness with respect to a Project, (ii) all payments of
principal required to be made (other than payments of any principal balance
remaining to be paid by the terms of the applicable Indebtedness at the maturity
thereof) with respect to any Indebtedness on a Project and (iii) the
amortization of loan fees, original issue discount, non-cash interest payments,
the interest component of Capital Lease Obligations and hedging costs (but
excluding extraordinary interest expense, and net of amortization of deferred
costs associated with new financings or refinancings of existing Indebtedness)
with respect to such Project during such period.
 

 
 
5

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

 
“DEFAULT” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“DEFAULTING LENDER” means any Lender, as determined by the Administrative Agent
in good faith, that (a) has failed to fund (or has failed, within one Business
Day after request by the Agent, to confirm that it will comply with the terms of
this Agreement relating to its obligations to fund) any portion of the Loans or
participations in Letter of Credits required to be funded by it hereunder within
two Business Days of the date required to be funded by it hereunder, (b) has
otherwise failed to pay to the Administrative Agent or any other Lender any
other amount required to be paid by it hereunder within two Business Days of the
date when due, unless such amount is the subject of a good faith dispute,
(c) has notified the Borrower, the Administrative Agent or any other Lender in
writing that, or has made a public statement to the effect that, it does not
intend to comply with any of its funding obligations under this Agreement, or
(d) has become or is (i) insolvent or (ii) the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment.

“DOLLARS” or “$” refers to lawful money of the United States of America.

“EFFECTIVE DATE” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).

“ELIGIBLE PROJECT” means, any Project that (i) is 100% owned by the Borrower
and/or any of its wholly-owned Subsidiaries, (ii) is free of all title defects
and material structural defects, (iii) has at one time achieved an occupancy
rate of not less than 80%, (iv) is managed by the Borrower or any Subsidiary of
the Borrower, and (v) is free of all Hazardous Materials as verified by an
environmental assessment report in form and substance satisfactory to the
Administrative Agent.

“ENCUMBERED ELIGIBLE PROJECT” means any Eligible Project all or any portion of
which Eligible Project is encumbered by a Lien or subject to a Negative Pledge.

“ENVIRONMENTAL LAWS” means any and all present and future federal, state or
local laws, rules, regulations, statutes or codes and any and all ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
 
 
 
6

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

 
 
“ENVIRONMENTAL LIABILITY” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary of the Borrower
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the presence, generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

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

“EQUITY ISSUANCE” means any issuance by a Person of any Equity Interest in such
Person and shall in any event include the issuance of any Equity Interest upon
the conversion or exchange of any security constituting Indebtedness that is
convertible or exchangeable, or is being converted or exchanged, for Equity
Interests.

“EQUITY VALUE” means, as of a given date, (a) the stockholders’ or owners’
equity of the Company and its Subsidiaries determined on a consolidated basis,
plus (b) accumulated depreciation and amortization, minus (c) the following (to
the extent reflected in determining stockholders’ or owners’ equity of the
Company and its Subsidiaries): (i) the amount of any write-up in the book value
of any assets contained in any balance sheet resulting from revaluation thereof
or any write-up in excess of the cost of such assets acquired, and (ii) all
amounts appearing on the assets side of any such balance sheet for assets which
would be classified as intangible assets under GAAP, all determined on a
consolidated basis.

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

“ERISA AFFILIATE” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

“ERISA EVENT” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b)  the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (c) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan; (d) the receipt
by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (e) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multi-employer Plan; or (f) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multi-employer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multi-employer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 
7

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

 
“EURODOLLAR” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“EVENT OF DEFAULT” has the meaning assigned to such term in Article VII.

“EXCLUDED TAXES” means with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any Obligation, (a) income or franchise taxes imposed on (or measured by) its
net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.17(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.15(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.15(a).

“EXISTING LETTER OF CREDIT” means any letter of credit listed on Schedule 2.04
hereto and issued by the Issuing Bank, pursuant to that certain Credit
Agreement, dated as of August 23, 1999, by and among the Borrower, the financial
institutions party thereto, the Administrative Agent and the Issuing Bank, as
amended, supplemented or otherwise modified.

“FAIR MARKET VALUE” means, with respect to (a) security listed on a national
securities exchange or the NASDAQ National Market, the price of such security as
reported on such exchange or market by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to any
other property, the price which could be negotiated in an arm’s-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of which is under pressure or compulsion to complete the transaction.

 
8

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

 
“FEDERAL FUNDS EFFECTIVE RATE” means for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/ 100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“FEE PAYMENT DATE” has the meaning set forth in Section 2.10(c).
 
“FINANCIAL OFFICER” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower or the Company as applicable.

“FIXED CHARGES” means with respect to any fiscal period, the sum of (i) Total
Interest Expense and (ii) the aggregate of all scheduled principal payments on
Indebtedness made or required to be made during such fiscal period for the
Consolidated Businesses (but excluding balloon payments of principal due upon
the stated maturity of an Indebtedness) and (iii) the aggregate of all dividends
declared and payable on any of the Company’s, the Borrower’s or any of their
Subsidiaries’ preferred Equity Interests. The Lenders agree to review a request
from the Borrower to exclude charges associated with any future convertible
preferred issues from inclusion in “Fixed Charges”; provided that any such
exclusion shall be determined in the sole discretion of the Required Lenders.

“FUNDS FROM OPERATIONS” means, with respect to a Person and for a given period,
(a) net income (loss) of such Person determined on a consolidated basis for such
period minus (or plus) (b) gains (or losses) from debt restructuring and sales
of property during such period plus (c) depreciation with respect to such
Person’s real estate assets and amortization (other than amortization of
deferred financing costs) of such Person for such period, all after adjustment
for unconsolidated partnerships and joint ventures plus (d) real estate
impairment charges incurred outside of the ordinary course of
business.  Adjustments for unconsolidated entities will be calculated to reflect
funds from operations on the same basis.

“FOREIGN LENDER” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is a resident for tax
purposes. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of
America.

“GENERAL PARTNER” means the Company and any successor general partner(s) of the
Borrower.

“GOVERNMENTAL AUTHORITY” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
 
9

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

 
 
“GUARANTEE” of or by any Person (as used in this definition, the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (as used in this definition, the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include (i) endorsements for collection or deposit in the
ordinary course of business, (ii) guarantees of completion unless and until a
claim for payment has been made thereunder, at which time any such guaranty of
completion shall be deemed to be a Guaranty in an amount equal to any such claim
and (iii) Low Income Housing Credit Program Guarantees.

“GUARANTOR” means any Person that is a party to the Guaranty as a “Guarantor”
and in any event shall include the Company and each Subsidiary of the Company
(other than the Borrower) or the Borrower that owns an Unencumbered Eligible
Project.

“GUARANTY” means the Guaranty Agreement of even date herewith made by the
Company and the other parties thereto for the benefit of the Administrative
Agent, the Lenders and the Issuing Bank in the form attached hereto as Exhibit
B.

“HAZARDOUS MATERIALS” means toxic substances, hazardous waste, hazardous
materials or hazardous substances, as such terms are defined in the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 9601 ET
SEQ.), the Comprehensive Environmental, Response, Compensation and Liability
Act, as amended (42 U.S.C. Sections 9601 and 9657 ET SEQ.) and/or the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801 ET SEQ.), and
the regulations promulgated pursuant to any such laws, any asbestos or asbestos
related products and any oils, petroleum-derived compounds or pesticides;
provided that “Hazardous Materials” shall not include (a) materials which exist
in quantities or in a compounded non-hazardous form in compliance with all
applicable Federal, state and local laws, ordinances, rules and regulations such
as asphalt contained in road surfacing materials and (b) materials customarily
used in the day-to-day operation and maintenance of the Properties which are
stored, used and disposed of in accordance with all applicable Federal, state
and local laws, ordinances, rules and regulations such as cleaning fluids.

“HEDGING AGREEMENT” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement, collar
transaction, cap transaction, other swap transaction or other interest or
currency exchange rate or commodity price hedging arrangement.
 
 
10

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

 
 
“IMPROVEMENTS” means all buildings, fixtures, structures, parking areas,
landscaping and all other improvements whether existing now or hereafter
constructed, together with all machinery and mechanical, electrical, HVAC and
plumbing systems presently located thereon and used in the operation thereof,
excluding (a) any such items owned by utility service providers, (b) any such
items owned by tenants or other third-parties unaffiliated with the Borrower and
(c) any items of personal property.

“INDEBTEDNESS” of any Person means, without duplication, (a) all obligations
(including, without limitation, Contingent Obligations) of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations (including, without limitation, Contingent Obligations) of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations (including, without limitation, Contingent Obligations) of such
Person upon which interest charges are customarily paid, (d) all obligations
(including, without limitation, Contingent Obligations) of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations (including, without limitation, Contingent
Obligations) of such Person, (i) all obligations (including, without limitation,
Contingent Obligations) of such Person as an account party in respect of letters
of credit and letters of guaranty, (j) all obligations (including, without
limitation, Contingent Obligations) of such Person in respect of bankers’
acceptances, (k) net obligations under any Hedging Agreement not entered into as
a hedge against existing Indebtedness, in an amount equal to the mark-to-market
value for such Hedging Agreement, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Hedging Agreement (which may include any Lender) and (l) such
Person’s pro rata share of the Indebtedness of any Unconsolidated Affiliate of
such Person. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

“INDEMNIFIED TAXES” means Taxes other than Excluded Taxes.

“INTEREST ELECTION REQUESTS” means a request by the Borrower to convert or
continue a Loan in accordance with Section 2.06.

“INTEREST PAYMENT DATE” means the first day of each calendar month.
 

 
 
11

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

 
“INTEREST PERIOD” means the period commencing on the date of any Eurodollar
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two or three months thereafter, as the Borrower may elect, provided
that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (ii) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a Loan, thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.

“INVESTMENT GRADE CREDIT RATING” means a rating assigned by S&P or Moody’s to
the senior unsecured long term Indebtedness of a Person of BBB-/Baa3 (or the
equivalent) or higher.

“ISSUING BANK” means The Manufacturers and Traders Trust Company, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.04(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.

“LC DISBURSEMENT” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

“LC EXPOSURE” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

“LEASE” means a lease, license, concession agreement or other agreement
providing for the use or occupancy of any portion of any Project, including all
amendments, supplements, modifications and assignments thereof and all side
letters or side agreements relating thereto.

“LENDERS” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance.

“LETTER OF CREDIT” means any letter of credit issued pursuant to this Agreement
and any Existing Letter of Credit.

“LETTER OF CREDIT FEE” has the meaning set forth in Section 2.10(b).
 

 
 
12

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

 
“LIBO RATE” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 page (or any successor to
or substitute for such service, providing rate quotations comparable to those
currently provided on such service or if such page or service ceases to display
such information from such other service or method as the Administrative Agent
may select) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period.

“LIEN” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“LOANS” means the Loans made by the Lenders to the Borrower pursuant to this
Agreement.

“LOAN DOCUMENTS” means this Agreement, the Notes, the Guaranty and all other
instruments, agreements and written obligations delivered by the Borrower or any
Guarantor in connection with, pursuant to or relating to this Agreement, as any
of them may be amended, modified, extended or supplemented from time to time.

“LOW INCOME HOUSING CREDIT PROGRAM GUARANTEES” means the assurance by the
Borrower to limited partners of certain Affiliates of the Borrower, of which the
Borrower or a Subsidiary of the Borrower is the general partner, that the real
properties developed and operated by such Affiliates under the Low Income
Housing Tax Credit program established under the Code will be kept in compliance
with applicable requirements to avoid loss of, or recapture of, low income
housing tax credits.

“MARGIN STOCK” means “margin stock” as such term is defined in Regulation U and
Regulation G of the Federal Reserve Board as in effect from time to time.

“MATERIAL ADVERSE EFFECT” means a material adverse effect on (a) the business,
assets, operations or condition (financial or otherwise) of the Borrower and its
wholly-owned Subsidiaries, taken as a whole, (b) the ability of the Company, the
Borrower or any of their Subsidiaries to perform any of their obligations under
this Agreement or the Loan Documents or (c) the rights of or benefits available
to the Lenders under this Agreement or the Loan Documents.

“MATERIAL INDEBTEDNESS” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Company, the Borrower and the Subsidiaries of the Company and the
Borrower in an aggregate principal amount exceeding $7,500,000. For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
the Company, the Borrower or any Subsidiary of the Company or the Borrower in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company, the Borrower
or such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.

 
13

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

 
“MATURITY DATE” means August 31, 2011 (the “Initial Maturity Date”); provided
however that if (i) the Borrower advises the Administrative Agent on or before
May 31, 2011 (but in any event not prior to February 28, 2011) in writing of its
desire to extend the Maturity Date, (ii) pays the Administrative Agent for the
account of each Lender an extension fee (the “Extension Fee”) equal to 0.375% of
each Lender’s Commitment, (iii) on the date such notice is delivered and on the
Initial Maturity Date no Default or Event of Default has occurred and is
continuing and (iv) on the date such notice is delivered and on the Initial
Maturity Date all representations and warranties under the Loan Documents are
true and correct in all material respects except to the extent such
representation or warranty expressly relates to an earlier date (in which case
such representation and warranty shall be true and correct as of such date),
then the “Maturity Date” shall mean August 31, 2012. Upon payment, the Extension
Fee shall be fully earned and nonrefundable.

“MAXIMUM AVAILABILITY” means the aggregate amount of the Lenders’ Commitments.

“MOODY’S” means Moody’s Investors Service, Inc.

“MULTI-EMPLOYER PLAN” means a multi-employer plan as defined in Section
4001(aX3) of ERISA.

