Exhibit 10.1

 

 

 

SENIOR SECURED CREDIT AGREEMENT

Dated as of December 13, 2011

among

APARTMENT INVESTMENT AND MANAGEMENT COMPANY,

AIMCO PROPERTIES, L.P.,

and

AIMCO/BETHESDA HOLDINGS, INC.,

as the Borrowers,

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent, Swing Line Lender

and an L/C Issuer,

WELLS FARGO BANK, N.A.,

as Syndication Agent

BANK OF AMERICA, N.A.

and

REGIONS BANK,

as Co-Documentation Agents,

and

The Other Lenders Party Hereto

and

KEYBANC CAPITAL MARKETS

and

WELLS FARGO SECURITIES,

as

Joint Lead Arrangers and Joint Book Managers

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I.

 

DEFINITIONS AND ACCOUNTING TERMS

     1   

1.01

  Defined Terms      1   

1.02

  Other Interpretive Provisions      31   

1.03

  Accounting Terms      32   

1.04

  Rounding      33   

1.05

  Times of Day      33   

1.06

  Letter of Credit Amounts      33   

ARTICLE II.

 

THE COMMITMENTS AND CREDIT EXTENSIONS

     33   

2.01

  Revolving Loans      33   

2.02

  Borrowings, Conversions and Continuations of Revolving Loans      34   

2.03

  Letters of Credit      35   

2.04

  Swing Line Loans      43   

2.05

  Prepayments      46   

2.06

  Termination or Reduction of Commitments      46   

2.07

  Repayment of Loans      47   

2.08

  Interest      47   

2.09

  Fees      48   

2.10

  Computation of Interest and Fees      48   

2.11

  Evidence of Debt      49   

2.12

  Payments Generally; Administrative Agent’s Clawback      49   

2.13

  Sharing of Payments by Lenders      51   

2.14

  Cash Collateral      52   

2.15

  Defaulting Lenders      53   

2.16

  Extension of Maturity Date      55   

2.17

  Increase in Commitments      56   

ARTICLE III.

 

TAXES, YIELD PROTECTION AND ILLEGALITY

     57   

3.01

  Taxes      57   

3.02

  Illegality      60   

3.03

  Inability to Determine Rates      60   

3.04

  Increased Costs; Reserves on Eurodollar Rate Loans      60   

3.05

  Compensation for Losses      62   

3.06

  Mitigation Obligations; Replacement of Lenders      63   

3.07

  Survival      63   

ARTICLE IV.

 

CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT AND CREDIT
EXTENSIONS

     63   

4.01

  Conditions of Effectiveness of this Agreement      63   

4.02

  Conditions to all Credit Extensions      65   

ARTICLE V.

 

REPRESENTATIONS AND WARRANTIES

     66   

5.01

  Existence, Qualification and Power; Compliance with Laws      66   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

5.02

  Authorization; No Contravention      66   

5.03

  Governmental Authorization; Other Consents      66   

5.04

  Binding Effect      66   

5.05

  Financial Statements; No Material Adverse Effect      67   

5.06

  Litigation      67   

5.07

  No Default      67   

5.08

  Ownership of Property; Liens      68   

5.09

  Environmental Compliance      68   

5.10

  Insurance      68   

5.11

  Taxes      68   

5.12

  ERISA Compliance      68   

5.13

  Subsidiaries; Equity Interests      69   

5.14

  Margin Regulations; Investment Company Act; REIT and Tax Status; Stock
Exchange Listing      69   

5.15

  Disclosure      70   

5.16

  Compliance with Laws      70   

5.17

  Intellectual Property; Licenses, Etc.      70   

ARTICLE VI.

 

AFFIRMATIVE COVENANTS

     71   

6.01

  Financial Statements      71   

6.02

  Certificates; Other Information      72   

6.03

  Notices      73   

6.04

  Payment of Obligations      74   

6.05

  Preservation of Existence, Etc.      74   

6.06

  Maintenance of Properties      75   

6.07

  Maintenance of Insurance      75   

6.08

  Compliance with Laws      75   

6.09

  Books and Records      75   

6.10

  Inspection Rights      75   

6.11

  Use of Proceeds      76   

6.12

  Additional Guarantors      76   

6.13

  Intra-Company Debt      77   

ARTICLE VII.

 

NEGATIVE COVENANTS

     77   

7.01

  Liens      77   

7.02

  Investments      79   

7.03

  Indebtedness      80   

7.04

  Fundamental Changes      82   

7.05

  Intentionally Omitted      82   

7.06

  Restricted Payments      83   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

7.07

  Change in Nature of Business      84   

7.08

  Transactions with Affiliates      84   

7.09

  Burdensome Agreements      84   

7.10

  Use of Proceeds      84   

7.11

  Financial Covenants      84   

7.12

  Special Covenants Relating to the REIT      85   

7.13

  Taxation of AIMCO      86   

ARTICLE VIII.

 

EVENTS OF DEFAULT AND REMEDIES

     86   

8.01

  Events of Default      86   

8.02

  Remedies Upon Event of Default      88   

8.03

  Application of Funds      89   

ARTICLE IX.

 

ADMINISTRATIVE AGENT

     89   

9.01

  Appointment and Authority      89   

9.02

  Rights as a Lender      90   

9.03

  Exculpatory Provisions      90   

9.04

  Reliance by Administrative Agent      91   

9.05

  Delegation of Duties      91   

9.06

  Resignation of Administrative Agent      91   

9.07

  Non-Reliance on Administrative Agent and Other Lenders      93   

9.08

  No Other Duties, Etc.      93   

9.09

  Administrative Agent May File Proofs of Claim      93   

9.10

  Collateral and Guaranty Matters      94   

9.11

  Approvals      95   

ARTICLE X.

 

MISCELLANEOUS

     95   

10.01

  Amendments, Etc.      95   

10.02

  Notices; Effectiveness; Electronic Communication      97   

10.03

  No Waiver; Cumulative Remedies      98   

10.04

  Expenses; Indemnity; Damage Waiver      98   

10.05

  Payments Set Aside      100   

10.06

  Successors and Assigns      101   

10.07

  Treatment of Certain Information; Confidentiality      105   

10.08

  Right of Setoff      106   

10.09

  Interest Rate Limitation      107   

10.10

  Counterparts; Integration; Effectiveness      107   

10.11

  Survival of Representations and Warranties      107   

10.12

  Severability      107   

10.13

  Replacement of Lenders      108   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

10.14

  Governing Law; Jurisdiction; Etc.      109   

10.15

  Waiver of Jury Trial      109   

10.16

  USA PATRIOT Act Notice      110   

10.17

  Time of the Essence      110   

10.18

  Borrowers’ Obligations      110   

10.19

  Fiduciary Duty      114   

 

v

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SCHEDULES   

1.01C

   Construction/Renovation

1.01E

   Existing Letters of Credit

1.01G

   Guarantors as of the Closing Date

2.01A

   Commitments and Applicable Percentages

5.06

   Litigation

5.09

   Environmental Matters

5.11

   Taxes

5.13

   Subsidiaries

7.01

   Existing Liens

7.03(b)(i)

   Existing Indebtedness

7.03(b)(ii)

   Cross-Collateralized and Cross-Defaulted Indebtedness

7.11

   Mezzanine Indebtedness

10.02

   Administrative Agent’s Office; Certain Addresses for Notices

 

EXHIBITS       Form of

A

   Revolving Loan Notice

B

   Swing Line Loan Notice

C-1

   Revolving Note

C-2

   Swing Line Note

D

   Compliance Certificate

E

   Assignment and Assumption

F

   Guaranty

G

   Intra-Company Loan Subordination Agreement

H

   Joinder Agreement

I-1

   Borrower Pledge Agreement

I-2

   Non-Borrower Pledge Agreement

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SENIOR SECURED CREDIT AGREEMENT

This SENIOR SECURED CREDIT AGREEMENT is entered into as of December 13, 2011,
among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
“REIT”), AIMCO PROPERTIES, L.P., a Delaware limited partnership (“AIMCO”) and
AIMCO/Bethesda HOLDINGS, INC., a Delaware corporation (“AIMCO/Bethesda”) (the
REIT, AIMCO and AIMCO/Bethesda, collectively referred to as the “Borrowers”),
each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), KEYBANK NATIONAL ASSOCIATION, as Administrative
Agent, Swing Line Lender and an L/C Issuer, WELLS FARGO BANK, N.A., as
Syndication Agent, and BANK OF AMERICA, N.A. and REGIONS BANK, as
Co-Documentation Agents, with reference to the following Recitals:

RECITALS

WHEREAS, Borrowers have requested that the Lenders provide a revolving credit
facility to the Borrowers; and

WHEREAS, the Administrative Agent and the Lenders are willing to make such
credit facility available to the Borrowers on the terms and conditions contained
herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties hereto agree
as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Actual Debt Service” means, for any period, aggregate debt service on all Total
Funded Indebtedness (exclusive of balloon, bullet or similar payments at
maturity), including Total Scheduled Amortization and Total Interest Expense.

“Adjusted Tangible Net Worth” means, as of the date of determination, an amount
equal to the sum of (a) Consolidated Tangible Net Worth, plus (b) accumulated
depreciation of the Borrowing Group on a consolidated basis, all in accordance
with GAAP.

“Adjusted Total EBITDA” means, for any period, an amount equal to (a) Total
EBITDA, minus (b) the Capital Expenditure Reserve as of the last day of such
period.

“Adjusted Total NOI” means, for any period, an amount equal to (a) Total Net
Operating Income, minus (b) the Capital Expenditure Reserve as of the last day
of such period.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the
Borrowers and the Lenders.

 

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“Administrative Agent” means KeyBank in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.

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

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

“Aggregate Commitments” means the Commitments of all the Lenders.

“Aggregate Credit Exposures” means, at any time and without double counting, the
sum of (i) the unused portion of the Aggregate Commitments then in effect, and
(ii) the Total Outstandings at such time.

“Aggregate Recourse Indebtedness” means, on any date of determination and
without double counting, the sum of (a) the Obligations, plus (b) the Borrowing
Group’s Share of Recourse Indebtedness.

“Agreement” means this Senior Secured Credit Agreement, as may be amended,
restated, amended and restated, extended, supplemented or otherwise modified in
writing from time to time.

“AIMCO” is defined in the preamble to this Agreement.

“AIMCO/Bethesda” is defined in the preamble to this Agreement.

“Applicable Capitalization Rate” means 7.00%.

“Applicable Percentage” means, as of the date of determination:

(a) with respect to a Lender’s obligation to make Revolving Loans and receive
payments of principal, interest, fees, costs, and expenses with respect thereto,
(i) prior to the Commitments being terminated or reduced to zero, the percentage
obtained by dividing (y) such Lender’s Commitment, by (z) the aggregate
Commitments of all Lenders, and (ii) from and after the time that all
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the aggregate outstanding principal amount of such Lender’s
Revolving Loans by (z) the aggregate outstanding principal amount of all
Revolving Loans,

(b) with respect to a Lender’s obligations to participate in Letters of Credit,
to reimburse the applicable L/C Issuer, and to receive payments of fees with
respect thereto, (i) prior to the Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender’s Commitment, by
(z) the aggregate Commitments of all Lenders, and (ii) from and after the time
that the Commitments have been terminated or reduced to zero, the percentage
obtained by dividing (y) the aggregate outstanding principal amount of such
Lender’s Revolving Loans by (z) the aggregate outstanding principal amount of
all Revolving Loans, and

 

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(c) with respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 10.04), the percentage
obtained by dividing (i) such Lender’s Commitment, by (ii) the aggregate amount
of Commitments of all Lenders; provided, however, that in the event the
Commitments have been terminated or reduced to zero, the Applicable Percentage
under this clause (c) shall be the percentage obtained by dividing (A) the
outstanding principal amount of such Lender’s Revolving Loans, plus such
Lender’s ratable portion of the outstanding Letters of Credit by (B) the
principal amount of all outstanding Revolving Loans, plus the aggregate amount
of outstanding Letters of Credit.

(d) The initial Applicable Percentage of each Lender is set forth opposite the
name of such Lender on Schedule 2.01A or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable.

(e) The Applicable Percentages shall be subject to adjustment as provided in
Section 2.15.

“Applicable Rate” means the following percentages per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance Certificate received
by Administrative Agent pursuant to Section 6.02(b):

Applicable Rate

 

Pricing Level

   Leverage Ratio   LIBOR
Applicable Rate
    Base Rate
Applicable Rate     Letters of
Credit  

1

   < 50%     2.50 %      1.25 %      2.50 % 

2

   ³ 50% and < 55%     2.75 %      1.50 %      2.75 % 

3

   ³ 55% and < 60%     3.00 %      1.75 %      3.00 % 

4

   ³ 60%     3.25 %      2.25 %      3.25 % 

Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 4 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered until the date such Compliance
Certificate is delivered, whereupon, the Applicable Rate shall be adjusted based
upon the calculation of the Leverage Ratio contained in such Compliance
Certificate. The Applicable Rate in effect from the Closing Date to the first
Business Day immediately following the date a Compliance Certificate is required
to be delivered pursuant to Section 6.02(b) for the fiscal quarter ended
December 31, 2011 shall be determined based upon Pricing Level 2.

“Applicable Unused Fee” means 0.35% per annum for Usage (as such term is defined
below) less than 50% and 0.25% per annum for Usage of 50% or greater, based upon
the Usage as of the date of determination. As used in this definition, the term
“Usage” shall mean on each date of determination the percentage of usage of the
Commitments obtained by subtracting the average daily Total Outstandings for the
most recent fiscal quarter ending prior to the date of determination from the
aggregate Commitments then in effect.

 

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“Approved Fund” means any Fund 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.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent which
acceptance will not be unreasonably withheld or delayed, in substantially the
form of Exhibit E or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, in respect of any capital lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP.

“Audited Financial Statements” means the audited consolidated balance sheet of
the REIT for the fiscal year ended December 31, 2010, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year of the REIT, including the notes thereto.

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Commitments pursuant to Section 2.06, and (c) the date of termination of the
commitment of each Lender to make Revolving Loans and of the obligation of the
L/C Issuers to make L/C Credit Extensions pursuant to Section 8.02.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by KeyBank as its “prime
rate,” and (c) the Eurodollar Rate applicable to a Revolving Loan with a one
month Interest Period plus 1.25%. The “prime rate” is a rate set by KeyBank
based upon various factors including KeyBank’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by KeyBank shall take effect at the opening of
business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Revolving Loan that bears interest based on the Base
Rate.

“Borrowers” has the meaning specified in the introductory paragraph hereto. Any
reference to Borrowers herein shall be deemed to refer to each Person
constituting Borrowers, and the responsibilities, obligations and covenants of
each such Person under this Agreement and the other Loan Documents shall be
joint and several unless expressly stated otherwise herein or the context
otherwise requires; provided, however, that the obligations of Borrowers with
respect to delivery of reports, financial statements and certifications may be
performed by AIMCO for or on behalf of any or all of the Borrowers, as
applicable.

 

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“Borrowing” means a Revolving Borrowing or a Swing Line Borrowing, as the
context may require.

“Borrowing Group” means the Borrowers and all of their respective Subsidiaries.

“Borrowing Group’s Share” means, with respect to any item (including by way of
example and not of limitation, Indebtedness, EBITDA, Net Income, Net Operating
Income, Interest Expense or Scheduled Amortization) of the Borrowing Group, its
allocable pro rata share (which share, for example, would be 100% in the case of
a Borrower or 60% in the case of a Subsidiary in which a Borrower owns 60% of
the Equity Interests and/or is allocated 60% of the applicable item) of the
applicable item based on the Borrowing Group’s aggregate percentage ownership
interest in items of income or loss of such Person consistent with that used in
the preparation of the REIT’s financial statements; provided, that, if the
percentage ownership used in the preparation of the REIT’s financial statements
does not, in the good faith judgment of the Borrowers, accurately reflect the
Borrowing Group’s share of Indebtedness, EBITDA, Net Income, Net Operating
Income, Interest Expense, Scheduled Amortization and other similar items, then
such items may be adjusted by the Borrowers subject to disclosure to and
approval by the Administrative Agent.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of the United States where the Administrative Agent’s
Office is located and, if such day relates to any Eurodollar Rate Loan, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.

“Capital Expenditure Reserve” means, as of any date of determination, the
product of (a) $350 per annum and (b) the Borrowing Group’s Share of apartment
units owned as of such date of determination; provided, however, that an
apartment unit shall be excluded from the foregoing calculation if, at the date
of determination, a mortgage lender with respect to such apartment unit holds a
funded reserve for future capital improvements for such apartment unit.

“Capital Expenditures” means, for any period and with respect to any Person, the
aggregate of all expenditures by such Person for the acquisition or leasing of
fixed or capital assets or additions to equipment or property (including
replacements, capitalized repairs and improvements during such period but
excluding Capital Improvements, Construction/Renovation and Moderate
Redevelopment) which should be capitalized under GAAP on a consolidated balance
sheet of such Person. For the purpose of this definition, the purchase price of
assets or additions to equipment or property which is purchased simultaneously
with the trade-in of existing assets or additions to equipment or property owned
by such Person or with insurance proceeds shall be included in “Capital
Expenditures” only to the extent of the gross amount of such purchase price,
less the credit granted by the seller of such asset, addition to equipment or
property for such asset, addition to equipment or property being traded in at
such time, or the amount of such proceeds, as the case may be.

“Capital Improvements” means all development capital expenditures that are made
to enhance the value or profitability of an asset from its original purchase
condition.

 

5

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“Capital Replacements” means, for any period and with respect to any Person, the
Borrowing Group’s Share of capital additions that are deemed to replace the
portion of acquired capital assets (excluding capital additions for casualties,
accidents and redevelopment and the Borrowing Group’s Share of capital additions
that are made to enhance the value, profitability or useful life of an asset as
compared to its original purchase condition) that was consumed in the ordinary
course of business during the period that such Person owned such asset.

“Cash” means money, currency or a credit balance in any demand, time, savings,
passbook or like account with a bank, savings and loan association, credit union
or like organization, other than an account evidenced by a negotiable
certificate of deposit.

“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Administrative Agent, any L/C
Issuer or the Swing Line Lender (as applicable) and the Lenders, as collateral
for L/C Obligations, Obligations in respect of Swing Line Loans or obligations
of Lenders to fund participations in respect of either thereof (as the context
may require), cash or deposit account balances, pursuant to documentation in
form and substance reasonably satisfactory to the Administrative Agent and any
L/C Issuer or the Swing Line Lender (as applicable) (which documents are hereby
consented to by the Lenders). “Cash Collateral” shall have a meaning correlative
to the foregoing and shall include the proceeds of such cash collateral and
other credit support.

“Cash Equivalents” means:

(a) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the
United States having maturities of not more than twelve (12) months from the
date of acquisition;

(b) certificates of deposit, time deposits, demand deposits, eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers’
acceptances, having in each case a term of not more than six (6) months, issued
by (x) Administrative Agent or any Lender or (y) any U.S. commercial bank (or
any branch or agency of a non-U.S. bank licensed to conduct business in the
U.S.) having membership in the FDIC, combined capital and surplus of not less
than $100,000,000 and whose short-term securities are rated at least A-1 by S&P
and P-1 by Moody’s (determined, for purposes of this clause (b) only, at the
time of acquisition or roll-over);

(c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s
and in either case having a term of not more than three (3) months (determined,
for purposes of this clause (c) only, at the time of acquisition or roll-over);

(d) securities rated at least A by S&P or A2 by Moody’s and in either case
having maturities of not more than twelve (12) months from the date of
acquisition (determined, for purposes of this clause (d) only, at the time of
acquisition or roll-over); and

(e) money market funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (d) above.

 

6

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

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 33- 1/3% of the common shares of the REIT on a fully-diluted
basis (and taking into account all such securities that such person or group has
the right to acquire pursuant to any option right); or

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors of the REIT cease to be composed of individuals (i) who were
members of that board on the first day of such period, (ii) whose election or
nomination to that board was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least a
majority of that board or (iii) whose election or nomination to that board was
approved by individuals referred to in clauses (i) and (ii) above constituting
at the time of such election or nomination at least a majority of that board
(excluding, in the case of both clause (ii) and clause (iii), any individual
whose initial nomination for, or assumption of office as, a member of that board
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).

Notwithstanding the foregoing, “option right” shall not include any common
shares which any person or group has a right to acquire as a result of a merger
or acquisition agreement, until such right is exercised, at which time “option
right” shall include the common shares with respect to which such right was
exercised.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

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

 

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“Collateral” means the collateral pledged to the Administrative Agent for the
ratable benefit of the Lenders pursuant to the Pledge Agreements.

“Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01A or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement. The aggregate Commitment shall not exceed $500,000,000, unless
increased pursuant to Section 2.17.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Consolidated Tangible Net Worth” means, as of any date of determination, for
the REIT on a consolidated basis, (a) shareholders’ equity in respect of the
REIT on that date, minus (b) the Intangible Assets of the Borrowing Group on
that date.

