Exhibit 10.9

REVOLVING CREDIT AGREEMENT

dated as of

April 7, 2016

among

HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING

PARTNERSHIP, L.P., as Borrowers

and

The Lenders Party Hereto

and

KEYBANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I Definitions

     1  

SECTION 1.01

  

Defined Terms

     1  

SECTION 1.02

  

Classification of Revolving Loans and Borrowings

     18  

SECTION 1.03

  

Terms Generally

     18  

SECTION 1.04

  

Accounting Terms; GAAP

     18  

ARTICLE II The Revolving Loan

     18  

SECTION 2.01

  

Commitments

     18  

SECTION 2.02

  

Revolving Loans and Borrowings

     19  

SECTION 2.03

  

Requests for Borrowings

     19  

SECTION 2.04

  

Reserved

     20  

SECTION 2.05

  

Funding of Borrowings

     20  

SECTION 2.06

  

Interest Elections

     20  

SECTION 2.07

  

Reserved

     22  

SECTION 2.08

  

Repayment of Revolving Loans; Evidence of Debt

     22  

SECTION 2.09

  

Prepayment of Revolving Loans

     22  

SECTION 2.10

  

Fees

     23  

SECTION 2.11

  

Interest

     24  

SECTION 2.12

  

Alternate Rate of Interest

     25  

SECTION 2.13

  

Increased Costs

     25  

SECTION 2.14

  

Break Funding Payments

     26  

SECTION 2.15

  

Taxes

     27  

SECTION 2.16

  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     28  

SECTION 2.17

  

Mitigation Obligations; Replacement of Lenders

     29  

SECTION 2.18

  

Defaulting Lenders

     30  

SECTION 2.19

  

Intentionally Omitted

     31  

ARTICLE III Representations and Warranties

     31  

SECTION 3.01

  

Organization; Powers

     31  

SECTION 3.02

  

Authorization; Enforceability

     31  

SECTION 3.03

  

Governmental Approvals; No Conflicts

     32  

SECTION 3.04

  

Financial Condition; No Material Adverse Change

     32  

SECTION 3.05

  

Properties

     32  

SECTION 3.06

  

Intellectual Property

     33  

SECTION 3.07

  

Litigation and Environmental Matters

     33  

SECTION 3.08

  

Compliance with Laws and Agreements

     35  

SECTION 3.09

  

Investment and Holding Company Status

     35  

SECTION 3.10

  

Taxes

     35  

SECTION 3.11

  

ERISA

     35  

SECTION 3.12

  

Disclosure

     36  

SECTION 3.13

  

RESERVED

     36  

SECTION 3.14

  

Margin Regulations

     36  

SECTION 3.15

  

RESERVED

     36  

SECTION 3.16

  

OFAC

     36  

 

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ARTICLE IV Conditions

     36  

SECTION 4.01

  

Effective Date

     36  

SECTION 4.02

  

Each Borrowing

     37  

ARTICLE V Affirmative Covenants

     38  

SECTION 5.01

  

Financial Statements; Ratings Change and Other Information

     38  

SECTION 5.02

  

Financial Tests

     39  

SECTION 5.03

  

Notices of Material Events

     39  

SECTION 5.04

  

Existence; Conduct of Business

     40  

SECTION 5.05

  

Payment of Obligations

     40  

SECTION 5.06

  

Maintenance of Properties; Insurance

     40  

SECTION 5.07

  

Books and Records; Inspection Rights

     41  

SECTION 5.08

  

Compliance with Laws

     41  

SECTION 5.09

  

Use of Proceeds

     41  

SECTION 5.10

  

Fiscal Year

     41  

SECTION 5.11

  

Environmental Matters

     41  

SECTION 5.12

  

RESERVED

     41  

SECTION 5.13

  

Further Assurances

     41  

SECTION 5.14

  

Bank Accounts

     41  

SECTION 5.15

  

Heron Point

     42  

SECTION 5.16

  

Ownership Interests

     42  

ARTICLE VI Negative Covenants

     42  

SECTION 6.01

  

Liens

     42  

SECTION 6.02

  

Fundamental Changes

     42  

SECTION 6.03

  

Investments, Loans, Advances and Acquisitions

     43  

SECTION 6.04

  

Hedging Agreements

     43  

SECTION 6.05

  

Restricted Payments

     43  

SECTION 6.06

  

Transactions with Affiliates

     44  

SECTION 6.07

  

Intentionally Omitted

     44  

SECTION 6.08

  

Restrictive Agreements

     44  

SECTION 6.09

  

Indebtedness

     44  

SECTION 6.10

  

Fees

     44  

ARTICLE VII Events of Default

     45  

ARTICLE VIII The Administrative Agent

     47  

ARTICLE IX Miscellaneous

     49  

SECTION 9.01

  

Notices

     49  

SECTION 9.02

  

Waivers; Amendments

     50  

SECTION 9.03

  

Expenses; Indemnity; Damage Waiver

     51  

SECTION 9.04

  

Successors and Assigns

     53  

SECTION 9.05

  

Survival

     56  

SECTION 9.06

  

Counterparts; Integration; Effectiveness

     56  

 

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SECTION 9.07

  

Severability

     56  

SECTION 9.08

  

Right of Setoff

     57  

SECTION 9.09

  

Governing Law; Jurisdiction; Consent to Service of Process

     57  

SECTION 9.10

  

WAIVER OF JURY TRIAL

     58  

SECTION 9.11

  

Headings

     58  

SECTION 9.12

  

Confidentiality

     58  

SECTION 9.13

  

Interest Rate Limitation

     58  

SECTION 9.14

  

USA PATRIOT Act

     59  

SECTION 9.15

  

Rights of Contribution

     59  

SECTION 9.16

  

Joint and Several Liability

     59  

 

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SCHEDULES:

 

Schedule 2.01    –      Commitments Schedule 3.07    –      Litigation
Disclosure Schedule 3.15    –      Subsidiaries

EXHIBITS:

 

Exhibit A    –      Form of Assignment and Acceptance Exhibit B    –      Form
of Compliance Certificate Exhibit C    –      Form of Guaranty Exhibit D    –
     Form of Note Exhibit E    –      Form of Borrowing Request/Interest Rate
Election

 

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REVOLVING CREDIT AGREEMENT (“Agreement”) dated as of

April 7, 2016, among

HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING

PARTNERSHIP, L.P., as Borrowers,

the LENDERS party hereto,

and

KEYBANK, NATIONAL ASSOCIATION, as Administrative Agent

BACKGROUND

With respect to the definition of “Borrower” or “Borrowers” hereunder or in any
other Loan Document, except where the context otherwise provides and whether or
not expressly stated, (i) any representations contained herein or in any other
Loan Documents of Borrower shall be made separately by each Borrower with
respect to and applicable to such Borrower, (ii) any affirmative covenants
contained herein or in any other Loan Documents shall be deemed to be covenants
of each Borrower and shall require performance by all Borrowers, (iii) any
negative covenants contained herein or in any other Loan Documents shall be
deemed to be covenants of each Borrower, and shall be breached if any Borrower
fails to comply therewith, and (iv) any liabilities, obligations or indebtedness
of Borrower (1) shall be deemed to include any liabilities, obligations or
indebtedness of any Borrower, and (2) in all events shall be direct and primary,
and joint and several, in all respects whatsoever. Each Person comprising a
Borrower hereunder represents that it has carefully considered the alternatives
to and the legal consequences of incurring joint and several liability under the
Note, this Agreement, and the other Loan Documents, and otherwise respecting the
liabilities, obligations or indebtedness of Borrower arising hereunder, and has
determined that by such arrangement it is able to obtain financing on terms more
favorable than otherwise, and that under a joint and several facility each will
realize substantial interest savings over alternative financing arrangements and
that this constitutes one of the reasons for its joining in the Loan with the
other Borrower. Consequently, each Borrower, jointly and severally, hereby
assumes and agrees fully, faithfully, and punctually to discharge all
liabilities, obligations or indebtedness of all of Borrowers to Lender, subject
however, to the terms and provisions hereof.

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.

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“Accommodation Payment” shall have the meaning set forth in Section 9.16(d).

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means KeyBank, National Association, 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.

“Affiliate Transfer” has the meaning set forth in Section 6.02(d).

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments of the Lenders 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 Rate” means, for any day, with respect to any ABR Loan, Daily Libor
Loan or Eurodollar Loan, as the case may be, the applicable rate per annum set
forth below under the caption “ABR Spread” or “Eurodollar/Daily Libor Spread”:

 

ABR Spread

   Eurodollar/Daily
Libor
Spread  

3.00%

     4.00 % 

“Approved Fund” has the meaning set forth in Section 9.04(b).

“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.

 

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“Availability Period” means the period from and including the Effective Date to
but excluding the Maturity Date.

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

“Borrower” or “Borrowers” means, jointly and severally, Highland Capital
Management L.P., a Delaware limited partnership, and NMOP.

“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 Borrowing 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 Boston, Massachusetts or New York, New York are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan or a Daily Libor 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 Event” means a distribution made to the holder of an ownership interest
in any Subsidiary as a result of any financing, sale or other transfer of any
asset of the Subsidiary, or any realization of any distributions on account of
any dividends or return on any preferred or other equity investment in any
Subsidiary.

“Capital Event Pledge” means the pledge and security agreement dated as of even
date herewith related to any Capital Event granted by the Parent and NMOP to the
Administrative Agent, together with all other instruments, agreements and
written obligations executed and/or delivered by the Parent and NMOP in
connection therewith.

“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.

“Change in Control” means:

(i) as to Highland: (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning 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 thirty percent (30%) of the aggregate ordinary voting

 

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power represented by the issued and outstanding capital stock of the Borrower;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Borrower by Persons who were neither (i) nominated by the
board of directors of the Borrower nor (ii) appointed by directors so nominated;
(c) the acquisition of direct or indirect Control of the Borrower by any Person
or group; or (d) the failure of the Borrower to own, directly or indirectly,
free and clear of any Liens except those granted in favor of the Agent, at least
90% of the ownership interests in each Collateral Subsidiary; and

(ii) as to NMOP: (a) NexPoint Real Estate Advisors II, L.P., a Delaware limited
partnership (the “Advisor”), or an Affiliate of the Advisor or the Borrower
ceases to be the advisor of the Parent; (b) the failure of Parent to own,
directly or indirectly, free and clear of any Liens 100% of the ownership
interests in NMOP; or (c) the failure of the Borrower to own, directly or
indirectly, free and clear of any Liens except those granted in favor of the
Agent, at least 90% of the ownership interests in each Collateral Subsidiary.

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement by any Governmental Authority, (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, for purposes of Section 2.14(b), by any lending office of such
Lender or by such Lender’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. Notwithstanding
anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (b) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

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

“Collateral” means all property, tangible or intangible, real, personal or
mixed, now or hereafter subject to the liens and security interests of the Loan
Documents, or intended so to be, which Collateral shall secure the Obligations.

“Collateral Subsidiary” means each Subsidiary of the Borrower which owns a
direct or indirect interest in a Mortgaged Property or a Real Property subject
to a Pledged Interest.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans hereunder as set forth on Schedule 2.01. The aggregate
amount of the Lenders’ Commitments is $15,000,000.00.

“Compliance Certificate” has the meaning set forth in Section 5.01(d) hereof and
a form of which is attached hereto as Exhibit B.

“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

 

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voting power, by contract or otherwise, which includes the customary powers of a
managing member of any limited liability company, any general partner of any
limited partnership, or any board of directors of a corporation. “Controlling”
and “Controlled” have meanings correlative thereto.

“Credit Party” means Borrower and Parent.