“NEGATIVE PLEDGE” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document) which prohibits
or purports to prohibit the creation or assumption of any Lien on such asset as
security for Indebtedness of the Person owning such asset or any other Person;
provided, however, that an agreement that conditions a Person’s ability to
encumber its assets upon the maintenance of one or more specified ratios that
limit such Person’s ability to encumber its assets but that do not generally
prohibit the encumbrance of its assets, or the encumbrance of specific assets,
shall not constitute a Negative Pledge.

“NET CASH PROCEEDS” means all cash when and as received by any Consolidated
Business in connection with the sale or refinancing of any Real Property, less
the amount of Secured Indebtedness required to be repaid in connection with the
sale or refinancing of such Real Property, real estate transfer taxes payable in
connection with the sale of such Real Property and reasonable costs and expenses
paid by the Borrower or its Subsidiaries in connection with such sale or
refinancing.  Notwithstanding the foregoing, Net Cash Proceeds shall not be
deemed to have been received by a Consolidated Business at any time while such
proceeds are held by a 1031 exchange agent.

“NET OFFERING PROCEEDS” means with respect to any Equity Issuance by a Person,
the aggregate amount of all cash and the Fair Market Value of all other property
(other than securities of such Person being converted or exchanged in connection
with such Equity Issuance) received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.

 
14

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

 
“NEW GUARANTOR” shall have the meaning set forth in Section 5.13(a).

“NOI” means, with respect to a Project, net operating income derived from such
Project determined in accordance with GAAP, adjusted, however, to exclude
accrued rent with respect to tenants that are more than 90 days in arrears in
the payment of rent, and further adjusted to account for the actual management
fee, if any, paid with respect to such Project.

“NOTE” means a promissory note in the form attached hereto as Exhibit C payable
to a Lender, evidencing certain of the Obligations of the Borrower to such
Lender and executed by the Borrower, as the same may be amended, supplemented,
modified or restated from time to time; “NOTES” means, collectively, all of such
Notes outstanding at any given time.

“OBLIGATIONS” means, individually and collectively: (a) the aggregate principal
balance of, and all accrued and unpaid interest on, all Loans; (b) all
reimbursement obligations with respect to Letters of Credit and all other
liabilities with respect to any Letter of Credit; and (c) all other
indebtedness, liabilities, obligations, covenants and duties of the Borrower,
the Company and the other Guarantors owing to the Agent or any Lender of every
kind, nature and description, under or in respect of this Agreement or any of
the other Loan Documents, including, without limitation, the fees and
indemnification obligations, whether direct or indirect, absolute or contingent,
due or not due, contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any promissory note.

 
“OTHER TAXES” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“PERMITTED ENCUMBRANCES” means:

(a)           Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

(b)           carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
 

 
 
15

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

 
(c)           pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

(d)           deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business; and

(e)           easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary of the Borrower;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“PERMITTED INVESTMENTS” means unrestricted:

(a)           cash;

(b)           marketable direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof,

(c)           investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

(d)           investments in domestic and Eurodollar certificates of deposit,
banker’s acceptances, time deposits and floating rate certificates of deposit
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America, any State thereof or the District of Columbia
which has a combined capital and surplus and undivided profits of not less than
$500,000,000;

(e)           fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (b) above and entered into with
a financial institution satisfying the criteria described in clause (d) above;

 
(f)           publicly traded equity securities issued by a REIT that primarily
owns multi-family properties; and

(g)           other marketable securities accepted by the Required Lenders.
 

 
 
16

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

 
“PERSON” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“PLAN” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“PRIME RATE” means the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal
office (which rate may not be the lowest rate of interest available by the
Administrative Agent); each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.

“PROJECT” means any residential housing building, related group of buildings or
community owned 100%, directly or indirectly, by any of the Consolidated
Businesses.

“PROPERTY” means any Real Property or personal property, plant, building,
facility, structure, equipment, general intangible, receivable, or other asset
owned or leased by any Consolidated Business.

“QRS SUBSIDIARY” means Home Properties Trust.

“QUALIFIED COMMUNITY REINVESTMENT PROJECTS” means those Projects that comply
with the Community Reinvestment Act or other applicable federal and state laws.

“QUARTERLY COMPLIANCE CERTIFICATE” shall have the meaning set forth in Section
5.01(a)(ii).

“REAL PROPERTY” means all of the Consolidated Businesses’ present and future
right, title and interest (including, without limitation, any leasehold estate)
in (i) any plots, pieces or parcels of land, (ii) any Improvements of every
nature whatsoever (the rights and interests described in clauses (i) and (ii)
above being the “PREMISES”), (iii) all easements, rights of way, gores of land
or any lands occupied by streets, ways, alleys, passages, sewer rights, water
courses, water rights and powers, and public places adjoining such land, and any
other interests in property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever, located
in, on or benefiting the Premises and (v) all other rights and privileges
thereunto belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of the rights
and interests described in clauses (iii) and (iv) above.

 
17

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

 
“RECOURSE SECURED INDEBTEDNESS” means (a) Guarantees of the Company, the
Borrower and their Subsidiaries and the Borrower’s pro rata share of any
Guarantees of Unconsolidated Affiliates, and (b) Secured Indebtedness affecting
any Project that is recourse to the Company, the Borrower or their Subsidiaries
or Unconsolidated Affiliates, in the case of each of clauses (a) and (b) limited
to the amount of such Guarantee or Secured Indebtedness that is recourse to the
Company, the Borrower or their Subsidiaries or Unconsolidated Affiliates, as the
case may be.

“REGISTER” has the meaning set forth in Section 9.04(c).

“REIT” means a domestic trust or corporation that qualifies as a “real estate
investment trust” under the Code.

“RELATED PARTIES” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“REQUIRED LENDERS” means, at any time, Lenders (excluding Defaulting Lenders)
having Revolving Credit Exposures and unused Commitments representing at least
66 2/3% of the sum of the total Revolving Credit Exposures and unused
Commitments at such time (excluding the Revolving Credit Exposures and unused
Commitments of any Defaulting Lender at such time).

“RESTRICTED PAYMENT” means: (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of the Company, the Borrower or any
Subsidiary of the Company or the Borrower now or hereafter outstanding, except a
dividend payable solely in Equity Interests of an identical or junior class to
the holders of that class; (b) any redemption, conversion, exchange, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Equity Interest of the Company, the Borrower or any
Subsidiary of the Company or the Borrower now or hereafter outstanding; and
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interests of the
Company, the Borrower or any Subsidiary of the Company or the Borrower now or
hereafter outstanding.

“REVOLVING CREDIT EXPOSURE” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans and its LC
Exposure at such time.

“S&P” means Standard & Poor’s.

“SECURED INDEBTEDNESS” means any Indebtedness secured by a Lien, and in the case
of the Borrower, shall include (without duplication) the Borrower’s pro rata
share of the Secured Indebtedness of its Unconsolidated Affiliates.

 
18

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

 
“STATUTORY RESERVE RATE” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for Eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“SUBSIDIARY” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date.

“TAXES” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“TOTAL INTEREST EXPENSE” means, for any period, the sum of (i) interest expense
of the Consolidated Businesses paid during such period and (ii) interest expense
of the Consolidated Businesses accrued and/or capitalized for such period in
each case including participating interest expense, the amortization of loan
fees, original issue discount, non-cash interest payment, the interest component
of Capital Lease Obligations and hedging costs but excluding extraordinary
interest expense, and net of amortization of deferred costs associated with new
financings or refinancings of existing Indebtedness.

“TOTAL OUTSTANDING INDEBTEDNESS” means, as of any date, the sum of (i) all
Indebtedness of the Consolidated Businesses and (ii) without duplication, all
Contingent Obligations of the Consolidated Businesses which are recourse to such
Person or any other Consolidated Business. “Total Outstanding Indebtedness”
shall not be deemed to include (a) completion guarantees of construction loans
or (b) Low Income Housing Tax Credit Program Guarantees.  For the avoidance of
doubt, Total Outstanding Indebtedness shall include the Borrower’s pro rata
share of the Indebtedness and Contingent Obligations of its Unconsolidated
Affiliates.

“TOTAL PROPERTY VALUE” means, as of any date for any Project, (i) with respect
to any Project which has been owned by a Consolidated Business for not less than
four full consecutive calendar quarters, as of the first day of each fiscal
quarter for the immediately preceding consecutive four full calendar quarters,
an amount equal to Adjusted NOI relating to such Project for such period divided
by the Capitalization Rate or (ii) with respect to any Project which has been
owned by a Consolidated Business for less than four full consecutive calendar
quarters, an amount equal to the cost of acquiring such Projects less reasonable
and customary transaction costs incurred in connection with such acquisition.

 
19

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

 
“TOTAL UNENCUMBERED VALUE” means, as of any measurement date, the sum of (i)
with respect to Unencumbered Eligible Projects which have been owned by a
Consolidated Business, as of the measurement date, for not less than four full
consecutive calendar quarters, an amount equal to Adjusted NOI for all such
Unencumbered Eligible Projects for the immediately preceding four consecutive
calendar quarters as of the measurement date, divided by the Capitalization
Rate; (ii) with respect to Unencumbered Eligible Projects which have been owned
by a Consolidated Business for less than four full consecutive calendar quarters
as of the measurement date, an amount equal to the cost of acquiring all such
Unencumbered Eligible Projects less reasonable and customary transaction costs
incurred in connection with such acquisition and (iii) an amount equal to the
lesser of (a) the sum of (x) 75% of Book Value of undeveloped land not subject
to a Lien that is owned by the Consolidated Businesses and (y) 75% of Book Value
of Projects not subject to a Lien on which construction is in progress; provided
that 100% of Book Value of such Projects shall be included for purposes of the
calculating the sum in this clause (iii)(a) once a temporary certificate of
occupancy has been issued for such Projects, and (b) 25% of Total Unencumbered
Value before including the amount of Total Unencumbered Value derived from this
clause (iii).

“TOTAL VALUE” means, as of any date, the sum of (i) Total Property Value for all
Eligible Projects; (ii) an amount equal to 75% of all investments in notes
secured by mortgages on the Property of any Consolidated Business;
(iii) unrestricted Permitted Investments of the Consolidated Businesses; (iv) an
amount equal to the lesser of (a) the sum of (x) 75% of Book Value of
undeveloped land not subject to a Lien that is owned by the Consolidated
Businesses and (y) 75% of Book Value of Projects not subject to a Lien on which
construction is in progress; provided that 100% of Book Value of such Projects
shall be included for purposes of the calculating the sum in this clause (iv)(a)
once a temporary certificate of occupancy has been issued for such Projects, and
(b) 10% of Total Value before including the amount of Total Value derived from
this clause (iv); and (v) without duplication, any Consolidated Business’s pro
rata share of investments in Real Property not constituting Eligible Projects,
valued at the lower of the cost of such investment or the value of such
investment as determined in a manner consistent with clauses (i) through (iv)
above, as applicable.  The Borrower’s pro rata share of assets held by
Unconsolidated Affiliates (excluding assets of the type described in the
immediately preceding clause (iii)) will be included in Total Value calculations
consistent with the above described treatment for assets of Consolidated
Businesses (including, without limitation, Eligible Projects of Unconsolidated
Affiliates disregarding clause (i) of the definition thereof).

“TRANSACTIONS” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder.

“TYPE” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“UNCONSOLIDATED AFFILIATE” means, with respect to any Person, any other Person
in whom such Person holds an investment, which investment is accounted for in
the financial statements of such Person on an equity basis of accounting and
whose financial results would not be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person.

 
20

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

 
“UNENCUMBERED ELIGIBLE PROJECT” means any Eligible Project which is 100% owned
by the Borrower and/or any Guarantor and that is not an Encumbered Eligible
Project.

“UNSECURED INDEBTEDNESS” means, for any applicable period, without duplication,
(a) all obligations for borrowed money or advances of any kind, (b) all
obligations evidenced by bonds, debentures, notes or similar instruments, and
(c) all obligations upon which interest charges are customarily paid, in each
case, that are not secured by a Lien.

“UNSECURED INTEREST EXPENSE” means the interest expense paid, accrued or
capitalized on all Total Outstanding Indebtedness that is not Secured
Indebtedness for the applicable period.

“UNUSED FACILITY FEE” has the meaning set forth in Section 2.10(a).

“UNUSED FACILITY FEE RATE” means the per annum percentage set forth in the table
below corresponding to the Level at which the “Applicable Margin” is determined
in accordance with the definition thereof:

Level
Unused Facility Fee Rate
1
0.500%
2
0.500%
3
0.500%
4
0.375%
5
0.375%

Notwithstanding the foregoing, for the period from the Effective Date through
but excluding the date which is the fifth Business Day following the
Administrative Agent’s receipt of the Annual Compliance Certificate for the
fiscal year ending December 31, 2009, the Unused Facility Fee Rate shall be
determined based on Level 1 and thereafter, such Unused Facility Fee Rate shall
be adjusted from time to time as set forth in the definition of “Applicable
Margin”.

“WITHDRAWAL LIABILITY” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS.  For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

 
21

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

 
SECTION 1.03. TERMS GENERALLY.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

SECTION 1.04. ACCOUNTING TERMS: GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.Notwithstanding the
foregoing, all financial covenants contained herein shall be calculated, without
giving effect to any election under Statement of Financial Accounting Standards
159 (or any similar accounting principle) permitting a Person to value its
financial liabilities at the fair value thereof, and if the Company has elected,
or elects in the future, to value its financial liabilities at the fair value,
it shall furnish to the Administrative Agent and Lenders at the time that it
delivers the quarterly and annual reports pursuant to Section 5.01 (a) and (b) a
reconciliation showing the value of its financial liabilities as if the Company
had not made such election.  Notwithstanding the foregoing or anything herein to
the contrary, for purposes of calculating the financial covenants set forth
herein, including, without limitation those included in Section 6.01 hereof,
Briggs Wedgewood Associates, L.P. shall not be deemed to be a Subsidiary or an
Unconsolidated Affiliate of the Company or the Borrower so long as (i) the
aggregate amount of all Indebtedness, liabilities and other obligations of
Briggs Wedgewood Associates, L.P. that are recourse to the Company, the Borrower
or any Subsidiary of the Company or the Borrower do not exceed $500,000 at any
one time outstanding and (ii) none of the Company, the Borrower and any
Subsidiary of the Company or the Borrower owns more than .01% of the Equity
Interests of Briggs Wedgewood Associates, L.P. at any time.