“Construction/Renovation” means the Borrowing Group’s Share of any New
Construction or any substantial rehabilitation, redevelopment, renovation and/or
expansion of any multi-family property which, in the case of rehabilitation,
redevelopment, renovation or expansion, involves the repositioning or upgrading
of such multi-family property with respect to comparable multi-family properties
located in the proximate geographic area, excluding any Moderate Redevelopment.
The Borrowing Group’s Share of Properties under Construction/Renovation as of
the Closing Date are listed on Schedule 1.01C attached hereto.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

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

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Debt Service Coverage Ratio” means, as of any date of determination, the ratio
of (a) Adjusted Total EBITDA for the four quarter period ending on such date to
(b) Actual Debt Service during such four quarter period.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
highest Applicable Rate (regardless of the then applicable Leverage Ratio)
applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that
with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest
rate equal to (i) the Eurodollar Rate plus (ii) the highest Applicable Rate
(regardless of the then applicable Leverage Ratio) applicable to Eurodollar Rate
Loans plus 2% per annum, and (b) when used with respect to Letter of Credit
Fees, a rate equal to the highest Applicable Rate (regardless of the then
applicable Leverage Ratio) applicable to Letters of Credit plus 2% per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Revolving Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one (1) Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one (1) Business Day of the date when
due, unless the subject of a good faith dispute, (c) any L/C Issuer has a good
faith belief that such Lender has defaulted in fulfilling its obligations under
one or more other syndicated credit facilities (and in such other credit
facilities such Lender has been treated as a defaulting or otherwise impacted
lender), (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) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment; provided, that, a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any Equity
Interests in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender, or (e) has failed, within three (3) Business Days after written request
by the Administrative Agent or any Borrower, to confirm in writing to the
Administrative Agent and the Borrowers that it will comply with its prospective
funding obligations hereunder (provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (e) upon receipt of such written
confirmation by the Administrative Agent and the Borrowers). No Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or
consent under this Agreement (and the portion of the Total Outstandings held or
deemed held by any Defaulting Lender shall be excluded in determining if any
required approval or consent of the Lenders has been obtained), except that the
Commitment of such Defaulting Lender may not be increased or extended without
the consent of such Defaulting Lender (subject to Sections 2.16 and 2.17).

“Development Assets” means, as of any date of determination, raw land, vacant
out parcels or real property or any portion thereof owned by a Person and which,
as of such date, is in whole or material part the subject of
Construction/Renovation; provided, that such real

 

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property or any portion thereof will be included in “Development Assets” only
until the earlier of (a) the date on which the property or any portion thereof
achieves a stabilized occupancy level of at least 85% for the most recent
complete quarter, and (b) six months after the date of completion of
Construction/Renovation such that the property or any portion thereof may
legally be occupied for its intended purpose.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction and dispositions due
to casualty or condemnation) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“EBITDA” means, for any period and for any Person, an amount equal to such
Person’s Net Income for such period plus (a) the following, to the extent
deducted in calculating such Net Income: (i) such Person’s Interest Expense plus
other costs related to amortization of fees and expenses relating to the
issuance of indebtedness for such period, (ii) the provision for Federal, state
and local income taxes payable by such Person for such period, (iii) such
Person’s depreciation and amortization expense for such period, (iv) other
non-cash expenses of such Person reducing such Net Income for such period which
do not represent a cash item in such period or any future period and
(v) restructuring, severance, reserves or similar charges for any such period
and minus (b) the following to the extent included in calculating such Net
Income: (i) Federal, state and local income tax credits of the Person for such
period and (ii) all non-cash items increasing such Person’s Net Income for such
period, excluding non-cash items for which cash was received in a prior period
or will be received in a future period.

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent and (ii) unless an Event of Default has occurred
and is continuing, the Borrowers (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrowers or any of the Borrowers’ Affiliates or
Subsidiaries.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any Hazardous Materials into the environment, including those related
to hazardous substances or wastes, air emissions and discharges to waste or
public systems.

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

 

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“Equity Interest” means, with respect to any Person, shares of capital stock of
(or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or such
other interests), and other ownership or profit interests in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination. Convertible debt shall
not constitute an Equity Interest unless and until such debt is converted into
the applicable underlying securities.

“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)
under common control with the Borrowers within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrowers or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by the Borrowers or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan amendment as a termination under Sections 4041 of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
material liability under Title IV of ERISA, other than for PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Borrowers or any ERISA
Affiliate.

“Eurodollar Rate” means,

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to the average rate (rounded to the nearest whole multiple of 1/100
of 1%) as shown in Reuters Screen LIBOR 01 Page (or any successor service or, if
such Person no longer reports such rate as determined by Administrative Agent,
by another commercially available source providing such quotations approved by
Administrative Agent) at which Dollar deposits are offered by first class banks
in the London interbank market at approximately 11:00 a.m. (London time) on the
day that is two (2) Business Days prior to the first day of such Interest Period
with a maturity approximately equal to such Interest Period and in an amount
approximately equal to the amount to which such Interest Period relates; and

 

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(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to the average rate (rounded to the nearest whole
multiple of 1/100 of 1%) as shown in Reuters Screen LIBOR 01 Page (or any
successor service or, if such Person no longer reports such rate as determined
by Administrative Agent, by another commercially available source providing such
quotations approved by Administrative Agent) at which Dollar deposits are
offered by first class banks in the London interbank market at approximately
11:00 a.m. (London time) on the day that is two (2) Business Days prior to the
first day of such Interest Period with a maturity of one month commencing that
day and in an amount approximately equal to the amount of the Base Rate Loan
being made, continued or converted by KeyBank or such other amount as reasonably
determined by the Administrative Agent.

“Eurodollar Rate Loan” means a Revolving Loan that bears interest at a rate
based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers hereunder, (a) taxes imposed on or measured
by its overall net income (or any Person whose net income is measured with
reference to it) (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located, or in which it is doing business, 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 or any similar tax imposed by any
other jurisdiction in which the Borrowers are located, (c) other than with
respect to an assignee pursuant to a request by the Borrowers under
Section 10.13, any withholding tax that is imposed on amounts payable to such
Person at the time such Person becomes a party hereto (or designates a new
Lending Office) or is attributable to such Person’s failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Person (or its assignor, if any) was entitled, at the time
of its appointment or designation of a new Lending Office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 3.01(a) and (d) U.S. federal taxes imposed by reason of
a Lender’s failure to comply with the requirements of FATCA to establish that
such payment is exempt from withholding tax thereunder.

“Existing Credit Agreement” means the Second Amended and Restated Senior Secured
Credit Agreement dated as of November 2, 2004, among the Borrowers, Bank of
America, N.A., as administrative agent, swing line lender and letter of credit
issuer, KeyBank, as syndication agent, and certain lenders party thereto, as
amended.

“Existing Letters of Credit” means the letters of credit set forth on Schedule
1.01E.

 

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“Existing Maturity Date” is defined in Section 2.16(a).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations promulgated thereunder or official interpretations thereof.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to KeyBank on
such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the letter agreement, dated September 12, 2011, among the
Borrowers, the Administrative Agent and the Joint Lead Arrangers.

“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio
of (a) Adjusted Total EBITDA for the four fiscal quarter period ending on such
date to (b) Fixed Charges for such period.

“Fixed Charges” means, for any period, the sum of (i) Total Interest Expense for
such period, plus (ii) Total Scheduled Amortization for such period (without
double counting amounts funded with reserve accounts or sinking funds if already
taken into account in determining Fixed Charges for such period or any prior
period), plus (iii) dividends accrued (whether or not declared or payable) on
any shares of preferred Stock and/or preferred Partnership Units of the
Borrowers or any of their Subsidiaries outstanding during such period, which
preferred securities are owned at any time during such period by Persons other
than the Borrowers and their Subsidiaries.

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

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

“Free Cash Flow” means, for any period of determination, an amount equal to the
Borrowing Group’s Share of EBITDA for such period, minus the Borrowing Group’s
Share of the following for such period: (i) Capital Replacements, (ii) Fixed
Charges and (iii) the amount of the minimum required dividends for the REIT to
maintain its REIT Status.

 

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“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to an L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations with respect to Letters of Credit issued by such L/C
Issuer other than L/C Obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof and (b) with respect to the
Swing Line Lender, such Defaulting Lender’s Applicable Percentage of Swing Line
Loans other than Swing Line Loans as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

“Fronting Fee” has the meaning specified in Section 2.03(j).

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funded Indebtedness” means, as of any date of determination, for any Person,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (other than surety bonds and bonds supporting utility
deposits or other comparable security deposits), (b) all purchase money
Indebtedness, (c) all direct obligations arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, and
similar instruments, (d) all obligations in respect of the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business), (e) Attributable Indebtedness in respect of capital lease
obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above, and
(g) all Indebtedness of the types referred to in clauses (a) through (f) above
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person or its Subsidiary
is a general partner or joint venturer with liability for joint venture
obligations, unless such Indebtedness is expressly made not Recourse to the
Person or such Subsidiary; provided, however, that solely for purposes of
Sections 7.03(g) and 7.11 and the definitions relating to calculations of
financial covenants contained therein and for purposes of determining the
Applicable Rate, “Funded Indebtedness” shall exclude Intra-Company Debt,
deferred income taxes, security deposits, accounts payable and accrued
liabilities and any prepaid rent (as and to the extent such terms are defined
under GAAP).

“Funds From Operations” means, with respect to Borrowers and their Subsidiaries
on a consolidated basis, net income calculated in accordance with GAAP,
excluding gains or losses from debt restructuring and sales of depreciable
property, plus depreciation and amortization (excluding amortization of
financing costs), and after adjustments for unconsolidated partnerships and
joint ventures (with adjustments for unconsolidated partnerships and joint
ventures calculated to reflect funds from operations on the same basis) and the
payment of dividends on preferred Stock, as interpreted by the National
Association of Real Estate Investment Trusts in its April 1, 2002, White Paper;
provided, however, the following shall be excluded when calculating “Funds From
Operations”: (i) non-cash adjustments for preferred Stock issuance costs,
(ii) non-cash adjustments for loan amortization costs and (iii) non-cash
adjustments for impairment losses on real estate development assets, net of any
tax benefit.

 

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“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 10.06(h).

“Gross Asset Value” means, as of any date of determination and without double
counting any item, the sum of the Borrowing Group’s Share of the following:

(i) Cash (including Restricted Cash but excluding any Cash held in funds for
Capital Expenditures and actually deducted in the determination of Capital
Expenditure Reserve as provided in the definition thereof, funds held in sinking
funds or interest reserves and Cash held in escrow in connection with property
exchanges under Section 1031 of the Code), and Cash Equivalents;

(ii) Notes Receivable valued at net realizable value as of such date of
determination in accordance with GAAP;

(iii) with respect to all real estate assets wholly or partially owned by such
Person(s) throughout the most recent four calendar quarters ending on or prior
to such date of determination (other than Development Assets), the Adjusted
Total NOI attributable to such real estate assets for such four quarter period
divided by the Applicable Capitalization Rate;

(iv) with respect to all real estate assets wholly or partially owned on such
date of determination, but acquired less than four calendar quarters but at
least one calendar quarter preceding such date of determination (other than
Development Assets), the Adjusted Total NOI attributable to such real estate
assets for any period that such Person(s) owned such assets measured on an
annualized basis and divided by the Applicable Capitalization Rate;

(v) with respect to all real estate assets wholly or partially owned on such
date of determination, but acquired less than one calendar quarter preceding
such date of determination (other than Development Assets), 100% of the purchase
price paid by such Person(s) for such assets;

(vi) 100% of the book value (determined in accordance with GAAP) of Development
Assets and Unimproved Land owned as of such date of determination;

 

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(vii) an amount equal to 400% of the aggregate EBITDA attributable to, without
duplication, property and asset management fees of the Borrowing Group for the
four consecutive fiscal quarter period preceding such date of determination; and

(viii) 100% of the book value (determined in accordance with GAAP) of the
Permitted Junior Loans and Permitted Mortgage Certificates owned as of such date
of determination; provided that, notwithstanding the foregoing, the book value
of any such Permitted Junior Loans or Permitted Mortgage Certificates shall be
$0.00 in the event (x) there exists, as of such date, any payment default under,
or event of default or other event which would permit the acceleration of, such
Permitted Junior Loans or Permitted Mortgage Certificates or (y) of the
occurrence of any event or circumstance relating to any such Permitted Junior
Loan or Permitted Mortgage Certificate which results in the modification of the
payment “waterfall” provided for in the documentation underlying or relating to
such Permitted Junior Loan or Permitted Mortgage Certificate that would
otherwise be in effect absent such event or circumstance, which modification
results in such Permitted Junior Loan or Permitted Mortgage Certificate
receiving reduced or modified payments or otherwise being locked out from
receiving any cash flow.

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness payable or performable by another Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness of the payment or
performance of such Indebtedness, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness, or (iv) entered into for the purpose of assuring in
any other manner the obligee in respect of such Indebtedness of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person securing any
Indebtedness of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantor” means each Subsidiary of any Borrower that executes and delivers a
counterpart of any Guaranty on the Closing Date or from time to time thereafter
pursuant to Section 6.12, and collectively are referred to herein as the
“Guarantors”. The Guarantors as of the Closing Date are set forth on
Schedule 1.01G attached hereto.

“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders, substantially in the form of Exhibit F.

 

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“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, 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.

“Honor Date” is defined in Section 2.03(c)(i).

“Increase Effective Date” is defined in Section 2.17(a)(iv).

“Indebtedness” means, as to any Person, at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments (other than surety bonds and bonds supporting utility
deposits or other comparable security deposits);

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank guaranties
and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) capital lease obligations of such Person;

(g) all obligations of such Person (other than Qualified Redemption Obligations)
to purchase, redeem, retire or defease any Equity Interest in such Person,
valued, in the case of a redeemable preferred interest, at the liquidation
preference plus accrued and unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer with liability for joint venture
obligations, unless such Indebtedness is expressly made non-recourse to such
Person. The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date. The
amount of

 

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any capital lease as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date. Solely for
purposes of Sections 7.03(g) and 7.11 and the definitions relating to
calculations of financial covenants contained therein and for purposes of
determining the Applicable Rate, “Indebtedness” shall exclude Intra-Company
Debt, deferred income taxes, security deposits, accounts payable and accrued
liabilities and any prepaid rent (as such terms are defined under GAAP).

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Intangible Assets” means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents, franchises, licenses, unamortized deferred
charges, unamortized debt discount and capitalized research and development
costs, but only to the extent such intangible assets are material or separately
and distinctly identified in a line item on the REIT’s balance sheet.

“Interest Expense” means, for any Person and for any period, without
duplication, the sum of (x) gross interest expense paid, incurred or accrued
during such period by such Person (including all commissions, discounts, fees
and other charges in connection with standby letters of credit and similar
instruments), including capitalized interest, plus (y) the portion of the
upfront costs and expenses for Swap Contracts relating to interest rate hedges
entered into by such Person (to the extent not included in gross interest
expense) fairly allocated to such Swap Contracts as expenses for such period, as
determined for such Person in accordance with GAAP, provided, that, included in
Interest Expense will be all interest expense accrued by Borrowers and their
respective Subsidiaries during such period, even if not payable on or before the
Maturity Date, and excluded from Interest Expense will be all amortization of
costs for the issuance of debt and interest accrued under any Intra-Company Debt
and all upfront fees, arrangement fees, commitment fees, commissions and similar
charges associated with the issuance of Indebtedness.

“Interest Payment Date” means (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each calendar month and the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrowers in their applicable Revolving Loan
Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

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(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date.

“Interest Reserves” means, with respect to any Indebtedness, the aggregate of
all sums held by any applicable lender as reserves for future interest payments
in respect of the Borrowing Group’s Share of such Indebtedness.

“Intra-Company Debt” means all Indebtedness (whether book-entry or evidenced by
a term, demand or other note or other instrument) owed by any member of the
Borrowing Group to any other member of the Borrowing Group; provided, that, all
such Intra-Company Debt owed by Borrowers or any Guarantor (excluding a de
minimis amount thereof not to exceed $250,000) shall be subordinated in right of
payment to the payment in full of the Obligations in accordance with the terms
of the Intra-Company Loan Subordination Agreement.

“Intra-Company Loan Subordination Agreement” means a Subordination Agreement, in
the form attached hereto as Exhibit G (with such amendments or modifications
thereto as may be agreed to by the Required Lenders), with respect to
Intra-Company Debt, in favor of Administrative Agent for the ratable benefit of
Lenders, and entered into by each of the lenders of the Intra-Company Debt,
Borrowers and Guarantors.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the book value of such
Investment.

“IP Rights” has the meaning specified in Section 5.17.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer that issued such Letter of Credit and the Borrowers (or
any Subsidiary) or in favor such L/C Issuer and relating to any such Letter of
Credit.

 

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“Joinder Agreement” means a joinder agreement substantially in the form attached
hereto as Exhibit H.

“Joint Lead Arrangers” mean KeyBanc Capital Markets and Wells Fargo Securities,
in their capacities as joint lead arrangers and joint book managers.

“KeyBank” means KeyBank National Association and its successors.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed by 5:00 p.m. on the Honor Date
(or, if the Borrowers were notified of such drawing on or after the Honor Date,
not later than 5:00 p.m. on the following Business Day) or refinanced as a
Revolving Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means (a) KeyBank, in its capacity as issuer of Letters of Credit
issued by it hereunder, together with its successors in such capacity, (b) Bank
of America, N.A., in its capacity as issuer of the Existing Letters of Credit,
together with its successors in such capacity or (c) any other Lender or Lenders
selected by the Borrowers and reasonably satisfactory to the Administrative
Agent, in its capacity as issuer of Letters of Credit issued by such Lender
hereunder, together with its successors in such capacity; provided that under no
circumstances shall there be more than three L/C Issuers at any time.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

 

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“Lender” has the meaning specified in the introductory paragraph hereto,
includes any Person that shall have become party hereto pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption and, as the context requires,
includes the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

“Letter of Credit” means any standby letter of credit issued hereunder and shall
include the Existing Letters of Credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer that issued such Letter of Credit.

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

“Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

“Leverage Ratio” means, on any date of determination, the ratio of (a) Total
Funded Indebtedness as of such date to (b) Gross Asset Value as of such date.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means a Revolving Loan and a Swing Line Loan, as the context requires.

“Loan Documents” means this Agreement, each Revolving Note, the Swing Line Note,
each Issuer Document, the Fee Letter, the Guaranty, the Intra-Company Loan
Subordination Agreement, the Pledge Agreements, and other instrument, document
or agreement from time to time delivered by a Loan Party in connection with this
Agreement.

“Loan Parties” or “Loan Party” means, individually or collectively, the
Borrowers, each Guarantor and each Subsidiary which is party to a Pledge
Agreement, as applicable.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of the Borrowers
or the Borrowers and their

 

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Subsidiaries taken as a whole; (b) a material impairment of the ability of (x) a
Borrower or (y) the Loan Parties (other than the Borrowers), taken as a whole,
to perform the Obligations under the Loan Documents; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against the
Loan Parties of the Loan Documents.

“Maturity Date” means the later of (a) December 13, 2014 and (b) if the Existing
Maturity Date is extended pursuant to Section 2.16, such extended Maturity Date
as determined pursuant to such Section 2.16.

“Mezzanine Indebtedness” means Indebtedness of the Borrowers or any of their
Subsidiaries secured by a pledge of one or more equity interests in a Single
Purpose Entity owning only one real property asset, where such real property
asset is prohibited from being further encumbered.

“Moderate Redevelopment” means any renovation of any multi-family property that
does not involve any demolition of existing units and which does not involve
(a) taking units out of service for more than 30 consecutive days or (b) more
than 20% of the total units in a multi-family property, in each case at any
particular time.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrowers or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“NAPICO Assets” means assets of National Partnership Investments Corp., a
California corporation and a Subsidiary of AIMCO/Bethesda.

“Negative Pledge Assets” means, collectively, (i) the Note(s) Receivables,
(ii) all property management contracts of the Borrowing Group, and (iii) the
Borrowing Group’s general partnership interests in partnerships that own
properties managed by any member of the Borrowing Group.

“Net Disposition Proceeds” means, with respect to any Disposition of any
property (including as a result of casualty or condemnation and any purchase
price refund in respect of any acquisition), Subsidiary, Affiliate or material
property management contract, the Borrowing Group’s Share of Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise or any earnout payments after
the closing of a Disposition, but only as and when so received) or Cash
Equivalents received from such Disposition, net of any bona fide direct costs
incurred in connection with such Disposition, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Disposition as a result of any gain recognized in connection with such
Disposition and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the Stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Disposition.

 

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“Net Income” means, for any period and for any Person, the net income (loss) of
the Person (including net income (loss) attributable to noncontrolling interests
in consolidated real estate partnerships) for that period, determined in
accordance with GAAP; provided that there shall be excluded the net amount of
any gains or non-cash losses.

“Net Operating Income” means, for any period, as to any real property asset
(a) all gross revenues received from the operation of such property during such
period (including, without limitation, payments received from insurance on
account of business or rental interruption and condemnation proceeds from any
temporary use or occupancy, in each case, to the extent attributable to the
period for which such Net Operating Income is being determined, but excluding
any proceeds from the sale or other disposition (other than by lease) of any
part or all of such property; or from any financing or refinancing of such
property; or from any condemnation of any part or all of such property (except
for temporary use or occupancy); or on account of a casualty to the property
(other than payments from insurance on account of business or rental
interruption); or any security deposits paid under leases of all or a part of
such property, unless forfeited by tenants), minus (b) all reasonable and
customary property maintenance and repair costs, leasing and administrative
costs, management fees and, without double counting, real estate taxes and
insurance premiums paid or accrued on account of such property (whether by
direct payment or by deposit into reserves for future payment) (exclusive of
Capital Expenditures). When calculating Net Operating Income, there shall be no
deduction for any non cash items, such as depreciation.

“New Construction” means the development and construction of any new
multi-family property by any Borrower, any Guarantor or any of their respective
Subsidiaries and shall not include any renovations, rehabilitations or
expansions of existing multi-family properties.

“Non-Consenting Lender” means any Lender that does not provide consent in any
circumstance where the consent of all Lenders is required, but only the consent
of a majority of all Lenders is obtained.

“Non-Controlled Entities” means any Person not consolidated by the Borrowing
Group in accordance with GAAP.

“Non-Core Assets” means: (i) unimproved land (other than Development Assets) of
the Borrowing Group and Notes Receivable of the Borrowing Group valued at their
net book value, (ii) Permitted Junior Loans, and (iii) Permitted Mortgage
Certificates.