“Daily Libor” means for any day, the rate for 1 month U.S. dollar deposits as
reported on as shown on Reuters LIBOR01 as of 11:00 a.m., London time, for such
day, provided, if such day is not a Business Day, the immediately preceding
Business Day (or, in the event such rate does not appear on a Reuters page or
screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that
publishes such rate from time to time as selected by the Administrative Agent in
its reasonable discretion; in each case the “LIBOR Screen Rate”).

“Debtor Relief Laws” means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, fraudulent conveyance,
reorganization, or similar laws affecting the rights, remedies, or recourse of
creditors generally, including without limitation the Bankruptcy Code and all
amendments thereto, as are in effect from time to time during the term of this
Agreement.

“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 that: (a) has failed to perform any of its
funding obligations hereunder, including in respect of its Commitment, within
two (2) Business Days of the date required to be funded by it hereunder; (b) has
notified the Borrower or Administrative Agent that it does not intend to comply
with its funding obligations or has made a public statement to that effect with
respect to its funding obligations hereunder (unless such notification or public
statement relates to such Lender’s obligation to fund a Loan and indicates that
such position is based on such Lender’s good faith determination that a
condition precedent (specifically identified and including the particular
Default, if any) to funding a Loan is not or cannot be satisfied) or under other
agreements in which it commits to extend credit; (c) has failed, within two
(2) Business Days after written request by the Administrative Agent or Borrower
(and the Administrative Agent has received a copy of such request), to confirm
in a manner satisfactory to the Administrative Agent that it will comply with
its funding obligations hereunder; or (d) has, or has a direct or indirect
parent company that has: (i) become the subject of a proceeding under any Debtor
Relief Law; (ii) had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or a custodian appointed for it; or (iii) in the
good faith determination of the Administrative Agent, taken any material action
in furtherance of, or indicated its consent to, approval of or acquiescence in
any such proceeding or appointment; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority; provided, further, that such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made by
such Lender.

 

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“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).

“Environmental Claim” means any notice of violation, action, claim,
Environmental Lien, demand, abatement or other order or direction (conditional
or otherwise) by any Governmental Authority or any other Person for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restriction,
resulting from or based upon (i) the existence, or the continuation of the
existence, of a Release (including, without limitation, sudden or non-sudden
accidental or non-accidental Releases) of, or exposure to, any Hazardous
Material, or other Release in, into or onto the environment (including, without
limitation, the air, soil, surface water or groundwater) at, in, by, from or
related to any property owned, operated or leased by the Borrower or any of its
Subsidiaries or any activities or operations thereof; (ii) the environmental
aspects of the transportation, storage, treatment or disposal of Hazardous
Materials in connection with any property owned, operated or leased by the
Borrower or any of its Subsidiaries or their operations or facilities; or
(iii) the violation, or alleged violation, of any Environmental Laws or
Environmental Permits of or from any Governmental Authority relating to
environmental matters connected with any property owned, leased or operated by
the Borrower or any of its Subsidiaries.

“Environmental Laws” means all applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, 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 and includes (without limitation) the Comprehensive
Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C.
§ 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et
seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et
seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Clean Air
Act, 42 U.S.C. §7401 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq., the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., (to the extent the
same relates to any Hazardous Materials), and the Oil Pollution Act of 1990, 33
U.S.C. § 2701 et seq., as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous state and local
statutes.

“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 directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) exposure to any Hazardous Materials in violation of any Environmental Law,
(c) the Release or threatened Release of any Hazardous Materials into the
environment in violation of any Environmental Law or (d) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

 

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“Environmental Lien” means any lien in favor of any Governmental Authority
arising under any Environmental Law.

“Environmental Permit” means any permit required under any applicable
Environmental Law or under any and all supporting documents associated
therewith.

“Equity Percentage” means the aggregate ownership percentage of Borrower in each
Unconsolidated Affiliate, which shall be calculated as the greater of
(a) Borrower’s nominal capital ownership interest in the Unconsolidated
Affiliate as set forth in the Unconsolidated Affiliate’s organizational
documents, and (b) Borrower’s economic ownership interest in the Unconsolidated
Affiliate, reflecting Borrower’s share of income and expenses of the
Unconsolidated Affiliate.

“Equity Proceeds Pledge” means the pledge and security agreement dated as of
even date herewith related to any equity issuance proceeds of the Parent or NMOP
granted by the Parent and NMOP to the Administrative Agent, together with all
other instruments, agreements and written obligations executed and/or delivered
by the Parent and NMOP in connection therewith.

“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 existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) 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; (d) 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;
(e) 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; (f) 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 Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

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“Eurodollar,” when used in reference to any Revolving Loan or Borrowing, refers
to whether such Revolving Loan, or the Revolving 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 or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (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 2.18(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 2.16(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 2.16(a).

“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.

“Financial Officer” means the chief financial officer or the chief accounting
officer of the Borrower.

“Financing Statements” means all such Uniform Commercial Code financing
statements as the Administrative Agent shall require, duly authorized by the
Borrower, to give notice of and to perfect or continue perfection of the
Lenders’ security interest in all Collateral.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is organized. 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, subject to the provisions of Section 1.04.

“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,

 

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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.

“Guarantee” of or by any Person (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
(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 endorsements for
collection or deposit in the ordinary course of business.

“Guarantor” means the Parent, Harry Bookey and Pamela Bookey, and any other
Person who from time to time has executed a Guaranty as required by the terms of
this Agreement.

“Guaranty” means, collectively, the guaranties provided by Guarantor in the form
of Exhibit C attached hereto, or such other form as may be agreed upon by the
parties.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances or wastes, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law;
provided, that Hazardous Materials shall not include any such substances or
wastes utilized or maintained at the Real Property in the ordinary course of
business and in accordance with all applicable Environmental Laws.

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

“Hedging Obligations” means, with respect to the Parent, any Borrower or any
Subsidiary of the Parent or a Borrower, any obligations arising under any
Hedging Agreement entered into with the Administrative Agent.

“Highland” means Highland Capital Management L.P., a Delaware limited
partnership.

“Highland Term Loan” means the loan arrangement evidenced by the Bridge Credit
Agreement dated as of August 5, 2015 between Highland and KeyBank National
Association, as Administrative Agent, and the lenders party thereto.

“Impacted Interest Period” has the meaning set forth in the definition of LIBO
Rate.

 

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“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, including mandatorily redeemable preferred stock,
(c) all obligations of such Person upon which interest charges are customarily
paid, (d) all 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, but excluding customary non-recourse,
carveout guarantees and environmental indemnitees until such time as such
guarantees or indemnitees become a recourse obligation, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (k) all obligations, contingent or otherwise,
of such Person with respect to any Hedging Agreements (calculated on a
mark-to-market basis as of the reporting date), and (l) payments received in
consideration of sale of an ownership interest in Borrower when the interest so
sold is determined, and the date of delivery is, more than one (1) month after
receipt of such payment and only to the extent that the obligation to deliver
such interest is not payable solely in such interest of such Person. The
Indebtedness of the Borrower shall be calculated on a stand-alone basis per its
unconsolidated financial statements as previously furnished to Administrative
Agent and shall, therefore, not include any Indebtedness of entities
consolidated by Borrower.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

“Interest Payment Date” means the first Business Day of each calendar quarter.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one month thereafter; provided,
that (a) 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, in the case of a Eurodollar Borrowing only, 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 (b) any Interest Period
pertaining to a Eurodollar Borrowing 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 Borrowing, thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

 

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“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Rate) determined
by the Administrative Agent (which determination shall be conclusive and binding
absent manifest error) to be equal to the rate that results from interpolating
on a linear basis between: (a) the LIBO Rate for the longest period for which
the LIBO Rate is available that is shorter than the Impacted Interest Period;
and (b) the LIBO Rate for the shortest period for which that LIBO Rate is
available that exceeds the Impacted Interest Period, in each case, at such time.

“KeyBank” means KeyBank, National Association, in its individual capacity.

“Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority.

“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.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the London interbank offered rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for U.S. Dollars) for a period equal in length to such Interest Period as
displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion; in each case the “LIBOR Screen Rate”) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period; provided that (i) if the LIBOR Screen Rate shall be less than zero, such
rate shall be deemed to be zero for the purposes of this Agreement; provided
further that if the LIBOR Screen Rate shall not be available at such time for
such Interest Period (an “Impacted Interest Period”) then the LIBO Rate shall be
the Interpolated Rate; provided that if any Interpolated Rate shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement, and
(ii) if no such rate administered by ICE Benchmark Administration (or by such
other Person that has taken over the administration of such rate for U.S.
Dollars) is available to the Administrative Agent, the applicable LIBO Rate for
the relevant Interest Period shall instead be the rate determined by the
Administrative Agent to be the rate at which KeyBank or one of its Affiliate
banks offers to place deposits in U.S. dollars with first class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the approximate amount
of the relevant Eurodollar Loan and having a maturity equal to such Interest
Period.

“Lien” means, with respect to an asset, (a) any mortgage, deed of trust, lien
(statutory or other), pledge, hypothecation, negative pledge, collateral
assignment, encumbrance, deposit arrangement, 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; (c) the filing under the Uniform Commercial Code or
comparable law of any

 

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jurisdiction of any financing statement naming the owner of the asset to which
such Lien relates as debtor; (d) any other preferential arrangement of any kind
or nature whatsoever intended to assure payment of any Indebtedness or other
obligation; and (e) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities, including any
dividend reinvestment or redemption plans.

“Liquidity” means (i) cash or cash equivalents or obligations of, or guaranteed
by, the United States of America having a maturity of not more than one
(1) year; and (ii) marketable securities net of any indebtedness that encumbers
such securities.

“Loan” means the loans comprising the Revolving Loan made by the Lenders to the
Borrower pursuant to this Agreement.

“Loan Documents” means this Agreement, the Notes, the Pledge Agreements, the
Financing Statements, and all other instruments, agreements and written
obligations executed and delivered by any of the Credit Parties in connection
with the transactions contemplated hereby.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or financial condition of (i) the Borrower and its
Subsidiaries taken as a whole, (b) the ability of any of the Credit Parties to
perform their obligations under the Loan Documents or (c) the rights of or
benefits available to the Administrative Agent or the Lenders under the Loan
Documents; provided, however, that none of the following shall constitute, or
shall be considered in determining whether there has occurred, and no event,
circumstance, change or effect resulting from or arising out of any of the
following shall constitute, a Material Adverse Effect: (A) changes in the
national or world economy or financial markets as a whole or changes in general
economic conditions that affect the industries in which the Parent, the
Borrower, and its Subsidiaries conduct their business, so long as such changes
or conditions do not adversely affect the Parent, the Borrower, and its
Subsidiaries, taken as a whole, in a materially disproportionate manner relative
to other similarly situated participants in the industries or markets in which
they operate; (B) any change in applicable Law, rule or regulation or GAAP or
interpretation thereof after the date hereof, so long as such changes do not
adversely affect the Parent, the Borrower, and its Subsidiaries, taken as a
whole, in a materially disproportionate manner relative to other similarly
situated participants in the industries or markets in which they operate;
(C) the failure, in and of itself, of the Parent or the Borrower to meet any
published or internally prepared estimates of revenues, earnings or other
financial projections, performance measures or operating statistics; (D) a
decline in the price, or a change in the trading volume, of the Parent; and
(E) compliance with the terms of, and taking any action required by, this
Agreement, or taking or not taking any actions at the request of, or with the
consent of, the Administrative Agent.

“Material Contract” means any contract or other arrangement (other than Loan
Documents), whether written or oral, to which any Credit Party is a party as to
which the breach, nonperformance, cancellation or failure to renew by any party
thereto could reasonably be expected to have a Material Adverse Effect.

“Maturity Date” means April     , 2017.

 

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“Maximum Rate” shall have the meaning set forth in Section 9.13.

“Mortgaged Property” means the Real Property owned by Estates on Maryland
Owners, LLC located at 1802 West Maryland Avenue, Phoenix, Arizona.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Note” means a promissory note in the form attached hereto as Exhibit D payable
to a Lender evidencing certain of the obligations of the Borrower to such Lender
and executed by 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.