 
22

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

 
ARTICLE II  − THE CREDITS

SECTION 2.01. COMMITMENTS.   Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (ii) the sum of the total Revolving Credit Exposures
exceeding the total Maximum Availability. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Loans.

SECTION 2.02. LOANS AND BORROWINGS.
 
(a)           Each Loan shall be made as part of a Borrowing consisting of Loans
made by the Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder, provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.

(b)           Subject to Section 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

(c)           At the commencement of each Interest Period for any Eurodollar
Loan, such Loan shall be in an aggregate amount that is not less than $2,500,000
and $250,000 increments in excess thereof. At the time that each ABR Loan is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $ 1,000,000; provided that an ABR Loan
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten Borrowings outstanding.

(d)           Notwithstanding anything herein to the contrary, at no time shall
the aggregate Revolving Credit Exposure be greater than the Maximum
Availability.

(e)           Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.

 
23

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

 
SECTION 2.03. REQUESTS FOR BORROWINGS.  To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of the proposed Borrowing; provided that any such notice of
an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.04(e) may be given not later than 10:00 a.m., New York
City time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in the form
of Exhibit D−1 attached hereto, or such other form approved by the
Administrative Agent, and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

(i)           the aggregate amount of the requested Borrowing;

(ii)           the date of such Borrowing, which shall be a Business Day;

(iii)           whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv)           in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term “Interest Period”; and

(v)           the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.05.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Eurodollar Borrowing with an Interest Period of one month’s
duration. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. LETTERS OF CREDIT.
 
(a)           GENERAL. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit for the account of the
Borrower on its behalf or on behalf of any of the Consolidated Businesses, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.  Each Existing Letter of Credit shall be deemed
for all purposes hereof to be a Letter of Credit issued pursuant to this
Agreement as of the Effective Date.

 
24

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

 
(b)           NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION, CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice in the form of Exhibit
D-2 attached hereto, or such other form approved by the Issuing Bank,
the  Administrative Agent, and signed by the Borrower requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $20,000,000 and (ii) the sum of the total Revolving Credit Exposures
shall not exceed the Maximum Availability.

(c)           EXPIRATION DATE. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is thirty days prior to the Maturity Date.

(d)           PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or Event of Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 
25

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

 
(e)           REIMBURSEMENT. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received. by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $1,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 that such payment be financed with a Loan in an equivalent amount
and, to the extent so financed, the Borrower’s obligation to make such payment
shall be discharged and replaced by the resulting Loan. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Except as
provided in Section 2.16(b), promptly following receipt by the Administrative
Agent of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f)           OBLIGATIONS ABSOLUTE. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 
26

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

 
(g)           DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent, the Lenders and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.

(h)           INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.11(a) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.

(i)           REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank; provided that each
Issuing Bank (including any successor Issuing Bank) shall be a Lender hereunder.
The Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.10(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit, and all Letters of Credit
previously issued by the replaced Issuing Bank shall remain Letters of Credit
under this Agreement notwithstanding the replacement of such Issuing Bank.

 
27

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

 
(j)           CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that is two Business Days after the Borrower
receives notice from the Administrative Agent or the Required Lenders demanding
the deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower described in clause (h) or (i) of
Article VII. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Obligations. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Obligations has been accelerated, be applied to satisfy other
Obligations. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived to the
satisfaction of the Required Lenders or each of the Lenders if required
herein.  Upon demand by the Administrative Agent at any time while a Lender is a
Defaulting Lender, the Borrower shall deliver to the Administrative Agent within
one Business Day of such demand, cash collateral or other credit support
satisfactory to the Administrative Agent in its sole discretion in an amount
equal to such Defaulting Lender’s Applicable Percentage of the LC Exposure then
outstanding.

(k)           INFORMATION TO LENDERS. The Administrative Agent shall
periodically deliver to the Lenders information setting forth the stated amount
of all outstanding Letters of Credit.  Other than as set forth in this
subsection, the Administrative Agent shall have no duty to notify the Lenders
regarding the issuance or other matters regarding Letters of Credit issued
hereunder.  The failure of the Administrative Agent to perform its requirements
under this subsection shall not relieve any Lender from its obligations under
Section 2.04(d) and (e) hereof.

 
28

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

 
SECTION 2.05. FUNDING OF BORROWINGS.
 
(a)           Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time on the date such Loan is to be made in accordance
hereunder, to the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower designated by the
Borrower in the applicable Borrowing Request; provided that ABR Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.04(e)
shall be remitted by the Administrative Agent to the Issuing Bank.

(b)           Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

SECTION 2.06. INTEREST ELECTIONS.
 
(a)           Each Loan initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Loan, shall have
an initial Interest Period as specified in such Borrowing Request or as
otherwise set forth herein.  Thereafter, the Borrower may elect to convert such
Loan to a different Type or to continue such Loan and, in the case of a
Eurodollar Loan, may elect Interest Periods therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.

(b)           To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.

 
29

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

 
(c)           Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

(i)           the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);

(ii)           the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

(iii)           whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

(iv)           if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period.”

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d)           Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e)           If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Loan prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Loan shall be converted to a
Eurodollar Loan with an Interest Period of one month’s duration. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing (i)
no outstanding Loan may be converted to or continued as a Eurodollar Loan and
(ii) unless repaid, each Eurodollar Loan shall be converted to an ABR Loan at
the end of the Interest Period applicable thereto.

SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS.
 
(a)           Unless previously terminated, the Commitments shall terminate on
the Maturity Date.

(b)           The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $100,000 and not less than
$1,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.09, the Revolving Credit Exposures would exceed the Maximum
Availability.

 
30

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

 
(c)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Other than in connection with the termination of the Commitment of a Defaulting
Lender pursuant to Section 2.18(b), each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.08. REPAYMENT OF LOANS, EVIDENCE OF DEBT.
 
(a)           The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan together with all accrued interest and all other Obligations
(other than contingent, indemnification obligation owing to the Administrative
Agent, the Issuing Bank and the Lenders hereunder) on the Maturity Date.

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

(c)           The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereto.

(d)           The entries made in the accounts maintained pursuant to paragraph
(b) and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

 
31

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

 
SECTION 2.09. PREPAYMENT OF LOANS.
 
(a)           The Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.

(b)           The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Loan, not later than 11:00 a.m., New York City time,
three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Loan, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice relating to a Loan,
the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $1,000,000. Each prepayment of a Loan
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.11 and any fees due and payable under Section 2.14.

(c)           If at any time a Consolidated Business receives proceeds from the
sale, transfer, assignment, conveyance or refinancing of any Real Property or
any interest in any Real Property, the Borrower shall prepay a portion of the
Loan in an amount equal to the Net Cash Proceeds unless the Borrower shall have
obtained prior written consent from the Required Lenders to retain the Net Cash
Proceeds. In addition, at the time of such prepayment, the Borrower shall
deliver to the Administrative Agent and the Lenders a certificate, in form and
substance reasonably satisfactory to the Administrative Agent, demonstrating
compliance (after giving effect to the sale of such Real Property) with the
covenants set forth in Section 5.05 and Article VI.  To the extent the Borrower
is unable to show compliance with such covenants, such mandatory prepayment
shall permanently reduce the aggregate amount of the Commitments hereunder by an
amount equal to such prepayment.   In the event of a required prepayment in
accordance with this clause (c), the Borrower shall simultaneously with the
receipt of such Net Cash Proceeds make such prepayment together with the
interest accrued to the date of the prepayment on the principal amount prepaid.
In connection with the prepayment of any Loan prior to the maturity thereof, the
Borrower shall also pay any applicable expenses pursuant to Section 2.14 hereof.
Each such prepayment shall be applied to prepay ratably the Loans of the
Lenders. As used in this clause (c) only, the phrase “sale, transfer,
assignment, conveyance or refinancing” shall not include sales or conveyances
among the Consolidated Businesses.

(d)           If at any time the Revolving Credit Exposure exceeds the Maximum
Availability, the Borrower shall be required to prepay a portion of the Loan in
an amount equal to such excess. In the event of a required prepayment in
accordance with this clause (d), the Borrower shall immediately make such
prepayment together with the interest accrued to the date of the prepayment on
the principal amount prepaid and shall, to the extent necessary, return or cause
to be returned to the Issuing Bank such Letters of Credit so that immediately
following such prepayment and return of such Letters of Credit the Revolving
Credit Exposure shall not exceed the Maximum Availability; provided that in lieu
of returning any such Letters of Credit, the Borrower may deposit with the
Administrative Agent cash collateral in accordance with Section 2.04(j). In
connection with the prepayment of any Loan prior to the maturity thereof, the
Borrower shall also pay any applicable expenses pursuant to Section 2.14 hereof.
Each such prepayment shall be applied to prepay ratably the Loans of the
Lenders.

 
32

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

 
(e)           If at any time (i) the Company or the Borrower merges or
consolidates with another Person and the Company or the Borrower, as the case
may be, is not the surviving entity, or (ii) one or more of the Company, the
Borrower, or any of the Borrower’s Subsidiaries ceases to provide property
management and leasing services to at least 80% of the total number of Projects
in which the Consolidated Businesses have an ownership interest (the date any
such event shall occur being the “PREPAYMENT DATE”), the Borrower shall prepay
the Loans in their entirety as if the Prepayment Date were the Maturity Date,
and the Commitment shall be terminated as of the Prepayment Date, without
further notice to the Borrower. In the event of a required prepayment in
accordance with this clause (e), the Borrower shall on the Prepayment Date make
such prepayment together with the interest accrued to the date of the prepayment
on the principal amount prepaid and shall return or cause to be returned all
Letters of Credit to the Issuing Bank. In connection with the prepayment of any
Loan prior to the maturity thereof, the Borrower shall also pay any applicable
expenses pursuant to Section 2.14 hereof.  Each such prepayment shall be applied
to prepay ratably the Loans of the Lenders. Amounts prepaid pursuant to this
clause (e) may not be reborrowed.

SECTION 2.10. FEES.
 
(a)           The Borrower agrees to pay to the Administrative Agent, for the
account of each Lender, an unused facility fee (“UNUSED FACILITY FEE”), which as
of the Fee Payment Date shall accrue at a rate per annum equal to (i) the
applicable Unused Facility Fee Rate times (ii) the average daily difference
between (x) the Commitment of such Lender minus (y) Revolving Credit Exposure of
such Lender, during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates; provided however, that
if such Lender continues to have any Revolving Credit Exposure after its
Commitment terminates, then such Unused Facility Fee shall continue to accrue on
the daily amount of such Lender’s Revolving Credit Exposure from and including
the date on which its Commitment terminates to but excluding the date on which
such Lender ceases to have any Revolving Credit Exposure.

(b)           The Borrower agrees to pay (i) to the Administrative Agent, for
the account of each Lender, a letter of credit fee (“LETTER OF CREDIT FEE”) with
respect to its participation in each Letter of Credit, which shall accrue at a
rate per annum equal to the Applicable Margin for Eurodollar Loans  then in
effect on the average daily amount of such Lender’s LC Exposure attributable to
such Letter of Credit during the period from and including the date of issuance
of such Letter of Credit to but excluding the date on which such Letter of
Credit expires or is drawn in full (including without limitation any LC Exposure
that remains outstanding after the Maturity Date) and (ii) to the Issuing Bank
for its own account a fronting fee (“FRONTING FEE”), which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the Availability Period (or until the date that all Letters of Credit are
irrevocably cancelled, whichever is later), as well as the Issuing Bank’s
standard fees with respect to issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder.  Pursuant to Section
2.11(d), notwithstanding the foregoing, while an Event of Default exists the
rate per annum used to calculate the Letter of Credit Fee pursuant to clause (i)
above shall automatically be increased by an additional 2% per annum.

 
33

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

 
(c)           Accrued fees under paragraphs (a) and (b) above (i) shall be
payable quarterly in arrears on the last day of each March, June, September and
December of each year, commencing on September 30, 2009 and on the Maturity Date
(and if later, the date the Loans and LC Exposure shall be repaid in their
entirety) (each such date, a “FEE PAYMENT DATE”); provided, that any such fees
accruing after the date on which the Commitments terminate shall be payable on
demand.  All fees shall be computed on the basis of a year of three hundred
sixty (360) days and shall be payable for the actual number of days elapsed.

(d)           The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

(e)           All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of Fronting Fee and other standard fees payable to the Issuing
Bank) for distribution, in the case of Unused Facility Fees and Letter of Credit
Fees, to the Lenders.  Fees paid shall not be refundable under any
circumstances.  Upon its receipt of fees to which the Lenders are entitled, the
Administrative Agent shall promptly remit such fees to the Lenders as provided
herein.

SECTION 2.11. INTEREST.
 
(a)           The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate (which rates are subject to change without notice to the
Borrower as specified in the definition of Alternate Base Rate) plus the
Applicable Margin for ABR Loans.

(b)           The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin for Eurodollar Loans.

(c)           [intentionally omitted].