“Non-Recourse Indebtedness” means Indebtedness which is not Recourse
Indebtedness.

“Note(s)” means each Revolving Note and the Swing Line Note.

“Note(s) Receivable” means a payment obligation to a member or members of the
Borrowing Group (other than Intra-Company Debt) which is evidenced by a written
and enforceable promissory note and which is classified as a note receivable in
accordance with GAAP.

“NYSE” means the New York Stock Exchange.

 

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“Obligations” means all advances to, and debts, liabilities and obligations of,
any Loan Party arising under any Loan Document or otherwise with respect to any
Loan or Letter of Credit, 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 Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity, or, in each
case, equivalent or comparable constitutive documents with respect to any
non-U.S. jurisdiction.

“Other Taxes” means 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 under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document; provided, however, that “Other Taxes” shall not include
such amounts to the extent imposed as a result of any transfer by any Lender or
the Administrative Agent of any interest in or under any Loan Document.

“Outstanding Amount” means (i) with respect to Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments thereof occurring on such date; and (ii) with respect
to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements of outstanding unpaid drawings
under any Letters of Credit or any reductions in the maximum amount available
for drawing under Letters of Credit taking effect on such date.

“Participant” has the meaning specified in Section 10.06(d).

“Partnership Units” means the units of limited partnership interest in the
Borrowers or any of their Subsidiaries, as the case may be, issued and
outstanding from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrowers or
any ERISA Affiliate or to which the

 

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Borrowers or any ERISA Affiliate contributes or has an obligation to contribute,
or in the case of a multiple employer or other plan described in Section 4064(a)
of ERISA, has made contributions at any time during the immediately preceding
five plan years.

“Permitted Junior Loans” means Investments by any Person in the Borrowing Group
in Indebtedness consisting of junior mortgage loans and/or mezzanine loans
secured by equity interests, initially owed by Persons that were Subsidiaries of
the Borrowing Group (regardless of whether such Persons continue to be
Subsidiaries of the Borrowers); provided that the owner of any such Investments
must be a Borrower or Guarantor.

“Permitted Mortgage Certificates” means Investments by any Person in the
Borrowing Group in one or more tranches or series of collateralized mortgage
backed securities or certificates initially owed by any Person with respect to
Indebtedness of one or more Subsidiaries of the Borrowing Group; provided that
the owner of any such Investments must be a Borrower or Guarantor.

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

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrowers or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

“Pledge Agreement” means a Security Agreement (Securities), in the form of
Exhibit I-1 or I-2, attached hereto (with such amendments or modifications
thereto as may be agreed to by the Administrative Agent), in favor of the
Administrative Agent for the ratable benefit of the Lenders and entered into by
a Borrower or a Subsidiary of a Borrower that owns the Collateral as described
therein.

“Qualified Redemption Obligations” means, (i) in the case of AIMCO, the
obligation of AIMCO to acquire or redeem issued Partnership Units which
obligation AIMCO may elect to satisfy with shares of common Stock of the REIT
and (ii) any obligation of a Person to redeem or repurchase an Equity Interest
in such Person either (a) upon the happening of a change of control or other
conditional event which is not reasonably likely to occur and which condition is
set forth in the applicable securities and which event has in fact not occurred
prior to the date of determination hereunder, or (b) at the holder’s option
(except following or as a result of circumstances described in clause (a) above)
only after the date which is one year after the Maturity Date or (c) at any time
on or subsequent to the one year anniversary of the Maturity Date. In all
events, “Qualified Redemption Obligations” include all preferred Equity
Interests which are convertible only into common Stock of the REIT.

“Qualifying Loans” has the meaning specified in Annex I hereto.

“Recourse” means, with respect to any Indebtedness or Guarantee of any Person,
that such Indebtedness or Guarantee is recourse to the general assets and/or
properties of such Person (except as provided below); provided, however, that
with respect to Indebtedness secured by real property which is characterized as
“nonrecourse” or which is only Recourse to the real property of the Person
except for limitations to the “nonrecourse” nature of the obligation or

 

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Indebtedness or Guarantees which are recourse to a Person or such Person’s
assets and/or properties only upon the occurrence of certain events such as
those set forth in (a) through (k) below, such Indebtedness or Guarantees shall
only be deemed “Recourse” if and to the extent the nonrecourse exceptions (if
any) are for the Person’s liability for the following under the applicable loan
documentation and any of the events described in clauses (a) through (k) have
occurred and the lender or holder of such Indebtedness or Guarantee has given
written notice of the occurrence thereof: (a) fraud, waste, material
misrepresentation, or willful misconduct; (b) indemnification with respect to
environmental matters or failure to comply with Environmental Laws; (c) failure
to maintain required insurance policies; (d) misapplication of insurance
proceeds, condemnation awards and tenant security deposits; (e) breach of
covenants relating to unpermitted transfers or encumbrances of real property or
other collateral; (f) misappropriation or misapplication of property income;
(g) breach of covenants relating to unpermitted transfers of interests in a
Person; (h) failure to deliver books and records; (i) failure to pay transfer
fees or charges; (j) bankruptcy filings or (k) other matters similar to those
set forth in clauses (a) through (j) above or otherwise constituting customary
exceptions for nonrecourse financings. An obligation of a Person that is not
Recourse to the general assets and/or properties of such Person shall not be
considered a “Recourse” obligation; an obligation of a Person that is contingent
upon the occurrence of certain events shall not be considered a “Recourse”
obligation unless any of the events or circumstances described in clauses
(a) through (k) above have occurred and the lender or holder of such
Indebtedness or Guarantee has given written notice of the occurrence of such
events (in which case the amount of such obligation shall be limited to
reasonably anticipated liability resulting from the occurrence of such events or
circumstances). Indebtedness of a Single Purpose Entity secured by that Single
Purpose Entity’s assets shall not be considered a “Recourse” obligation of such
Single Purpose Entity.

“Recourse Indebtedness” means that portion of Total Funded Indebtedness in which
the Recourse of the applicable lender or lenders to the obligor for non-payment
is not limited to such lender’s Lien on an asset or assets, including any
guarantee of payment by a member of the Borrowing Group to the extent such
guarantee is Recourse to such Borrowing Group member but in any event excluding
any Indebtedness or Guarantees which are not Recourse at the applicable date of
determination. “Recourse Indebtedness” shall include any Indebtedness consisting
of preferred Stock or preferred Partnership Units which are not Qualified
Redemption Obligations but are otherwise mandatorily redeemable or redeemable at
the option of the holder thereof. If a Person is a Single Purpose Entity which
owns a real property asset and has Indebtedness which is not limited in recourse
to that real property asset, such Indebtedness shall not be considered “Recourse
Indebtedness”, provided no other member of the Borrowing Group has guaranteed
such Indebtedness on a Recourse basis as of the applicable date of
determination.

“Register” has the meaning specified in Section 10.06(c).

“REIT” is defined in the preamble to this Agreement.

“REIT Status” means, with respect to any Person, (a) the qualification of such
Person as a real estate investment trust under Sections 856 through 860 of the
Code, and (b) the applicability to such Person and its shareholders of the
method of taxation provided for in Sections 857 et seq. of the Code.

 

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

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

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Commitments then in effect or, if the Commitment of each Lender
to make Revolving Loans and the obligation of the L/C Issuers to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, the Total Outstandings
(with the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by
such Lender for purposes of this definition); provided that the Commitment of,
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.

“Required Supermajority Lenders” means, as of any date of determination, Lenders
having 67% or more of the Commitments then in effect or, if the Commitment of
each Lender to make Revolving Loans and the obligation of the L/C Issuers to
make L/C Credit Extensions have been terminated pursuant to Section 8.02, the
Total Outstandings (with the aggregate amount of each Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans
being deemed “held” by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Supermajority Lenders.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or any executive vice
president of a Loan Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.

“Restricted Cash” means the Borrowing Group’s Share of any Cash pledged to any
lender (including a Lender) and includes the Cash indicated in the line item for
“restricted cash” in the REIT’s balance sheet from time to time.

“Restricted Payment” means, with respect to any Person, any dividend or other
distribution (whether in cash, securities or other property) with respect to any
capital stock or other Equity Interest of such Person, 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 capital stock or other Equity Interest
of such Person, or on account of any return of capital to such Person’s
stockholders, partners or members (or the equivalent Person thereof).

 

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“Revolving Borrowing” means a borrowing consisting of simultaneous Revolving
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Revolving Loan” means a Base Rate Loan or a Eurodollar Rate Loan made to the
Borrowers by a Lender in accordance with its Applicable Percentage pursuant to
Section 2.01(a), except as otherwise provided herein.

“Revolving Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Loans from one Type to the other, or (c) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit A.

“Revolving Note” means a promissory note made by the Borrowers in favor of a
Lender evidencing Revolving Loans made by such Lender, substantially in the form
of Exhibit C-1.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business and any successor thereto.

“Scheduled Amortization” means, with respect to any Person, the sum, as of any
date of determination, of all regularly scheduled amortization payments paid or
accrued on such Person’s Indebtedness (exclusive of balloon payments).

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“SEC Report” means all filings on Form 10-K, Form 10-Q or Form 8-K with the SEC
made by the REIT pursuant to the Securities Exchange Act of 1934.

“Secured Indebtedness Ratio” means, on any date of determination, the ratio of
(a) Total Secured Indebtedness as of such date, to (b) Gross Asset Value as of
such date.

“Single Purpose Entity” means a Person which is created or existing solely to
own a specific real property asset and which has no Indebtedness other than in
conjunction with the acquisition, operation and maintenance of such real
property asset (including normal and customary trade payables) and which engages
in no business other than the ownership, operation and maintenance of such real
property asset.

“SPC” has the meaning specified in Section 10.06(h).

“Stock” means all shares, options, warrants, interests, participations or other
equivalents (regardless of how designated) of or in a corporation or equivalent
entity, whether voting or nonvoting, including common stock, preferred stock,
perpetual preferred stock or any other “equity security” (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
SEC under the Exchange Act). Convertible debt shall not constitute Stock unless
and until such debt is converted into the applicable underlying securities.

 

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“Subsidiary” of a Person means (a) a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person and (b) any corporation, partnership, joint venture, limited
liability company or other business entity that is consolidated with such Person
in accordance with GAAP. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrowers.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means KeyBank in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

 

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“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Note” means a promissory note made by the Borrowers in favor of the
Swing Line Lender evidencing Swing Line Loans made by such Lender, substantially
in the form of Exhibit C-2.

“Swing Line Sublimit” means an amount equal to $100,000,000. The Swing Line
Sublimit is part of, and not in addition to, the Aggregate Commitments.

“Syndication Agent” means Wells Fargo Bank, N.A., in its capacity as syndication
agent under this Agreement.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

“Threshold Amount” means (a) with respect to Indebtedness that is not Recourse
Indebtedness, $250,000,000 individually or in the aggregate, and (b) with
respect to Indebtedness which is Recourse Indebtedness, $35,000,000 individually
or in the aggregate; provided that solely for purposes of determining the
Threshold Amount, Indebtedness relating to NAPICO Assets shall be calculated as
equal to Borrowing Group’s Share thereof to the extent that such share (x) is an
administrative non-controlling interest, and (y) amounts to less than 5% of the
interest in any such NAPICO Asset.

“Total EBITDA” means, for any period and without double counting, the Borrowing
Group’s Share of EBITDA.

“Total Funded Indebtedness” means, for any period and without double counting,
the sum of the Borrowing Group’s Share of (a) Funded Indebtedness, minus (b) its
share of any debt service reserves or sinking funds with respect to such Funded
Indebtedness.

“Total Interest Expense” means, for any period and without double counting, the
sum of (a) the Borrowing Group’s Share of Interest Expense, minus (b) the
aggregate amount of Interest Reserves (to the extent included as interest).

“Total Net Operating Income” means, for any period and without double counting,
the Borrowing Group’s Share of Net Operating Income.

“Total Outstandings” means the sum of (i) the aggregate Outstanding Amount of
all Revolving Loans, (ii) the aggregate Outstanding Amount of all Swing Line
Loans, and (iii) the aggregate Outstanding Amount of all L/C Obligations.

“Total Scheduled Amortization” means, for any period of determination and
without double counting any item, the Borrowing Group’s Share of Scheduled
Amortization.

 

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“Total Secured Indebtedness” means, as of any date of determination and without
double counting any item, the aggregate amount of Total Funded Indebtedness that
is secured by a Lien (excluding Indebtedness secured solely by cash in debt
service reserves or sinking funds), plus, any Total Funded Indebtedness
described in the last sentence of the definition of Recourse Indebtedness which
is otherwise not secured by a Lien; provided, however, that the Obligations
shall be excluded from the calculation of Total Secured Indebtedness.

“Total Unsecured Indebtedness” means, for any period of determination, the
aggregate amount of the Borrowing Group’s Share of Funded Indebtedness which is
not secured by a Lien (excluding Indebtedness secured solely by cash in debt
service reserves or sinking funds); provided, however, that the Obligations
shall be included in the calculation of Total Unsecured Indebtedness.

“Type” means, with respect to a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 430 of the Code for the applicable
plan year.

“Unimproved Land” means, as of any date of determination, a legal parcel of real
property that is vacant and unimproved and which does not constitute Development
Assets.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Variable Rate Debt Ratio” means, on any date of determination, the ratio of
(a) Variable Rate Indebtedness as of such date, to (b) Total Funded Indebtedness
as of such date.

“Variable Rate Indebtedness” means, as of any date of determination and without
double counting any item, the aggregate amount of Total Funded Indebtedness that
for the duration of its term neither (a) bears interest at a fixed rate nor
(b) has been hedged to produce a fixed or maximum rate of interest.

“Wholly-Owned Subsidiary” means a Subsidiary of AIMCO and/or the REIT and/or
AIMCO/Bethesda of which 100% of the Equity Interests is owned directly or
indirectly by Borrowers.

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) 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

 

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requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organization Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, restated, amended and restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, restatements,
amendments and restatements, supplements or modifications set forth herein or in
any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) 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.

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

(d) To the extent that any of the representations and warranties contained in
this Agreement or any other Loan Document is qualified by “Material Adverse
Effect” or any other materiality qualifier, then the qualifier “in all material
respects” contained in Sections 2.17(a)(v) and 4.02(a) and the qualifier “in any
material respect” contained in Section 8.01(d) shall not apply solely with
respect to any such representations and warranties.

1.03 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrowers or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders, the Administrative Agent and the Borrowers); provided that, until so
amended, (i) such

 

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ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrowers shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.

(c) Computations. Notwithstanding any other provision contained herein, all
terms of an accounting or financial nature used herein shall be construed, and
all computations of amounts and ratios referred to herein shall be made
(i) without giving effect to any election under Accounting Standards
Codification 825-10-25 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of a Borrower or any of its Subsidiaries at
“fair value”, as defined therein, (ii) without giving effect to any treatment of
Indebtedness in respect of convertible debt instruments under Accounting
Standards Codification 470-20 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal
amount thereof and (iii) in a manner such that any obligations relating to a
lease that was accounted for by a Person as an operating lease as of the Closing
Date and any similar lease entered into after the date of this Agreement by such
Person shall be accounted for as obligations relating to an operating lease
under GAAP as in effect on the Closing Date.

1.04 Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Revolving Loans.

(a) Revolving Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to
the Borrowers from time to time, on any Business Day during the Availability
Period, in an

 

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aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Revolving Borrowing, (i) the Total Outstandings shall not exceed the
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment. Within the limits of each Lender’s Commitment, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this
Section 2.01(a), prepay under Section 2.05, and reborrow under this
Section 2.01(a). Revolving Loans may be Base Rate Loans or Eurodollar Rate
Loans, as further provided herein. The Borrowers and each Lender acknowledge
that, immediately prior to the Closing Date, the principal amount outstanding
under the Existing Credit Agreement is $24,800,000.00 and that such entire
principal amount (together with all accrued but unpaid amounts due thereunder)
shall be repaid in accordance with this Article II on and as a condition to the
Closing Date.

2.02 Borrowings, Conversions and Continuations of Revolving Loans.

(a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrowers’ irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than (i) 4:00 p.m., three (3) Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and
(ii) 4:00 p.m., one (1) Business Day prior to the requested date of any
Borrowing of Base Rate Loans. Each telephonic notice by the Borrowers pursuant
to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Revolving Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrowers. Each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple
of $500,000 in excess thereof. Each Revolving Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrowers are requesting a Revolving
Borrowing, a conversion of Revolving Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Revolving Loans to be borrowed, converted or
continued, (iv) the Type of Revolving Loans to be borrowed or to which existing
Revolving Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If the Borrowers fail to specify a Type of
Revolving Loan in a Revolving Loan Notice or if the Borrowers fail to give a
timely notice requesting a conversion or continuation, then the applicable
Revolving Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrowers request a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Revolving Loan Notice, but
fail to specify an Interest Period, they will be deemed to have specified an
Interest Period of one month.

 

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(b) Following receipt of a Revolving Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Revolving Loans, and if no timely notice of a conversion or
continuation is provided by the Borrowers, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Revolving Borrowing,
each Lender shall make the amount of its Revolving Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 4:00 p.m. on the Business Day specified in the
applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrowers in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrowers on the
books of KeyBank with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrowers; provided, however,
that if, on the date the Revolving Loan Notice with respect to such Borrowing is
given by the Borrowers, there are L/C Borrowings outstanding, then the proceeds
of such Borrowing, first, shall be applied to the payment in full of any such
L/C Borrowings, and second, shall be made available to the Borrowers as provided
above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

(d) The Administrative Agent shall promptly notify the Borrowers and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrowers and the Lenders
of any change in KeyBank’s prime rate used in determining the Base Rate promptly
following the public announcement of such change.

(e) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Revolving Loans.

2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrowers or their Subsidiaries, and to amend
Letters of Credit previously issued by it, in accordance with Section 2.03(b)
below, and (2) to honor drawings under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrowers

 

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or their Subsidiaries and any drawings thereunder; provided that after giving
effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the
Total Outstandings shall not exceed the Commitments, (y) the aggregate
Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount
of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each
request by the Borrowers for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrowers that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence. Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall
be fully revolving, and, accordingly, the Borrowers may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed. All Existing Letters of Credit
shall be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.

(ii) No L/C Issuer shall issue any Letter of Credit if the expiry date of such
requested Letter of Credit would occur more than 12 months after the Maturity
Date then in effect.

(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit
if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such L/C Issuer from issuing
such Letter of Credit, or any Law applicable to such L/C Issuer or any request
or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such L/C Issuer shall prohibit, or request that
such L/C Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such L/C Issuer with
respect to such Letter of Credit any restriction, reserve or capital requirement
(for which such L/C Issuer is not otherwise compensated hereunder) not in effect
on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of
such L/C Issuer;

(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer,
such Letter of Credit is in an initial stated amount less than $500,000;

(D) such Letter of Credit is to be denominated in a currency other than Dollars;
or

(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists
or any Lender is at such time a Defaulting Lender hereunder and such Defaulting
Lender’s obligations to acquire a participation in such Letter of Credit cannot
be reallocated, or

 

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can only be partially reallocated, among the non-Defaulting Lenders in
accordance with Section 2.15(a)(iv), unless such L/C Issuer has entered into
arrangements mutually satisfactory to such L/C Issuer, Administrative Agent and
Borrowers to eliminate such L/C Issuer’s risk with respect to such Lender (which
arrangements may include the providing of Cash Collateral in relation to the
Borrowers’ obligations to pay any Unreimbursed Amounts in respect of such
defaulting Lender’s or Defaulting Lender’s participation in such Letter of
Credit after giving effect to any partial reallocation pursuant to
Section 2.15(a)(iv)).

(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not
be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if
(A) such L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(vi) Each L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and such
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article IX with respect to any acts taken or omissions
suffered by such L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included such L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to such L/C Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrowers delivered to the applicable L/C Issuer (with a copy
to the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrowers.
Such Letter of Credit Application must be received by such L/C Issuer and the
Administrative Agent not later than 4:00 p.m. at least five (5) Business Days
(or such later date and time as the Administrative Agent and such L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to such L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as such L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
such L/C Issuer: (A) the Letter of Credit to be amended; (B) the proposed date
of amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as such L/C Issuer may require.
Additionally, the Borrowers shall furnish to the applicable L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as such L/C Issuer or the Administrative Agent may require.

 

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(ii) Promptly after receipt of any Letter of Credit Application, the applicable
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrowers and, if not, such L/C Issuer will provide
the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer
has received written notice from any Lender, the Administrative Agent or any
Loan Party, at least one (1) Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied, then,
subject to the terms and conditions hereof, such L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of the Borrowers (or
the applicable Subsidiary) or enter into the applicable amendment, as the case
may be, in each case in accordance with such L/C Issuer’s usual and customary
business practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the L/C Issuer that issued such Letter of Credit a risk
participation in such Letter of Credit in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the applicable L/C Issuer will also deliver to the Borrowers and the
Administrative Agent and to any requesting Lender a true and complete copy of
such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer that issued such Letter of
Credit shall notify the Borrowers and the Administrative Agent thereof. Not
later than 2:00 p.m. on the date of any payment by an L/C Issuer under a Letter
of Credit (each such date, an “Honor Date”) (or, if the Borrowers were notified
of such drawing on or after the Honor Date, not later than 5:00 p.m. on the
following Business Day), the Borrowers shall reimburse such L/C Issuer through
the Administrative Agent in an amount equal to the amount of such drawing
(unless the Borrowers elect to reimburse such L/C Issuer through a Revolving
Loan, as set forth below). If the Borrowers fail to so reimburse such L/C Issuer
by such time, the Administrative Agent shall promptly notify each Lender of the
Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”),
and the amount of such Lender’s Applicable Percentage thereof and in such event,
the Borrowers shall be deemed to have requested a Revolving Borrowing of Base
Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Aggregate Commitments and the conditions
set forth in Section 4.02 (other than the delivery of a Revolving Loan Notice).
Any notice given by an L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

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(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the applicable L/C
Issuer at the Administrative Agent’s Office in an amount equal to its Applicable
Percentage of the Unreimbursed Amount not later than 4:00 p.m. on the Business
Day specified in such notice by the Administrative Agent, which date will not be
earlier than the Business Day after the Honor Date, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrowers in such amount.
The Administrative Agent shall remit the funds so received to the applicable L/C
Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrowers shall be
deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of such L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn
under any Letter of Credit issued by it, interest in respect of such Lender’s
Applicable Percentage of such amount shall be solely for the account of such L/C
Issuer.