“NMOP” means NexPoint Multifamily Operating Partnership, L.P., a Delaware
limited partnership.

“Obligations” means all liabilities, obligations, covenants and duties of any
Credit Party to the Administrative Agent and/or any Lender arising under or
otherwise with respect to any Loan Document, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Credit Party or any
Affiliate thereof of any proceeding under any bankruptcy or other insolvency
proceeding naming such person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceedings.

“OFAC” has the meaning set forth in Section 3.16.

“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, and not including the Excluded Taxes.

“Ownership Interest Pledge” means those certain Pledge and Security Agreements
executed by the Borrower in favor of Administrative Agent pledging Borrower’s
interest in the Pledged Interests, including the Pledged Interests relating to
the Estates on Maryland Holdco, LLC and Nashville RE Holdings, LLC.

“Parent” means NexPoint Multifamily Realty Trust, Inc., a Maryland corporation.

“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 5.05;

 

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

(c) deposits to secure the performance of bids, trade contracts, purchase,
construction or sales 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;

(d) the Title Instruments, Liens and other matters described in the Title
Insurance Policy;

(e) uniform commercial code protective filings with respect to personal property
leased to the Borrower or any Subsidiary;

(f) landlords’ liens for rent not yet due and payable; and

(g) liens arising under the Senior Loan;

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

“Permitted Investments” means Investments consistent with those historically
made by Borrower.

“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.

“Pledge Agreements” means the Equity Proceeds Pledge, the Capital Event Pledge,
the Stock Pledge and the Ownership Interest Pledge.

“Pledged Interests” means, collectively, the ownership (or in the reasonable
discretion of the Administrative Agent, the economic) interests now or hereafter
pledged by Borrower or any Subsidiary of Borrower in each Collateral Subsidiary
and each other Subsidiary of the Borrower hereunder and subject to the liens and
security interests of the Loan Documents, or intended so to be.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by KeyBank, National Association, as its prime rate in effect at its
principal office in Cleveland, Ohio; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

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“Real Property” means, collectively, all interest in any land and improvements
located thereon (including direct financing leases of land and improvements
owned by a Credit Party or any of Borrower’s Subsidiaries), together with all
equipment, furniture, materials, supplies and personal property now or hereafter
located at or used in connection with the land and all appurtenances, additions,
improvements, renewals, substitutions and replacements thereof now or hereafter
acquired by a Credit Party or any of Borrower’s Subsidiaries.

“Register” has the meaning set forth in Section 9.04.

“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.

“Release” means any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching
or migration on or into the indoor or outdoor environment or into or out of any
property in violation of applicable Environmental Laws.

“Remedial Action” means all actions, including without limitation any capital
expenditures, required or necessary to (i) clean up, remove, treat or in any
other way address any Hazardous Material; (ii) prevent the Release or threat of
Release, or minimize the further Release, of any Hazardous Material so it does
not migrate or endanger public health or the environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv) bring facilities on any property owned or leased by the Borrower or any of
its Subsidiaries into compliance with all Environmental Laws.

“Required Lenders” ” means, as of any date of determination, Lenders having more
than 66 2/3% of the Commitments or, if the Commitments of each Lender to make
Loans have been terminated pursuant to Article VII, Lenders holding in the
aggregate at least 66 2/3% of the aggregate Obligations; provided that the
Commitment of, and the portion of the Obligations held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any ownership interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such ownership interests in the Borrower or any option, warrant or other
right to acquire any such shares of capital stock of the Borrower.

“Revolving Loan” means the loan made on the Effective Date pursuant to
Section 2.01.

“Senior Credit Agreement” means, collectively, (i) that certain Multifamily Loan
and Security Agreement in the stated principal amount of $26,919,000.00 dated as
of August 5, 2015 between Estates on Maryland Owners, LLC, as borrower, and
KeyBank National Association, as Lender, and (ii) any loan agreement or credit
agreement entered into between the owner of any Real Property subject to the
Pledged Interest and the lender with respect thereto.

 

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“Senior Loan” means each loan made pursuant to a Senior Credit Agreement.

“Senior Loan Documents” means each Senior Credit Agreement and all other
instruments, agreements and written obligations executed and delivered in
connection with the transactions contemplated by a Senior Credit Agreement.

“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 Governmental Authority 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.

“Stock Pledge” means the pledge and security agreement dated as of even date
herewith granted by The Dugaboy Investment Trust to the Administrative Agent, in
1,000,000 shares of NexPoint Residential Trust, Inc., together with all other
instruments, agreements and written obligations executed in connection
therewith.

“Subsidiary” means, with respect to Borrower, Parent or any Credit Party, as
applicable, 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, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held by
parent, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent.

“Tangible Net Worth” shall mean total assets (without deduction for accumulated
depreciation and accumulated amortization of lease intangibles) less (1) all
intangible assets and (2) all liabilities (including contingent and indirect
liabilities), all determined in accordance with GAAP. The term “intangible
assets” shall include, without limitation, (i) deferred charges such as
straight-line rents and other non-cash items, and (ii) the aggregate of all
amounts appearing on the assets side of any such balance sheet for franchises,
licenses, permits, patents, patent applications, copyrights, trademarks, trade
names, goodwill, treasury stock, experimental or organizational expenses and
other like intangibles (other than amounts related to the purchase price of real
property which are allocated to lease intangibles). The term “liabilities” shall
include, without limitation, (i) Indebtedness secured by Liens on property of
the Person with respect to which Tangible Net Worth is being computed whether or
not such Person is liable for the payment thereof, (ii) deferred liabilities,
and (iii) Capital Lease Obligations. Tangible Net Worth shall be calculated on a
consolidated basis in accordance with GAAP.

 

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

“Title Instruments” means true and correct copies of all instruments of record
in the Office of the County Clerk, the Real Property Records or of any other
Governmental Authority affecting title to all or any part of the Mortgaged
Properties or the Real Property subject to the Pledged Interest, including but
not limited to those (if any) which impose restrictive covenants, easements,
rights-of-way or other encumbrances on all or any part of the Mortgaged
Properties or the Real Properties subject to the Pledged Interest.

“Title Insurance Policy” means, collectively, the policies of title issued by a
title insurance company satisfactory to the each lender under a Senior Credit
Agreement, or to the Borrower if there is no lender, and insuring that title to
each Mortgaged Property or the Real Property subject to the Pledged Interest,
free and clear of any Lien, objection, exception or requirement, subject only to
the Permitted Encumbrances.

“Total Assets” means the assets shown on Highland’s unconsolidated financial
statements.

“Total Leverage Ratio” means the ratio (expressed as a percentage) of (a) the
Indebtedness of Highland (without duplication) to (b) Total Assets.

““Transactions” means the execution, delivery and performance by the Credit
Parties of the Loan Documents, the borrowing of the Revolving Loan, and the use
of the proceeds thereof.

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

“UFCA” shall have the meaning set forth in Section 9.16(d).

“UFTA” shall have the meaning set forth in Section 9.16(d).

“Unconsolidated Affiliate” means, without duplication, in respect of any Person,
any other Person (other than a Person whose stock is traded on a national
trading exchange) in whom such Person holds a voting equity or ownership
interest 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.

“Unused Fee” shall have the meaning set forth in Section 2.12(b).

“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.

 

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SECTION 1.02 Classification of Revolving Loans and Borrowings. For purposes of
this Agreement, Revolving 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”).

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.

ARTICLE II

The Revolving Loan

SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make Revolving Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in such Lender’s Revolving Loan exceeding such Lender’s Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

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SECTION 2.02 Revolving Loans and Borrowings.

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Revolving 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 Revolving Loans as required.

(b) Subject to Section 2.13, each Borrowing shall be comprised of ABR Loans,
Daily Libor Loans and/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) Each Eurodollar Loan shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $1,000,000. 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 four (4) Eurodollar Borrowings outstanding.

(d) 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.

SECTION 2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request not less than ten (10) days
before the date of the proposed Borrowing. Each such 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 E
attached hereto and hereby made a part hereof and signed by the Borrower. Each
such written Borrowing Request shall specify the following information in
compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the intended use of the requested Borrowing, accompanied by such financial
and other information as may be reasonably requested by Administrative Agent
with respect to the Real Property and investment relating to such requested
Borrowing;

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

(iv) whether such Borrowing is to be an ABR Borrowing, a Daily Libor Loan or a
Eurodollar Borrowing;

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

(vi) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

 

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If no election as to the Type of Borrowing is specified in the Borrowing
Request, then the requested Borrowing shall be an ABR Borrowing. 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 Reserved.

SECTION 2.05 Funding of Borrowings.

(a) If Administrative Agent, in its reasonable discretion, has approved the
making of any Revolving Loan on account of any requested Borrowing, 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, Boston,
Massachusetts time, 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 maintained
with the Administrative Agent in Boston, Massachusetts, or wire transferred to
such other account or in such manner as may be designated by the Borrower in the
applicable Borrowing Request.

(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 the corresponding Loan made to the Borrower. 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 Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may

 

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elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, 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 the form of a
Borrowing Request (with proper election made for an interest rate election only)
and signed by the Borrower.

(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, a Daily Libor
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”.

(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 Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Eurodollar Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
a Daily Libor Borrowing. 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 Borrowing may be converted
to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

 

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SECTION 2.07 Reserved.

SECTION 2.08 Repayment of Revolving 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 the
Revolving Loan on the Maturity Date. At the request of each Lender, the
Revolving Loans made by such Lender shall be evidenced by a Note payable to such
Lender in the amount of such Lender’s Commitment.

(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 Revolving 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 Revolving 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 thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (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 Revolving Loans in
accordance with the terms of this Agreement.

SECTION 2.09 Prepayment of Revolving Loans.

(a) The Borrower shall have the right at any time and from time to time to
prepay, without penalty, any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section, and subject to
Section 2.15, if applicable.

(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 Borrowing, not later than 11:00 a.m., Boston, Massachusetts time,
three (3) Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing or a Daily LIBOR Loan, not later than 11:00 a.m.,
Boston, Massachusetts 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. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the

 

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contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that is an integral multiple of $100,000 and not less than $200,000. Each
prepayment of a Borrowing 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 2.12.

(c) In connection with the prepayment of any portion of the Revolving Loan prior
to the expiration of the Interest Period applicable thereto, the Borrower shall
also pay any applicable expenses pursuant to Section 2.15.

(d) The Borrower shall prepay the Loans (a “Mandatory Prepayment”) in an amount
equal to one hundred percent (100%) of the net proceeds payable to Borrower or
Guarantor (i) generated by equity issuances by the Parent or the Borrower, or
(ii) payable to the Borrower or any Subsidiary (after payment of usual and
customary closing costs and expenses and repayment of any Indebtedness secured
by such Real Property) generated by the sale, finance or refinance of any Real
Property owned directly or indirectly by Parent.

(e) Amounts to be applied to the prepayment of the Revolving Loan pursuant to
any of the preceding subsections of this Section shall be applied, first, to
reduce outstanding ABR Loans, next to reduce outstanding Daily LIBOR Loans, and
next, to the extent of any remaining balance, to reduce outstanding Eurodollar
Loans. Each such prepayment shall be applied to prepay ratably the Revolving
Loans of the Lender.

SECTION 2.10 Fees.

(a) The Borrower agrees to pay to Administrative Agent, on the Effective Date, a
commitment fee in the amount of $150,000.00.

(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender an unused fee (the “Unused Fee”), which shall accrue during the
period from and including the date of this Agreement to, but excluding, date on
which such Commitment terminates, at .35% per annum on the average daily unused
amount of the Commitment of such Lender. Unused Fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the seventh Business Day following Borrower’s receipt of an
invoice therefore. All Unused Fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day) and shall be based on the then
existing Commitments of the Lenders.