(d)           Notwithstanding the foregoing, while an Event of Default exists,
the Borrower shall pay to the Administrative Agent for the account of each
Lender (i) in the case of the outstanding Loans, interest at a rate per annum
equal to 2% plus the rate otherwise applicable to the outstanding Loan pursuant
to Section 2.11(a) and (b), (ii) in the case of the Letter of Credit Fee, the
rate per annum used to calculate the Letter of Credit Fee pursuant to Section
2.10(b)(i) plus an additional 2% per annum and (iii) in the case of any other
amount outstanding, 2% plus the rate applicable to ABR Loans as provided in
Section 2.11(a).

 
34

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

 
(e)           Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for the immediately preceding calendar month and upon
termination of the Commitments; provided that (i) interest on any Eurodollar
Loan shall be paid at the end of each Interest Period but in no event less
frequently than every three months, (ii) interest accrued pursuant to paragraph
(d) of this Section 2.11 shall be payable on demand, (iii) in the event of any
repayment or prepayment of any Loan, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iv) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

(f)           All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate and Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.12. ALTERNATE RATE OF INTEREST.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a)           the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

(b)           the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period; then
the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Loan to, or continuation of
any Loan as, a Eurodollar Loan shall be ineffective and (ii) if any Borrowing
Request requests a Eurodollar Loan, such Borrowing shall be made as an ABR Loan,
provided that if the circumstances giving rise to such notice affect only one
Interest Period or one Type of Borrowings, then the other Interest Periods and
Type of Borrowings shall be permitted.

SECTION 2.13. INCREASED COSTS.
 
(a)           If any Change in Law shall:

 
(i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or

 
35

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

 
 
(ii)
impose on any Lender or the Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

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

(c)           A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.

(d)           Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided, further, that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

 
36

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

 
SECTION 2.14. BREAK FUNDING PAYMENTS.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.09(b) and is
revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.17, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.15. TAXES.
 
(a)           Any and all payments by or on account of any Obligation shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

(b)           In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

(c)           The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any Obligation (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other 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 or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.

 
37

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

 
(d)           As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(e)           Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.

SECTION 2.16. PAYMENTS GENERALLY, PRO RATA TREATMENT, SHARING OF SET-OFFS.
 
(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the Administrative Agent
at its offices, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.

(b)           If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, toward payment of any indemnities or expense reimbursement due
hereunder or under the Loan Documents to the Administrative Agent, (ii) second,
toward payment of any indemnities or expense reimbursement due hereunder or
under the Loan Documents to the Issuing Bank or any Lender, (iii) third, toward
payment of interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to
such parties, (iv) fourth, toward payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties, (v) fifth, toward cash collateralization of any Letters of
Credit then outstanding to the extent so required to be paid in accordance with
the terms hereunder and (vi) sixth, toward payment of all other Obligations
owing hereunder or under the other Loan Documents.

 
38

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

 
(c)           If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans and participations
in LC Disbursements of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans and participations in LC Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

(d)           Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 
39

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

 
SECTION 2.17. MITIGATION OBLIGATIONS, REPLACEMENT OF LENDERS.
 
(a)           If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b)           If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Bank, which consent shall not
unreasonably be withheld), (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments.  A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

SECTION 2.18. DEFAULTING LENDERS
 
    (a)           In addition to the rights and remedies that may be available
to the Administrative Agent or the Borrower under this Agreement or applicable
law with respect to a Defaulting Lender, a Defaulting Lender’s right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Administrative Agent or
to be taken into account in the calculation of the Required Lenders, shall be
suspended during the pendency of such failure or refusal.  If a Lender is a
Defaulting Lender because it has failed to make timely payment to the
Administrative Agent of any amount required to be paid to the Administrative
Agent hereunder (without giving effect to any notice or cure periods), in
addition to other rights and remedies which the Administrative Agent or the
Borrower may have under the immediately preceding provisions or otherwise, the
Administrative Agent shall be entitled (i) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date on
which the payment was due until the date on which the payment is made at the
rate otherwise set forth herein or if no rate is otherwise set forth herein at
the Federal Funds Effective Rate, (ii) to withhold or setoff and to apply in
satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest.  Any amounts received by the Administrative Agent in
respect of a Defaulting Lender’s Loans shall not be paid to such Defaulting
Lender and shall be held uninvested by the Administrative Agent and either
applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon such Defaulting Lender’s
curing of its default.

 
40

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

 
    (b)           Any Lender who is not a Defaulting Lender may, but shall not
be obligated to, in its sole discretion, acquire all or a portion of a
Defaulting Lender’s Commitments.  Any Lender desiring to exercise such right
shall give written notice thereof to the Administrative Agent and the Borrower
no sooner than 2 Business Days and not later than 5 Business Days after
receiving written notice from Administrative Agent that such Defaulting Lender
became a Defaulting Lender.  If more than one Lender exercises such right, each
such Lender shall have the right to acquire an amount of such Defaulting
Lender’s Commitments in proportion to the Commitments of the other Lenders
exercising such right.  If after such 5th Business Day, the Lenders have not
elected to purchase all of the Commitments of such Defaulting Lender, then the
Borrower may, by giving written notice thereof to the Administrative Agent, such
Defaulting Lender and the other Lenders, either (i) demand that such Defaulting
Lender assign its Commitments subject to and in accordance with the provisions
of Section 9.04.(b) for the purchase price provided for below or (ii) terminate
the Commitments of such Defaulting Lender.  No party hereto shall have any
obligation whatsoever to initiate any such replacement or to assist in finding
such assignee.  Upon any such purchase or assignment, the Defaulting Lender’s
interest in the Loans and its rights hereunder (but not its liability in respect
thereof or under the Loan Documents or this Agreement to the extent the same
relate to the period prior to the effective date of the purchase) shall
terminate on the date of purchase, and the Defaulting Lender shall promptly
execute all documents reasonably requested to surrender and transfer such
interest to the purchaser or assignee thereof, including an appropriate
Assignment and Assumption and, notwithstanding Section 9.04.(b), shall pay to
the Administrative Agent an assignment fee in the amount of $7,000.  The
purchase price for the Commitments of a Defaulting Lender shall be equal to the
amount of the principal balance of the Loans outstanding and owed by the
Borrower to the Defaulting Lender plus any accrued but unpaid interest thereon
and accrued but unpaid fees.  Prior to payment of such purchase price to a
Defaulting Lender, the Administrative Agent shall apply against such purchase
price any amounts retained by the Administrative Agent pursuant to the last
sentence of the immediately preceding subsection (a).  The Defaulting Lender
shall be entitled to receive amounts owed to it by the Borrower under the Loan
Documents which accrued prior to the date of the default by the Defaulting
Lender, to the extent the same are received by the Administrative Agent from or
on behalf of the Borrower.  There shall be no recourse against any Lender or the
Administrative Agent for the payment of such sums except to the extent of the
receipt of payments from any other party or in respect of the Loans.

 
41

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

 
SECTION 2.19. INACCURATE FINANCIAL STATEMENTS OR COMPLIANCE CERTIFICATES.  If
the Administrative Agent and/or any Lender determines that any financial
statement, Quarterly Compliance Certificate or Annual Compliance Certificate
delivered pursuant to this Agreement is inaccurate (regardless of whether this
Agreement or the Commitments are in effect when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin or Unused Facility Fee Rate for any period (an “APPLICABLE
PERIOD”) than the Applicable Margin and/or Unused Facility Fee Rate applied for
such Applicable Period, and only in such case, then the Borrower shall
immediately (i) deliver to the Administrative Agent a corrected compliance
certificate for such Applicable Period, (ii) determine the Applicable Margin and
Unused Facility Fee Rate for such Applicable Period based on the corrected
financial statements and compliance certificate, and (iii) pay to the
Administrative Agent for the account of the Lenders the accrued additional
interest and/or fees owing as a result of such increased Applicable Margin
and/or Unused Facility Fee Rate for such Applicable Period, which payment shall
be promptly applied by the Administrative Agent in accordance with the terms of
this Agreement. This subsection shall not in any way limit the rights of the
Administrative Agent and Lenders (x) with respect to Section 2.11(d) or
(y) under Article VII.

ARTICLE III  − REPRESENTATIONS AND WARRANTIES

The Borrower and the Company represent and warrant to the Administrative Agent
and each Lender that:

SECTION 3.01. ORGANIZATION: POWERS.
 
Each of the Consolidated Businesses is duly organized, validly existing and in
good standing (or such similar concept) under the laws of the jurisdiction of
its organization, has all requisite power and authority to carry on its business
as now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where it owns property or where the conduct of its business or the
ownership of its property or assets (including, without limitation, the
Projects) requires such qualification. No Consolidated Business is a “foreign
person” within the meaning of Section 1445 of the Code.

SECTION 3.02. AUTHORIZATION, ENFORCEABILITY.
 
(a)           The Transactions have been duly authorized by all necessary
partnership action of the Borrower, and the General Partner has the requisite
power and authority to execute, deliver and perform this Agreement and the other
Loan Documents on behalf of the Borrower. The Guaranty has been duly authorized
by all necessary action of each Guarantor, and each Guarantor has the requisite
power and authority to execute, deliver and perform the Guaranty and the other
Loan Documents to which it is a party. This Agreement and each other Loan
Document to which the Borrower is a party has been duly executed and delivered
by the Borrower and constitutes a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. The
Guaranty and each other Loan Document to which any Guarantor is a party has been
duly executed and delivered by such Guarantor and constitutes a legal, valid and
binding obligation of such Guarantor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

 
42

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

 
(b)           Schedule 3.02, as of the Effective Date, contains a diagram
indicating the ownership structure of the Company, the Borrower and their
respective Subsidiaries, indicating the nature of such interest with respect to
each Person included in such diagram and accurately sets forth (1) the correct
legal name of such Person, the jurisdiction of its incorporation or organization
and the jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise, and (2) the authorized, issued and outstanding shares
or interests of each class of securities of such Person.  None of such issued
and outstanding Equity Interests of the Borrower or any of the Subsidiaries of
the Company or the Borrower is subject to any vesting, redemption, or repurchase
agreement, and there are no warrants or options outstanding with respect to such
securities, except as noted on such Schedule.  The outstanding Equity Interests
of the Company, the Borrower and each of their respective Subsidiaries is duly
authorized, validly issued, fully paid and nonassessable.  As of the Effective
Date, neither the Company nor the Borrower has any Subsidiaries other than as
set forth on such Schedule 3.02.

SECTION 3.03. GOVERNMENTAL APPROVALS, NO CONFLICTS.  Neither the Transactions
nor the execution, delivery and performance of the Loan Documents by the
Borrower, the Company or any of their Subsidiaries, as the case may be, (a)
requires any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except as may be required under applicable
federal securities laws, (b) violates any applicable law or regulation or the
charter, by-laws, partnership agreement or other organizational documents of the
Company, the Borrower or any of their Subsidiaries, or any order of any
Governmental Authority, (c) violates or results in a default under any
indenture, agreement or other instrument binding upon the Company, the Borrower
or any of their Subsidiaries or their assets, or give rise to a right thereunder
to require any payment to be made by the Company, the Borrower or any of their
Subsidiaries or (d) results in the creation or imposition of any Lien on any
asset of the Company, the Borrower or any of their Subsidiaries.

SECTION 3.04. FINANCIAL CONDITION: NO MATERIAL ADVERSE CHANGE.  (a) The Borrower
has heretofore furnished to the Administrative Agent and the Lenders (i) the
Company’s annual audited financial statements for the fiscal year ended December
31, 2008, reported on by PriceWaterhouseCoopers, LLP, independent public
accountants, and (ii) the Company’s quarterly financial statements for the
quarter ended June 30, 2009, certified by the Company’s chief financial officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Consolidated
Businesses as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.

 
43

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

 
(b)           Since December 31, 2008, there has been no change, event or
circumstance which has had or is reasonably likely to have a Material Adverse
Effect.

(c)           None of the Company, the Borrower nor any of their respective
Subsidiaries has any Contingent Obligation or liability for any taxes, long-term
leases or commitments, not reflected in its audited financial statements
delivered to the Administrative Agent and the Lenders on or prior to the
Effective Date or otherwise disclosed to the Administrative Agent and the
Lenders in writing, which will have or is reasonably likely to have a Material
Adverse Effect.

(d)           Schedule 3.04 sets forth, as of July 31, 2009, all Indebtedness of
the Company, the Borrower and their respective Subsidiaries and there are no
defaults in the payment of principal or interest on any such Indebtedness and no
payments thereunder have been deferred or extended beyond their stated maturity.

SECTION 3.05. PROPERTIES.
 
(a)           Each of the Company, the Borrower and their Subsidiaries has good
and marketable title to, or valid leasehold interests in, all its Property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes. Ownership of all wholly
owned Projects and other Property of the Consolidated Businesses is held by the
Borrower and its Subsidiaries and is not held directly by the Company.

(b)           There are no pending or, to the best knowledge of the Borrower,
threatened proceedings or actions to revoke, attack, invalidate, rescind or
modify in any material respect (i) the zoning of any Projects, or any part
thereof, or (ii) any building or other permits heretofore issued with respect to
any Project, or asserting that any such zoning or permits do not permit the
operation of any such Project or any part thereof or that any improvements
located on such Project cannot be operated in accordance with its intended use
or is in violation of applicable law. There are no pending or, to the best
knowledge of the Borrower, threatened or contemplated proceedings relating to
any (A) taking by eminent domain or other condemnation of any portion of any
Project, (B) condemnation or relocation of any roadways abutting any Project and
(C) denial of access to any Project from any point of access to such Project
which would have, or is reasonably likely to have, a Material Adverse Effect.
Each Project has adequate and permanent legal access to water, gas and
electrical public utilities, storm, and sanitary sewerage facilities, other
required public utilities (with respect to each of the aforementioned items by
means of either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting such
Project), parking and means of access between such Project and public highways
over recognized curb cuts; and all of the foregoing comply in all material
respects with all applicable laws, rules and regulations of Governmental
Authorities.