(v) Each Lender’s obligation to make Revolving Loans or L/C Advances to
reimburse the applicable L/C Issuer for amounts drawn under Letters of Credit
issued by it, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against such L/C Issuer, the Borrowers or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving Loans
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrowers of a Revolving Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Borrowers to reimburse the applicable L/C Issuer for the
amount of any payment made by such L/C Issuer under any Letter of Credit issued
by it, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the
account of the applicable L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover
from such Lender (acting through

 

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the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to such L/C Issuer at a rate per annum equal to the
Federal Funds Rate. A certificate of the applicable L/C Issuer submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after an L/C Issuer has made a payment under any Letter of
Credit issued by it and has received from any Lender such Lender’s L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of such L/C Issuer any payment in
respect of the related Unreimbursed Amount or interest thereon (whether directly
from the Borrowers or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent will distribute
to such Lender its Applicable Percentage thereof (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Lender’s L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of an
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.05 (including pursuant to any
settlement entered into by such L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of such L/C Issuer its
Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause
shall survive the payment in full of the Obligations and the termination of this
Agreement.

(e) Obligations Absolute. The obligation of the Borrowers to reimburse each L/C
Issuer for each drawing under each Letter of Credit issued by it and to repay
each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrowers or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), such L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

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(iv) any payment by such L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by such L/C Issuer under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrowers or any
Subsidiary.

The Borrowers shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrowers’ instructions or other irregularity, the
Borrowers will immediately notify the applicable L/C Issuer. The Borrowers shall
be conclusively deemed to have waived any such claim against each L/C Issuer and
its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuers. Each Lender and the Borrowers agree that, in paying any
drawing under a Letter of Credit, the applicable L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuers,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of any L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable;
(ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrowers hereby assume all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Borrowers’ pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuers, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of any L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrowers may have a claim against an L/C Issuer,
and such L/C Issuer may be liable to the Borrowers, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrowers which the Borrowers prove were caused by such L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit issued by it after the presentation to
it by the beneficiary of a sight draft and certificate(s) strictly complying
with the terms and conditions of such Letter of Credit. In furtherance and not
in limitation of the foregoing, each L/C Issuer may accept documents that appear
on their face to be in order, without responsibility

 

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for further investigation, regardless of any notice or information to the
contrary, and such L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.

(g) Intentionally Omitted.

(h) Applicability of ISP. Unless otherwise expressly agreed by an L/C Issuer and
the Borrowers with respect to a Letter of Credit issued by such L/C Issuer
(including any such agreement applicable to an Existing Letter of Credit), the
rules of the ISP shall apply to each standby Letter of Credit.

(i) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage a
Letter of Credit fee (the “Letter of Credit Fee”) for each standby Letter of
Credit equal to the Applicable Rate for Letters of Credit, stated as a
percentage per annum times the daily amount available to be drawn under such
Letter of Credit; provided, however, any Letter of Credit Fees otherwise payable
for the account of a Defaulting Lender with respect to any Letter of Credit as
to which such Defaulting Lender has not provided Cash Collateral satisfactory to
the L/C Issuer that issued such Letter of Credit pursuant to this Section 2.03
shall be payable, to the non-Defaulting Lenders in accordance with the upward
adjustments in their respective Applicable Percentages allocable to such Letter
of Credit pursuant Section 2.15(a)(iv), with the balance of such fee, if any,
payable to such L/C Issuer for its own account with respect to the amount of
such fee allocable to such L/C Issuer’s Fronting Exposure arising from that
Defaulting Lender, except to the extent such Fronting Exposure has been Cash
Collateralized by a Borrower. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. Letter of Credit
Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and
payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers.
The Borrowers shall pay directly to the applicable L/C Issuer for its own
account a fronting fee (the “Fronting Fee”) with respect to each standby Letter
of Credit issued by such L/C Issuer, in an amount equal to 0.125% per annum,
computed on the daily amount available to be drawn under such Letter of Credit
on a quarterly basis in arrears, and due and payable on the first Business Day
after the end of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. In addition, the Borrowers shall pay directly to each L/C Issuer
for its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such Fronting Fee,
customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.

 

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(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Borrowers shall be obligated to
reimburse the applicable L/C Issuer hereunder for any and all drawings under
such Letter of Credit. The Borrowers hereby acknowledge that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the
Borrowers, and that the Borrowers’ business derives substantial benefits from
the businesses of such Subsidiaries.

2.04 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.04, to make loans (each such loan, a “Swing Line
Loan”) to the Borrowers from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed the Commitments, and (ii) the aggregate Outstanding Amount of
the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and provided, further, that the Borrowers shall not
use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrowers may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrowers’ irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 4:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrowers. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan

 

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Notice, the Swing Line Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such
Swing Line Loan Notice and, if not, the Swing Line Lender will notify the
Administrative Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Administrative Agent (including at the request of any Lender) prior to
5:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Section 4.02
is not then satisfied, then, subject to the terms and conditions hereof, the
Swing Line Lender will, not later than 5:00 p.m. on the borrowing date specified
in such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the Borrowers at its office by crediting the account of the Borrowers on the
books of the Swing Line Lender in immediately available funds.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrowers (which hereby irrevocably authorize the
Swing Line Lender to so request on their behalf), that each Lender make a Base
Rate Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Revolving Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Commitments and the conditions set forth in Section 4.02. The Swing Line Lender
shall furnish the Borrowers with a copy of the applicable Revolving Loan Notice
promptly after delivering such notice to the Administrative Agent. Each Lender
shall make an amount equal to its Applicable Percentage of the amount specified
in such Revolving Loan Notice available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at the
Administrative Agent’s Office not later than 4:00 p.m. on the day specified in
such Revolving Loan Notice, whereupon, subject to Section 2.04(c)(ii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrowers in such amount. The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period

 

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from the date such payment is required to the date on which such payment is
immediately available to the Swing Line Lender at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the Swing Line Lender
in accordance with banking industry rules on interbank compensation. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.

(iv) Each Lender’s obligation to make Revolving Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, the Borrowers or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, (C) any Lender being a Defaulting Lender or (D) any other occurrence,
event or condition, whether or not similar to any of the foregoing; provided,
however, that each Lender’s obligation to make Revolving Loans pursuant to this
Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrowers to repay Swing Line Loans, together with interest as provided
herein.

(d) Repayment of Participations.

(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrowers for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or risk participation pursuant to
this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing
Line Loan, interest in respect of such Applicable Percentage shall be solely for
the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

 

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2.05 Prepayments.

(a) The Borrowers may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Revolving Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than (A) 3:00 p.m. three (3) Business Days prior
to any date of prepayment of Eurodollar Rate Loans and (B) 3:00 p.m. on the date
of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment and the
Type(s) of Revolving Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage (if any) of such prepayment. If such notice is
given by the Borrowers, the Borrowers shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein; provided that if such notice indicates that such prepayment is to be
funded with the proceeds of a refinancing of the Loans and Commitments, such
notice may be revoked if such refinancing is not consummated and such payment
amount will not be due and payable. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05. Each such
prepayment shall be applied to the Revolving Loans of the Lenders indicated in
such notices in accordance with their respective Applicable Percentages.

(b) The Borrowers may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 3:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrowers, the Borrowers shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

(c) If for any reason the Total Outstandings at any time exceed the Commitments
then in effect, the Borrowers shall immediately prepay the Revolving Loans
and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to
such excess; provided, however, that the Borrowers shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after
the prepayment in full of the Revolving Loans the Total Outstandings exceed the
Commitments then in effect.

2.06 Termination or Reduction of Commitments.

The Borrowers may, upon notice to the Administrative Agent, terminate the
Commitments, or from time to time permanently reduce the Commitments; provided
that the Commitments may not be reduced below $100,000,000 (except in connection
with a termination of the Commitments and payment in full of the Obligations
thereunder) without the consent of the Administrative Agent and the Syndication
Agent; and, provided further (i) any such notice

 

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shall be received by the Administrative Agent not later than 3:00 p.m. five
(5) Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not
terminate or reduce the Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Commitments, and (iv) if, after giving effect to any reduction of the
Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds
the amount of the Commitments, such Sublimit shall be automatically reduced by
the amount of such excess. The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Commitments. Any
reduction of the Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. All fees accrued pursuant to
Section 2.09 until the effective date of any termination of the Commitments
shall be paid on the effective date of such termination.

2.07 Repayment of Loans.

(a) The Borrowers shall repay on the Maturity Date the aggregate principal
amount of Revolving Loans outstanding on such date.

(b) The Borrowers shall repay to the Swing Line Lender each Swing Line Loan on
the earlier to occur of (i) the date five (5) Business Days after such Swing
Loan is made and (ii) the Maturity Date.

2.08 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Rate.

(b)(i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrowers
under any Loan Document is not paid when due (without regard to any applicable
grace periods), whether at stated maturity, by acceleration or otherwise, then
upon the request of the Required Lenders, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrowers shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

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(iv) Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.09 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

(a) Unused Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender (subject to Section 2.15(a)(iii)) ratably in proportion
to its Commitment, an unused fee equal to the Applicable Unused Fee. The
Applicable Unused Fee shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date, as
may be extended pursuant to Section 2.16. The Applicable Unused Fee shall be
calculated quarterly in arrears. The Applicable Unused Fee shall accrue at all
times following the Closing Date while Commitments are in effect, including at
any time during which one or more of the conditions in Section 4.02 is not met.

(b) Other Fees.

(i) The Borrowers shall pay to the Joint Lead Arrangers and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.

(ii) The Borrowers shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

2.10 Computation of Interest and Fees.

(a) All computations of interest for Base Rate Loans (including Base Rate Loans
determined by reference to the Eurodollar Rate) shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid; provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.12(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

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(b) The parties understand that the Applicable Rate and certain fees set forth
herein may be determined and/or adjusted from time to time based upon certain
financial ratios and/or other information to be provided or certified to the
Lenders by the Borrowers (the “Borrower Information”). If it is subsequently
determined that any such Borrower Information was incorrect (for whatever
reason, including without limitation because of a subsequent restatement of
earnings by a Borrower) at the time it was delivered to the Administrative
Agent, and if the Applicable Rate or applicable fees calculated for any period
were lower than they should have been had the correct information been timely
provided, then, such interest rate and such fees for such period shall be
automatically recalculated using correct Borrower Information. Administrative
Agent shall promptly notify the Borrowers in writing of any additional interest
and fees due because of such recalculation, and the Borrowers shall pay such
additional interest or fees due to Administrative Agent, for the account of each
Lender, within five (5) Business Days of receipt of such written notice. Any
recalculation of interest or fees required by this provision shall survive the
termination of this Agreement, and this provision shall not in any way limit any
of Administrative Agent’s, any L/C Issuer’s, or any Lender’s other rights under
this Agreement.

2.11 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrowers and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrowers hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrowers shall execute and deliver to such Lender
(through the Administrative Agent) the applicable Note(s), which shall evidence
such Lender’s Loans in addition to such accounts or records. Each Lender may
attach schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

2.12 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is

 

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owed, at the Administrative Agent’s Office in Dollars and in immediately
available funds not later than 3:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office. All
payments received by the Administrative Agent after 3:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment to be made by the Borrowers shall come
due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

(b)(i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Revolving Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Revolving
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the Borrowers a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Revolving Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrowers severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount in immediately available
funds with interest thereon, for each day from and including the date such
amount is made available to the Borrowers to but excluding the date of payment
to the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (B) in the case of a payment to be made by the Borrowers, the
interest rate applicable to Base Rate Loans. If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Revolving Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Revolving Loan included in such Revolving Borrowing. Any payment by the
Borrowers shall be without prejudice to any claim the Borrowers may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.

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

 

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A notice by the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrowers by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Revolving Loans, to fund participations in Letters of Credit and Swing Line
Loans and to make payments pursuant to Section 10.04(c) are several and not
joint. The failure of any Lender to make any Revolving Loan, to fund any such
participation or to make any payment under Section 10.04(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Revolving Loan, to purchase its participation or to
make its payment under Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.13 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
the Revolving Loans made by it, or the participations in L/C Obligations or in
Swing Line Loans held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Revolving Loans or participations and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Revolving Loans and subparticipations in L/C Obligations
and Swing Line Loans of the other Lenders, or make such other adjustments as
shall be equitable, 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 Revolving Loans and other amounts owing
them, provided that:

(a) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

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(b) the provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement (including, for the avoidance of doubt, as this
Agreement may be amended from time to time) (including the application of funds
arising from the existence of a Defaulting Lender), (y) the application of Cash
Collateral as provided for in Section 2.14 or (z) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Revolving Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to the Borrowers or any
Subsidiary thereof (as to which the provisions of this Section shall apply).

Each Loan Party party hereto consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

2.14 Cash Collateral.

(a) Certain Credit Support Events. If an L/C Issuer has honored any full or
partial drawing request under any Letter of Credit issued by it and such drawing
has resulted in an L/C Borrowing, then upon the request of the Administrative
Agent, Borrowers shall immediately Cash Collateralize the then Outstanding
Amount of all L/C Obligations; provided that so long as no Event of Default
exists, any such Cash Collateral will be released to the Borrowers upon payment
in full of such L/C Borrowing. Additionally, if, as of the Letter of Credit
Expiration Date, any L/C Obligation for any reason remains outstanding, the
Borrowers shall immediately (i) Cash Collateralize the then Outstanding Amount
of all L/C Obligations, or (ii) to the extent approved by the applicable L/C
Issuer (to which an L/C Obligation is owed) in its sole discretion, if the
Commitments are replaced with a new revolving facility, cause “back to back”
letters of credit with respect to all outstanding Letters of Credit issued by
such L/C Issuer to be issued; provided, however, if Borrowers have delivered a
notice pursuant to Section 2.16(a) extending the Maturity Date, Borrowers shall
not be required to so Cash Collateralize the then Outstanding Amount of the
applicable L/C Obligations or so cause such “back to back” letters of credit to
be issued until the Letter of Credit Expiration Date (after giving effect to
such extension of the Maturity Date). At any time there shall exist a Defaulting
Lender, within one (1) Business Day following the written request of the
Administrative Agent or any L/C Issuer or the Swing Line Lender (with a copy to
the Administrative Agent), the Borrowers shall Cash Collateralize the L/C
Issuers’ Fronting Exposure with respect to such Defaulting Lender (determined
after giving effect to Section 2.15 and any Cash Collateral provided by such
Defaulting Lender).

(b) Grant of Security Interest. The Borrowers, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grant to the Administrative
Agent, for the benefit of the L/C Issuers and the Lenders, a security interest
in all such cash, deposit accounts and all balances therein and all proceeds of
the foregoing. Cash Collateral shall be maintained in blocked deposit accounts
at KeyBank.

(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.14 or Section 2.05,
2.15 or 8.02(c) in respect of Letters of Credit or Swing Line Loans shall be
applied to the satisfaction of the specific L/C Obligations, Swing Line Loans
and obligations to fund participations therein

 

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(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) for which the Cash Collateral was so provided, prior
to any other application of such property as may otherwise be provided for
herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce any L/C Issuer’s Fronting Exposure or other obligations shall be released
promptly following, and to the extent of, (i) the elimination or reduction of
the applicable Fronting Exposure or other obligations giving rise thereto
(including by the termination of Defaulting Lender status of the applicable
Lender (or, as appropriate, its assignee following compliance with
Section 10.06(b)(vi)), or (ii) the Administrative Agent’s good faith
determination that there exists excess Cash Collateral; provided that, subject
to Section 2.15 the Person providing Cash Collateral and the applicable L/C
Issuer or Swing Line Lender, as applicable, may agree that Cash Collateral shall
be held to support future anticipated Fronting Exposure or other obligations.

2.15 Defaulting Lenders.

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

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

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of such Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or
otherwise) or received by the Administrative Agent from a Defaulting Lender
pursuant to Section 10.08 shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, to the payment on a pro rata basis of any amounts owing by such
Defaulting Lender to any L/C Issuer or the Swing Line Lender hereunder; third,
to Cash Collateralize the L/C Issuers’ Fronting Exposure with respect to such
Defaulting Lender in accordance with Section 2.14; fourth, as the Borrowers may
request (so long as no Default or Event of Default exists), to the funding of
any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrowers, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the L/C
Issuers’ future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.14; sixth, to the payment of any amounts owing to the Lenders,
the L/C Issuers or the Swing Line Lender as a result of any judgment of a court
of competent jurisdiction obtained by any Lender, the L/C Issuers or the Swing
Line Lender against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Borrowers as a

 

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result of any judgment of a court of competent jurisdiction obtained by any
Borrower against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; and eighth, to such Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Loans or
L/C Borrowings in respect of which such Defaulting Lender has not fully funded
its appropriate share, and (y) such Loans were made or the related Letters of
Credit were issued at a time when the conditions set forth in Section 4.02 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and L/C Borrowings owed to, all non-Defaulting Lenders on a pro rata basis prior
to being applied to the payment of any Loans of, or L/C Borrowings owed to, such
Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders
pro rata in accordance with the Commitments without giving effect to
Section 2.15(a)(iv). 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 2.15(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. Such Defaulting Lender (x) shall not be entitled to receive
any commitment fee pursuant to Section 2.09(a) for any period during which that
Lender is a Defaulting Lender (and the Borrowers shall (A) be required to pay to
each of the L/C Issuers and the Swing Line Lender, as applicable, the amount of
such fee allocable to its Fronting Exposure arising from that Defaulting Lender,
except to the extent the Fronting Exposure arising from the Defaulting Lender
has been reallocated pursuant to clause (iv) below or Cash Collateralized by the
Borrowers and (B) not be required to pay the remaining amount of such fee that
otherwise would have been required to have been paid to that Defaulting Lender)
and (y) shall be limited in its right to receive Letter of Credit Fees as
provided in Section 2.03(i).

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in L/C Obligations and Swing Line
Loans shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Applicable Percentages (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent that (x) the conditions
set forth in Section 4.02 are satisfied at the time of such reallocation (and,
unless the Borrowers shall have otherwise notified the Administrative Agent at
such time, the Borrowers shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y) such reallocation does not
cause the aggregate Outstanding Amount of the Revolving Loans of such
non-Defaulting Lender, plus such non-Defaulting Lender’s Applicable Percentage
of the Outstanding Amount of all L/C Obligations, plus such non-Defaulting
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans
to exceed such non-Defaulting Lender’s Commitment. No reallocation hereunder
shall constitute a waiver or release of any claim of any party hereunder against
a Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a non-Defaulting Lender as a result of such
non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral, Repayment of Swing Line Loans. If the reallocation
described in clause (iv) above cannot, or can only partially, be effected, the
Borrowers shall, without prejudice to any right or remedy available to it
hereunder or under law, (x) first, prepay Swing Line Loans in an amount equal to
the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the
L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in
Section 2.14.

 

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(b) Defaulting Lender Cure. If the Borrowers, the Administrative Agent, the
Swing Line Lender and each L/C Issuer agree in writing that a Lender is no
longer a Defaulting Lender, the 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), that Lender will, to the extent applicable, purchase at
par that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Revolving Loans and funded and unfunded participations in Letters of Credit and
Swing Line Loans to be held pro rata by the Lenders in accordance with their
Applicable Percentages (without giving effect to Section 2.15(a)(iv)), whereupon
such Lender will cease to be a Defaulting Lender; provided that no adjustments
will be made retroactively with respect to fees accrued or payments made by or
on behalf of the Borrowers while that Lender was a Defaulting Lender; and
provided, further, that except to the extent otherwise expressly agreed by the
affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

(c) New Swing Line Loans/Letters of Credit. So long as any Lender is a
Defaulting Lender, (i) the Swing Line Lender shall not be required to fund any
Swing Line Loans unless it is satisfied that it will have no Fronting Exposure
after giving effect to such Swing Line Loan and (ii) no L/C Issuer shall be
required to issue, extend, renew or increase any Letter of Credit unless it is
satisfied that it will have no Fronting Exposure after giving effect thereto.

2.16 Extension of Maturity Date.

(a) Requests for Extension. The Borrowers shall have two rights and options, by
notice to the Administrative Agent (who shall promptly notify the Lenders) not
earlier than 120 days prior to, and not later than 60 days prior to, the
Maturity Date then in effect hereunder (the “Existing Maturity Date”), cause
each Lender to extend such Lender’s Existing Maturity Date for an additional one
(1) year with respect to each such exercise from the Existing Maturity Date and
each Lender shall extend such Lender’s Commitment for an additional one (1) year
with respect to each such exercise from the Existing Maturity Date in accordance
with this Section 2.16.

(b) Conditions to Effectiveness of Extensions. Notwithstanding the foregoing,
the extension of the Maturity Date pursuant to this Section shall not be
effective with respect to the Lenders unless:

(i) no Default or Event of Default shall have occurred and be continuing on the
date of such extension and after giving effect thereto;

 

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(ii) to the knowledge of the Borrowers, the representations and warranties
contained in this Agreement are true and correct, on and as of the date of such
extension and after giving effect thereto, as though made on and as of such date
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, only as of such specific date); and

(iii) the Borrowers pay the Lenders an extension fee on the Existing Maturity
Date in an amount equal to the product of (x) 0.25%, multiplied by (y) the
Commitments then in effect at the time of the extension.