(c) All fees payable hereunder shall be paid on the dates due in immediately
available funds. Fees paid shall not be refundable under any circumstances.

 

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SECTION 2.11 Interest.

(a) The Revolving Loans comprising each ABR Borrowing shall bear interest at the
lesser of (x) the Alternate Base Rate plus the Applicable Rate, or (y) the
Maximum Rate.

(b) The Revolving Loans comprising each Eurodollar Borrowing shall bear interest
at the lesser of (a) the Adjusted LIBO Rate for the Interest Period in effect
for such Eurodollar Loan plus the Applicable Rate, or (b) the Maximum Rate.

(c) The Revolving Loans comprising each Daily Libor Borrowing shall bear
interest at the lesser of (a) the Daily Libor plus the Applicable Rate, or
(b) the Maximum Rate.

(d) Notwithstanding the foregoing, (A) if any principal of or interest on the
Revolving Loan or any portion thereof or any other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of the Revolving Loan, the lesser of (x) 4% plus the rate otherwise
applicable to the Revolving Loan as provided in the preceding paragraphs of this
Section, or (y) the Maximum Rate, or (ii) in the case of any other amount, the
lesser of (x) 4% plus the rate applicable to ABR Loans as provided in paragraph
(a) of this Section, or (y) the Maximum Rate; and (B) after the occurrence of
any Event of Default, at the option of the Administrative Agent, or if the
Administrative Agent is directed in writing by the Required Lenders to do so,
the Revolving Loan shall bear interest at a rate per annum equal to the lesser
of (x) 4% plus the rate otherwise applicable to the Revolving Loan as provided
in the preceding paragraphs of this Section, or (y) the Maximum Rate.

(e) Accrued interest on each Revolving Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Revolving Loan (other than a prepayment of an
ABR Borrowing or a Daily LIBOR Borrowing prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Revolving 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 computations of interest on the Loans and of other fees to the extent
applicable shall be based on a 360-day year and paid for the actual number of
days elapsed. The applicable Alternate Base Rate, Daily Libor, Adjusted LIBO
Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

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SECTION 2.12 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing or Daily Libor 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, the Daily Libor or the LIBO Rate, as
applicable, for such Interest Period; or

(b) the Administrative Agent is advised by any Lender that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Eurodollar Loan 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 Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing or a Daily LIBOR
Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Borrowing or a Daily LIBOR Borrowing, such Borrowing shall be made as
an ABR Borrowing; provided that if the circumstances giving rise to such notice
affect only one Type of Borrowings, then the other 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

(ii) impose on any Lender or the London interbank market any other condition
(other than one relating to Excluded Taxes) affecting this Agreement or
Eurodollar Loans made by such Lender;

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 reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.

(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s capital or liquidity or on the capital or liquidity of such Lender’s
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender, to a level

 

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below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in 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,
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 to demand compensation pursuant
to this Section shall not constitute a waiver of such Lender’s right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
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.

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 Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.10(b)), 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 2.18, 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 thirty (30) days after receipt thereof.

 

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SECTION 2.15 Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder 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 or Lender (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 and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (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, provided the Administrative Agent shall have given the Borrower at
least ten (10) days’ prior notice of that the Administrative Agent intends to
pay such Indemnified Taxes or Other Taxes on the Borrower’s behalf. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

(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.

 

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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 of amounts payable under Section 2.14,
Section 2.15 or 2.16, or otherwise) prior to 1:00 p.m., Boston, Massachusetts
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
reasonable 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 main offices in Cleveland, Ohio, except that payments pursuant to Sections
2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons entitled
thereto. If the Administrative Agent receives a payment for the account of a
Lender prior to 1:00 p.m., Boston, Massachusetts time, such payment must be
delivered to the Lender on the same day and if it is not so delivered due to the
fault of the Administrative Agent, the Administrative Agent shall pay to the
Lender entitled to the payment interest thereon for each day after payment
should have been received by the Lender pursuant hereto until the Lender
receives payment, at the Federal Funds Effective Rate. 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 Dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards 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,
and (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

(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 resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its Loans and accrued interest thereon 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
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; 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, other than to the Borrower or any Subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). The Borrower consents

 

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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 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 the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender 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 Federal Funds Effective Rate.

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to 2.06(b) or 2.17(d), then the Administrative Agent may, in its
reasonable discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.

SECTION 2.17 Mitigation Obligations; Replacement of Lenders.

(a) Each Lender will notify the Borrower of any event occurring after the date
of this Agreement which will entitle such Person to compensation pursuant to
Sections 2.12 and 2.14 as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation, provided that such Person
shall not be liable for any costs, fees, expenses, or additional interest due to
the failure to provide such notice. If any Lender requests compensation under
Section 2.12, or if the Borrower is required to pay any additional amount to any
such Person or any Governmental Authority for the account of any Lender pursuant
to Section 2.14, then such Lender shall use reasonable efforts to avoid or
minimize the amounts payable, including, without limitation, the designation of
a different lending office for funding or booking its Loans hereunder or the
assignment of 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 2.12 or 2.14, 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 and documented costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.12, 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 2.14, or if any
Lender

 

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defaults in its obligation to fund Loans hereunder, then the Borrower may, at
its sole expense and effort (excluding any costs or expense incurred by such
Defaulting Lender), 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, 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, 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 2.12 or payments required to be made pursuant to Section 2.14, 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) Adjustments. Notwithstanding anything to the contrary contained in this
Credit Agreement, if any Lender becomes a Defaulting Lender, then, until such
time as that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

(i) Waivers and Amendments. That Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Credit
Agreement shall be restricted as set forth in Section 9.02.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by Administrative Agent for the account of a Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to ARTICLE VII or
otherwise, and including any amounts made available to Administrative Agent by
that Defaulting Lender pursuant to Section 9.08), shall be applied at such time
or times as may be determined by Administrative Agent as follows: first, to the
payment of any amounts owing by that Defaulting Lender to Administrative Agent
hereunder; second, if so determined by Administrative Agent, to be held as cash
collateral for future funding obligations of such Defaulting Lender; third, to
the payment of any amounts owing to the non-Defaulting Lenders as a result of
any judgment of a court of competent jurisdiction obtained by any Lender against
such Defaulting Lender as a result of that Defaulting Lender’s breach of its
obligations under this Credit Agreement; fourth, so long as no Default or Event
of Default exists, to the payment of any amounts owing to the applicable
Borrower as a result of any judgment of a court of competent jurisdiction
obtained by Borrower against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Credit

 

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Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction. Any payments, prepayments or other amounts paid
or payable to a Defaulting Lender that are applied (or held) to pay amounts owed
by a Defaulting Lender or to post cash collateral pursuant to this
Section 2.19(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(b) Defaulting Lender Cure. If the Borrower and Administrative Agent agree in
writing in their reasonable discretion that a Defaulting Lender has taken such
action that it should no longer be deemed to be a Defaulting Lender,
Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any cash collateral),
such Defaulting Lender will, to the extent applicable, purchase that portion of
outstanding Loans of the other Lenders or take such other actions as
Administrative Agent may determine to be necessary to cause the Loans to be held
on a pro rata basis by the Lenders in accordance with their Applicable
Percentages, whereupon such Defaulting Lender will cease to be a Defaulting
Lender; provided that no adjustments will be made retroactively with respect to
fees accrued or payments made by or on behalf of the Borrower while such Lender
was a Defaulting Lender; and provided, further, that except to the extent
otherwise expressly agreed by the affected parties, no cessation in status as
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising during the period that such Lender was a Defaulting Lender.

SECTION 2.19 Intentionally Omitted.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders and the Administrative Agent
that:

SECTION 3.01 Organization; Powers. Each Credit Party and each of its
Subsidiaries is duly organized, validly existing and in good standing 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 such qualification is
required.

SECTION 3.02 Authorization; Enforceability. The Transactions are within the
corporate, partnership or limited liability company powers (as applicable) of
the respective Credit Parties and their Subsidiaries and have been duly
authorized by all necessary corporate, partnership or limited liability company
action. This Agreement and the Loan Documents have been duly executed and
delivered by each Credit Party which is a party thereto and constitute the
legal, valid and binding obligation of each such Person, 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.

 

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SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require 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 or which shall be completed at the appropriate
time for such filings under applicable securities laws, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of any Credit Party or any Collateral Subsidiary or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon any Credit Party or any of
the Borrower’s Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by any Credit Party or any of the Borrower’s
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of any Credit Party or any Collateral Subsidiary, except pursuant
to the Pledge Agreements and the Senior Loan.

SECTION 3.04 Financial Condition; No Material Adverse Change.

(a) The Borrower has heretofore furnished to the Lenders management-prepared
financial statements as of and for the fiscal period ended                     
for the Borrower. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower as of such dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments.

(b) Since December 31, 2014, no event has occurred which could reasonably be
expected to have a Material Adverse Effect.

SECTION 3.05 Properties.

(a) Each of the Borrower and its Subsidiaries has title to, or valid leasehold
interests in, all its real and personal 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, or Liens permitted under Section 6.01.

(b) To each Credit Party’s actual knowledge, all franchises, licenses,
authorizations, rights of use, governmental approvals and permits (including all
certificates of occupancy and building permits) required to have been issued by
Governmental Authority to enable all Real Property owned or leased by Borrower
or any of its Subsidiaries to be operated as then being operated have been
lawfully issued and are in full force and effect, other than those which the
failure to obtain in the aggregate could not be reasonably expected to have a
Material Adverse Effect. To each Credit Party’s actual knowledge, no Credit
Party or any Subsidiary thereof is in violation of the terms or conditions of
any such franchises, licenses, authorizations, rights of use, governmental
approvals and permits, which violation would reasonably be expected to have a
Material Adverse Effect.

 

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(c) None of the Credit Parties has received any notice or has any actual
knowledge of any pending, threatened or contemplated condemnation proceeding
affecting any Real Property owned or leased by Borrower or any of its
Subsidiaries or any part thereof, or any proposed termination or impairment of
any parking (except as contemplated in any approved expansion approved by
Administrative Agent, at any such owned or leased Real Property or of any sale
or other disposition of any Real Property owned or leased by Borrower or any of
its Subsidiaries or any part thereof in lieu of condemnation, which in the
aggregate, are reasonably likely to have a Material Adverse Effect.

SECTION 3.06 Intellectual Property. To the actual knowledge of each Credit
Party, such Credit Party and its Subsidiaries owns, or is licensed to use, all
patents and other intellectual property material to its business, and the use
thereof by such Credit Party or such Subsidiary 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. To the actual knowledge of each Credit Party, there are no
material slogans or other advertising devices, projects, processes, methods,
substances, parts or components, or other material now employed, or now
contemplated to be employed, by any Credit Party or any Subsidiary of any Credit
Party, with respect to the operation of any Real Property, and no claim or
litigation regarding any slogan or advertising device, project, process, method,
substance, part or component or other material employed, or now contemplated to
be employed by any Credit Party or any Subsidiary of any Credit Party, is
pending or threatened, the outcome of which could reasonably be expected to have
a Material Adverse Effect.

SECTION 3.07 Litigation and Environmental Matters.