 
44

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

 
(c)           Neither the existence of any Improvements upon a Project or the
present use or condition of any Project violates in any material respect any
applicable laws, rules and regulations of Governmental Authorities. Each Project
may be operated in its current fashion and the Consolidated Businesses have
received no notices from any Governmental Authority alleging any material
violation by any Project of any applicable laws, rules or
regulations.  Certificates of occupancy have been issued for all of the
Improvements located on the Projects, and the use of such Improvements are
covered by all other certificates and permits required by applicable laws,
rules, regulations, and ordinances or in connection with the use, occupancy, and
operation thereof. No material portion of any Projects, nor any Improvements
located on such Projects that are material to the operation, use, or value
thereof, have been damaged in any respect as a result of any fire, explosion,
accident, flood, or other casualty, except to the extent that the same have been
restored to their condition prior thereto. No written notices of material
violation of any federal, state, or local law or ordinance or order or
requirement have been received with respect to any Projects.

(d)           There are no pending or, to the best of Borrower’s knowledge,
proposed special or other assessments for public improvements or otherwise
affecting any Project, nor, to the best of Borrower’s knowledge, are there any
contemplated improvements to any Projects that may result in such special or
other assessments.

(e)           Each Project is free of material structural defects and all
building systems contained therein and required for the operation of each
Project are in good working order subject to ordinary wear and tear.

(f)           Each Project is being operated and maintained in accordance with
the Borrower’s usual and customary business practices.

SECTION 3.06. INTELLECTUAL PROPERTY.  The Company, the Borrower and their
Subsidiaries own, or are licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to their respective
businesses, and the use thereof by the Company, the Borrower and their
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07. LITIGATION AND ENVIRONMENTAL MATTERS.
 
(a)           There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the best knowledge
of the Borrower, threatened against or affecting the Company, the Borrower or
any of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve this Agreement or the Transactions.

(b)           Except with respect to matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Company, the Borrower nor any of its Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.

 
45

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

 
(c)           Except as may be disclosed in detail by the Borrower to the
Administrative Agent and the Lenders in writing from time to time, no Hazardous
Materials are located on or about any of the Properties, and the Properties do
not contain any underground tanks for the storage or disposal of Hazardous
Materials; provided that notwithstanding the delivery of any such notice, the
Borrower and each of its Subsidiaries shall at all times be in compliance with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its Properties except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Further, (i) the Borrower has not, and to the knowledge of the Borrower
no other Person has, (A) stored or treated Hazardous Materials, (B) disposed of
Hazardous Materials or incorporated Hazardous Materials into, on or around any
of the Properties, and (C) permitted any underground storage tanks to exist on
any of the Properties except where such storage, treatment or disposal of
Hazardous Materials or existence of underground storage tanks, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, (ii) no complaint, order, citation or notice with regard to air
emissions, water discharges, noise emissions, or Hazardous Materials, if any, or
any other environmental, health, or safety matters affecting any of the
Properties or any portion thereof, from any person, government or entity, has
been issued to the Borrower which has not been remedied or cured except where
failure to have remedied or cured any of the foregoing, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect and (iii) the Borrower and each of the other Consolidated Businesses has
complied in all material respects with all applicable laws, rules or regulations
affecting the Properties.

SECTION 3.08. COMPLIANCE WITH LAWS AND AGREEMENTS.  Each of the Company, the
Borrower and their Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.

SECTION 3.09. INVESTMENT COMPANY STATUS.  None of the Company, the Borrower nor
any of their Subsidiaries is an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940 and none of the Company,
the Borrower nor any of their Subsidiaries is subject to any other applicable
law which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Agreement or to perform its
obligations under any Loan Document to which it is a party.

SECTION 3.10. TAXES.  Each of the Company, Borrower and each of their
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the the Company, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.

 
46

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

 
SECTION 3.11. ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $250,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $250,000 the fair market value of
the assets of all such underfunded Plans.

SECTION 3.12. DISCLOSURE.  The Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which the Company, the Borrower or any of their Subsidiaries is
subject, and all other matters known to the Borrower, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or the
Loan Documents or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

SECTION 3.13. INSURANCE.  Schedule 3.13 accurately sets forth as of the
Effective Date all insurance policies and programs currently in effect with
respect to the Properties, assets and business of the Company, the Borrower and
their Subsidiaries, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, and (v) the expiration date thereof. The Borrower has delivered
to the Administrative Agent copies of all insurance policies set forth on
Schedule 3.13. Such insurance policies and programs are (i) currently in full
force and effect, (ii) together with payment by the insured of scheduled
deductible payments, are in amounts sufficient to cover the replacement value of
the respective Properties and assets of the Company, the Borrower and their
Subsidiaries and (iii) in form and substance that is commercially reasonable and
customary for companies with similar operations and real estate holdings as the
Company, the Borrower and their Subsidiaries parties thereto.

 
47

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

 
SECTION 3.14. REIT STATUS.  The Company qualifies as a REIT under the Code.

SECTION 3.15. SOLVENCY.  Within the meaning of Section 548 of Title 11 of the
United States Code entitled “Bankruptcy” as now or hereafter in effect, or any
successor thereto (the “BANKRUPTCY CODE”), the Uniform Fraudulent Transfer Act
and the Uniform Fraudulent Conveyance Act as in effect in any relevant
jurisdiction, and any similar laws or statutes, and after giving effect to the
transactions contemplated hereby: the fair saleable value of each of the
Borrower’s and the Company’s assets exceeds and will, immediately following the
making of the Loans, exceed such Person’s total liabilities including, without
limitation, subordinated, unliquidated, disputed, and contingent liabilities;
the fair saleable value of each of the Borrower’s and Company’s assets is and
will, immediately following the making of each Loan, be greater than the each of
the Borrower’s and the Company’s probable liabilities, including the maximum
amount of each of the Borrower’s and the Company’s contingent liabilities on
such Person’s debts as such debts become absolute and matured; each of the
Borrower’s and the Company’s assets do not and, immediately following the making
of the Loans will not, constitute unreasonably small capital to carry out such
Person’s business as conducted or as proposed to be conducted; and neither the
Borrower nor the Company intends to, and does not believe that such Person will,
incur debts and liabilities (including without limitation contingent liabilities
and other commitments) beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by such
Person and the amounts to be payable on or in respect of obligations of such
Person).

SECTION 3.16. MARGIN REGULATIONS.  Neither the Borrower, the Company nor any
Guarantor is engaged in the business of extending credit for the purpose of
purchasing or carrying any margin stock or margin securities (within the meaning
of Regulations G, T, U and X issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Loan will be used, directly or
indirectly, to purchase or carry any margin stock or margin securities or to
extend credit to others for the purpose of purchasing or carrying any margin
stock or margin securities. None of the transactions contemplated by this
Agreement will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended.

SECTION 3.17. OFAC.  Neither the Borrower, the Company or any of their
Subsidiaries (i) is a person whose property or interest in property is blocked
or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001),
as amended), (ii) engages in any dealings or transactions prohibited by Section
2 of such executive order, or is otherwise associated with any such person in
any manner violative of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

SECTION 3.18. PATRIOT ACT.  Each of the Borrower, the Company and each of their
Subsidiaries is in compliance, in all material respects, with (i) the Trading
with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001, as amended).  No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

 
48

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

 
SECTION 3.19. REPRESENTATIONS AND WARRANTIES IN THE LOAN DOCUMENTS.  The
representations and warranties of the Borrower, the Company and each of their
respective Subsidiaries, as the case may be, in each of the Loan Documents are
true, complete and correct in all material respects, and the Borrower and the
Company hereby confirms each such representation and warranty as being true,
complete and correct in all material respects as of the relevant dates with the
same effect as if set forth in its entirety herein.

SECTION 3.20. SENIOR DEBT STATUS.  The Obligations rank and will rank at least
pari passu in priority of payment with all other Indebtedness of the Borrower
and the Company other than Indebtedness of the Borrower or the Company secured
by a Lien permitted pursuant to Section 6.02 hereof.  There is no Lien upon or
with respect to any of the properties or income of the Borrower or the Company
and each of their Subsidiaries which secures Indebtedness or other obligations
of any Person except as otherwise permitted under Section 6.02 hereof.

ARTICLE IV – CONDITIONS

SECTION 4.01. EFFECTIVE DATE.  Subject to Section 5.14 hereof, the obligations
of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

(a)           The Administrative Agent (or its counsel) shall have received from
the Borrower, the Company and each party thereto a counterpart of this Agreement
and all other Loan Documents to which it is a party, signed on behalf of such
party including, without limitation, the Guaranty.

(b)           The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Nixon Peabody LLP, counsel for the Borrower and the Company,
substantially in the form of Exhibit E, and covering such other matters relating
to the Borrower, the Company, the Guarantors, this Agreement or the Transactions
as the Required Lenders shall reasonably request. The Borrower hereby requests
such counsel to deliver such opinion.

 
49

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

 
(c)           The Administrative Agent shall have received a certificate of each
of the Borrower and the Company signed by an authorized officer of such Person
as of the date hereof certifying as to the following:

 
(i)
A true and accurate copy or recitation of actions taken by such Person to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents;

 
(ii)
The incumbency, names and signatures of the officers of such Person authorized
to execute and deliver this Agreement and the other the Loan Documents and, with
respect to the Borrower, the officers of the Borrower then authorized to deliver
Borrowing Request and to request the issuance of Letters of Credit;

 
(iii)
True and accurate copies of the articles or incorporation, certificate of
limited partnership, certificate of formation, or comparable organizational
document, as applicable, and the bylaws, partnership agreement or operating
agreement, as applicable, of such Person with all amendments thereto; and

 
(iv)
A certificate of good standing or certificate of similar meaning with respect to
each such Person issued as of a recent date by the Secretary of State of the
state of formation of each such Person.

(d)           The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, an Executive Vice President or a
Financial Officer of the General Partner, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.

(e)           No change in the business, assets, management, operations,
financial condition or prospects of the Borrower, the Company and each of its
Subsidiaries or any of their Properties shall have occurred since December 31,
2008, which change, in the judgment of the Administrative Agent, will have or is
reasonably likely to have a Material Adverse Effect.

(f)           Except as disclosed in writing to the Administrative Agent and the
Lenders, since December 31, 2008, neither the Borrower nor the Company shall
have (i) entered into any (as determined in good faith by the Administrative
Agent) commitment or transaction, including, without limitation, transactions
for borrowings and capital expenditures, which are not in the ordinary course of
the Borrower’s or the Company’s business, (ii) declared or paid any dividends or
other distributions other than regular quarterly dividends and distributions
paid in February, May and August, 2009, and such dividends or distribution
expressly permitted hereunder or (iv) redeemed or issued any equity Securities
other than (1) shares of common stock, par value $.01 per share, of the Company
(x) issued from time to time pursuant to the terms and conditions of the
Company’s Dividend Reinvestment and Stock Purchase, Resident Stock Purchase and
Employee Stock Purchase Plan and (y) issued in exchange for limited partnership
interests in the Borrower and (2) options to purchase common stock and shares of
restricted stock issued to employees and directors pursuant to the Company’s
stock benefit plan.

 
50

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

 
(g)           Since December 31, 2008, no agreement or license relating to the
business, operations or employee relations of the Borrower or any of its
Properties shall have been terminated, modified, revoked, breached or declared
to be in default, the termination, modification, revocation, breach or default
under which, in the reasonable judgment of the Administrative Agent, would
result in a Material Adverse Effect.

(h)           Since December 31, 2008, no material adverse change shall have
occurred in the conditions in the capital markets or the market for loan
syndications generally in the reasonable judgment of the Administrative Agent.

(i)           The Administrative Agent shall have received copies of all
insurance policies set forth on Schedule 3.13.

(j)           The Administrative Agent shall have received satisfactory evidence
of the termination of that certain Credit Agreement dated as of August 23, 1999,
by and among the Borrower, the financial institutions party thereto and the
Administrative Agent.

(k)           The making of the Loans and the issuance of the Letters of Credit
shall not contravene any law, regulation or order of any Governmental Authority
applicable to the Borrower, the Company, the Administrative Agent or any Lender.

(l)           No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
Transactions contemplated hereby or thereby or which would make it inadvisable
to consummate the transactions contemplated by this Agreement or the other Loan
Documents.

(m)           The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02. EACH CREDIT EVENT.  The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a)           The representations and warranties of the Company and the Borrower
set forth in this Agreement shall be true and correct on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.

 
51

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

 
(b)           At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default or Event of Default shall have occurred and be
continuing.

(c)           No event has occurred since the date of this Agreement which has
had, and continues to have, or is reasonably likely to have, a Material Adverse
Effect.

(d)           The Borrower shall have delivered a certificate in the form of
Exhibit D-1 or D-2, as applicable, attached hereto, signed by a Financial
Officer of the Borrower, representing and certifying that immediately prior to
and immediately after the requested Borrowing or the issuance, amendment or
extension of a Letter of Credit, the Company, the Borrower and their
Subsidiaries are in compliance with the representations, warranties and
covenants set forth in this Agreement.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a)
through (d) of this Section 4.02.

ARTICLE V − AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower and the Company covenant
and agree with the Lenders that:

SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower will
furnish to the Administrative Agent and each Lender:

(a)           QUARTERLY REPORTS.