(c) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

2.17 Increase in Commitments.

(a) Increase in Commitments.

(i) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Administrative Agent (which shall promptly notify the
Lenders), the Borrowers may from time to time, request an increase in the
Aggregate Commitments of up to (for all such requests) $200,000,000; provided
that any such request for an increase shall be in a minimum amount of
$10,000,000. Such notice shall indicate the proposed Applicable Rate (or other
applicable interest rate margins) for such new Commitments. In the event new
Commitments are to be provided, no consent of any Lender shall be required in
connection with the issuance of any such new Commitments, regardless of whether
the Applicable Rate (or other applicable interest rate margins) for such new
Commitments or Revolving Loans is less than or greater than that for any other
Commitments or Revolving Loans hereunder.

(ii) Lender Elections to Increase. In no event shall any Lender be obligated to
provide an additional Commitment.

(iii) Additional Lenders. Increases in Aggregate Commitments may be provided by
Lenders or Eligible Assignees. Increases in Aggregate Commitments may be
effected pursuant to a Joinder Agreement or amendment to this Agreement in form
and substance reasonably satisfactory to the Administrative Agent and its
counsel.

(iv) Effective Date and Allocations. If the Aggregate Commitments are increased
or if new Commitments are provided in accordance with this Section, the
Administrative Agent, the Syndication Agent and the Borrowers shall determine
the effective date (the “Increase Effective Date”) and the final allocation of
such increase or new Commitments under this clause (a). The Administrative Agent
shall promptly notify the Borrowers and the Lenders of the final allocation of
such increase or new Commitments and the Increase Effective Date. Any such
increase or new Commitments may be drawn on upon the satisfaction of the
applicable conditions precedent set forth in Section 4.02.

(v) Conditions to Effectiveness of Increase. As a condition precedent to such
increase or new Commitments under this clause (a), the Borrowers shall deliver
to the Administrative Agent a certificate of the Borrowers dated as of the
Increase Effective Date signed by a Responsible Officer of the Borrowers
(i) certifying and attaching the resolutions adopted by each Borrower approving
or consenting to such increase, and (ii) in the case of the

 

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Borrowers, certifying that, before and after giving effect to such increase, to
the knowledge of Borrowers (A) the representations and warranties contained in
Article V and the other Loan Documents are true and correct in all material
respects, on and as of the Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case, to the knowledge of the Borrowers, they are true and correct in all
material respects as of such earlier date, and except that for purposes of this
Section 2.17, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (B) no Default exists. The Borrowers shall prepay any
Revolving Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent necessary to
keep the outstanding Revolving Loans ratable with any revised Applicable
Percentages arising from any nonratable increase in the Commitments under this
Section (which prepayments will not be on a pro rata basis with respect to the
outstanding Commitments prior to the effectiveness of any such increase).
Notwithstanding any provisions of this Agreement to the contrary, the Borrowers
may borrow from the Lenders providing such increase in the Commitments (on a non
pro rata basis with Lenders not providing such increase) in order to fund such
prepayment. The Administrative Agent and the Borrowers may, without the consent
of any Lenders, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent and the Borrowers, to effect the increase in Commitments
pursuant to this Section 2.17(a), including, without limitation, establishing
pricing, commitment fees and the maturity of any new commitments, incorporation
of a new revolving tranche and amendments in respect of borrowing and prepayment
procedures for any new revolving tranche.

(b) Conflicting Provisions. This Section 2.17 shall supersede any provisions in
Sections 2.13 or 10.01 to the contrary.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrowers shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
L/C Issuer, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrowers shall make
such deductions and (iii) the Borrowers shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
subsection (a) above, the Borrowers shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 

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(c) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent, each Lender and each L/C Issuer, within 10 days after
demand therefor (accompanied by reasonable back-up documentation), for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent, such Lender or such L/C Issuer, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrowers by a Lender or an L/C Issuer (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender or an L/C Issuer, setting forth in reasonable detail
the basis and calculation of such amounts, shall be conclusive absent manifest
error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority,
the Borrowers 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) Status of Lenders. Any Administrative Agent, L/C Issuer or Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrowers are resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any other Loan Document shall deliver to the Borrowers (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrowers or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Administrative Agent, L/C Issuer or Lender, if
requested by the Borrowers or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Administrative Agent, L/C
Issuer or Lender is subject to backup withholding or information reporting
requirements.

Without limiting the generality of the foregoing, in the event that the
Borrowers are resident for tax purposes in the United States, any Administrative
Agent, L/C Issuer or Lender shall deliver to the Borrowers and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Person becomes a party to this
Agreement (and from time to time thereafter upon the request of the Borrowers or
the Administrative Agent, but only if such Person is legally entitled to do so),
and upon a change in circumstances requiring the delivery of new forms and/or
documentation, whichever of the following is applicable:

(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

 

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(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly
completed copies of Internal Revenue Service Form W-8BEN,

(iv) in the case of any Administrative Agent, Lender or L/C Issuer that is a
“United States person” within the meaning of Section 7701(a)(30) of the Code,
duly completed copies of Internal Revenue Service W-9, establishing a complete
exemption from backup withholding taxes; provided, however, that such a Person
that the Borrowers are entitled to treat as an “exempt recipient” (without
regard to whether any Borrower has requested any certificates or forms in this
respect) shall not be required to provide such form, and/or

(v) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrowers to determine the withholding or deduction
required to be made.

If a payment made to a Lender under any Loan Document would be subject to U.S.
federal withholding Tax imposed by FATCA if such Lender were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall
deliver to the Borrowers and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the
Borrowers or the Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Sections 1471(b)(3)(C)(i) of the
Code) and such additional documentation reasonably requested by the Borrowers or
the Administrative Agent as may be necessary for the Borrowers and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has or has not complied with such Lender’s
obligations under FATCA or, as necessary, to determine the amount to deduct and
withhold from such payment.

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or any
L/C Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or
with respect to which the Borrowers have paid additional amounts pursuant to
this Section, it shall pay to the Borrowers an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent, such Lender or such L/C Issuer, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that the Borrowers, upon the request of the
Administrative Agent, such Lender or such L/C Issuer, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or such L/C Issuer in the event the Administrative Agent, such
Lender or such L/C Issuer is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or any L/C Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrowers or any other Person.

 

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3.02 Illegality.

If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrowers
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrowers that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrowers shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrowers shall also pay accrued
interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates.

If the Required Lenders determine that for any reason in connection with any
request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that (a) Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and Interest Period of such
Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrowers and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrowers may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Revolving Borrowing of Base Rate
Loans in the amount specified therein.

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e)) or any L/C
Issuer;

 

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(ii) subject any Lender or any L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender or such L/C Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of,
or any change in the rate of, any Excluded Tax ); or

(iii) impose on any Lender or any L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting into or continuing or maintaining any Eurodollar
Rate Loan (or of maintaining its obligation to make any such Loan), or to
increase the cost to such Lender or such L/C Issuer of participating in, issuing
or maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of any
sum received or receivable by such Lender or such L/C Issuer hereunder (whether
of principal, interest or any other amount) then, upon request of such Lender or
such L/C Issuer, the Borrowers will pay to such Lender or such L/C Issuer, as
the case may be, such additional amount or amounts as will compensate such
Lender or such L/C Issuer, as the case may be, for such additional costs
incurred or reduction suffered.

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

(c) Certificates for Reimbursement. A certificate of a Lender or an L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or such
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrowers shall be
conclusive absent manifest error. The Borrowers shall pay such Lender or such
L/C Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof (accompanied by reasonable back-up
documentation).

 

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

(e) Reserves on Eurodollar Rate Loans. The Borrowers shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan;
provided, the Borrowers shall have received at least 10 days’ prior notice (with
a copy to the Administrative Agent) of such additional interest from such
Lender. If a Lender fails to give notice 10 days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable 10 days from
receipt of such notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Eurodollar Rate
Loan on a day other than the last day of the Interest Period for such Eurodollar
Rate Loan (whether voluntary, mandatory, automatic, by reason of acceleration,
or otherwise);

(b) any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Eurodollar
Rate Loan on the date or in the amount notified by the Borrowers; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrowers pursuant
to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained (but excluding any loss relating to
the Applicable Rate or anticipated profits). The Borrowers shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.

 

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For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Borrowers may replace such Lender in accordance with
Section 10.13.

3.07 Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

ARTICLE IV.

CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT AND

CREDIT EXTENSIONS

4.01 Conditions of Effectiveness of this Agreement. The effectiveness of this
Agreement and the obligation of each L/C Issuer and each Lender to make its
initial Credit Extension hereunder is subject to satisfaction of the following
conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals, telecopies or other electronic image (e.g., “PDF” or “TIF” via
electronic mail) (followed promptly by originals) unless otherwise specified,
each properly executed by a Responsible Officer of the signing Loan Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and substance
satisfactory to the Administrative Agent and each of the Lenders.

(i) originally executed counterparts of this Agreement, the Guaranty, the Pledge
Agreements and the Intra-Company Loan Subordination Agreement;

(ii) an original Revolving Note executed by the Borrowers in favor of each
Lender requesting a Revolving Note and an original Swing Line Note executed by
the Borrowers in favor of the Swing Line Lender;

 

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(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized as of the date hereof to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;

(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each Loan Party is validly existing and in good standing in its
jurisdiction of organization;

(v) favorable opinions of each of Skadden, Arps, Slate, Meagher & Flom LLP and
DLA Piper LLP (US), special counsel to the Loan Parties, addressed to the
Administrative Agent and each Lender, as to matters concerning the Loan Parties
and the Loan Documents and in form and substance reasonably satisfactory to the
Administrative Agent;

(vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

(vii) a certificate signed by a Responsible Officer of the Borrowers certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied and (B) that there has been no event or circumstance since the date of
the Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(viii) a duly completed Compliance Certificate as of the last day of the fiscal
quarter of the Borrowers’ most recently ended prior to the Closing Date, signed
by a Responsible Officer of the Borrowers;

(ix) evidence that all Liens securing obligations under the Existing Credit
Agreements have been or concurrently with the Closing Date are being released
and all amounts outstanding thereunder have been or concurrently with the
Closing Date are being repaid in full and that the Existing Credit Agreement and
all related loan documents are automatically terminated and of no further force
or effect (other than with respect to indemnification obligations of the
borrowers thereunder that by their terms survive such repayment); and

(x) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuers, the Swing Line Lender or the Required
Lenders reasonably may require.

(b) Any fees required to be paid hereunder on or before the Closing Date shall
have been paid.

 

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(c) Unless waived by the Administrative Agent, the Borrowers shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrowers and the
Administrative Agent).

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrowers and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct in all material respects to the knowledge of the Borrowers
only as of such earlier date, and except that for purposes of this Section 4.02,
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) The Administrative Agent and, if applicable, the applicable L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.

Each Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrowers shall be deemed to be a
representation and warranty to the knowledge of the Borrowers that the
conditions specified in Sections 4.02(a) and (b) have been satisfied on and as
of the date of the applicable Credit Extension.

 

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ARTICLE V.

REPRESENTATIONS AND WARRANTIES

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

5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
(a) is duly organized or formed, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization except to the
extent permitted by Section 7.04, (b) has all requisite corporate or other
organizational power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien (other than any Lien granted
pursuant to the Loan Documents in favor of the Administrative Agent) under, or
require any payment (other than repayments under the Existing Credit Agreement)
to be made under (i) any Contractual Obligation to which such Person is a party
or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law, except to the extent that any of the foregoing referred
to in clause (b) and (c) could not reasonably be expected to have a Material
Adverse Effect.

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except for
filings or recordings in respect of the Liens created pursuant to the Loan
Documents and except as may be required, in connection with the disposition of
any Collateral, by laws generally affecting the offering and sale of securities.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

 

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5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the REIT
as of the date thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; and (iii) together
with the Form 10-K and Form 10-Q filings of the REIT, show all material
indebtedness and other liabilities, direct or contingent, of the Borrowers and
their Subsidiaries as of the respective dates thereof, including liabilities for
taxes, material commitments, Contractual Obligations and Indebtedness in
accordance with GAAP or which are required to be disclosed in such financial
statements under SEC rules and regulations.

(b) The unaudited consolidated balance sheet of the Borrowers and their
Subsidiaries dated September 30, 2011, and the related consolidated statements
of income or operations and cash flows for the fiscal quarter ended on that date
(i) were prepared in accordance with GAAP consistently applied throughout the
period covered thereby, except as otherwise expressly noted therein, and
(ii) fairly present the financial condition of the Borrowers and their
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

(d) The consolidated financial projections of the REIT delivered pursuant to
Section 6.01(c) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, (it being understood that such
projections are subject to uncertainties and contingencies, which may be beyond
the control of the Borrowers and their Subsidiaries and that no assurance is
given by the Borrowers that such projections will be realized).

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrowers, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against any Borrower or any of their Subsidiaries or against any of their
properties or revenues that (a) questions the validity of this Agreement or any
other Loan Document, any action taken or to be taken pursuant hereto or thereto
or any lien, security title or security interest created or intended to be
created pursuant hereto or thereto, or (b) except as specifically disclosed in
Schedule 5.06, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

5.07 No Default. No member of the Borrowing Group is in default under or with
respect to any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

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5.08 Ownership of Property; Liens. Each member of the Borrowing Group has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business,
taken as a whole, except for such defects in title as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Loan Parties and their Subsidiaries is subject to no Liens,
other than Liens permitted by Section 7.01.

5.09 Environmental Compliance. The Borrowers and their Subsidiaries have
conducted a review of the effect of existing Environmental Laws and known claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Borrowers have reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

5.10 Insurance. The properties of each Borrower and its Subsidiaries are either
(a) insured with financially sound and reputable insurance companies not
Affiliates of the Borrowers, in such amounts, or (b) self insured pursuant to a
program reasonably satisfactory to the Administrative Agent, in either case with
such deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
such Borrower or the applicable Subsidiary operates.

5.11 Taxes. Borrowers and their Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against Borrowers or any of their Subsidiaries that would, if made,
have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary
thereof is party to any material tax sharing agreement other than as disclosed
on Schedule 5.11, as such Schedule may be updated from time to time. Borrowers
may update Schedule 5.11 from time to time by providing written notice to
Administrative Agent.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrowers, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrowers and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.

 

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(b) There are no pending or, to the best knowledge of the Borrowers, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.

(c)(i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any material Unfunded Pension Liability; (iii) neither the
Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrowers nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests. As of the Closing Date, the Borrowers have
no Subsidiaries (excluding Subsidiaries which are immaterial to the Borrowing
Group) other than those specifically disclosed in the REIT’s 10-K filed with the
SEC for the fiscal year ending December 31, 2010, which are disclosed in
Schedule 5.13, and, as of the Closing Date, all of the outstanding Equity
Interests in such Subsidiaries have been validly issued, are fully paid and
nonassessable and are free and clear of all Liens except as permitted under this
Agreement. All of the outstanding Equity Interests in the Borrowers have been
validly issued and are fully paid and nonassessable.

5.14 Margin Regulations; Investment Company Act; REIT and Tax Status; Stock
Exchange Listing.

(a) Except for the repurchase of the shares of the REIT, no Borrower is engaged
or will engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock, in any case, in violation of Regulation U
of the FRB. Following the application of the proceeds of each Borrowing or
drawing under each Letter of Credit, not more than 25% of the value of the
assets (either of the Borrowers only or of the Borrowing Group) subject to the
provisions of Section 7.01 or subject to any restriction contained in any
agreement or instrument between the Borrowers, and any Lender or any Affiliate
of any Lender relating to Indebtedness and within the scope of Section 8.01(e)
will be margin stock.

(b) None of the Borrowers, any Person Controlling the Borrowers, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

(c) Except as disclosed to Administrative Agent, none of the Borrowers nor any
Wholly-Owned Subsidiary (except for AIMCO Assurance Ltd., a Bermuda corporation)
is a “foreign person” within the meaning of Section 1445(f)(3) of the Code.

 

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(d) The REIT currently has REIT Status and has maintained REIT Status on a
continuous basis since its formation. AIMCO is not an association taxable as a
corporation under the Code. The shares of common stock of the REIT are listed on
the NYSE, American Stock Exchange or NASDAQ Stock Exchange.

5.15 Disclosure. Each Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect (which disclosure shall include all matters
disclosed in the REIT’s SEC filings). No report, financial statement,
certificate or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case, 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, the Borrowers make no such representation or warranty with
respect to projections, industry or general economic information and other
forward-looking information, except that with respect to projections and other
forward-looking information, the Borrowers represent only that such projections
and other forward-looking information were prepared in good faith based upon
assumptions believed to be reasonable at the time made, it being understood that
no assurance is given that the results forecasted in such projections and other
forward-looking information will in fact be achieved and such projections and
other forward-looking information are subject to significant uncertainties and
contingencies many of which are beyond the control of the Borrowers and their
Subsidiaries.

5.16 Compliance with Laws. Each Borrower and each of its Subsidiaries are in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17 Intellectual Property; Licenses, Etc. Each Borrower and each of its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, except as could not reasonably be
expected to have a Material Adverse Effect. To the knowledge of the Borrowers,
no slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Borrowers or any Subsidiary infringes upon any rights held by any other Person,
except as could not reasonably be expected to have a Material Adverse Effect. No
claim or litigation regarding any of the foregoing is pending or, to the
knowledge of the Borrowers, threatened, which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

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ARTICLE VI.

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation (other than contingent indemnification obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless Cash Collateralized in accordance with Section 2.03(g)), the Borrowers
shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent, in form and
detail reasonably satisfactory to the Administrative Agent:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year, a consolidated balance sheet of the REIT (and upon request, AIMCO)
on a consolidated basis as at the end of such fiscal year, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, including the REIT’s (and upon request,
AIMCO’s) SEC Form 10-K for such period, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be audited and accompanied
by a report and opinion of Ernst & Young or another independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit;

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year a consolidated balance
sheet of the REIT (and upon request, AIMCO) on a consolidated basis as at the
end of such fiscal quarter, and the related consolidated statements of income or
operations and cash flows for such fiscal quarter and for the portion of the
REIT’s (and upon request, AIMCO’s) fiscal year then ended, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such consolidated statements to be certified by a
Responsible Officer of the REIT (and upon request, AIMCO) as fairly presenting
the financial condition, results of operations, shareholders’ equity and cash
flows of the REIT (and upon request, AIMCO) in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes; and

(c) as soon as available, but in any event within 90 days after the beginning of
each fiscal year, forecasts prepared by management of the Borrowers for such
fiscal year in form and detail reasonably satisfactory to Administrative Agent.

As to any information contained in materials furnished pursuant to
Section 6.02(d), the Borrowers shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrowers to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

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6.02 Certificates; Other Information. Deliver to the Administrative Agent, in
form and detail reasonably satisfactory to the Administrative Agent:

(a) Intentionally Omitted;

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrowers;

(c) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
the REIT by independent accountants in connection with the accounts or books of
the REIT or any Subsidiary, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the REIT, and copies of all quarterly reports on Form 10-Q and current
reports on Form 8-K which the REIT may file or be required to file with the SEC
under Section 13 or 15(d) of the Securities and Exchange Act, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

(e) promptly, and in any event within five (5) Business Days after receipt
thereof by any Borrower, copies of each material notice or other material
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Borrower (except to the extent prohibited by confidentiality obligations
required by the SEC or any comparable agency);

(f) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrowers or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request; provided that the Borrowers shall not be
required to provide any information (i) in respect of which disclosure to the
Administrative Agent or the Lenders (or their designated representative) is then
prohibited by law or any arms-length agreement with unaffiliated third parties
binding on any Borrower or any of its Subsidiaries or (ii) is subject to
attorney-client privilege or constitutes attorney work product;

(g) promptly after the occurrence thereof, notice of the failure of the REIT to
maintain REIT Status or of any existing Subsidiary of the REIT to maintain its
status as a qualified REIT subsidiary under the Code, if and to the extent
required by applicable law; and

(h) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), the REIT’s consolidated financial covenant projections
for the current and the succeeding three fiscal quarters, as prepared by the
REIT’s Chief Financial Officer and in a format and with such detail as
Administrative Agent may reasonably require.

 

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Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrowers post such documents, or provide a link thereto on the Borrowers’
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrowers’ behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent), including the SEC’s EDGAR website; provided that:
(i) the Borrowers shall deliver paper copies of such documents to the
Administrative Agent or any Lender upon its request to the Borrowers to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) except with respect to
current reports on Form 8-K, the Borrowers shall notify the Administrative Agent
(by telecopier or electronic mail) of the posting of any such documents
(provided that such notices may be provided by commercial third-party websites
by electronic mail at the direction of the Borrowers). Documents required to be
delivered pursuant to Section 6.02(b) may be delivered to the Administrative
Agent by electronic image scan (e.g., “PDF” or “TIF”) transmission. The
Administrative Agent shall have no obligation to request the delivery of or to
maintain paper copies of the documents referred to above, and in any event shall
have no responsibility to monitor compliance by the Borrowers with any such
request by a Lender for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.

The Borrowers and each Lender hereby acknowledge that (a) the Administrative
Agent and/or the Joint Lead Arrangers will make available to the Lenders and the
L/C Issuers materials and/or information provided by or on behalf of the
Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on IntraLinks, SyndTrak or another similar electronic system (the
“Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Borrowers or their securities) (each, a “Public Lender”). The Borrowers
hereby agree that (w) all Borrower Materials (other than SEC Reports) that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative
Agent, the Joint Lead Arrangers, the L/C Issuers and the Lenders to treat such
Borrower Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Borrowers or their securities for purposes of United States Federal and state
securities laws; (y) all SEC Reports and all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
“Public Investor;” and (z) the Administrative Agent and the Joint Lead Arrangers
shall be entitled to treat any Borrower Materials (other than SEC Reports) that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor.”