(a) To the actual knowledge of the Borrower, except as set forth in Schedule
3.07 attached hereto, there are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, threatened against
or affecting any Credit Party or any of the Borrower’s 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 any matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect:

(i) to the actual knowledge of the Credit Parties, all Real Property leased or
owned by Borrower or any of its Subsidiaries is free from contamination by any
Hazardous Material, except to the extent such contamination could not reasonably
be expected to cause a Material Adverse Effect;

(ii) to the actual knowledge of the Credit Parties, the operations of Borrower
and its Subsidiaries, and the operations at the Real Property leased or owned by
Borrower or any of its Subsidiaries are in compliance with all applicable
Environmental Laws, except to the extent such noncompliance could not reasonably
be expected to cause a Material Adverse Effect;

 

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(iii) neither the Borrower nor any of its Subsidiaries have known liabilities
with respect to Hazardous Materials and, to the knowledge of each Credit Party,
no facts or circumstances exist which could reasonably be expected to give rise
to liabilities with respect to Hazardous Materials, in either case, except to
the extent such liabilities could not reasonably be expected to have a Material
Adverse Effect;

(iv) to Borrower’s actual knowledge, (A) the Borrower and its Subsidiaries and
all Real Property owned or leased by Borrower or its Subsidiaries have all
Environmental Permits necessary for the operations at such Real Property and are
in compliance with such Environmental Permits; (B) there are no legal
proceedings pending nor, to the knowledge of any Credit Party, threatened to
revoke, or alleging the violation of, such Environmental Permits; and (C) none
of the Credit Parties have received any notice from any source to the effect
that there is lacking any Environmental Permit required in connection with the
current use or operation of any such properties, in each case, except to the
extent the nonobtainment or loss of an Environmental Permit could not reasonably
be expected to have a Material Adverse Effect;

(v) to the actual knowledge of any Credit Party, neither the Real Property
currently leased or owned by Borrower nor any of its Subsidiaries, nor (x) any
predecessor of any Credit Party, nor (y) any of Credit Parties’ Real Property
owned or leased in the past, nor (z) any owner of Real Property leased or
operated by Borrower or any of its Subsidiaries, are subject to any outstanding
written order or contract, including Environmental Liens, with any Governmental
Authority or other Person, or to any federal, state, local, foreign or
territorial investigation of which a Credit Party has been given notice
respecting (A) Environmental Laws, (B) Remedial Action, (C) any Environmental
Claim; or (D) the Release or threatened Release of any Hazardous Material, in
each case, except to the extent such written order, contract or investigation
could not reasonably be expected to have a Material Adverse Effect;

(vi) to the actual knowledge of each Credit Party, none of the Credit Parties
are subject to any pending legal proceeding alleging the violation of any
Environmental Law nor are any such proceedings threatened, in either case,
except to the extent any such proceedings could not reasonably be expected to
have a Material Adverse Effect;

(vii) to the actual knowledge of each Credit Party, neither the Borrower nor any
of its Subsidiaries, nor any predecessor of any Credit Party, nor to the
knowledge of each Credit Party, any owner of Real Property leased by Borrower or
any of its Subsidiaries, have filed any notice under federal, state or local,
territorial or foreign law indicating past or present treatment, storage, or
disposal of or reporting a Release of Hazardous Material into the environment,
in each case, except to the extent such Release of Hazardous Material could not
reasonably be expected to have a Material Adverse Effect;

 

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(viii) to the actual knowledge of each Credit Party, none of the operations of
the Borrower or any of its Subsidiaries or, of any owner of premises currently
leased by Borrower or any of its Subsidiaries or of any tenant of premises
currently leased from Borrower or any of its Subsidiaries, involve or previously
involved the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Part 261.3 (in effect as of the date
of this Agreement) or any state, local, territorial or foreign equivalent, in
violation of Environmental Laws; and

(ix) to the knowledge of the Credit Parties, there is not now, nor has there
been in the past (except, in all cases, to the extent the existence thereof
could not reasonably be expected to have a Material Adverse Effect), on, in or
under any Real Property leased or owned by Borrower or any of its Subsidiaries,
or any of their predecessors (A) any underground storage tanks or surface tanks,
dikes or impoundments (other than for surface water); (B) any friable
asbestos-containing materials; (C) any polychlorinated biphenyls; or (D) any
radioactive substances other than naturally occurring radioactive material.

SECTION 3.08 Compliance with Laws and Agreements. Each of the Credit Parties and
their Subsidiaries is in material 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 to its
knowledge, 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 has occurred and is continuing.

SECTION 3.09 Investment and Holding Company Status. Neither any of the Credit
Parties nor any of the Borrower’s Subsidiaries is (a) an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a “holding company” as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

SECTION 3.10 Taxes. Each Credit Party and each of the Borrower’s 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 such Person 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.

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. Neither the Borrower nor any of its
Subsidiaries have any Plans as of the date hereof. As to any future Plan 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) will not exceed 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) will not exceed the fair market value of the assets
of all such underfunded Plans.

 

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SECTION 3.12 Disclosure. To the actual knowledge of the Borrower, the Borrower
has disclosed or made available to the Lenders all agreements, instruments and
corporate or other restrictions to which it, any other Credit Party, or any of
its Subsidiaries is subject, and all other matters known to it, that, 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 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 RESERVED.

SECTION 3.14 Margin Regulations. Neither the Borrower nor any Subsidiary of
Borrower is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board), and no proceeds of the Revolving Loan will be used to purchase or
carry any margin stock.

SECTION 3.15 RESERVED.

SECTION 3.16 OFAC. None of the Borrower, any of the other Credit Parties, any of
the other Subsidiaries, or any other Affiliate of the Borrower: (i) is a person
named on the list of Specially Designated Nationals or Blocked Persons
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from any Loan, will be used to finance any
operations, investments or activities in, or make any payments to, any such
country, agency, organization, or person.

ARTICLE IV

Conditions

SECTION 4.01 Effective Date. The obligations of the Lenders to make the
Revolving Loan 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 each
Credit Party either (i) a counterpart of this Agreement and all other Loan
Documents to

 

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which it is party signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of each such Loan Document other than
the Notes) that such party has signed a counterpart of the Loan Documents,
together with copies of all Loan Documents.

(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 Wick Phillips Gould & Martin, LLP, counsel for the Borrower, and such
other counsel as the Administrative Agent may approve, covering such matters
relating to the Credit Parties, the Loan Documents or the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.

(c) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the Credit Parties, the
authorization of the Transactions and any other legal matters relating to the
Credit Parties, this Agreement (including each Credit Party’s compliance with
Section 9.14 and other customary “know your customer” requirements) or the
Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel.

(d) The Administrative Agent shall have received a Compliance Certificate, dated
the date of this Agreement and signed by a Financial Officer of Borrower, in
form and substance satisfactory to the Administrative Agent.

(e) 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.

(f) The Administrative Agent shall have received executed copies of all other
documents, certificates and instruments with respect to the Collateral as
Administrative Agent may require and such other due diligence information as the
Administrative Agent may require for each Mortgaged Property or the Real
Property subject to the Pledged Interest.

SECTION 4.02 Each Borrowing. The obligation of each Lender (as applicable) to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:

(a) The representations and warranties of each Credit Party set forth in this
Agreement or in any other Loan Document shall be true and correct on and as of
the date of such Borrowing.

(b) At the time of and immediately after giving effect to such Borrowing, no
Default shall have occurred and be continuing.

(c) With respect to any requested Borrowings, the Borrower shall have complied
with Section 2.03.

 

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Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in this Section.

ARTICLE V

Affirmative Covenants

Until the principal of and interest on the Revolving Loan and all fees payable
hereunder shall have been paid in full, the Borrower covenants and agrees with
the Lenders that:

SECTION 5.01 Financial Statements; Ratings Change and Other Information. The
Borrower and Parent will furnish to the Administrative Agent and each Lender:

(a) within 180 days after the end of each fiscal year of Highland, Highland’s
audited unconsolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, together
with all notes thereto, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by KPMG or other
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Highland in accordance with GAAP
consistently applied;

(b) within 120 days after the end of each fiscal year of Parent, Parent’s
audited unconsolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, together
with all notes thereto, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by KPMG or other
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Parent in accordance with GAAP
consistently applied;

(c) within 60 days after the end of each fiscal quarter of each fiscal year of
Highland, Highland’s unconsolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
Highland in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes; except that information
shall be provided on a standalone basis and not subject to GAAP consolidation
requirements.;

 

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(d) within 60 days after the end of each fiscal quarter of each fiscal year of
Parent, Parent’s unconsolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
Parent in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

(e) concurrently with any delivery of financial statements under clause (a) or
(b) above, a compliance certificate of a Financial Officer of Highland and a
compliance certificate of a Financial Officer of NMOP (collectively, the
“Compliance Certificate”) in the form of Exhibit B attached hereto;

(f) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Credit Party or
any Subsidiary of the Borrower, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may reasonably request; and

(g) within 180 days after the end of each calendar year, personal financial
statements of Harry Bookey and Pamela Bookey, and accompanying supporting
schedules, all in such form as may be reasonably required by Administrative
Agent.

SECTION 5.02 Financial Tests. Highland shall have and maintain at all times, on
a consolidated basis in accordance with GAAP, tested as of the close of each
calendar quarter:

(a) A Total Leverage Ratio not to exceed thirty-five percent (35%);

(b) Tangible Net Worth at all times of not less $250,000,000.00; and

(c) A minimum Liquidity of $10,000,000.00 at all times.

SECTION 5.03 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender written notice of the following promptly
after it becomes aware of same (unless specific time is set forth below):

(a) the occurrence of any Default under this Agreement or any default or event
of default under a Senior Loan Document;

(b) within fifteen (15) Business Days after the filing or commencement of any
action, suit or proceeding by or before any arbitrator or Governmental Authority
against or affecting any Credit Party or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

 

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(c) within fifteen (15) Business Days after 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 Borrower and its
Subsidiaries in an aggregate amount exceeding $10,000,000.00; and

(d) 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 statement of
a Financial Officer or other executive officer of 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.

SECTION 5.04 Existence; Conduct of Business. The Borrower will, and will cause
each of its 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
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under this Agreement and
shall not apply to the real estate investment trust status of the Borrower until
such time as the Borrower has made its initial election to be treated as a real
estate investment trust under the Code. The Borrower must at all times be a
wholly owned Subsidiary of Borrower. The Borrower may not be organized under the
laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.

SECTION 5.05 Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its obligations, 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 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.
The Borrower will, and will cause each of its Subsidiaries to, comply with all
of its obligations and liabilities (as applicable) under the Senior Loan
Documents.

SECTION 5.06 Maintenance of Properties; Insurance.

(a) The Borrower will, and will cause each of its Subsidiaries to, (i) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (ii) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are reasonable and customary for similarly situated
Properties.

(b) The Borrower will pay and discharge, or cause to be paid and discharged, all
taxes, assessments, maintenance charges, permit fees, impact fees, development
fees, capital repair charges, utility reservations and standby fees and all
other similar impositions of every kind and character charged, levied, assessed
or imposed against any interest in any of the Real Property owned by it or any
of its Subsidiaries, as they become

 

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payable and before they become delinquent. The Borrower shall furnish receipts
evidencing proof of such payment to the Administrative Agent promptly after
payment and before delinquency.

SECTION 5.07 Books and Records; Inspection Rights.

(a) The Borrower will, and will cause each of its 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.

(b) The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice and subject to rights of tenants, 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.

SECTION 5.08 Compliance with Laws. The Borrower will, and will cause each of its
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 5.09 Use of Proceeds. The proceeds of the Revolving Loan will be used
solely for the refinancing the Highland Term Loan and to fund a portion of the
cost of real estate acquisitions and related investments made by NMOP. No part
of the proceeds of the Revolving Loan will be used, whether directly or
indirectly, for financing, funding or completing the hostile acquisition of
publicly traded Persons or for any purpose that entails a violation of any of
the Regulations of the Board, including Regulations U and X.

SECTION 5.10 Fiscal Year. Borrower shall maintain as its fiscal year the twelve
(12) month period ending on December 31 of each year.

SECTION 5.11 Environmental Matters. Borrower shall comply and shall cause each
of its Subsidiaries and each Real Property owned or leased by such parties to
comply in all material respects with all applicable Environmental Laws currently
or hereafter in effect, except to the extent noncompliance could not reasonably
be expected to have a Material Adverse Effect.