(i)           COMPANY QUARTERLY FINANCIAL REPORTS. As soon as practicable, and
in any event within forty-five (45) days after the end of each fiscal quarter in
each fiscal year (other than the last fiscal quarter in each fiscal year),
consolidated balance sheets and the related consolidated statements of
operations and cash flow of the Company, the Borrower and their Subsidiaries on
Form 10-Q as at the end of such period and, with respect to the statements of
operations and cash flow, setting forth in comparative form the corresponding
figures for the corresponding period of the previous fiscal year, certified by a
Financial Officer of the Company as fairly presenting the consolidated financial
position of the Company, the Borrower and their Subsidiaries as at the date
indicated and the results of their operations and cash flow for the period
indicated in accordance with GAAP, subject to normal adjustments but without
certain footnote disclosures required by GAAP (as permitted by the requirements
for reporting on Form 10-Q).

 
52

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

 
(ii)           QUARTERLY COMPLIANCE CERTIFICATES. Together with each delivery of
any quarterly report pursuant to clauses (i) of this Section 5.01(a), the
Borrower shall deliver a certificate of the Company in the form of Exhibit F
attached hereto (the “QUARTERLY COMPLIANCE CERTIFICATE”), signed by the a
Financial Officer of the Company, representing and certifying (1) that the
Financial Officer signatory thereto has reviewed the terms of the Loan
Documents, and has made, or caused to be made under his/her supervision, a
review in reasonable detail of the transactions and consolidated financial
condition of the Company, the Borrower and their Subsidiaries, during the fiscal
quarter covered by such reports, that such review has not disclosed the
existence during or at the end of such fiscal quarter, and that such officer
does not have knowledge of the existence as at the date of such Quarterly
Compliance Certificate, of any condition or event which constitutes an Event of
Default or Default or mandatory prepayment event, or, if any such condition or
event existed or exists, and specifying the nature and period of existence
thereof and what action the Company and/or the Borrower or any of its
Subsidiaries has taken, is taking and proposes to take with respect thereto; (2)
the calculations evidencing compliance with each of the financial covenants set
forth in Section 5.05 and Article VI hereof; and (3) a schedule of the average
occupancy level of all Unencumbered Eligible Projects for such fiscal quarter.

(b)           ANNUAL REPORTS.

(i)           COMPANY FINANCIAL STATEMENTS. As soon as practicable, and in any
event within ninety (90) days after the end of each fiscal year, (i) an audited
consolidated balance sheet and the related consolidated statements of operations
and cash flow of the Company and its Subsidiaries on Form 10-K as at the end of
such fiscal year and a report setting forth in comparative form the
corresponding figures from the consolidated financial statements of the Company
and its Subsidiaries for the prior fiscal year, (ii) a report with respect
thereto of PriceWaterhouseCoopers, LLP or other nationally recognized
independent certified public accountants acceptable to the Administrative Agent,
which report shall be unqualified and shall state that such financial statements
fairly present the consolidated financial position of the Company and its
Subsidiaries as at the dates indicated and the consolidated results of its
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
PriceWaterhouseCoopers, LLP or any such other independent certified public
accountants, if applicable, shall concur and which shall have been disclosed in
the notes to the financial statements) (which report shall be subject to the
confidentiality limitations set forth herein); and (iii) in the event that the
report referred to in clause (ii) above is qualified, a copy of the management
letter or any similar report delivered to the Company or to any officer or
employee thereof by such independent certified public accountants in connection
with such financial statements. The Administrative Agent and each Lender
(through the Administrative Agent) may, with the consent of the Company (which
consent shall not be unreasonably withheld), communicate directly with such
accountants, with any such communication to occur together with a representative
of the Company, at the expense of the Administrative Agent (or the Lender
requesting such communication), upon reasonable notice and at reasonable times
during normal business hours.

 
53

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

 
(ii)           ANNUAL COMPLIANCE CERTIFICATES. Together with each delivery of
any annual report pursuant to clauses (i) of this Section 5.01(b), the Borrower
shall deliver a certificate of the Company in the form of Exhibit F attached
hereto (the “ANNUAL COMPLIANCE CERTIFICATE”), signed by a Financial Officer of
the Company, representing and certifying (1) that the officer signatory thereto
has reviewed the terms of the Loan Documents, and has made, or caused to be made
under his/her supervision, a review in reasonable detail of the transactions and
consolidated financial condition of the Company, the Borrower and its
Subsidiaries, during the accounting period covered by such reports, that such
review has not disclosed the existence during or at the end of such accounting
period, and that such officer does not have knowledge of the existence as at the
date of such Annual Compliance Certificate, of any condition or event which
constitutes an Event of Default or Default or mandatory prepayment event, or, if
any such condition or event existed or exists, and specifying the nature and
period of existence thereof and what action the Company and/or the Borrower or
any of its Subsidiaries has taken, is taking and proposes to take with respect
thereto; (2) the calculations evidencing compliance with each of the financial
covenants set forth in Section 5.05 and Article VI hereof and (3) a schedule of
the average occupancy level of all Unencumbered Eligible Projects for such
fiscal year.

 
54

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

 
(c)           ACCOUNTANT’S CERTIFICATE.  Concurrently with any delivery of
financial statements under clause (b) above, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines).

(d)           PROPERTY REPORTS. When requested by the Administrative Agent or
the Required Lenders, a rent roll and income statement with respect to any
Project.

(e)           COMMUNITY REINVESTMENT ACT. Promptly following any request
therefor, such other information regarding the Loans and the use thereof,
Qualified Community Reinvestment Projects and the Company, the Borrower and its
Subsidiaries as any Lender may request to determine compliance by the Projects
with the Community Reinvestment Act or other applicable federal or state law;
provided that the Borrower shall have no obligation hereunder to deliver any
such information to any Lender more than one time in any calendar quarter.

(f)           THIRD PARTY DUE DILIGENCE REPORTS.  Promptly upon the
Administrative Agent’s request thereof, copies of all due diligence and periodic
monitoring reports, if any, submitted to or performed with respect to any
Project, the Company, the Borrower or their Subsidiaries by a third party, which
are reasonably requested by the Administrative Agent.

(g)           PATRIOT ACT INFORMATION.  From time to time and promptly upon each
request, information identifying the Borrower and any Guarantor as a Lender may
request in order to comply with the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001) as amended, and regulations promulgated in
connection therewith).

(h)           ADDITIONAL INFORMATION. Promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of the Company, the Borrower or any Subsidiary of the Company or the
Borrower, or compliance with the terms of this Agreement, as the Administrative
Agent or any Lender may reasonably request; including, without limitation,
insurance certificates demonstrating the Borrower’s compliance with Section 5.05
hereof.

 
55

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

 
SECTION 5.02. NOTICES OF MATERIAL EVENTS.
 
(a)           The Borrower will furnish to the Administrative Agent and each
Lender prompt written notice of the following:

(i)           the occurrence of any Default or Event of Default;

(ii)           the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

(iii)           the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company, the Borrower or any of their Subsidiaries in
an aggregate amount exceeding $250,000; and

(iv)           any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a certificate
of a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

(b)           The Borrower shall deliver to the Administrative Agent and the
Lenders written notice of each of the following not less than ten (10) Business
Days prior to the occurrence thereof: (i) a sale, transfer or other disposition
of assets by any of the Consolidated Businesses, in a single transaction or
series of related transactions, for consideration in excess of an amount equal
to 10% of the Total Value, (ii) an acquisition of assets by any one or more
Consolidated Business, in a single transaction or series of related
transactions, for consideration in excess of 10% of the Total Value, and (iii)
the grant of a Lien by any one or more Consolidated Business with respect to
assets, in a single transaction or series of related transactions, in connection
with Indebtedness aggregating an amount in excess of 10% of the Total Value. In
addition, simultaneously with delivery of any such notice, the Borrower shall
deliver to the Administrative Agent a certificate of the Borrower and its
Financial Officer certifying that Borrower and the Guarantors are in compliance
with this Agreement and the other Loan Documents both on a historical basis and
on a pro forma basis, exclusive of the property sold, transferred and/or
encumbered and inclusive of the property to be acquired or the indebtedness to
be incurred, together with calculations, in the form of Schedule B to Exhibit F
attached hereto, evidencing compliance with each of the financial covenants set
forth in Article VI hereof.

 
56

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

 
To the extent such proposed transaction, after giving effect to the prepayment
required to be made pursuant to Section 2.09(c), would result in a failure to
comply with the financial covenants set forth herein, the Borrower shall prepay
outstanding Loans in such amount, as determined by the Administrative Agent, as
may be required to reduce the Obligations so that the Borrower will be in
compliance with the covenants set forth herein upon the consummation of the
contemplated transaction.

SECTION 5.03. EXISTENCE, CONDUCT OF BUSINESS.  The Company and the Borrower
will, and will cause each of their Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of their respective businesses.

SECTION 5.04. PAYMENT OF OBLIGATIONS.  The Borrower and the Company will, and
will cause each of their Subsidiaries to, pay its obligations, and liabilities,
including Tax liabilities, that, if not paid, could result in a Material Adverse
Effect before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Company, the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.

SECTION 5.05. MAINTENANCE OF PROPERTIES, INSURANCE, MANAGEMENT.
 
(a)           The Borrower and the Company will, and will cause each of their
Subsidiaries to, (i) keep and maintain all Property useful and necessary to the
conduct of their respective businesses in good working order and condition,
ordinary wear and tear excepted, (ii) from time to time make or cause to be made
all necessary repairs, renovations or replacements of all Property useful and
necessary to the conduct of their respective businesses, and (iii) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are described in Section 3.13 or substantially
similar policies and programs as are acceptable to the Administrative Agent.

(b)           The Borrower and its wholly-owned Subsidiaries, individually or
collectively, shall at all times manage Projects constituting the greater of (i)
80% of Total Value or (ii) 80% of the total number of apartment units comprising
all Projects.

SECTION 5.06. BOOKS AND RECORDS, INSPECTION RIGHT.  The Borrower and the Company
will, and will cause each of their Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower and the
Company will, and will cause each of their Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.

 
57

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

 
SECTION 5.07. COMPLIANCE WITH LAWS.  The Borrower and the Company will, and will
cause each of their Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 5.08. USE OF PROCEEDS AND LETTERS OF CREDIT.  No part of the proceeds of
any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations G, T, U and X. The Borrower shall use the proceeds of the Loans only
for refinancing of existing Indebtedness, working capital needs and general
corporate purposes.

SECTION 5.09. COMPANY STATUS.  The Company shall at all times (a) remain a
publicly traded company listed on the New York Stock Exchange or another
national securities exchange, (b) maintain its status as a “real estate
investment trust” under Sections 856-860 of the Code and (c) retain direct or
indirect management and control of the Borrower.

SECTION 5.10. OWNERSHIP OF PROJECTS AND PROPERTY: UNENCUMBERED ASSETS. The
ownership of substantially all wholly owned Projects and other Property of the
Consolidated Businesses shall be held by the Borrower and its Subsidiaries and
shall not be held directly by the Company.

SECTION 5.11. SHAREHOLDER COMMUNICATION, FILINGS, ETC.  Promptly upon the
mailing or filing thereof, the Borrower shall deliver to the Administrative
Agent and the Lenders copies of all financial statements, reports and proxy
statements mailed to the Company’s shareholders, and copies of all of the
Company’s final registration statements and other final documents filed with the
Securities and Exchange Commission (or any successor thereto) or any national
securities exchange.

SECTION 5.12. FURTHER ASSURANCES.  The Borrower and the Company agree upon
demand of the Administrative Agent to do any act or execute any additional
documents as may be reasonably required by the Administrative Agent to exercise
or enforce its rights under this Agreement, the Notes or the other Loan
Documents and to realize thereon. This covenant shall survive the termination of
this Agreement until payment in full of all amounts due hereunder or under the
Notes and the other Loan Documents, provided that the covenant shall be
reinstated if any payment of all amounts due hereunder or under the Notes and
the other Loan Documents is required to be returned to the payor or any other
party under any applicable bankruptcy law.

SECTION 5.13. NEW GUARANTORS.

 
 
58

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

 

(a)           REQUIREMENTS TO BECOME A GUARANTOR.  The Borrower shall cause any
Subsidiary of the Company or the Borrower that is not already a Guarantor (a
“NEW GUARANTOR”) that owns an Eligible Project that the Borrower would like to
include as an Unencumbered Eligible Project hereunder to execute and deliver to
the Administrative Agent an Accession Agreement to the Guaranty as a condition
to including such Eligible Project as an Unencumbered Eligible Project in
accordance with the terms hereof.

(b)           DELIVERIES WITH RESPECT TO NEW GUARANTORS.  No later than 45 days
following the last day of each fiscal quarter of the Company during which any
New Guarantor has executed and delivered an Accession Agreement, the Borrower
shall deliver to the Administrative Agent each of the items required under
Sections 4.01(b) (which opinion may be delivered by in-house counsel) and (c)
with respect to any entity that was a Guarantor on the Effective Date (without
giving effect to Section 5.14 hereof).

(c)           RELEASE OF GUARANTORS. The Borrower may request in writing that
the Administrative Agent release a Guarantor, other than the Company, if (i)
upon its release as a Guarantor, such entity will no longer own an Unencumbered
Eligible Project and (ii) no Event of Default shall then be in existence or
would occur as a result of such release.  Together with any such request, the
Borrower shall deliver to the Administrative Agent a certificate signed by the
chief financial officer of the Company certifying that the conditions set forth
in immediately preceding clauses (i) and (ii) will be true and correct upon the
release of such Guarantor.  No later than 10 Business Days following the
Administrative Agent’s receipt of such written request and the related
certificate, and so long as the conditions set forth in immediately preceding
clauses (i) and (ii) will be true and correct, the release shall be effective
and the Administrative Agent shall execute and deliver, at the sole cost and
expense of the Borrower, such documents as Borrower may reasonably request to
evidence such release.