6.03 Notices. Promptly notify the Administrative Agent (which shall provide such
notice to the Lenders):

(a) of the occurrence of any Default, to the best knowledge of the Borrowers;

 

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(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrowers or any Subsidiary;
(ii) any dispute, litigation, investigation, proceeding or suspension between
the Borrowers or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrowers or any Subsidiary, including pursuant to any applicable
Environmental Laws;

(c) of the occurrence of any ERISA Event; and

(d) of any material change in accounting policies or financial reporting
practices by the REIT to the extent such change would have an effect on
calculations of financial covenants under this Agreement or the REIT’s Funds
From Operations.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrowers setting forth details of the occurrence
referred to therein and stating what action the Borrowers have taken and propose
to take with respect thereto; provided that the Borrowers shall not be required
to provide any information (i) in respect of which disclosure to the
Administrative Agent or the Lenders (or their designated representative) is then
prohibited by law or any arms-length agreement with unaffiliated third parties
binding on any Borrower or any of its Subsidiaries or (ii) is subject to
attorney-client privilege or constitutes attorney work product. Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrowers or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness, in each case to the extent the failure to do any of the foregoing
could reasonably be expected to have a Material Adverse Effect.

6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect the legal existence and good standing of (i) the Borrowers
except in a transaction expressly permitted by Section 7.04 and (ii) Loan
Parties (other than the Borrowers) under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04 and except with
respect to the Loan Parties (other than the Borrowers) where the failure to so
preserve, renew and maintain would not reasonably be expected to have a Material
Adverse Effect; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

 

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6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear, force majeure,
casualty events and transactions not prohibited by this Agreement excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities, taken as a whole.

6.07 Maintenance of Insurance. Cause the properties of each Borrower and its
Subsidiaries to either be (a) insured with financially sound and reputable
insurance companies not Affiliates of the Borrowers, in such amounts, or
(b) self insured pursuant to a program reasonably satisfactory to the
Administrative Agent which Administrative Agent may review not more frequently
than once annually, in either case with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where such Borrower or the applicable
Subsidiary operates. The Borrowers shall provide the Administrative Agent with
prior written notice of not less than 30 days of a material termination,
material reduction, material lapse or material cancellation in the aggregate
insurance coverage of the Borrowing Group.

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.

6.09 Books and Records. (a) Maintain proper books of record and account, in
which correct entries in conformity with GAAP consistently applied shall be made
of financial transactions and matters involving the assets and business of the
Borrowers and its Subsidiaries, as the case may be; and (b) maintain such books
of record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrowers and
their Subsidiaries, as the case may be.

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its officers and key employees, all at the reasonable expense of
the Borrowers and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance (no less than
forty-eight (48) hours’) notice to the Borrowers; provided, however, that when
an Event of Default exists the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice including engage in discussions relating to the
Borrowers’ affairs, finances and accounts with the Borrowers’ directors and
independent public accountants. Notwithstanding anything to the contrary in this
Section 6.10, none of the Borrowers or any of their Subsidiaries will be
required to disclose, permit the inspection, examination or making of extracts,
or discussion of, any document, information or

 

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other matter that (i) in respect of which disclosure to the Administrative Agent
or the Lenders (or their designated representative) is then prohibited by law or
any arms-length agreement with unaffiliated third parties binding on any
Borrower or any of its Subsidiaries or (ii) is subject to attorney-client
privilege or constitutes attorney work product.

6.11 Use of Proceeds. The proceeds of Revolving Loans will be available to the
Borrowers to fund working capital and other corporate purposes, including
acquisitions, development and redevelopment of properties, Restricted Payments
permitted pursuant to Section 7.06, and the refinancing of existing and future
Indebtedness, all in accordance with this Agreement.

6.12 Additional Guarantors.

(a) Notify the Administrative Agent of any Wholly-Owned Subsidiary of the
Borrowers that directly (without giving effect to Net Operating Income of any
Subsidiary owned by such Wholly-Owned Subsidiary) owns assets that are projected
to generate an amount of Net Operating Income equal to or greater than 1% of the
Net Operating Income of AIMCO for the next calendar quarter (each, a “Bottom
Tier Subsidiary”), and promptly thereafter (and in any event within 60 days),
cause such Person to (i) become a Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty or such other document as the
Administrative Agent shall deem appropriate for such purpose, and (ii) deliver
to the Administrative Agent the documents referred to in clauses (iii) and
(iv) of Section 4.01(a) and, if required by Administrative Agent, favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to in clause (i)), all in form, content and scope reasonably
satisfactory to the Administrative Agent. If a Bottom Tier Subsidiary is
prohibited from providing a Guaranty by a Contractual Obligation or Organization
Documents, then no Guaranty from such Subsidiary shall be required and the
Borrowers shall cause each Wholly-Owned Subsidiary which is not then a Guarantor
and which owns an Equity Interest in the Bottom Tier Subsidiary (each, a “Second
Tier Subsidiary”) to instead execute and deliver the Guaranty. If a Second Tier
Subsidiary is prohibited from providing a Guaranty by a Contractual Obligation
or Organization Documents, then no Guaranty from such Subsidiary shall be
required and the Borrowers shall cause each Wholly-Owned Subsidiary which is not
then a Guarantor and which owns an Equity Interest in the Second Tier Subsidiary
to instead execute and deliver the Guaranty (to the extent such guaranty is not
prohibited by Contractual Obligation or Organization Documents).

(b) With respect to any Wholly-Owned Subsidiary that becomes a Guarantor
pursuant to Section 6.12(a) and promptly after such Wholly-Owned Subsidiary
becomes a Guarantor (and in any event within 20 days), the Borrowers shall cause
the Stock or other Equity Interest in such Wholly-Owned Subsidiary that becomes
a Guarantor to be pledged to the Administrative Agent for the benefit of the
Lenders as Collateral under this Agreement (to the extent not prohibited by
Contractual Obligation or Organization Documents). Borrowers or any applicable
Subsidiary (to the extent not prohibited by Contractual Obligation or
Organization Documents) shall execute and deliver to the Administrative Agent
such amendments or joinders to the Pledge Agreements as the Administrative Agent
deems reasonably necessary or desirable to grant to the Administrative Agent for
the benefit of the Lenders a perfected first priority security interest in the
Stock or other Equity Interest of such new Guarantor in accordance with the
Pledge Agreements and deliver to the Administrative Agent the certificates
representing such Stock or Equity Interest (to the extent certificated),
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer.

 

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6.13 Intra-Company Debt. Intra-Company Debt (excluding a de minimis amount
thereof not to exceed $250,000) owed by the Borrowers or any Guarantor shall at
all times be subordinated in right of payment to the payment in full of the
Obligations in accordance with the terms of the Intra-Company Loan Subordination
Agreement.

ARTICLE VII.

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation (other than contingent indemnification obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless Cash Collateralized in accordance with Section 2.14), each Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following (and other than Liens in favor of Borrower or Guarantor and
Liens securing Indebtedness permitted under Section 7.11(i)); provided that in
no event may the Negative Pledge Assets be subject to any such Liens:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof;

(c) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(d) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto in accordance with GAAP are maintained on the
books of the applicable Person;

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

 

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(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property in the ordinary conduct of the business of the
applicable Person;

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;

(i) statutory, contractual or common law landlords’ Liens under leases to which
any Borrower or any Subsidiary thereof is a party;

(j) Liens securing reimbursement obligations with respect to letters of credit
and banker’s acceptances which encumber only documents and other property
relating to such letters of credit and the products and proceeds thereof;

(k) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of setoff or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution; provided that (i) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
depositor in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (ii) such deposit account is not intended by the depositor to
provide collateral to the depository institution as security for Indebtedness
for borrowed money;

(l) Liens securing Indebtedness permitted under Section 7.03(d), (e), (g), (h),
(i), (j) or (o) or Section 7.11(i); provided, that in the case of any Liens
securing Indebtedness permitted under Section 7.03(o), such Liens relate and
attach only to the insurance policies or the proceeds thereof, or deposits made
as security for the obligations thereunder, to the extent of any unpaid premium;

(m) Liens supporting purchase options or obligations and Guarantees not
prohibited by this Agreement;

(n) Liens on property of a Person which becomes a Subsidiary of any Borrower or
any Subsidiary thereof after the date hereof and Liens existing on property at
the time of acquisition thereof (and any refinancing or replacement of any such
Liens); provided that (i) such Liens existed at the time such Person becomes a
Subsidiary of any Borrower or any Subsidiary thereof or at the time such
property was acquired and were not incurred or otherwise created in anticipation
thereof, and (ii) any such Lien is not expanded to cover any other Property of
such Person after the time such Person becomes a Subsidiary of any Borrower or
any Subsidiary thereof;

(o) licenses, sublicenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of the
business of the Loan Parties, taken as a whole;

(p) Intentionally Omitted;

(q) Liens arising from precautionary UCC financing statement filings regarding
operating leases entered into by any Borrower or any Subsidiary thereof; and

 

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(r) Liens arising from sale-leaseback transactions.

7.02 Investments. Make any Investments, except:

(a) Investments held by any Borrower or any of its Subsidiaries in the form of
Cash, Cash Equivalents or short-term marketable securities;

(b) Investments of the Borrowers in any Subsidiary or any other Borrower,
Investments of any Subsidiary in the Borrowers or in another Subsidiary and
Investments in any Person that, as a result of or in connection with such
Investment, becomes or will become a Subsidiary of a Borrower;

(c) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors or received in
respect of delinquent accounts or in connection with the bankruptcy or
reorganization of account debtors or other obligors or in settlements of
disputes with obligors, in each case to the extent reasonably necessary in order
to prevent or limit loss;

(d) Guarantees permitted by Section 7.03;

(e) Investments in Non-Core Assets, provided that at all times the Borrowing
Group’s Share of Investments in Non-Core Assets has an aggregate book value
(i) that does not exceed 7.5% of the Gross Asset Value then in effect, and
(ii) that, together with the aggregate book value of the Borrowing Group’s Share
of Investments permitted under Sections 7.02(f), (g) and (p), does not exceed
20% of the Gross Asset Value then in effect;

(f) Investments in Development Assets, provided that at all times the Borrowing
Group’s Share of Investments in Development Assets has an aggregate book value
(i) that does not exceed 10% of the Gross Asset Value then in effect, and
(ii) that, together with the aggregate book value of the Borrowing Group’s Share
of Investments permitted under Sections 7.02(e), (g) and (p), does not exceed
20% of the Gross Asset Value then in effect;

(g) Investments in Non-Controlled Entities, provided that at all times the
Borrowing Group’s Share of Investments in Non-Controlled Entities has an
aggregate net book value (valued at the Borrowing Group’s Share of the book
value less depreciation and associated Indebtedness) (i) that does not exceed
20% of the Gross Asset Value then in effect, and (ii) that together with the
aggregate book value of the Borrowing Group’s Share of Investments permitted
under Sections 7.02(e), (f) and (p), does not exceed 20% of the Gross Asset
Value then in effect;

(h) Investments existing on the date hereof;

(i) Investments consisting of advances to officers, directors and employees of
the Borrowers and their Subsidiaries for travel, entertainment, relocation and
similar ordinary business purposes;

(j) Investments permitted by Section 7.04;

 

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(k) Investments in Intra-Company Debt;

(l) Investments in respect of Swap Contracts permitted under Section 7.03(d);

(m) Investments in the ordinary course of the Borrowers and their Subsidiaries’
business not otherwise permitted under this Section 7.02, in an aggregate amount
at any time outstanding not to exceed $10,000,000 (it being understood that
Investments in real estate secured mortgages shall not be considered “in the
ordinary course” of the Borrowers and their Subsidiaries’ business);

(n) Investments in multi-family apartment projects (including those with de
minimis commercial aspects) in fee simple or leasehold interests therein or
partnership, joint venture interests or other Investments (including capital
contributions or partner loans) in Persons that directly or indirectly own
interests in multi-family apartment projects (including those with de minimis
commercial aspects) and other real property acquired in connection with any such
Investment that the Borrowers or the applicable Subsidiary intend to dispose of
as soon as commercially reasonable;

(o) Investments (including debt obligations and Equity Interests) received upon
the foreclosure with respect to any secured Investment or other transfer of
title with respect to any secured Investment or in connection with the
bankruptcy, reorganization or other restructuring of any obligor under
Investments held by any Borrower or any Subsidiary of the Borrowers; and

(p) subject to the limitations set forth in Sections 7.02(e)(ii), (f)(ii) and
(g)(ii), promissory notes and other noncash consideration received in connection
with the sale of a Subsidiary or from the sale of assets in a transaction not
prohibited hereunder.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness under the Loan Documents;

(b) (i) Indebtedness outstanding on the date hereof and listed on Schedule
7.03(b)(i) and any refinancings, refundings, renewals or extensions thereof, and
(ii) all cross-collateralized and cross-defaulted Indebtedness outstanding on
the date hereof and listed on Schedule 7.03(b)(ii) and any refinancings,
refundings, renewals or extension thereof;

(c) Guarantees by any Borrower or any Subsidiary in respect of Indebtedness
otherwise permitted hereunder of the Borrowers or any Subsidiary;

(d) obligations (contingent or otherwise) of the Borrowers or any of their
Subsidiaries existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view” (it being
understood that, notwithstanding the foregoing, interest rate Swap Contracts
which have the effect of converting a fixed rate to a floating rate shall be
permitted to the extent such Swap Contract (or

 

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the notional amount thereof) is reflected in calculations made under
Section 7.11(g)); and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

(e) Indebtedness in respect of capital leases and purchase money obligations for
fixed or capital assets;

(f) Intra-Company Debt;

(g) Recourse Indebtedness of the Borrowers, the Guarantors and their
Subsidiaries (whether secured or unsecured) so long as the Borrowing Group’s
Share (excluding the Commitments and the Total Outstandings) does not exceed the
limitation set forth in Section 7.11(h);

(h) secured Indebtedness of the Borrowers, the Guarantors and their Subsidiaries
which is not Recourse Indebtedness of the Borrowers, the Guarantors or any of
their Subsidiaries;

(i) Indebtedness of the Borrowers and their Subsidiaries consisting of
“exceptions to nonrecourse” guaranties of non-recourse Indebtedness otherwise
permitted under this Section 7.03 or of other Indebtedness permitted under this
Section 7.03; provided, that, “exceptions to non-recourse” shall include the
types of additional exceptions customarily required by Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation from time to time in their
standard form loan documentation and customary contingent environmental
indemnities required in connection with Non-Recourse Indebtedness permitted
hereunder;

(j) Indebtedness in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and similar obligations and trade-related letters of credit, in
each case, provided in the ordinary course of business, and any extension,
renewal or refinancing thereof to the extent not provided to secure the
repayment of other Indebtedness;

(k) Indebtedness under bonds supporting utility deposits or insurance or other
comparable security deposits or property taxes, in each case incurred in the
ordinary course of business;

(l) Indebtedness arising from the honoring of a check, draft or similar
instrument against insufficient funds;

 

(m) Intentionally Omitted;

(n) customary title company indemnities required in connection with Non-Recourse
Indebtedness permitted hereunder, Dispositions and acquisitions of property not
prohibited hereunder;

(o) Indebtedness consisting of the financing of insurance premiums or otherwise
arising in connection with insurance arrangements of the Borrowers or any of
their Subsidiaries in the ordinary course of business; and

 

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(p) endorsements for collection or deposit in the ordinary course of business.

7.04 Fundamental Changes. Merge or consolidate with or into another Person,
except that, so long as no Default exists or would result therefrom:

(a) any Subsidiary may merge or consolidate with (i) any Borrower, provided that
such Borrower shall be the continuing or surviving Person, (ii) any one or more
other Subsidiaries, provided that in the event one or more of such Subsidiaries
is (x) a Guarantor, the continuing or surviving Person shall be a Guarantor or
(y) a “Pledgor” under a Pledge Agreement, the continuing or surviving Person
shall be such Pledgor or shall become a Pledgor promptly after such merger or
consolidation (and in any event within 20 days), or (iii) any Borrower may merge
or consolidate with another Borrower;

(b) Subsidiaries of the Borrowers may engage in reverse mergers or internal
reorganizations whereby a Subsidiary or Subsidiaries merge into or with one or
more Subsidiaries of the Borrowers or any Guarantor or any combination thereof;
provided that in the event one or more of such Subsidiaries is (x) a Guarantor,
the continuing or surviving Person shall be a Guarantor or (y) a “Pledgor” under
a Pledge Agreement, the continuing or surviving Person shall be such Pledgor or
shall become a Pledgor promptly after such merger or reorganization (and in any
event within 20 days); and

(c) any Borrower or any Subsidiary of any Borrower may merge, or consolidate
with another Person; provided that each of the following conditions are
satisfied: (A) in the event one or more of such Subsidiaries (x) is a Guarantor,
the continuing or surviving Person shall be a Guarantor, unless such Guarantor
is released, in accordance with the terms of the Loan Documents, from its
obligations under the Guaranty in connection with a sale of such Guarantor or
(y) is a “Pledgor” under a Pledge Agreement, the continuing or surviving Person
shall be a Pledgor or shall become a Pledgor promptly after such merger or
consolidation (and in any event within 20 days), unless the Liens granted by it
under such Pledge Agreement are released, in accordance with the terms of the
Loan Documents, in connection with a sale of such Pledgor; (B) Borrowers certify
to Administrative Agent that (1) if a Borrower is a party to such merger or
consolidation, such Borrower will be the surviving Person of such merger; (2) to
the best knowledge of the Borrowers, prior to the consummation of the
transaction, the transaction will not cause the Borrowers to be in breach of the
representations and warranties of this Agreement and the other Loan Documents;
and (3) the transaction will not cause the Borrowers to be in breach of the
covenants of this Agreement and the other Loan Documents, including financial
covenants, after the consummation thereof; and (C) the Borrowers provide the
Administrative Agent with a pro forma Compliance Certificate that demonstrates
that after the consummation of the proposed transaction the Borrowers will be in
compliance with the financial covenants in this Agreement.

7.05 Intentionally Omitted.

 

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7.06 Restricted Payments. Declare or make any Restricted Payment, except that:

(a) each Subsidiary may make Restricted Payments to the Borrowers, the
Guarantors or any Subsidiary of the Borrowers and any other Person that owns an
Equity Interest in such Subsidiary, ratably, in the case of such other Persons
that are not Borrowers or Subsidiaries, according to their respective holdings
of the type of Equity Interest in respect of which such Restricted Payment is
being made; and each Borrower may make Restricted Payments to any other Borrower
or any Subsidiary that owns an Equity Interest in such Borrower;

(b) the Borrowers and each Subsidiary may declare and make dividend payments or
other distributions to the extent paid or payable solely in the common stock or
other common Equity Interests of such Person; provided that the limitations set
forth in this clause (b) shall not prohibit the making of cash payments in
connection with any dividend or other distribution paid or payable in common
stock or other common Equity Interests of such Person so long as such cash
payment is not otherwise prohibited by the terms of the Loan Documents;

(c) the Borrowers and each Subsidiary may purchase, redeem or otherwise acquire
any Equity Interests of the Borrowers or any Subsidiary; provided, that, at the
time or as a result thereof there shall exist no Default or Event of Default.
Notwithstanding the foregoing, in no event may the Commitment be used to fund
the purchase, redemption or other acquisition of REIT common stock, except to
the limited extent that if Net Disposition Proceeds which otherwise would be
permitted to be used to purchase, redeem or otherwise acquire such common stock
and are designated to be so used but for an interim period are instead used to
pay down the Revolving Loans, then an equal amount of the Commitment may be
borrowed (in accordance with this Agreement) to purchase, redeem or otherwise
acquire such common stock for a period ending 60 days after such repayment; and

(d) the Borrowers and each Subsidiary may declare or make dividends and
distributions (excluding those dividends and distributions otherwise permitted
under this Section 7.06) in an aggregate amount that do not exceed the greater
of (i) during any four consecutive fiscal quarter period for which financials
are available, 95% of Funds From Operations for such four consecutive fiscal
quarter period, and (ii) with respect to any tax year of the REIT, such amount
as may be necessary for the REIT to maintain REIT Status for such tax year;
provided that, notwithstanding the foregoing, the Borrowers may also make
Restricted Payments (so long as no Default exists or would arise as a result of
such Restricted Payment) in an amount equal to the amount that would need to be
distributed to all of the Borrowers’ partners or shareholders in order for the
REIT to make the minimum distributions required to be distributed to its
shareholders under the Code (A) to avoid the payment of taxes imposed under Code
Section 857(b)(1) and 4981 of the Code, and (B) to avoid the a payment of taxes
imposed under Section 857(b)(3) of the Code.

Nothing in Sections 7.06(a), (b) (c) or (d) shall prohibit (A) any Borrower or
any Subsidiary of any Borrower from making tender offers for or otherwise
acquiring for value any Equity Interests, now or hereafter outstanding, of any
Borrower or any Subsidiary of any Borrower which were not issued by such
acquiring Borrower or Subsidiary or (B) any Restricted Payment by any Person
pursuant to such Person’s Organization Documents, including any Restricted
Payment funded with proceeds from Dispositions of assets.

 

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7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrowers
and their Subsidiaries on the date hereof or any business substantially related
or incidental or ancillary thereto.

7.08 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Borrowers, whether or not in the ordinary course of
business, other than (a) any transaction not prohibited by this Agreement,
(b) transactions on fair and reasonable terms substantially as favorable to the
Borrowers or such Subsidiary as would be obtainable by the Borrowers or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate, (c) transactions between or among Borrowers and their
respective Subsidiaries, (d) employment, compensation and indemnification
arrangements with officers and directors of Borrowers and their respective
Subsidiaries, (e) fees payable in connection with directors’ fees and services
rendered to the Board of Directors of Borrowers and their respective
Subsidiaries and (f) loans and advances to officers and directors of Borrowers
and their respective Subsidiaries.