SECTION 5.12 RESERVED.

SECTION 5.13 Further Assurances. At any time upon the request of the
Administrative Agent, Borrower will, promptly and at its expense, execute,
acknowledge and deliver such further documents and perform such other acts and
things as the Administrative Agent may reasonably request to evidence the
Revolving Loan made hereunder and interest thereon in accordance with the terms
of this Agreement.

SECTION 5.14 Bank Accounts. Subject to the terms of the Senior Loan Documents,
the Borrower shall maintain (and cause each Collateral Subsidiary to maintain)
all property, operating and depository accounts with respect to the Mortgaged
Property, or the Real Property subject to the Pledged Interest, with KeyBank.

 

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SECTION 5.15 Heron Point. On or before July 16, 2016, NMOP or a direct or
indirect Subsidiary shall use best efforts to become the owner of the Real
Property known as Heron Point, and the Administrative Agent shall have been
granted a pledge of the Pledged Interest with respect thereto.

SECTION 5.16 Pledge of Interests. If a Borrower or any of its Subsidiaries
acquires any Real Property or any direct or indirect beneficial interest in any
entity which owns Real Property, Administrative Agent shall be granted a Pledged
Interest therein, subject to such limitations as may be imposed by any first
mortgage lender with respect to such Real Property.

ARTICLE VI

Negative Covenants

Until the principal of and interest on the Revolving Loan and all other amounts
due and payable hereunder have been paid in full, the Borrower covenants and
agrees with the Lenders that:

SECTION 6.01 Liens. Neither the Borrower, the Parent nor any of their
Subsidiaries will create, incur, assume or permit to exist any Lien on the
Mortgaged Property or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except solely with respect to
the Mortgaged Property, Permitted Encumbrances. Neither NMRT nor any of its
Subsidiaries will create, incur, assume or permit to exist any Lien on any of
their respective assets, or any beneficial interests therein except for
Permitted Encumbrances, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except solely with
respect to any first mortgage financing.

SECTION 6.02 Fundamental Changes. Neither the Borrower nor Parent will, and will
not permit any Collateral Subsidiary to:

(a) 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 the assets of the Borrower or all or substantially all of
the stock of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve;

(b) sell, transfer, lease or otherwise dispose of the Mortgaged Property, or the
Real Property subject to the Pledged Interest outside of the ordinary course of
business.

(c) Notwithstanding anything contained herein to the contrary, Borrower shall be
permitted to transfer any direct or indirect interests in any Collateral
Subsidiary to one or more of Affiliates of Borrower (“Affiliate Transfer”)
provided that each of the following conditions is satisfied:

(i) Borrower provides Administrative Agent with at least 30 days prior written
notice of the proposed Affiliate Transfer.

 

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(ii) At the time of the proposed Affiliate Transfer, no Event of Default has
occurred and is continuing and no event or condition has occurred and is
continuing that, with the giving of notice or the passage of time, or both,
would become an Event of Default.

(iii) Borrower pays or reimburses Administrative Agent, upon demand, for all
third-party costs and expenses incurred by Administrative Agent in connection
with the Affiliate Transfer.

(iv) Administrative Agent determines, in Administrative Agent’s reasonable
discretion, that the proposed transferee meets Administrative Agent’s
eligibility, credit, management and other standards.

(v) Borrower shall have executed and delivered to Administrative Agent, such
documents as may be required by Administrative Agent to maintain Administrative
Agent Agent’s security interests in Borrower’s ownership interests in the
Collateral Subsidiary to the same extent as such pledge prior to the Affiliate
Transfer;

(vi) Administrative Agent receives organizational charts reflecting the
structure of Borrower prior to and after the Affiliate Transfer.

(vii) Borrower delivers to Administrative Agent a search confirming that the
transferee is not on the list of Specially Designated Nationals or other blocked
persons published by the U.S. Office of Foreign Assets Control, or on the list
of persons or entities prohibited from doing business with the Department of
Housing and Urban Development.

(viii) For purposes of this Section, “control” includes the role of investment
advisor.

SECTION 6.03 Investments, Loans, Advances and Acquisitions. Neither the Borrower
nor Parent will make or permit to exist any investment except Permitted
Investments.

SECTION 6.04 Hedging Agreements. Neither the Borrower nor Parent will, 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 any Subsidiary of the Borrower is exposed in the
conduct of its business or the management of its liabilities.

SECTION 6.05 Restricted Payments. Neither the Borrower nor Parent will, and will
not permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, during any calendar quarter, any Restricted Payment,
except that any of the following Restricted Payments are permitted:
(a) Restricted Payments by the Borrower required to comply with

 

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Section 5.15(d), (b) provided no Default is then in existence, Restricted
Payments made by the Borrower to its equity holders, including in connection
with the existing redemption and dividend reinvestment plans, and (c) Restricted
Payments declared and paid ratably by Subsidiaries to Borrower with respect to
their capital stock or equity interest.

SECTION 6.06 Transactions with Affiliates. Neither the Borrower nor Parent will,
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its wholly owned Subsidiaries
not involving any other Affiliate, (c) transactions related to the closing of
and ongoing activities necessary to implement the loan obligations and
requirements of this Agreement, and (d) any Restricted Payment permitted by
Section 6.05.

SECTION 6.07 Intentionally Omitted.

SECTION 6.08 Restrictive Agreements. Neither the Borrower nor Parent will, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its property
or assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary; provided that the
restrictions contained in this Section 6.08 shall not apply to (i) restrictions
and conditions imposed by law or by this Agreement or as otherwise approved by
the Administrative Agent, (ii) customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iii) clause (a) of the foregoing shall
not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness or Liens permitted by this Agreement if such restrictions
or conditions apply only to the property or assets securing such Indebtedness,
or ownership interests in the obligors with respect to such Indebtedness, and
(iv) solely with respect to clause (a), provisions in leases restricting the
assignment thereof.

SECTION 6.09 Indebtedness. Neither the Borrower nor Parent nor any Collateral
Subsidiary shall, without the prior written consent of the Required Lenders,
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise with respect to any Indebtedness of the Collateral Subsidiary except
for any Indebtedness of the Collateral Subsidiary as of date hereof under the
Senior Loan Documents.

SECTION 6.10 Fees. Provided that no Default or Event of Default shall be in
existence, each Credit Party may pay all management, property and other asset
fees then due and payable. At any time that any Default or Event of Default
exists under this Agreement or any other Loan Document, then in any of such
event(s), no Credit Party or any Subsidiary may pay any management, property,
asset or similar fees to any other Credit Party or to any Subsidiary or

 

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Affiliate; provided that any such fees may accrue during the continuance of any
such Default or Event of Default and be payable at such time as no Default or
Event of Default is continuing hereunder. All such parties shall execute
subordination agreements in form and substance acceptable to the Administrative
Agent with respect to such fees. Notwithstanding the foregoing, Credit Parties
and their Subsidiaries may pay at all times any due and payable fees to third
party property managers.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of the Revolving 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, and such failure (other than
the payment due on the Maturity Date, for which there shall be no grace period)
shall continue unremedied for a period of over three (3) Business Days;

(b) the Borrower shall fail to pay any interest on the Revolving Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under any Loan Documents, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of over
three Business Days (such three Business Day period commencing after written
notice from the Administrative Agent as to any such failure);

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

(d) the Borrower or Parent shall fail to observe or perform any covenant,
condition or agreement contained in Article V or VI other than Sections 5.04,
5.05, 5.06, 5.07(a), 5.08, and 5.11;

(e) any Credit Party shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in clause
(a), (b) or (d) of this Article), and such failure shall continue unremedied for
a period of over 30 days after notice thereof from the Administrative Agent to
the Borrower (which notice will be given at the request of any Lender) and if
such default is not cureable within thirty (30) days and the Credit Party is
diligently pursuing cure of same, the cure period may be extended for 30 days
(for a total of 60 days after the original notice from the Administrative Agent)
upon written request from the Borrower to the Administrative Agent;

 

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(f) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Credit Party or any Collateral Subsidiary 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 any Credit Party or any Collateral Subsidiary 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;

(g) any Credit Party or any Subsidiary of 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 such Person 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;

(h) any Credit Party or any Collateral Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;

(i) one or more judgments for the payment of money in an aggregate amount in
excess of $10,000,000 shall be rendered against any Credit Party, any Subsidiary
of the Borrower or any combination thereof and the same shall remain
undischarged for a period of sixty (60) 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 such Person to enforce
any such judgment;

(j) 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 Borrower and its
Subsidiaries in an aggregate amount exceeding $10,000,000;

(k) any Credit Party shall default under any agreement and such default could
reasonably be expected to result in a Material Adverse Effect;

(l) any Credit Party shall (or shall attempt to) disavow, revoke or terminate
any Loan Document to which it is a party or shall otherwise challenge or contest
in any action, suit or proceeding in any court or before any Governmental
Authority the validity or enforceability of any Loan Document;

(m) any provision of any Loan Document with respect to the Collateral shall for
any reason cease to be valid and binding on, enforceable against, any Credit
Party resulting in a Material Adverse Effect, or any lien created under any Loan
Document ceases to be a valid and perfected first priority lien in any of the
Collateral purported to be covered thereby;

 

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(n) a Change in Control shall occur;

(o) (i) Borrower or Guarantor defaults under any recourse Indebtedness, or
(iii) any Subsidiaries of NMOP or Parent defaults under any non-recourse
Indebtedness; or

(p) An Event of Default, beyond any notice and cure periods, occurs under any of
the Senior Loan Documents or any other debt securing the Mortgaged Property or
the Real Property subject to the Pledged Interest.

then, and in every such event (other than an event described in clause (f) or
(g) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take some or all of the following actions, at
the same or different times: (i) declare the Revolving Loan then outstanding to
be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Revolving Loan so declared to be
due and payable, together with accrued interest thereon and all reasonable fees
and other obligations of the Borrower accrued hereunder, 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 (ii) exercise any
other rights or remedies provided under this Agreement or any other Loan
Document, or any other right or remedy available by law or equity; and in case
of any event described in clause (f) or (g) of this Article, the principal of
the Revolving Loan then outstanding, together with accrued interest thereon and
all reasonable fees and other obligations of the Borrower accrued hereunder,
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.

ARTICLE VIII

The Administrative Agent

Each of the Lenders 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. In the event of conflicting instructions or notices given to the
Borrower by the Administrative Agent and any Lender, the Borrower is hereby
directed and shall rely conclusively on the instruction or notice given by the
Administrative Agent.

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 Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

 

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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 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 any Credit Party
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 unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and 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, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (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. The Administrative Agent agrees that, in fulfilling its
duties hereunder, it will use the same standard of care it utilizes in servicing
loans for its own account.

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 (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in good faith in accordance with the advice of any such counsel, accountants or
experts.

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.

 

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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 and the Borrower, and may be removed by the Required
Lenders in the event of the Administrative Agent’s gross negligence or willful
misconduct. Upon any such resignation or removal, the Required Lenders shall
have the right, with the approval of Borrower (provided no Default has occurred
and is continuing), which approval shall not be unreasonably withheld, 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 or is removed,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a Lender, or a bank with an office
in New York, New York, 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 for its own behalf
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. The Administrative Agent shall cooperate with any successor
Administrative Agent in fulfilling its duties hereunder.

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. Administrative Agent agrees to
provide the Lenders with copies of all material documents and certificates
received by the Administrative Agent from Borrower in connection with the Loans.