SECTION 5.14. POST-CLOSING OBLIGATIONS.  The Borrower shall deliver to the
Administrative Agent the following, each in form and substance reasonably
satisfactory to the Administrative Agent and within thirty days following the
Effective Date:

(a)           The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders) of Nixon Peabody
LLP, counsel for the Guarantors, substantially in the form delivered on the
Effective Date, and covering such other matters relating to the Guarantors
(other than the Company) as shall be reasonably requested by the Administrative
Agent; and

(b)           The Administrative Agent shall have received a certificate of each
of Guarantor (other than the Company) signed by an authorized officer of such
Person as of the date hereof certifying as to the following:

 
(i)
A true and accurate copy or recitation of actions taken by such Person to
authorize the execution, delivery and performance of this Agreement and the
other Loan Documents;

 
59

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

 
 
(ii)
The incumbency, names and signatures of the officers of such Person authorized
to execute and deliver this Agreement and the other the Loan Documents;

 
(iii)
True and accurate copies of the articles or incorporation, certificate of
limited partnership, certificate of formation, or comparable organizational
document, as applicable, and the bylaws, partnership agreement or operating
agreement, as applicable, of such Person with all amendments thereto; and

 
(iv)
A certificate of good standing or certificate of similar meaning with respect to
each such Person issued as of a recent date by the Secretary of State of the
state of formation of each such Person.

ARTICLE VI − NEGATIVE COVENANTS

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower and the Company covenant and agree with the
Administrative Agent and the Lenders that:

SECTION 6.01. INDEBTEDNESS AND OTHER FINANCIAL COVENANTS.
 
(a)           Indebtedness and Other Financial Covenants. The Borrower shall
not, and shall not permit its Subsidiaries to, directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except that the Borrower and/or its Subsidiaries
may create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness to the extent that (i) Total Outstanding
Indebtedness would not exceed 62.5% of Total Value, (ii) Secured Indebtedness of
the Consolidated Businesses would not exceed 60% of Total Value, (iii) Recourse
Secured Indebtedness would not exceed 35% of Total Value, or (iv) Adjusted
Recourse Secured Indebtedness would not exceed 12.5% of Total Value.
Notwithstanding anything to the contrary herein contained, in no event shall (x)
the aggregate amount of completion guarantees with respect to Projects at any
time exceed 15% of Total Value and (y) the aggregate amount of Low Income
Housing Credit Program Guarantees at any time exceed $11 million.

(b)            Minimum Equity Value. The Equity Value shall at no time be less
than $1,250,000,000, plus an amount equal to 85% of all Net Offering Proceeds of
all Equity Issuances effected by the Company or any Subsidiary of the Company
(including without limitation, the Borrower) after June 30, 2009 (other than
Equity Issuances to the Company or any Subsidiary of the Company).

(c)           Minimum Consolidated Interest Coverage Ratio. As of the first day
of each calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of Adjusted EBITDA to Total Interest Expense for such period
shall not be less than 2.0 to 1.0.

 
60

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

 
(d)           Minimum Unsecured Interest Coverage Ratio. As of the first day of
each calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of the sum of Adjusted Unencumbered NOI of all Unencumbered
Eligible Projects to Unsecured Interest Expense shall not be less than 1.75 to
1.0.

(e)           Total Unencumbered Value. At no time shall (i) the Unsecured
Indebtedness of the Consolidated Businesses be greater than 60% of the Total
Unencumbered Value; provided, however, that if the Total Outstanding
Indebtedness exceeds 55.0% of the Total Value, then the Unsecured Indebtedness
of the Consolidated Businesses shall not be greater than 50% of the Total
Unencumbered Value, (ii) the Total Unencumbered Value be less than $300,000,000
or (iii) the Unencumbered Eligible Projects consist of less than fifteen (15)
Eligible Projects.  At no time shall the sum of items (i) and (ii) set forth in
the definition of Total Unencumbered Value be less than $270,000,000.

(f)           Minimum Fixed Charge Coverage Ratio. As of the first day of each
calendar quarter for the immediately preceding four consecutive calendar
quarters, the ratio of Adjusted EBITDA to Fixed Charges shall not be less than
1.6 to 1.0.

(g)           Maximum Availability. The Revolving Credit Exposure shall not at
any time exceed the Maximum Availability. If at any time the Revolving Credit
Exposure exceeds the Maximum Availability, the Borrower shall immediately prepay
a portion of the Loan in an amount equal to such excess as provided for in
Section 2.09(d).

(h)           Minimum Occupancy Level for Unencumbered Eligible Projects. As of
the first day of each calendar quarter for the immediately preceding four
consecutive calendar quarters, the weighted average economic occupancy for
Unencumbered Eligible Projects shall not be less than 80%.

SECTION 6.02. LIENS.  The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
Property now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:

(a)           Permitted Encumbrances; and

(b)           Liens securing permitted Secured Indebtedness, provided that a
maximum Secured Indebtedness in an amount equal to not more than 20% of Total
Value may be secured by any one Project or several cross-collateralized
Projects.

SECTION 6.03.  FUNDAMENTAL CHANGE.
 
(a)           The Borrower will not, and will not permit any of its Subsidiaries
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the Equity
Interests of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing (i) any Person may merge into the Borrower or
any of Subsidiary of the Borrower in a transaction in which the Borrower or such
Subsidiary is the surviving entity, so long as the Borrower shall have delivered
to the Administrative Agent at least thirty (30) days prior to such merger a
certificate signed by the Borrower’s and Company’s respective Financial
Officers, certifying, and providing reasonably detailed calculations to
evidence, on a pro forma basis, compliance by the Borrower and the Company with
the financial covenants contained in Section 6.01 after giving effect to such
merger (ii) any Subsidiary of the Borrower may merge into the Borrower in a
transaction in which the Borrower is the surviving entity, and (iii) any
Subsidiary of the Borrower may merge into any other Subsidiary of the Borrower.

 
61

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

 
(b)           The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Borrower and its Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.

SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITION.  The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly-owned Subsidiary of the Borrower prior to such merger) any Equity
Interests, evidences of indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions) any assets
of any other Person constituting a business unit, except:

(a)           Permitted Investments;

(b)           investments in Real Property;

(c)           investments (including loans) in the Borrower’s wholly-owned
Subsidiaries and in other partnerships, joint ventures, corporations, limited
liability companies or other entities whose principal purpose is to acquire Real
Property to develop or to acquire, own and operate multi-family properties;

(d)           investments in notes secured by mortgages on any Real Property of
any Person;

(e)           investments in Real Property under development or construction;
and

(f)           investments in equity securities issued by a REIT that primarily
owns multi-family properties.

 
62

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

 
Notwithstanding the foregoing, the investments set forth above shall be limited
in the following manner (i) the aggregate amount of investments in land and/or
Real Property under development or construction shall not exceed 10% of Total
Value; (ii) the aggregate amount of investments in partnerships, joint ventures,
corporations, limited liability companies or other entities which are not
wholly-owned by the Borrower or its Subsidiaries shall not exceed 10% of Total
Value; (iii) the aggregate amount of investments by the Borrower and its
Subsidiaries in Properties which are not residential in nature shall not exceed
5% of Total Value; and (iv) the aggregate amount of investments in equity
securities issued by REITs that primarily own multi-family properties shall not
exceed 10% of Total Value.

SECTION 6.05. HEDGING AGREEMENTS. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary of the Borrower is exposed in the
conduct of its business or the management of its liabilities.

SECTION 6.06. TRANSACTIONS WITH AFFILIATES.  Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder or
holders of more than 5% of any class of Equity Interests of the Company or the
Borrower, or with any Affiliate of the Borrower or the Company which is not its
Subsidiary, on terms that are determined by the Board of Directors of the
Company to be less favorable to the Company, the Borrower or any of their
Subsidiaries, as applicable, than those that might be obtained in an arm’s
length transaction at the time from Persons who are not such a holder or
Affiliate. Nothing contained in this Section 6.06 shall prohibit (a) increases
in compensation and benefits for officers and employees of the Company, the
Borrower or any of their Subsidiaries which are customary in the industry or
consistent with the past business practice of the Company, the Borrower or such
Subsidiary, provided that no Event of Default or Default has occurred and is
continuing; (b) payment of customary partners’ indemnities in accordance with
the terms of the partnership agreement of the Borrower as in effect on the date
hereof; or (c) performance of any obligations arising under the Loan Documents.

SECTION 6.07. RESTRICTION ON FUNDAMENTAL CHANGE.  Neither the Borrower nor any
of its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower’s or any such
Subsidiary’s business or Property, whether now or hereafter acquired, except to
the extent permitted pursuant to Section 6.03.

SECTION 6.08. MARGIN REGULATIONS: SECURITIES LAWS.  Neither the Borrower nor any
of its Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.

SECTION 6.09. RESTRICTED PAYMENTS. Neither the Company nor the Borrower shall,
and shall not permit any of their respective Subsidiaries to, declare or make
any Restricted Payment; provided, however, that the Company, the Borrower and
their respective Subsidiaries may declare and make the following Restricted
Payments so long as no Default or Event of Default would result therefrom:

 
63

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

 
(a)           the Borrower may pay cash dividends to the QRS Subsidiary and
other holders of partnership interests in the Borrower with respect to any
fiscal year ending during the term of this Agreement to the extent necessary for
the QRS Subsidiary and the Company to distribute, and the QRS Subsidiary and the
Company may so distribute, cash dividends to its shareholders in an aggregate
amount not to exceed the greater of (i) the amount required to be distributed
for the Company to remain in compliance with Section 3.14 or (ii) 95.0% of Funds
From Operation;

(b)           the Borrower may pay cash dividends to the QRS Subsidiary and
other holders of partnership interests in the Borrower to the extent necessary
to permit the QRS Subsidiary and the Company to make, and the QRS Subsidiary and
the Company may make, cash distributions to its shareholders of capital gains
resulting from gains from certain asset sales to the extent necessary to avoid
payment of taxes on such asset sales imposed under Sections 857(b)(3) and 4981
of the Internal Revenue Code;

(c)           the Company, the Borrower or any Subsidiary of the Company or the
Borrower may acquire the Equity Interests of a Subsidiary that is not a wholly
owned Subsidiary to the extent otherwise permitted herein;

(d)           a Subsidiary that is not a wholly owned Subsidiary may make cash
distributions to holders of Equity Interests issued by such Subsidiary;

(e)           Subsidiaries may pay Restricted Payments to the Borrower or any
other Subsidiary;

 
(f)           the Borrower may redeem or repurchase its exchangeable senior
notes issued under that certain Indenture Agreement dated as of October 24,
2006, as in effect on the date hereof;
 

(g)           the Company may acquire limited partnership interests in the
Borrower in exchange for cash or common stock of the Company; and

(h)           the Company or the Borrower may make open market purchases of the
issued and outstanding common stock of the Company or the limited partnership
interests in the Borrower (and the Borrower may make distributions to the
Company for the purpose of making the purchases permitted by this clause).

Notwithstanding the foregoing, but subject to the following sentence, if a
Default or Event of Default exists, the Borrower may only declare and make cash
distributions to the QRS Subsidiary and other holders of partnership interests
in the Borrower with respect to any fiscal year to the extent necessary for the
QRS Subsidiary and the Company to distribute, and the QRS Subsidiary and the
Company may so distribute, an aggregate amount not to exceed the minimum amount
necessary for the Company to remain in compliance with Section 3.14.  If a
Default or Event of Default specified in Article VII clauses (a), (b), (h) or
(i) shall exist, or if as a result of the occurrence of any other Event of
Default any of the Obligations have been accelerated pursuant to Article VII,
neither the Company nor the Borrower shall, and shall not permit any Subsidiary
to, make any Restricted Payments to any Person other than to the Borrower.

 
64

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

 
SECTION 6.10. NEGATIVE COVENANTS OF THE COMPANY AND THE QRS SUBSIDIARY.
 
(a)           The Company will not acquire any assets of any nature whatsoever,
other than (i) additional partnership units, directly or indirectly, in the
Borrower and (ii) its interest in Home Properties I, LLC, Home Properties II,
LLC and Home Properties Florida Management, Inc.  The QRS Subsidiary will not
acquire any assets of any nature whatsoever, other than its limited partnership
interests in the Borrower.  Home Properties I, LLC will not acquire any assets
of any nature whatsoever, other than its shares of stock in the QRS Subsidiary.

(b)           From and after the date hereof, the Company will not incur any
Indebtedness or any other obligations or liabilities or any Liens on its assets
or any part thereof except (i) as the general partner of the Borrower in
connection with trade payables incurred in the ordinary course of business, (ii)
Indebtedness, the net proceeds of which are contributed to the QRS Subsidiary or
the Borrower, as the case may be, simultaneously with the incurrence thereof by
the Company, (iii) Guaranties of Indebtedness of any Affiliate of the Company
incurred in the ordinary course of such Affiliate’s business and (iv) the
obligation to pay dividends when and if declared by the Company. From and after
the date hereof, the QRS Subsidiary will not incur any Indebtedness or any other
obligations or liabilities or any Liens on its assets or any part thereof.

(c)           From and after the date hereof, (i) the Company will not retain
any Net Offering Proceeds, and the same will be contributed by the Company to
the Borrower, or if the QRS Subsidiary is a limited partner in the Borrower, to
the QRS Subsidiary simultaneously with receipt thereof by the Company and (ii)
the QRS Subsidiary will not retain any Net Offering Proceeds so contributed to
it by the Company, and the same will be contributed by the QRS Subsidiary to the
Borrower simultaneously with receipt thereof by the QRS Subsidiary.

(d)           The Company shall not enter into any merger or consolidation, or
liquidate, windup or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, any of its business or assets, including its interests
in the Borrower or in the QRS Subsidiary. Notwithstanding the foregoing, the
Company shall be permitted to merge with another Person so long as the Company
is the surviving Person following such merger. The QRS Subsidiary shall not
enter into any merger or consolidation, or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution), or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, any of its
business or assets, including its interests in the Borrower.