7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability of any
Wholly-Owned Subsidiary to make Restricted Payments to the Borrowers or any
Guarantor or to otherwise transfer property to the Borrowers or any Guarantor,
except for (A) any restrictions existing under or pursuant to any Indebtedness
permitted under Section 7.03 or any Liens permitted under Section 7.02,
(B) customary provisions in leases, subleases, licenses and other contracts
restricting the assignment thereof, (C) any restriction existing by reason of
applicable law, (D) restrictions in or contemplated by any Borrower’s, any
Subsidiary’s or any Non-Controlled Entities’ Organization Documents, or
(E) restrictions in contracts for sales, management, development or Dispositions
of property not prohibited hereby; provided, that, such restrictions relate only
to the property being managed, developed or disposed of.

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose, in each case, in
violation of Regulation U of the FRB; provided, that the Borrowers may use the
proceeds of Credit Extensions to repurchase the shares of the REIT.

7.11 Financial Covenants.

(a) Permit the Fixed Charge Coverage Ratio (i) for the fiscal quarter ending
December 31, 2011, to be less than 1.20:1.00 and (ii) for the fiscal quarter
ending March 31, 2012 and each fiscal quarter thereafter, to be less than
1.30:1.00;

(b) Permit the Debt Service Coverage Ratio (i) for the fiscal quarter ending
December 31, 2011, to be less than 1.40:1.00 and (ii) for the fiscal quarter
ending March 31, 2012 and each fiscal quarter thereafter, to be less than
1.50:1.00;

(c) Permit the Secured Indebtedness Ratio (i) for the fiscal quarter ending
December 31, 2011, to exceed 0.65:1.00, and (ii) for the fiscal quarter ending
March 31, 2012 and each fiscal quarter thereafter, to exceed 0.60:1.00;

 

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(d) Permit the Leverage Ratio to exceed 0.65:1.00;

(e) Permit Adjusted Tangible Net Worth to be less than the sum of (x) 85% of
Adjusted Tangible Net Worth as of the Closing Date, plus (y) 85% of the net
issuance proceeds of all issuances to Persons other than the Borrowers or
Subsidiaries of Stock or Partnership Units from and after the Closing Date;

(f) Permit the aggregate principal amount of the Borrowing Group’s Share of all
cross-collateralized or cross-defaulted Indebtedness to exceed 15% of Total
Funded Indebtedness;

(g) Permit the Variable Rate Debt Ratio to exceed 0.35:1.00;

(h) Permit the aggregate outstanding principal amount of the Borrowing Group’s
Share of Aggregate Recourse Indebtedness, exclusive of the Commitments and the
Total Outstandings, to exceed $100,000,000;

(i) Permit the aggregate outstanding principal amount (including paid-in-kind or
other non-current cash pay interest which is added to principal) of Mezzanine
Indebtedness to exceed $20,000,000 at any time. The Mezzanine Indebtedness
existing as of the Closing Date is set forth on Schedule 7.11(i) hereto; or

(j) Permit Total Unsecured Indebtedness to exceed an amount equal to the amount
obtained by dividing (x) Free Cash Flow by (y) a constant of 17.53% (based on a
7-year amortization and a 6% interest rate).

The Financial Covenants set forth in this Section 7.11 shall be measured as of
the last day of each fiscal quarter.

7.12 Special Covenants Relating to the REIT. In the case of the REIT:

(a) Make any disposition of or encumber, pledge or hypothecate, whether directly
or indirectly, all or any portion of its direct or indirect Equity Interest in
AIMCO at any time or any rights to distributions or dividends from AIMCO other
than (x) to AIMCO or a Wholly-Owned Subsidiary, and (y) any pledges of Equity
Interests in connection with this Agreement;

(b) At any time and for any reason, fail to own, either directly or through one
or more Wholly-Owned Subsidiaries of the REIT, more than 50% of the aggregate
outstanding partnership interests in AIMCO;

(c) Fail for any reason whatsoever, whether voluntarily or involuntarily, either
directly or through one or more Wholly-Owned Subsidiaries of the REIT, to be the
sole general partner of AIMCO at any time;

(d) Cease to have its common Stock listed on the NYSE, the American Stock
Exchange, or the Nasdaq Stock Exchange; or

 

 

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(e) Cease to have REIT Status or fail to comply with the requirements of the
Code relating to qualified REIT subsidiaries in respect of its ownership of any
Subsidiary of the REIT to the extent required under the Code and applicable law.

7.13 Taxation of AIMCO. In the case of AIMCO, become an association taxable as a
corporation or cease to be taxed as a partnership under the Code.

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrowers or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within five days after the same becomes due, any interest on
any Loan or on any L/C Obligation, or any fee due hereunder, or (iii) within
five days after the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

(b) Specific Covenants. The Borrowers fail to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02 (other than
6.02(c),(d), or (f)), 6.03, 6.05, 6.11 or 6.12 or Article VII, or any Guarantor
fails to perform or observe any term, covenant or agreement contained the
Guaranty; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days (or such other period as may be specified in the
applicable Loan Document) after the earlier of (i) the date upon which a
Responsible Officer knew or received written notice of such failure or (ii) the
date upon which written notice thereof is given to the Borrowers by the
Administrative Agent or any Lender; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrowers or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

(e) Cross-Default. (i) The Borrowers or any Subsidiary (A) fail, after any
applicable cure period, to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness or Guarantee (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount
(including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the applicable Threshold Amount, or (B) fail,
after any applicable cure period, to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
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beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity which offer is not complied with within applicable periods, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded; provided, that, any failure, occurrence of an event, or non-compliance
referred to in clause (A) or (B) shall only be deemed to have occurred, with
respect to any Indebtedness or Guarantee that is secured by real property and
which is characterized as “nonrecourse” after Borrower has received 30 days’
written notice thereof from the applicable lender; or (ii) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which the
Borrowers or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which the Borrowers or any Subsidiary is an Affected Party (as so defined)
and, in either event, the Swap Termination Value owed by the Borrowers or such
Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof which
individually generates more than 2% of AIMCO’s Net Operating Income or any
Subsidiaries which collectively in the aggregate generate more than 5% of
AIMCO’s Net Operating Income (in each case for the prior four quarter period),
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
which individually generates more than 2% of AIMCO’s Net Operating Income or any
Subsidiaries thereof which collectively in the aggregate generate more than 5%
of AIMCO’s Net Operating Income (in each case for the prior four quarter
period), becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party (i) a final judgment or
order for the payment of money in an aggregate amount exceeding $35,000,000 (to
the extent not covered by independent third-party insurance as to which the
insurer does not have a reasonable basis to dispute coverage), or (ii) any one
or more non-monetary final judgments that have, or could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 30 consecutive days during which
a stay of enforcement of such judgment, by reason of a pending appeal or
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(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrowers under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrowers or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $10,000,000; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or as a result of satisfaction in full of all
the Obligations, ceases to be in full force and effect (other than in accordance
with its terms); or any Loan Party or Affiliate thereof contests in any manner
the validity or enforceability of any provision of any Loan Document; or any
Loan Party denies that it has any liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

(k) Change of Control. There occurs any Change of Control.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
each L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers;

(c) require that the Borrowers Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or under applicable
law;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrowers under the Bankruptcy Code of the
United States, or any Event of Default of the type described in Section 8.01(f),
the obligation of each Lender to make Loans and any obligation of the L/C
Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation of the
Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the
Administrative Agent or any Lender.

 

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8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders and the L/C Issuers (including fees, charges and disbursements of
counsel to the respective Lenders and the L/C Issuers (including fees and time
charges for attorneys who may be employees of any Lender or L/C Issuer) and
amounts payable under Article III), ratably among them in proportion to the
amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably
among the Lenders and the L/C Issuers in proportion to the respective amounts
described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, L/C Borrowings and Obligations to Cash Collateralize L/C
Obligations comprised of the aggregate undrawn amount of Letters of Credit,
ratably among the Administrative Agent, Lenders and the L/C Issuers in
proportion to the respective amounts described in this clause Fourth held by
them; and

Last, the balance, if any, after all of the Obligations have been paid in cash
in full, to the Borrowers or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

ARTICLE IX.

ADMINISTRATIVE AGENT

9.01 Appointment and Authority. Each of the Lenders and the L/C Issuers hereby
irrevocably appoints KeyBank to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The
provisions of this Article (other than Sections 9.06 and 9.10) are solely for
the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and
neither the Borrowers nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.

 

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9.02 Rights as a Lender. The Person 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 the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrowers or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

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

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

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrowers or any of their Affiliates
that is communicated to or obtained by the Person serving as the 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 (i) with the consent or at the request of the Required Lenders (or such
other number, percentage or class of the Lenders as shall be necessary, or as
the Administrative Agent shall believe in good faith shall be necessary, under
the circumstances as provided in Sections 10.01 and 8.02) or (ii) 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 describing such Default is given to the Administrative Agent by the
Borrowers, a Lender or an L/C Issuer, in which event Administrative Agent shall
promptly deliver such notice to Lenders.

 

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The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document 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.

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

9.05 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document 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 of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article 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.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the L/C Issuers and the
Borrowers. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with the approval of the Borrowers provided no Default
then exists (which approval shall not be unreasonably withheld or delayed), to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
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 (the “Resignation Effective Date”), then the
retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers,
appoint a successor Administrative Agent meeting the qualifications set forth
above, subject to the approval of the Borrowers provided no Default then exists
(which approval shall not be unreasonably withheld or delayed); provided that if
the Administrative Agent shall notify the Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective on the Resignation Effective Date.

 

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If the Person serving as the Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, or has engaged in willful
misconduct or gross negligence with respect to its obligations as Administrative
Agent, the Required Lenders may, to the extent permitted by applicable law, by
notice in writing to the Borrowers and such Person remove such Person as
Administrative Agent and, in consultation with the Borrowers, appoint a
successor Administrative Agent meeting the qualifications set forth above. If no
such successor shall have been appointed by the Required Lenders and shall have
accepted such appointment within 30 days (or such earlier day as shall be agreed
by the Required Lenders) (the “Removal Effective Date”), then such removal shall
nonetheless become effective in accordance with such notice on the Removal
Effective Date.

With effect from the Resignation Effective Date or the Removal Effective Date
(as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the L/C Issuers under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (2) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and each L/C Issuer directly, until such time as the Required
Lenders appoint a successor Administrative Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the retiring or removed
Administrative Agent’s resignation or removal hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

Any resignation by or removal of KeyBank as Administrative Agent pursuant to
this Section shall also constitute its resignation or removal as an L/C Issuer
and Swing Line Lender. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring L/C
Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender
shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit. Required
Supermajority Lenders

 

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shall have the right to terminate the Administrative Agent for gross negligence
or willful misconduct in the performance of the Administrative Agent’s material
obligations or duties under this Agreement, as determined by a final and
unappealable judgment, in which event the other provisions of this Section 9.06
shall govern regarding the selection of a replacement administrative agent.

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

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Joint Book Managers, Joint Lead Arrangers, Syndication Agent or
Co-Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or an L/C Issuer hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on the Borrowers) shall be entitled and
empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuers and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuers and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuers and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender and each L/C Issuer
to make such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

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Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

9.10 Collateral and Guaranty Matters. The Lenders, the Swing Line Lender and the
L/C Issuers irrevocably authorize the Administrative Agent, and the
Administrative Agent hereby agrees:

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full in cash of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit (or upon Cash Collateralization or receipt of “back-to-back” letters of
credit in accordance with Section 2.14), (ii) that is sold, transferred or
otherwise disposed of or to be sold, transferred or otherwise disposed of as
part of or in connection with any transaction permitted hereunder or under any
other Loan Document (it being acknowledged and understood that any such property
shall be sold, transferred or otherwise disposed of free and clear of the Liens
created by the Loan Documents, provided no Default or Event of Default then
exists), (iii) subject to Section 10.01, if approved, authorized or ratified in
writing by the Required Lenders or (iv) that is owned by a Guarantor, upon
release of such Guarantor from its obligations under the Guaranty pursuant to
clause (c) below;

(b) provided no Default or Event of Default then exists or would arise as a
result thereof, to subordinate any Lien on any property granted to or held by
the Administrative Agent under any Loan Document to the holder of any Lien on
such property that is permitted by Section 7.01(i); and

(c) provided no Default or Event of Default then exists or would arise as a
result thereof, to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder (it being acknowledged and understood that all obligations of such
Guarantor under the Loan Documents (other than indemnification obligations which
by their term survive the payment of the Obligations) shall automatically
terminate and be of no further force and effect upon the consummation of any
such transaction).

The Administrative Agent shall take such actions and execute such documents, at
the expense of the Borrowers (including directing any collateral agent to take
such actions) as are appropriate in connection with such releases, subordination
or termination. Upon request by the Administrative Agent at any time, the
Required Lenders will confirm in writing the Administrative Agent’s authority to
release or subordinate its interest in particular types or items of property, or
to release any Guarantor from its obligations under the Guaranty pursuant to
this Section 9.10.

 

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9.11 Approvals.

(a) If consent is required for some action under this Agreement, or except as
otherwise provided herein an approval of the Lenders, the Required Supermajority
Lenders, the Required Lenders or all affected Lenders is required or permitted
under this Agreement, each Lender agrees to give the Administrative Agent,
within ten (10) Business Days of receipt of the request for action from
Administrative Agent (accompanied by an explanation for the request) together
with all reasonably requested information related thereto (or such lesser period
of time required by the terms of the Loan Documents), notice in writing of
approval or disapproval (collectively “Directions”) in respect of any action
requested or proposed in writing pursuant to the terms hereof. To the extent
that any Lender does not approve any recommendation of Administrative Agent,
such Lender shall in such notice to Administrative Agent describe the actions
that would be acceptable to such Lender. Each such request for approval shall
include the following in all capital, bolded, block letters on the first page
thereof: “THE FOLLOWING REQUEST REQUIRES A RESPONSE WITHIN TEN (10) BUSINESS
DAYS OF RECEIPT. FAILURE TO DO SO WILL BE DEEMED AN APPROVAL OF THE REQUEST.” If
consent is required for the requested action, any Lender’s failure to respond to
a request for Directions within the required time period shall be deemed to
constitute a Direction to take such requested action.

(b) In the event that any recommendation is not approved by the requisite number
of Lenders and a subsequent approval on the same subject matter is requested by
the Administrative Agent (a “Subsequent Approval Request”), then for the
purposes of this paragraph each Lender shall be required to respond to a request
for Directions within five (5) Business Days of receipt of such request. If the
Administrative Agent submits to the Lenders a Subsequent Approval Request such
Subsequent Approval Request shall include the following in all capital, bolded,
block letters on the first page thereof: “THE FOLLOWING REQUEST REQUIRES A
RESPONSE WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT. FAILURE TO DO SO WILL BE
DEEMED AN APPROVAL OF THE REQUEST.”

(c) The Administrative Agent and each Lender shall be entitled to assume that
any officer of the other Lenders delivering any notice, consent, certificate or
other writing is authorized to give such notice, consent, certificate or other
writing unless the Administrative Agent and such other Lenders have otherwise
been notified in writing.

ARTICLE X.

MISCELLANEOUS

10.01 Amendments, Etc. Subject to Section 2.16 and Section 2.17, no amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrowers or any other Loan Party therefrom,
shall be effective unless in writing signed by the Required Lenders (or the
Administrative Agent with the written concurrence of the Required Lenders) and
the Borrowers or the applicable Loan Party, as the case may be, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:

(a) waive any condition set forth in Section 4.01(a) without the written consent
of each Lender;

 

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(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender
(subject to Sections 2.16 and 2.17);

(c) postpone the final scheduled date of maturity of any Loan or postpone any
date fixed by this Agreement or any other Loan Document for any scheduled
payment of principal or payment of interest, fees or other amounts due to the
Lenders (or any of them) hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby;

(d) reduce the principal of, or the rate of interest (including the pricing grid
set forth in the definition of Applicable Rate) specified herein on, any Loan or
L/C Borrowing, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein);

(e) change Section 2.13 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

(f) change any provision of this Section or the definition of “Required Lenders”
or “Required Supermajority Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; or

(g) release all or substantially all (i) of the Guarantors from the Guaranty or
(ii) the Liens from the Collateral (except as permitted in Section 9.10) without
the written consent of each Lender.

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuers in addition to the Lenders required above,
affect the rights or duties of any L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and
(iv) the Fee Letter may be amended, or rights or privileges thereunder waived,
in a writing executed only by the parties thereto. 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

 

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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 the Commitment of such Lender may not be increased or
extended without the consent of such Lender (subject to Sections 2.16 and 2.17).

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), 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 telecopier or electronic mail
as follows, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:

(i) if to the Borrowers, the Administrative Agent, the L/C Issuers or the Swing
Line Lender, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the L/C Issuers hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or any L/C Issuer pursuant to Article
II if such Lender or such L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrowers
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

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(c) Change of Address, Etc. Each of the Borrowers, the Administrative Agent,
each L/C Issuer and the Swing Line Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrowers, the Administrative Agent, the L/C Issuers and the Swing Line Lender.

(d) Reliance by Administrative Agent, L/C Issuers and Lenders. The
Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Revolving Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of the Borrowers even if
(i) such notices were not made in a manner specified herein, were incomplete or
were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrowers shall indemnify the Administrative Agent,
each L/C Issuer, each Lender and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrowers, except
to the extent such losses, costs, expenses and liabilities are determined by a
court of competent jurisdiction by final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Person. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording, provided Administrative
Agent informs such party that the communication may be recorded prior to
commencing the communication.

10.03 No Waiver; Cumulative Remedies. No failure by any Lender, any L/C Issuer
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers 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, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out of
pocket expenses incurred by the L/C Issuers in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder,

 

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(iii) all out of pocket expenses incurred by the Administrative Agent, any
Lender or any L/C Issuer (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or any L/C
Issuer), and shall pay all allocated fees and time charges for attorneys who may
be employees of the Administrative Agent, any Lender or any L/C Issuer, in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit
issued hereunder, including all such out of pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit and (iv) to the extent not already covered by any of the preceding
subsections, all reasonable costs and expenses incurred by the Administrative
Agent, the L/C Issuers or the Lenders in connection with any bankruptcy or other
proceeding of the type described in Section 8.01(f), including the reasonable
fees and disbursements of counsel to the Administrative Agent, any L/C Issuer
and any Lender, whether such fees and expenses are incurred prior to, during or
after the commencement of such proceeding or the confirmation or conclusion of
any such proceeding.

(b) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each L/C
Issuer 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 fees, charges and disbursements of any counsel for any Indemnitee), and
shall indemnify and hold harmless each Indemnitee from all fees and time charges
and disbursements for attorneys who may be employees of any Indemnitee, incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrowers or any other Loan Party arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrowers or any of their
Subsidiaries, or any Environmental Liability related in any way to the Borrowers
or any of their 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, whether brought by a third
party or by the Borrowers or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto, in all cases, whether or not caused by or
arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrowers or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrowers or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.

 

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(c) Reimbursement by Lenders. To the extent that the Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub-agent thereof),
any L/C Issuer or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent),
such L/C Issuer or such Related Party, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or any L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrowers shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

(e) Payments. All amounts due under this Section shall be payable not later than
ten (10) Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent and any L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrowers is made to the Administrative Agent, any L/C Issuer or any Lender, or
the Administrative Agent, any L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, such L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and each L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuers under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

 

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10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrowers may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender (it being
understood that a merger or consolidation of a Borrower expressly permitted
under this Agreement shall not constitute such an assignment or transfer) and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto 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, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that:

(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance 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 or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each
of the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Borrowers otherwise consent (each such consent of the
Borrowers and Administrative Agent not to be unreasonably withheld or delayed);

(ii) 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
with respect to the Loans or the Commitment assigned, except that this clause
(ii) shall not apply to rights in respect of Swing Line Loans;

 

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(iii) any assignment of a Commitment must be approved by the Administrative
Agent, the L/C Issuers and the Swing Line Lender unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee) such approval not to be unreasonably
withheld, delayed or conditioned;

(iv) 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 (with only one such fee payable in connection with
simultaneous assignments to or by two or more Approved Funds), and the Eligible
Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire;

(v) no such assignment shall be made (A) to any Borrower or any of such
Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of
its Subsidiaries, or any Person who, upon becoming a Lender, would constitute
any of the foregoing Persons described in this clause (v); and

(vi) in connection with any assignment of rights and obligations of any
Defaulting Lender hereunder, no such assignment shall be effective unless and
until, in addition to the other conditions thereto set forth herein, the parties
to the assignment shall make such additional payments to the Administrative
Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrowers and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, each L/C
Issuer, the Swing Line Lender or any other Lender hereunder (and interest
accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata
share of all Loans and participations in Letters of Credit and Swing Line Loans
in accordance with its Applicable Percentage. Notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable Law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement 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 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided that, except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
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any party hereunder arising from that Lender having been a Defaulting Lender.
Upon request, the Borrowers (at their expense) shall execute and deliver a Note,
as applicable, to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at the Administrative Agent’s Office 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 Commitments of,
and principal amounts of, and interest owing on, the Loans and L/C Obligations
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 Borrowers,
the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender or an L/C
Issuer hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by each of the
Borrowers and the L/C Issuers at any reasonable time and from time to time upon
reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrowers or any of the Borrowers’
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent, the Lenders and the L/C Issuers shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrowers, 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 no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant

 

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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, letter of credit 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.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 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 Borrowers’ prior written consent. A Participant
shall not be entitled to the benefits of Section 3.01 unless the Borrowers are
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers, to comply with Section 3.01(e) as
though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrowers (an “SPC”) the
option to provide all or any part of any Revolving Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Revolving Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Revolving Loan, the Granting
Lender shall be obligated to make such Revolving Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees
that (i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrowers under this Agreement (including its obligations
under Section 3.01 or 3.04), (ii) no SPC shall be

 

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liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Revolving Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Revolving Loan were
made by such Granting Lender. In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrowers and the Administrative Agent and with the
payment of a processing fee of $3,500, assign all or any portion of its right to
receive payment with respect to any Revolving Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Revolving Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.