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 or
sent by telecopy, as follows:

(a) if to the Borrower, in care of Highland Capital Management L.P. at 300
Crescent Court, Suite 700, Dallas, Texas 75201, Attention: Matt McGraner
(Telephone No. (972) 419-6229 and Email: mmcgraner@highlandcapital.com); copies
to: Wick

 

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Phillips Gould & Martin, LLP, 3131 McKinney, Suite 100, Dallas, Texas 75204,
Attention: Chris Fuller (Telephone No. (214) 740-4023 and Email:
cfuller@wickphillips.com);

(b) if to the Administrative Agent, to KeyBank, National Association, 225
Franklin Street, Boston, Massachusetts 02110, Attention: Christopher T. Neil,
(Telephone No. (617) 385-6202 and Email: christopher_t_neil@)keybank.com; and

(c) if to any other Lender, to it at its address (or telecopy number) set forth
on the signature pages of this Agreement, or as provided to Borrower in writing
by the Administrative Agent or the Lender.

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 (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate confirmation is received (or if such day is not a
Business Day, on the next Business Day); (ii) if given by mail (return receipt
requested), on the earlier of receipt or three (3) Business Days after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid; or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the
Administrative Agent under Article II shall not be effective until received.

SECTION 9.02 Waivers; Amendments.

(a) No failure or delay by the Administrative Agent or any Lender in exercising
any right or power hereunder or under any other Loan Document 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 and
the Lenders hereunder and under any other Loan Document 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
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.

(b) Neither this Agreement nor any provision hereof nor any provision of any
Loan Document 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 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, (ii) reduce the principal
amount of any Loan or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the

 

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written consent of each Lender affected thereby, (iii) postpone the scheduled
date of payment of the principal amount of any Loan, 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 2.17(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) change any of the
provisions of this Section or the definition of “Required Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, (vi) release
any Credit Party from its obligations under the Loan Documents or release any
Collateral, except as specifically provided for herein, without the written
consent of each Lender, (vii) subordinate the Loans or any Collateral without
the written consent of each Lender, or (viii) consent to the Collateral securing
any other Indebtedness 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 hereunder without the prior written
consent of the Administrative Agent.

(c) Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender; and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any
Defaulting Lender more adversely than other affected Lenders shall require the
consent of such Defaulting Lender.

(d) If Administrative Agent shall request in writing the consent of any Lender
to any amendment, change, waiver, discharge, termination, consent or exercise of
rights covered by this Agreement, and such Lender fails to approve or deny such
request in writing within ten (10) Business Days of the making of such written
request, the Lender shall be deemed to have consented to the request.

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 counsel for the Administrative Agent, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent or any
Lender, including the reasonable fees, charges and disbursements of any counsel
for the Administrative Agent or any Lender, in connection with the enforcement
or

 

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protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Revolving Loan made hereunder,
including all such out-of-pocket expenses incurred during any waivers, workout,
restructuring or negotiations in respect of the Revolving Loan.

(b) The Borrower shall indemnify the Administrative Agent and each Lender, and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable 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 or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) the Revolving
Loan or the use of the proceeds therefrom, (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 resulted from the gross
negligence or willful misconduct of such Indemnitee as determined by a court of
law in a final non-appealable judgment, or the failure of the Indemnitee to make
Loans pursuant to its Commitment in breach of its obligations hereunder.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent such Lender’s
pro rata share (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 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 or any agreement or instrument contemplated hereby, the Transactions,
the Revolving Loan or the use of the proceeds thereof.

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

 

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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, 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 and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, 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 the outstanding
amount of the Revolving Loan at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if a
Default has occurred and is continuing, any other assignee; and

(B) the Administrative Agent.

Provided, no consent of the Borrower or Administrative Agent shall be required
in connection with any assignment to an entity acquiring, or merging with, a
Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) 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 Loans,
the amount of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000.00 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if a
Default has occurred and is continuing and such consent shall not be
unreasonably withheld;

(B) 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;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500.00; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

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For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption 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 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 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 (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the principal amount of the Revolving Loan 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 and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption 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 Assumption
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.

(c) Any Lender may, without the consent of the Borrower or the Administrative
Agent, 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 the Revolving Loan owing to it);
provided that

 

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(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, (iii) the Borrower, the Administrative
Agent 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 and (iv) Borrower’s obligations hereunder shall not be increased. 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 (d) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.16 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 2.17(c) as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided
that, except in the case of a Participant asserting any right of set-off
pursuant to Section 9.08, no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

(d) A Participant shall not be entitled to receive any greater payment under
Section 2.14 or 2.16 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 2.16 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 2.16(e) as
though it were a Lender.

(e) 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,

 

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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 the Revolving Loan,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any 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 the Revolving Loan
or any fee or any other amount payable under this Agreement is outstanding and
unpaid. The provisions of Sections 2.14, 2.15, 2.16 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 Revolving Loan or
the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness.

(a) 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.

(b) 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.

(c) Except as provided in Section 4.01, 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 shall be effective as delivery
of a manually executed counterpart of this Agreement.

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.

 

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SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, 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 of Borrower (general or special, time or demand,
provisional or final, but excluding any funds held by the Borrower on behalf of
tenants or other third parties) 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
Borrower against any of and all the obligations of the Borrower 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. Each Lender agrees promptly to notify the
Borrower after any such setoff and application made by such Lender, provided
that the failure to give such notice shall not affect the validity of such
setoff and application. 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 shall be governed by, and construed in accordance with, the
laws 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 state and federal courts
in Boston, Massachusetts and in New York, New York, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, 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 State or, to the extent permitted by law, in such Federal
court. 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
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document 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 or any other Loan Document 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.

(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.

 

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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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (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 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 hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (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 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 any Credit Party relating to the Credit Party or
its business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Credit Party; provided that, in the case of information
received from any Credit Party 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.

SECTION 9.13 Interest Rate Limitation. If at any time there exists a maximum
rate of interest which may be contracted for, charged, taken, received or
reserved by the Lenders in accordance with applicable law (the “Maximum Rate”),
then notwithstanding anything herein to

 

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the contrary, at any time the interest applicable to the Revolving Loan,
together with all fees, charges and other amounts which are treated as interest
on the Revolving Loan under applicable law (collectively, the “Charges”), shall
exceed such Maximum Rate, the rate of interest payable in respect of the
Revolving Loan 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 paid in respect of the Revolving Loan but were not
payable as result of the operation of this Section shall be cumulated and the
interest and Charges payable to the Lenders 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 the Lenders. If, for
any reason whatsoever, the Charges paid or received on the Revolving Loan
produces a rate which exceeds the Maximum Rate, the Lenders shall credit against
the principal of the Revolving Loan (or, if such indebtedness shall have been
paid in full, shall refund to the payor of such Charges) such portion of said
Charges as shall be necessary to cause the interest paid on the Revolving Loan
to produce a rate equal to the Maximum Rate. All sums paid or agreed to be paid
to the holders of the Revolving Loan for the use, forbearance or detention of
the Revolving Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of this Agreement, so that the interest rate is uniform throughout the full
term of this Agreement. The provisions of this Section shall control all
agreements, whether now or hereafter existing and whether written or oral,
between the parties hereto. Without notice to the Borrower or any other person
or entity, the Maximum Rate, if any, shall automatically fluctuate upward and
downward as and in the amount by which such maximum nonusurious rate of interest
permitted by applicable law fluctuates.

SECTION 9.14 USA PATRIOT Act. Each Lender 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)) (the “Act”), it is required to obtain,
verify and record information that identifies the Borrower and each other Credit
Party, which information includes the name and address of the Borrower and each
other Credit Party and other information that will allow such Lender to identify
the Borrower and each other Credit Party in accordance with the Act.

SECTION 9.15 Rights of Contribution. Each Borrower hereby agrees as among
themselves that, in connection with payments made hereunder, each Borrower shall
have a right of contribution, reimbursement and subrogation from each other
Borrower in accordance with applicable Law. Such contribution, reimbursement and
subrogation rights shall be subordinate and subject in right of payment to the
Obligations until such time as the Obligations (other than contingent
indemnification obligations which are not then due and payable or for which a
claim has not then been asserted) have been irrevocably paid in full and the
commitments relating thereto shall have expired or been terminated, and none of
the Borrowers shall exercise any such contribution, reimbursement and
subrogation rights until the Obligations have been irrevocably paid in full and
the commitments relating thereto shall have expired or been terminated.

SECTION 9.16 Joint and Several Liability.

(a) With respect to the definition of the “Borrower” hereunder or in any other
Loan Document, except where the context otherwise provides, (a) any
representations

 

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contained herein or in any other Loan Documents of Borrower shall be applicable
to each Borrower, (b) any affirmative covenants contained herein or in any other
Loan Documents shall be deemed to be covenants of each Borrower and shall
require performance by all Borrowers, (c) any negative covenants contained
herein or in any other Loan Documents shall be deemed to be covenants of each
Borrower, and shall be breached if any Borrower fails to comply therewith,
(d) the occurrence of any Event of Default with respect to any Borrower shall be
deemed to be an Event of Default hereunder or thereunder, and (e) any
Obligations of Borrowers, including, without limitation, under the Note
(i) shall be deemed to be Obligations of all of the Borrowers, and (ii) shall be
joint and several. Each Borrower recognizes that credit available to it under
the Loan is in excess of and on better terms than it otherwise could obtain on
and for its own account and that one of the reasons therefor is its joining in
the credit facility contemplated herein with all other Borrowers. Consequently,
each Borrower, jointly and severally, hereby assumes and agrees fully,
faithfully and punctually to discharge all Obligations of all of the Borrowers.

(b) To the fullest extent permitted by Law, the obligations of each Borrower
shall not be affected by (i) the failure of Lender to assert any claim or demand
or to enforce or exercise any right or remedy against any other Borrower under
the provisions of this Agreement, any other Loan Document or otherwise, (ii) any
rescission, waiver, amendment or modification of, or any release from any of the
terms or provisions of, this Agreement or any other Loan Document, (iii) the
failure to perfect any security interest in, or the release of, any of the
collateral or other security held by or on behalf of Lender, or (iv) any
default, failure or delay, willful or otherwise, in the performance of any of
the Obligations, or by any other act or omission that may or might in any manner
or to any extent vary the risk of any Borrower or that would otherwise operate
as a discharge of any Borrower as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations, excluding, however,
any contingent indemnification obligations which are not then due and payable or
for which a claim has not then been asserted). The obligations of each Borrower
shall not be subject to any reduction, limitation, impairment or termination for
any reason (other than the indefeasible payment in full in cash of the
Obligations, excluding, however, any contingent indemnification obligations
which are not then due and payable or for which a claim has not then been
asserted), including any claim of waiver, release, surrender, alteration or
compromise of any of the Obligations, and shall not be subject to any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Obligations or
otherwise.

(c) To the fullest extent permitted by Law, each Borrower waives any defense
based on or arising out of any defense of any other Borrower or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Borrower, other than the
indefeasible payment in full in cash of all the Obligations, excluding, however,
any contingent indemnification obligations which are not then due and payable or
for which a claim has not then been asserted. Lender may, at its election,
foreclose on any security held by one or more of them by one or more judicial or
non-judicial sales, accept an assignment of any such security in lieu of

 

- 60 -

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foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Borrower, or exercise any other right or remedy
available to them against any other Borrower, without affecting or impairing in
any way the liability of any Borrower hereunder except to the extent that all of
the Obligations have been indefeasibly paid in full in cash, excluding, however,
any contingent indemnification obligations which are not then due and payable or
for which a claim has not then been asserted. Each Borrower waives any defense
arising out of any such election even though such election operates, pursuant to
Law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Borrower against any other Borrower.