 
65

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

 
ARTICLE VII − EVENTS OF DEFAULT

If any of the following events (“EVENTS OF DEFAULT”) shall occur:

(a)           the Borrower or any Guarantor shall fail to pay (i) any principal
of any Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise or (ii)
any reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise, and such failure shall continue
unremedied for a period of three days after notice;

(b)           the Borrower or any Guarantor shall fail to pay any interest on
any Loan, any fee or any other Obligation (other than an amount referred to in
clause (a) of this Article), when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of five Business Days;

(c)           any representation or warranty made or deemed made by or on behalf
of the Company, Borrower or any of their respective Subsidiaries in or in
connection with this Agreement, any other Loan Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with this Agreement, any other Loan Document or any amendment
or modification hereof or thereof or waiver hereunder or thereunder, shall prove
to have been incorrect in any material respect when made or deemed made;

(d)           failure to observe or perform any covenant, condition or agreement
contained in Article V or in Article VI;

(e)           failure to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in clause (a), (b) or
(d) of this Article) or any other Loan Document, and such failure shall continue
unremedied for a period of 15 days after the earlier of the date upon which (i)
notice thereof is given from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender) or (ii) the Financial
Officer, chief executive officer or chief operating officer (or any other
officer of having similar executive management duties) of the Company or the
Borrower obtains knowledge of such failure;

(f)           the Company, the Borrower or any Subsidiary of the Company or the
Borrower shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable;

(g)           any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness unless prohibited by this Agreement;

 
66

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

 
(h)           an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Company, the Borrower or any Subsidiary of the Company or the
Borrower or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company, the
Borrower or any Subsidiary of the Company or the Borrower or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;

(i)           the Company, the Borrower or any Subsidiary of the Company or the
Borrower shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company, the
Borrower or any Subsidiary of the Borrower or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

(j)           the Company, the Borrower or any Subsidiary of the Company or the
Borrower shall become unable, admit in writing or fail generally to pay its
debts as they become due;

(k)           one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against the Company, the
Borrower, any Subsidiary of the Company or the Borrower or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to attach or levy upon any assets of the
Company, the Borrower or any Subsidiary of the Company or the Borrower to
enforce any such judgment;

(1)           an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company,
the Borrower and their Subsidiaries in an aggregate amount exceeding $250,000;

 
67

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

 
(m)           a Change in Control shall occur;

(n)           an event shall occur which has a Material Adverse Effect;

(o)           the Company shall fail to (i) maintain its status as a REIT for
federal income tax purposes, or (ii) continue as a general partner of the
Borrower, or (iii) comply with all requirements of law applicable to it and its
businesses and Properties, in the case of this clause (iii) where the failure to
so comply individually or in the aggregate will have or is reasonably likely to
have a Material Adverse Effect, or (iv) remain listed on the New York Stock
Exchange, or (v) file all tax returns and reports required to be filed by it
with any Governmental Authority as and when required to be filed or to pay any
taxes, assessments, fees or other governmental charges upon it or its Property,
assets, receipts, sales, use, payroll, employment, licenses, income, or
franchises which are shown in such returns, reports or similar statements to be
due and payable as and when due and payable, except for taxes, assessments, fees
and other governmental charges (A) that are being contested by the Company in
good faith by an appropriate proceeding diligently pursued, (B) for which
adequate reserves have been made on its books and records, and (C) the amounts
the nonpayment of which would not, individually or in the aggregate, result in a
Material Adverse Effect;

(p)           the Company shall merge or liquidate with or into any other Person
and, as a result thereof and after giving effect thereto, (i) the Company is not
the surviving Person or (ii) such merger or liquidation would effect an
acquisition of or investment in any Person not otherwise permitted under the
terms of this Agreement. The Borrower shall merge or liquidate with or into any
other Person and, as a result thereof and after giving effect thereto, (i) the
Borrower is not the surviving Person or (ii) such merger or liquidation would
effect an acquisition of or Investment in any Person not otherwise permitted
under the terms of this Agreement; or

(q)           the Guaranty or any other Loan Document shall at any time and for
any reason other than pursuant to the terms thereof, cease to be in full force
and effect or shall be declared null and void, or the validity or enforceability
thereof shall be contested by the Company or its Subsidiaries party thereto or
the Company or its Subsidiaries party thereto shall deny it has any further
liability or obligation thereunder,

then, and in every such event (other than an event with respect to the Borrower
or the Company described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent shall,
at the request of the Required Lenders, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans and all other Obligations then outstanding to be due and
payable in whole (or in part, in which case any Obligations not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the Obligations so declared to be due and payable shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower, and in case of any event
with respect to the Borrower or the Company described in clause (h) or (i) of
this Article, the Commitments shall automatically terminate and the Obligations
then outstanding shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.  In addition, following the occurrence and during
the continuation of an Event of Default, the Administrative Agent shall at the
request of the Required Lenders exercise any and all other remedies which may be
available under the Loan Documents or applicable law.

 
68

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

 
ARTICLE VIII − THE ADMINISTRATIVE AGENT

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent 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, together with such actions and
powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company, the Borrower or any Subsidiary of the
Company or the Borrower or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default or Event of Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Company, the Borrower or any of their Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default or Event of Default except with respect to
defaults in the payment of principal and interest required to be paid to the
Administrative Agent for the account of Lenders unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender.  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 by a Person other than the Administrative Agent,
(ii) the contents of any certificate, report or other document delivered
hereunder or in connection herewith by a Person other than the Administrative
Agent, (iii) the performance or observance of any of the covenants, agreements
or other terms or conditions set forth herein by a Person other than the
Administrative Agent, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 
69

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

 
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 believed by it to be genuine
and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel,
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.

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York State, or an Affiliate of any such bank. Upon the acceptance
of its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the 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 Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 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 it was acting as Administrative
Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender 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 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 related agreement or any
document furnished hereunder or thereunder.

 
70

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

 
ARTICLE IX – MISCELLANEOUS

SECTION 9.01. NOTICES.  Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail,
return receipt requested, or sent by telecopy, as follows:

(a)
if to the Borrower, to it at 850 Clinton Square, Rochester, New York 14604,
Attn: David P. Gardner (Telecopy No. 585−546−5433), with a copy to the Borrower
at the same address, Attention: Gerald B. Korn (Telecopy No. 585−232−3147);

(b)
if to the Administrative Agent, to Manufacturers and Traders Trust Company, 255
East Avenue, Rochester, New York 14604, Attn: Ms. Lisa Plescia, Vice President,
(Telecopy No. 585−546−5363) with a copy to Manufacturers and Traders Trust
Company, Debt Capital Markets Group, 25 S. Charles St., 12th Floor, Baltimore,
Maryland 21201, Attn: Hugh Giorgio, Managing Director (Telecopy No.
410-244-4477);

(c)
if to the Issuing Bank, to Manufacturers and Traders Trust Company, 255 East
Avenue, Rochester, New York 14604, Attn: Ms. Lisa Plescia, Vice President;
(Telecopy No. 585−546−5363) with a copy to Manufacturers and Traders Trust
Company, Debt Capital Markets Group, 25 S. Charles St., 12th Floor, Baltimore,
Maryland 21201, Attn: Hugh Giorgio, Managing Director (Telecopy No.
410-244-4477);  and

(d)
if to any other Lender, to it at its address (or telecopy number) set forth in
its Administrative Questionnaire. Any party hereto may change its address or
telecopy number for notices and other communications hereunder by notice to the
other parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.  For purposes of the delivery
requirements set forth in Article V hereof, to the extent the Borrower delivers
financial statements and other information to the Administrative Agent and the
Administrative Agent delivers or otherwise makes such information available to
the other Lenders, the Borrower shall be deemed to be in compliance with the
applicable covenants set forth therein.

 
71

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

 
SECTION 9.02. WAIVERS, AMENDMENTS.
 
(a)           No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any Default
or Event of Default, regardless of whether the Administrative Agent, any Lender
or the Issuing Bank may have had notice or knowledge of such Default or Event of
Default at the time.

(b)           Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the prior written consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender or, except as is otherwise set forth
in this Agreement, increase the aggregate amount of the Lenders’ Commitments
without the written consent of all Lenders, (ii) change the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement (except as expressly set forth in the definition of
Maturity Date), or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.16(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) release any Equity Interests or any other
material collateral that may now or hereafter secure amounts owing under this
Agreement, (vi) release any Guarantor from its obligations under the Guaranty
(except in accordance with Section 5.13(c) hereof) or (vii) change any of the
provisions of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the Issuing Bank hereunder
without the prior written consent of the Administrative Agent or the Issuing
Bank, as the case may be.

SECTION 9.03. EXPENSES; INDEMNITY, DAMAGE WAIVER.
 
(a)           The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of outside and in-house counsel for
the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with this Agreement, including its rights under this
Section, and the other Loan Documents including, without limitation, the Note,
or in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 
72

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

 
(b)           The Borrower hereby indemnifies the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “INDEMNITEE”) against, and holds each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or under any other Loan Document or the consummation of
the Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (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 and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses to the extent arising
from the gross negligence or willful misconduct of such Indemnitee, as
determined by a court of competent jurisdiction in a final, non-appealable
judgment.

(c)           To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent or the Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Issuing Bank in its capacity as such.

(d)           To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.

 
73

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

 
(e)           All amounts due under this Section shall be payable not later than
ten Business Days after written demand therefor.

SECTION 9.04. SUCCESSORS AND ASSIGNS.
 
(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b)           Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower and the Administrative Agent (and, in the case of an assignment of
all or a portion of a Commitment or any Lender’s obligations in respect of its
LC Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall be an
integral multiple of $1,000,000 and shall not be less than $5,000,000 unless
each of the Borrower and the Administrative Agent otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.

 
74

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

 
(c)           The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in the State of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “REGISTER”). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(d)           Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

(e)           Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a “PARTICIPANT”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. 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 the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03(b) to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.16(c) as though it were a
Lender.

 
75

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

 
(f)           A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as
though it were a Lender.

(g)           Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. SURVIVAL.  All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default, Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15,
2.19 and 9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.

SECTION 9.06. COUNTERPARTS, INTEGRATION, EFFECTIVENESS.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. This Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.

 
76

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

 
SECTION 9.07. SEVERABILITY.  Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. RIGHT OF SETOFF.  If an Event of Default shall have occurred and
be continuing, with the prior written consent of 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 law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final (other
than those accounts in which the Borrower is holding such monies solely as
custodian or agent or in trust, such as tenant security deposit accounts)) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of the Borrower against any of and
all the Obligations now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such Obligations may be unmatured. The rights
of each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

SECTION 9.09. GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE OF PROCESS.
 
(a)           This Agreement and all the other Loan Documents shall be construed
in accordance with and governed by the law of the State of New York.

(b)           The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in Monroe County and of the United States
District Court of the Western District of New York, and any appellate court from
any thereof, or such other jurisdiction or venue as the Required Lenders may
determine, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court, or in such
other jurisdiction or venue as the Required Lenders may so determine. Each of
the parties hereto agrees 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. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any jurisdiction.

(c)           The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 
77

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

 
(d)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. HEADINGS.  Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. CONFIDENTIALITY.  Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies under this Agreement or under any other Loan Document or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Borrower.

For the purposes of this Section, “Information” means all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank 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
date hereof, 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 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.

 
78

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

 
SECTION 9.13. INTEREST RATE LIMITATION.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or other
Obligation, together with all fees, charges and other amounts which are treated
as interest on such Loan or Obligation under applicable law (collectively the
“CHARGES”), shall exceed the maximum lawful rate (the “MAXIMUM RATE”) which may
be contracted for, charged, taken, received or reserved by the Lender holding
such Loan or Obligation in accordance with applicable law, the rate of interest
payable in respect of such Loan or Obligation hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan or Obligation but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.14. PATRIOT ACT.  The Lenders and the Administrative Agent each hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required
to obtain, verify and record information that identifies the Borrower and the
Guarantors, which information includes the name and address of the Borrower and
the Guarantors and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower and the Guarantors
in accordance with such Act.

 
79

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

HOME PROPERTIES, L.P.

     By: Home Properties, Inc.

     By: /s/ David P. Gardner
     Name: David P. Gardner
     Title: Executive Vice President and Chief Financial Officer

HOME PROPERTIES, INC.

By: /s/ David P. Gardner
Name: David P. Gardner
Title: Executive Vice President and Chief Financial Officer

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

MANUFACTURERS AND TRADERS TRUST
COMPANY, individually, and as Administrative Agent

By: /s/ Lisa A. Plescia
Name: Lisa A. Plescia
Title: Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

U.S. BANK NATIONAL ASSOCIATION

By: /s/ Bruce A. Ostrom
Name: Bruce A. Ostrom
Title: Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

RBS CITIZENS, N.A., d/b/a/ Charter One

By: /s/ Dominic Blea
Name: Dominic Blea
Title: Assistant Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

BANK OF MONTREAL

By: /s/ Aaron Lanski
Name: Aaron Lanski
Title: Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

CHEVY CHASE BANK, a division of Capital One, N.A.

By: /s/ Michael Antonelli
Name: Michael Antonelli
Title: Assistant Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

PNC BANK NATIONAL ASSOCIATION

By: /s/ Gregory J. Fedorko
Name: Gregory J. Fedorko
Title: Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

FIRST NIAGARA BANK

By: /s/ John M. Berry
Name: John M. Berry
Title: Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

JPMORGAN CHASE BANK N.A.

By: /s/ Robert F. Ryan
Name: Robert F. Ryan
Title: Senior Vice President

 
 

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

 

[Signature Page to Credit Agreement with Home Properties, L.P.]

TRISTATE CAPITAL BANK

By: /s/ Timothy A. Merriman
Name: Timothy A. Merriman
Title: Senior Vice President

 
 

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