(d) Upon payment by any Borrower of any Obligations, all rights of such Borrower
against any other Borrower arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all of the Obligations, excluding, however, any
contingent indemnification obligations which are not then due and payable or for
which a claim has not then been asserted. In addition, any indebtedness of any
Borrower now or hereafter held by any other Borrower is hereby subordinated in
right of payment to the prior indefeasible payment in full of the Obligations,
excluding, however, any contingent indemnification obligations which are not
then due and payable or for which a claim has not then been asserted and no
Borrower will demand, sue for or otherwise attempt to collect any such
indebtedness. If any amount shall erroneously be paid to any Borrower on account
of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of any Borrower, such amount shall be held in
trust for the benefit of Lender and shall forthwith be paid to Lender to be
credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of this Agreement and the other Loan Documents.
Subject to the foregoing, to the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an “Accommodation
Payment”), then the Borrower making such Accommodation Payment shall be entitled
to contribution and indemnification from, and be reimbursed by, each of the
other Borrowers in an amount, for each of such other Borrowers, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Borrower’s Allocable Amount and the denominator of which is the sum of the
Allocable Amounts of all of the Borrowers. As of any date of determination, the
“Allocable Amount” of each Borrower shall be equal to the maximum amount of
liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower “insolvent” within the
meaning of Section 101 (32) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.

 

- 61 -

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[Signature Pages Follow]

 

- 62 -

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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.

 

BORROWER:

HIGHLAND CAPITAL MANAGEMENT L.P., a Delaware limited partnership By: Strand
Advisors, Inc., its General Partner   By:  

/s/ James Dondero

  Name:   James Dondero   Title:   President NEXPOINT MULTIFAMILY OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership By: NexPoint Multifamily
Realty Trust, Inc., its General Partner   By:  

/s/ Matt McGraner

  Name:   Matt McGraner   Title:   COO/EVP – Investments

[Signatures Continue on the Following Page]

 

[Signature Page to Revolving Credit Agreement]

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ADMINISTRATIVE AGENT:

KEYBANK, NATIONAL ASSOCIATION,

as Administrative Agent,

By:  

/s/ Christopher T. Neil

Name:   Christopher T. Neil Title:   Senior Relationship Manager LENDER:
KEYBANK, NATIONAL ASSOCIATION By:  

/s/ Christopher T. Neil

Name:   Christopher T. Neil Title:   Senior Relationship Manager

 

[Signature Page to Revolving Credit Agreement]

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SCHEDULE 2.01

 

LENDER    LOAN COMMITMENT        (Percentage)  

KEYBANK, NATIONAL ASSOCIATION

   $ 15,000,000.00         (100 %) 

 

Schedule 2.01

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SCHEDULE 3.07

LITIGATION

NONE

 

Schedule 3.07

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

REVOLVING CREDIT AGREEMENT

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Revolving Credit Agreement identified below (as
amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any guarantees included in such facilities) and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.

 

1.   Assignor:   

 

   2.   Assignee:   

 

        [and is an Affiliate/Approved Fund of [identify Lender]1] 3.   Borrower:
   HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING
PARTNERSHIP, L.P. 4.   Administrative Agent:    KeyBank, National Association,
as the administrative agent under the Credit Agreement

 

1  Select as applicable.

 

A-1

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5.   Credit Agreement:    The Revolving Credit Agreement dated as of April     ,
2016, among HIGHLAND CAPITAL MANAGEMENT L.P., NEXPOINT MULTIFAMILY OPERATING
PARTNERSHIP, L.P., the Lenders parties thereto, and KeyBank, National
Association, as Administrative Agent 6.   Assigned Interest:   

 

Aggregate Amount of
Revolving Loan for all
Lenders     Amount of Revolving
Loan Assigned     Percentage
Assigned of Revolving
Loans2   $                   $                                  %  $
                  $                                  %  $                   $
                                 % 

 

Effective Date:                , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

  Title:  

 

ASSIGNEE [NAME OF ASSIGNEE] By:  

 

  Title:  

 

 

[Consented to and]3 Accepted:

[KeyBank, National Association], as Administrative Agent

By:  

 

  Title:  

 

 

 

2  Set forth, to at least 9 decimals, as a percentage of the Revolving Loans of
all Lenders thereunder.

3  To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.

 

A-2

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[Consented to:]4 [NAME OF RELEVANT PARTY] By:  

 

  Title:  

 

 

4  To be added only if the consent of the Borrower and/or other parties is
required by the terms of the Credit Agreement.

 

A-3

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

A-4

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3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

A-5

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REVOLVING CREDIT AGREEMENT

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

Key Bank, National

Association

as Administrative Agent

225 Franklin Street

Boston, MA 02110

Attn: Mr. Christopher Neil

RE: HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING
PARTNERSHIP, L.P. Compliance Certificate

for                      through                     

Dear Ladies and Gentlemen:

This Compliance Certificate is made with reference to that certain Revolving
Credit Agreement dated as of April     , 2016 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among HIGHLAND
CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P.
(the “Borrower”), the financial institutions party thereto, as lenders, and
KeyBank, National Association, as Administrative Agent. All capitalized terms
used in this Compliance Certificate (including any attachments hereto) and not
otherwise defined in this Compliance Certificate shall have the meanings set
forth for such terms in the Credit Agreement. All Section references herein
shall refer to the Credit Agreement.

I hereby certify that I am the [                    ] of HIGHLAND CAPITAL
MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P., and that I
make this Certificate on behalf of the Borrower. I further represent and certify
on behalf of the Borrower as follows as of the date of this Compliance
Certificate:

I have reviewed the terms of the Loan Documents and have made, or have caused to
be made under my supervision, a review in reasonable detail of the transactions
and consolidated and consolidating financial condition of the Borrower and its
Subsidiaries, during the accounting period (the “Reporting Period”) covered by
the financial reports delivered simultaneous herewith pursuant to
Section 5.01[(a)][(b)], and that such review has not disclosed the existence
during or at the end of such Reporting Period (and that I do not have knowledge
of the existence as at the date hereof) of any condition or event which
constitutes a Default or Event of Default.

 

B-1

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(a) Total Leverage Ratio   1.        Indebtedness of Highland and its
Subsidiaries    $               2.    Total Assets (as shown on unconsolidated
financial statements:     

TOTAL

   $               3.    Ratio: 1 divided by 2                   4.    Required
Ratio: not greater than 35%    (b) Tangible Net Worth $                  1.   
Actual                   2.    Required $250,000.000.00    (c) Minimum Liquidity
$                  1.    Cash and Cash Equivalents (excluding reserve amounts)
   $               2/    Marketable securities (net of any indebtedness that
encumbers such securities)    $10,000,000.00 Currently Defaulted Other Debt:   
(a) Aggregate Defaulted Recourse Debt of the Borrower $ (b) Aggregate Defaulted
Recourse Debt of Parent $ (c) Aggregate Defaulted Non-recourse Debt of the
Subsidiaries of NMOP or Parent $

This Compliance Certificate has been executed and delivered as of the date set
forth above.

[Signature Page Follows]

 

B-2

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BORROWER: [HIGHLAND CAPITAL MANAGEMENT L.P., a Delaware limited partnership By:
      By:  

 

  Name:     Title:   ]   [and separate certificate for] [NEXPOINT MULTIFAMILY
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership By:       By:  

 

  Name:     Title:   ]

 

B-3

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REVOLVING CREDIT AGREEMENT

EXHIBIT C

Intentionally Omitted

 

C-1

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

REVOLVING CREDIT AGREEMENT

EXHIBIT D

FORM OF NOTE

 

$                        , 2016

FOR VALUE RECEIVED, HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY
OPERATING PARTNERSHIP, L.P. (jointly and severally, the “Maker”) jointly and
severally promise to pay without offset or counterclaim to the order of [insert
name of Lender], (“Payee”), the principal amount equal to the lesser of
(x)                                          ($        ) or (y) the outstanding
amount advanced by Payee as a Loan under the Credit Agreement (as hereinafter
defined), payable in accordance with the terms of the Credit Agreement.

Maker also promises to pay interest on the unpaid principal amount of this Note
(this “Note”) at the rates and at the times which shall be determined in
accordance with the provisions of that certain Revolving Credit Agreement dated
of even date herewith, among Maker, the Lenders named therein, and KeyBank,
National Association, as Administrative Agent for itself and the Lenders (as
hereafter amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”). Capitalized terms used herein without definition shall have
the meanings set forth in the Credit Agreement.

This Note is subject to (a) mandatory prepayment and (b) prepayment at the
option of the Maker, as provided in the Credit Agreement.

This Note is issued pursuant to the Credit Agreement and is entitled to the
benefits of the Credit Agreement, reference to which is hereby made for a more
complete statement of the terms and conditions under which the Loan evidenced
hereby is made and is to be repaid.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. MAKER AGREES THAT JURISDICTION AND VENUE FOR ANY ACTION
REGARDING THIS NOTE SHALL BE AS SET FORTH IN THE CREDIT AGREEMENT.

Upon the occurrence of an Event of Default, the unpaid balance of the principal
amount of this Note may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.

Maker promises to pay all reasonable fees, costs and expenses incurred in the
collection and enforcement of this Note in accordance with the terms of the
Credit Agreement. Maker and any endorser of this Note hereby consents to
renewals and extensions of time at or after the maturity hereof, without notice,
and hereby waive diligence, presentment, protest, demand and notice of every
kind (except such notices as may be expressly required under the Credit
Agreement or the other Loan Documents) and, to the full extent permitted by law,
the right to plead any statute of limitations as a defense to any demand
hereunder.

 

D-1

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Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Note shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note.

IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered by
its duly authorized officer, as of the day and year first written above.

 

HIGHLAND CAPITAL MANAGEMENT L.P., a Delaware limited partnership By:       By:  

 

  Name:     Title:   NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership By:       By:  

 

  Name:     Title:  

 

D-2

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REVOLVING CREDIT AGREEMENT

EXHIBIT E

[FORM OF] INTEREST ELECTION REQUEST

[Date]

KeyBank, National Association

as Administrative Agent

225 Franklin Street, 18th floor

Boston, Massachusetts 02110

Attn: Mr. Christopher Neil

Re: HIGHLAND CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING
PARTNERSHIP, L.P.

Dear Ladies and Gentlemen:

This Interest Election Request is made with reference to that certain Revolving
Credit Agreement dated as of April     , 2016 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among HIGHLAND
CAPITAL MANAGEMENT L.P. and NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P.
(the “Borrower”), the financial institutions party thereto, as lenders, and
KeyBank, National Association, as Administrative Agent. All capitalized terms
used in this Interest Election Request (including any attachments hereto) and
not otherwise defined in this Interest Election Request shall have the meanings
set forth for such terms in the Credit Agreement. All Section references herein
shall refer to the Credit Agreement.

The Borrower hereby requests a conversion of an existing Loan as provided below.
The conversion is to be made as follows:

 

A.   ABR Loan.   1.    Amount of ABR Loan:   $               2.    Amount of
conversion of existing Loan to ABR Loan   $               3.    Date of ABR Loan
conversion:   A.   Daily Libor Loan.   1.    Amount of Daily Libor Loan:  
$               2.    Amount of conversion of existing Loan to Daily Libor Loan
  $               3.    Date of Daily Libor Loan conversion:  

 

E-1

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B.   Eurodollar Loan:   1.    Amount of Eurodollar Loan:   $               2.   
Amount of conversion of existing Loan to Eurodollar Loan:   $               3.
   Number of Eurodollar Loans(s) now in effect: [cannot exceed six (6)]     4.
   Date of Eurodollar Loan conversion:     5.    Interest Period:     6.   
Expiration date of current Interest Period as to this conversion:  

 

E-2

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The Borrower hereby represents and warrants that the amounts set forth above are
true and correct, that the representations and warranties contained in the
Credit Agreement are true and correct as if made as of this date (except to the
extent relating to a specific date), and that the Borrower has kept, observed,
performed and fulfilled each and every one of its obligations under the Credit
Agreement as of the date hereof [except as follows:                     ]

 

Very truly yours, HIGHLAND CAPITAL MANAGEMENT L.P., a Delaware limited
partnership By:       By:  

 

  Name:     Title:   NEXPOINT MULTIFAMILY OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership By:       By:  

 

  Name:     Title:  

 

E-3