(i) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time
KeyBank assigns all of its Commitment and Loans pursuant to subsection
(b) above, KeyBank may, (i) upon 30 days’ notice to the Borrowers and the
Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrowers,
resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Borrowers shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrowers to appoint any such successor shall
affect the resignation of KeyBank as L/C Issuer or Swing Line Lender, as the
case may be. If KeyBank resigns as an L/C Issuer, it shall retain all the rights
and obligations of an L/C Issuer hereunder with respect to all Letters of Credit
issued by it and outstanding as of the effective date of its resignation and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)). If KeyBank resigns as Swing Line Lender, it shall
retain all the rights and obligations of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c).

10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(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 purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or

 

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any action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any pledgee under Section 10.06(f), (ii) any assignee of or Participant
in, or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (iii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the
Borrowers and their obligations, (g) on a confidential basis to any rating
agency in connection with rating any Borrower or its Subsidiaries, (h) with the
consent of the Borrowers or (i) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender, any L/C Issuer or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrowers.

For purposes of this Section, “Information” means all information received from
the Borrowers or any Subsidiary relating to the Borrowers or any Subsidiary or
any of their respective Affiliates or businesses, other than any such
information that is available to the Administrative Agent, any Lender or any L/C
Issuer on a nonconfidential basis prior to disclosure by the Borrowers or any
Subsidiary, provided that, in the case of information received from the
Borrowers or any Subsidiary 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.

10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, each L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, such L/C Issuer or any such Affiliate to or for the credit or the
account of the Borrowers against any and all of the obligations of the Borrowers
now or hereafter existing under this Agreement or any other Loan Document to
such Lender or such L/C Issuer, irrespective of whether or not such Lender or
such L/C Issuer shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrowers may be contingent
or unmatured or are owed to a branch or office of such Lender or such L/C Issuer
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, each L/C Issuer and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, such L/C Issuer or their
respective Affiliates may have; provided that, in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.15 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the L/C Issuers and the
Lenders and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
Each Lender and each L/C Issuer agrees to notify the Borrowers and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

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10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
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. 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 that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic image (e.g.,
“PDF” or “TIF” via electronic mail) shall be effective as delivery of a manually
executed counterpart of this Agreement.

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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10.13 Replacement of Lenders. If any Lender requests compensation under
Section 3.04, if the Borrowers are required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, if any Lender is a Defaulting Lender or a Non-Consenting Lender
(so long as, in the case of a Non-Consenting Lender, no Default or Event of
Default has occurred and is continuing), or if any other circumstance exists
hereunder that gives the Borrowers the right to replace a Lender as a party
hereto, then the Borrowers may, at their sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.06 except as provided in this
Section 10.13), all of its interests, rights and obligations under this
Agreement and the related Loan Documents (or all of its Revolving Loans and
Commitment if so requested by the Borrower) to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

Without limiting the foregoing, Borrowers may, subject to the consent and
approval of Administrative Agent in its sole discretion and notwithstanding
anything to the contrary in Section 2.06, terminate the Commitment of any
Defaulting Lender with no outstanding Revolving Loans, provided that if
Administrative Agent grants such consent in its sole discretion, (i) the
obligations of such Defaulting Lender to acquire participations in any Letters
of Credit or make such funds available is reallocated among the non-Defaulting
Lenders as provided in Section 2.15(a)(iv), or (ii) Borrowers shall Cash
Collateralize such Defaulting Lender’s pro rata portion (if any, after giving
effect to any partial reallocation pursuant to Section 2.15(a)(iv)) of the
Outstanding Amount of any then applicable L/C Obligations in a manner
satisfactory to each L/C Issuer and Administrative Agent.

 

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10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF 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 IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE 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 OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY 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 APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY 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

 

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INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR 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 PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers 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 Borrowers, which information includes the name and address of the
Borrowers and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrowers in accordance
with the Act.

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

10.18 Borrowers’ Obligations. Each of the REIT, AIMCO and AIMCO/Bethesda
represents, warrants, covenants and agrees as follows:

(a) Defenses. The obligations pursuant to the Loan Documents shall not be
affected by any of the following: (i) the bankruptcy, disability, dissolution,
incompetence, insolvency, liquidation, or reorganization of any Borrower; or
(ii) the discharge, modification of the terms of, reduction in the amount of, or
stay of enforcement of any or all liens and encumbrances or any or all
obligations pursuant to the Loan Documents in any bankruptcy, insolvency,
reorganization, or other legal proceeding or by law, ordinance, regulation, or
rule (federal, state, or local).

(b) Rights of Administrative Agent. Subject to receiving any required consents
of the Required Lenders or all of the Lenders, as may be required pursuant to
applicable provisions of this Agreement and the other Loan Documents, the
Administrative Agent on behalf of the Lenders, may do the following acts or
omissions from time to time without notice to or consent of any Borrower and
without receiving payment or other value, nor shall the following acts or
omissions affect, delay or impair any of the obligations pursuant to the Loan
Documents or any or all liens and encumbrances: (i) the Administrative Agent may
obtain collateral or additional collateral; (ii) the Administrative Agent may
substitute for any or all collateral regardless of whether the same type or
greater or lesser value; (iii) the Administrative Agent may release any or all
collateral; (iv) the Administrative Agent may compromise, delay enforcement,
fail to enforce, release, settle or waive any rights or remedies of the
Administrative Agent as to any or all collateral; (v) the Administrative Agent
may sell or otherwise dispose of any collateral in such manner or order as the
Administrative Agent determines in accordance with the Loan Documents; (vi) the
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fail to ensure any or all liens or encumbrances; (vii) the Administrative Agent
may fail to inspect, insure, maintain, preserve or protect any or all
collateral; (viii) the Administrative Agent may obtain additional obligors for
any or all obligations pursuant to the Loan Documents; (ix) the Administrative
Agent may increase or decrease any or all obligations or otherwise change terms
of any or all obligations in accordance with the Loan Documents; (x) the
Administrative Agent may release any Borrower; (xi) Administrative Agent may
compromise, delay enforcement, fail to enforce, release, settle or waive any
obligations of any Borrower with the agreement of that Borrower; (xii) the
Administrative Agent may make advances, or grant other financial accommodations
to any Borrower; (xiii) the Administrative Agent may fail to file or pursue a
claim in any bankruptcy, insolvency, reorganization or other proceeding as to
any or all liens and encumbrances or any or all obligations; (xiv) the
Administrative Agent may amend, modify, extend, renew, restate, supplement or
terminate in whole or in part the obligation of any Borrower with the agreement
of that Borrower; (xv) the Administrative Agent may take or fail to take any
other action with respect to any Loan Document or any Borrower; and (xvi) the
Administrative Agent may do any other acts or make any other omissions that
result in the extinguishment of the obligation of any Borrower, subject, in the
case of clauses (ix) and (xiv) of this Section 10.18(b), to the consent of the
Borrower(s) to the extent such Borrower’s consent would be required pursuant to
the applicable provisions of this Agreement and the other Loan Documents in such
Borrower’s capacity not as a surety but in its capacity as a primary obligor
hereunder and under the other Loan Documents.

(c) Suretyship Waivers. Each Borrower waives any and all rights and benefits
under any statutes or rules now or hereafter in effect and any other statutes or
rules now or hereafter in effect that purport to confer specific rights upon or
make specific defenses or procedures available to each Borrower.

(d) Information. Each Borrower represents and warrants to the Administrative
Agent and Lenders that such Borrower is currently informed of the financial
condition of the Borrowers and of all other circumstances which a diligent
inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations. Each Borrower further represents and warrants to the Administrative
Agent and Lenders that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Borrower hereby covenants that such
Borrower will continue to keep informed of the Borrowers’ financial condition,
the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations. Notwithstanding anything herein which may be construed to the
contrary, the Administrative Agent shall have no obligation to provide to any
Borrower any information concerning the performance of any other Borrower, the
obligations pursuant to the Loan Documents, or the ability of any other Borrower
to perform the obligations pursuant to the Loan Documents or any other matter,
regardless of what information Administrative Agent may from time to time have.

(e) Waivers. Each Borrower waives, until payment in full of the Obligations, any
and all present and future claims, remedies and rights against any other
Borrower, any collateral and any other property, interest in property or rights
to property of any other Borrower (A) arising from any performance hereunder,
(B) arising from any application of any collateral, or any other property,
interest in property or rights to property of any Borrower, or (C) otherwise
arising in respect of the Loan Documents, regardless of whether such claims,
remedies and rights

 

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arise under any present or future agreement, document or instrument or are
provided by any law, ordinance, regulation or rule (federal, state or local)
(including, without limitation, any and all rights of contribution, exoneration,
indemnity, reimbursement, and subrogation arising under the Loan Documents and
any and all rights to participate in the rights and remedies of Lenders against
any Borrower).

(f) Joint and Several Liability of Borrowers.

(i) Each of Borrowers is accepting joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Administrative Agent and the Lenders under this Agreement,
for the mutual benefit, directly and indirectly, of each of Borrowers and in
consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.

(ii) Each of Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 10.18), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Borrower without preferences or distinction among them.

(iii) If and to the extent that any Borrower shall fail to make any payment with
respect to any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or perform, such
Obligation.

(iv) The Obligations of each Borrower under the provisions of this Section 10.18
constitute the absolute and unconditional, full recourse Obligations of each
Borrower enforceable against each such Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.

(v) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Loans issued under or pursuant to this Agreement, notice of the occurrence
of any Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by the
Administrative Agent or Lenders under or in respect of any of the Obligations,
any requirement of diligence or to mitigate damages and, generally, to the
extent permitted by applicable law, all demands, notices and other formalities
of every kind in connection with this Agreement (except as otherwise provided in
this Agreement). Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Administrative Agent or Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Administrative

 

112

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

Agent or Lenders in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution or release, in
whole or in part, of any Borrower. Without limiting the generality of the
foregoing, each Borrower assents to any other action or delay in acting or
failure to act on the part of the Administrative Agent or Lender with respect to
the failure by any Borrower to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this
Section 10.18 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this
Section 10.18, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of such Borrower
under this Section 10.18 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each Borrower under
this Section 10.18 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or the Administrative Agent or Lender.
The joint and several liability of each Borrower hereunder shall continue in
full force and effect notwithstanding any absorption, merger, amalgamation or
any other change whatsoever in the name, constitution or place of formation of
any of the Borrowers or Administrative Agent or Lenders.

(vi) The provisions of this Section 10.18 are made for the benefit of the
Administrative Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all Borrowers
as often as occasion therefor may arise and without requirement on the part of
Administrative Agent, or any Lender, successor or assign first to marshal any of
its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 10.18 shall remain in effect until all of the Obligations shall have
been paid in full or otherwise fully satisfied. If at any time, any payment, or
any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise,
the provisions of this Section 10.18 will forthwith be reinstated in effect, as
though such payment had not been made.

(vii) Each Borrower hereby agrees that it will not enforce any of its rights of
contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to the Administrative Agent or Lenders with respect to any
of the Obligations or any collateral security therefor until such time as all of
the Obligations have been paid in full in cash. Any claim which any Borrower may
have against the other Borrowers with respect to any payments to the
Administrative Agent or any Lender hereunder or under any other Loan Documents
are hereby expressly made subordinate and junior in right of payment, including
without limitation, as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full in cash of the Obligations and, in the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization
or other similar proceeding under the laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full in cash before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
the other Borrowers therefor.

 

113

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10.19 Fiduciary Duty. Neither the Administrative Agent nor any Lender has any
fiduciary relationship with or fiduciary duty to the Borrowers, the Guarantors
or their respective Subsidiaries arising out of or in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereunder
and thereunder, and the relationship between each Lender and Administrative
Agent, and the Borrowers and the Guarantors is solely that of a lender and
borrower, and nothing contained herein or in any of the other Loan Documents
shall in any manner be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and borrower.

[Remainder of page intentionally left blank]

 

114

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

BORROWERS:    

APARTMENT INVESTMENT AND MANAGEMENT COMPANY,

a Maryland corporation

      By:   /s/ Patti K. Fielding       Name: Patti K. Fielding       Title:
Executive Vice President and Treasurer

 

   

AIMCO PROPERTIES, L.P.,

a Delaware limited partnership

      By:  

AIMCO-GP, INC.,

a Delaware corporation

      Its:   General Partner                   By:   /s/ Patti K. Fielding      
    Name: Patti K. Fielding           Title: Executive Vice President and
Treasurer

 

   

AIMCO/BETHESDA HOLDINGS, INC.,

a Delaware corporation

      By:   /s/ Patti K. Fielding       Name: Patti K. Fielding       Title:
Executive Vice President and Treasurer

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

KEYBANK NATIONAL ASSOCIATION, as Administrative Agent, an L/C Issuer and a
Lender By:   /s/ Meredith H. Houseworth   Name: Meredith H. Houseworth   Title:
Vice President

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

WELLS FARGO BANK, N.A., as Syndication Agent and a Lender By:   /s/ J. Derek
Evans   Name: J. Derek Evans   Title: Senior Vice President

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

BANK OF AMERICA, N.A., as Co-Documentation Agent, an L/C Issuer and a Lender By:
  /s/ James P. Johnson   Name: James P. Johnson   Title: Senior Vice President

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

REGIONS BANK, as Co-Documentation Agent and a Lender By:   /s/ Kevin W. Murry  
Name: Kevin W. Murry   Title: Director

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

CITIBANK, N.A., as a Lender By:   /s/ John C. Rowland   Name: John C. Rowland  
Title: Vice President

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

MANUFACTURERS AND TRADERS TRUST COMPANY, as a Lender By:   /s/ John Mangan  
Name: John Mangan   Title: Vice President

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

PNC BANK, NATIONAL ASSOCIATION, as a Lender By:   /s/ James A. Harmann   Name:
James A. Harmann   Title: Senior Vice President

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

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender By:   /s/ Timothy J. Mertens  
Name: Timothy J. Mertens   Title: Vice President

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

MORGAN STANLEY BANK, N.A., as a Lender By:   /s/ Michael King   Name: Michael
King   Title: Authorized Signatory

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

THE HUNTINGTON NATIONAL BANK, a national banking association, as a Lender By:  
/s/ Michael L. Kauffman   Name: Michael L. Kauffman   Title: Sr. Vice President

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

RAYMOND JAMES BANK, FSB, as a Lender By:   /s/ Alexander L. Rody   Name:
Alexander L. Rody   Title: Sr. Vice President

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

EXHIBIT A

FORM OF REVOLVING LOAN NOTICE

Date:                     ,             

 

To: KeyBank National Association, as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Senior Secured Credit Agreement, dated as of
December 13, 2011 (as amended, restated, amended and restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among Apartment Investment and Management Company, a Maryland corporation (the
“REIT”), AIMCO Properties, L.P., a Delaware limited partnership (“AIMCO”) and
AIMCO/Bethesda Holdings, Inc., a Delaware corporation (“AIMCO/Bethesda”), (the
REIT, AIMCO and AIMCO/Bethesda, collectively referred to as the “Borrowers”),
the Lenders from time to time party thereto, and KeyBank National Association,
as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned hereby request (select one):

¨ A Borrowing of Revolving Loans         ¨ A conversion or continuation of
Revolving Loans

1. On                      (a Business Day).

2. In the principal amount of $                    .

3. Comprised of                     .

[Type of Revolving Loan requested to be borrowed or to which existing Revolving
Loans are to be converted]

4. For Eurodollar Rate Loans: with an Interest Period of              month(s)1.

After giving effect to the Revolving Borrowing, if any, requested herein, the
Total Outstandings shall not exceed the Aggregate Commitments.

 

1 

one, two, three or six months

 

A

Form of Revolving Loan Notice

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

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:      
Name:   Title:

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner         By:       Name:   Title:

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:       Name:   Title:

 

A

Form of Revolving Loan Notice

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

EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date:                     ,             

 

To: KeyBank National Association, as Swing Line Lender

     KeyBank National Association, as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Senior Secured Credit Agreement, dated as of
December 13, 2011 (as amended, restated, amended and restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among Apartment Investment and Management Company, a Maryland corporation (the
“REIT”), AIMCO Properties, L.P., a Delaware limited partnership (“AIMCO”) and
AIMCO/Bethesda Holdings, Inc., a Delaware corporation (“AIMCO/Bethesda”) (the
REIT, AIMCO and AIMCO/Bethesda, collectively referred to as the “Borrowers” ),
the Lenders from time to time party thereto, and KeyBank National Association,
as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned hereby request a Swing Line Loan:

 

1. On                      (a Business Day).

 

2. In the principal amount of $                    .

After giving effect to the Swing Line Borrowing requested herein, the Total
Outstandings shall not exceed the Aggregate Commitments and the proceeds of the
Swing Line Loan made pursuant to this request shall not be used to refinance any
outstanding Swing Line Loan.

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:      
Name:   Title:

 

B

Form of Swing Line Loan Notice

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

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner

        By:       Name:   Title: AIMCO/BETHESDA HOLDINGS, INC., a Delaware
corporation

By:       Name:   Title:

 

B

Form of Swing Line Loan Notice

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

EXHIBIT C-1

FORM OF REVOLVING NOTE

________________

FOR VALUE RECEIVED, the undersigned (the “Borrowers”) hereby promise to pay to
                     (or its registered assigns) (the “Lender”), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Revolving Loan from time to time made by the Lender to the
Borrowers under that certain Senior Secured Credit Agreement, dated as of
December 13, 2011 (as amended, restated, amended and restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among the Borrowers, the Lenders from time to time party thereto, and KeyBank
National Association, as Administrative Agent, L/C Issuer and Swing Line Lender.

The Borrowers promise to pay interest on the unpaid principal amount of each
Revolving Loan from the date of such Revolving Loan until such principal amount
is paid in full, at such interest rates and at such times as provided in the
Agreement. Except as otherwise provided in Section 2.04(f) of the Agreement with
respect to Swing Line Loans, all payments of principal and interest shall be
made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent’s Office. If any amount
is not paid in full when due hereunder, such unpaid amount shall bear interest,
to be paid upon demand, from the due date thereof until the date of actual
payment (and before as well as after judgment) computed at the per annum rate
set forth in the Agreement.

This Revolving Note is one of the Revolving Notes referred to in the Agreement,
is entitled to the benefits thereof and may be prepaid in whole or in part
subject to the terms and conditions provided therein. This Revolving Note is
also entitled to the benefits of the Guaranty and is secured by the Collateral.
Upon the occurrence and continuation of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Revolving
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Agreement. Revolving Loans made by the Lender shall be evidenced
by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Revolving Note
and endorse thereon the date, amount and maturity of its Revolving Loans and
payments with respect thereto.

The Borrowers, for themselves, their successors and assigns, hereby waive
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Revolving Note.

 

C-1-1

Form of Revolving Note

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

THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK.

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:      
Name:   Title:

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner

        By:       Name:   Title:

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:       Name:   Title:

 

C-1-2

Form of Revolving Note

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

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

   Type of
Loan Made    Amount of
Loan Made    End of
Interest
Period    Amount of
Principal or
Interest
Paid This
Date    Outstanding
Principal
Balance This
Date    Notation
Made By

 

C-1-3

Form of Revolving Note

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

EXHIBIT C-2

FORM OF SWING LINE NOTE

__________________

FOR VALUE RECEIVED, the undersigned (the “Borrowers”) hereby promise to pay to
KEYBANK NATIONAL ASSOCIATION (or its registered assigns) (the “Swing Line
Lender”), in accordance with the provisions of the Agreement (as hereinafter
defined), the principal amount of each Swing Line Loan from time to time made by
the Swing Line Lender to the Borrowers under that certain Senior Secured Credit
Agreement, dated as of December 13, 2011 (as amended, restated, amended and
restated, extended, supplemented or otherwise modified in writing from time to
time, the “Agreement;” the terms defined therein being used herein as therein
defined), among the Borrowers, the Lenders from time to time party thereto, and
KeyBank National Association, as Administrative Agent, L/C Issuer and Swing Line
Lender.

The Borrowers promise to pay interest on the unpaid principal amount of each
Swing Line Loan from the date of such Swing Line Loan until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. All payments of principal and interest shall be made to the Swing
Line Lender in Dollars in immediately available funds at the Administrative
Agent’s Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Agreement.

This Swing Line Note is the Swing Line Note referred to in the Agreement, is
entitled to the benefits thereof and may be prepaid in whole or in part subject
to the terms and conditions provided therein. This Swing Line Note is also
entitled to the benefits of the Guaranty and is secured by the Collateral. Upon
the occurrence and continuation of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Swing Line
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Agreement. Swing Line Loans made by the Swing Line Lender shall
be evidenced by one or more loan accounts or records maintained by the Swing
Line Lender in the ordinary course of business. The Swing Line Lender may also
attach schedules to this Swing Line Note and endorse thereon the date, amount
and maturity of its Swing Line Loans and payments with respect thereto.

The Borrowers, for themselves, their successors and assigns, hereby waive
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Swing Line Note.

 

C-2-1

Form of Revolving Note

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

THIS SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK.

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:      
Name:     Title:  

 

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:  

AIMCO-GP, Inc., a Delaware corporation,

its General Partner

  By:         Name:       Title:  

 

 

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:       Name:     Title:
 

 

C-2-2

Form of Swing Line Note

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

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

   Amount of Loan
Made    Amount of
Principal or
Interest Paid
This Date    Outstanding
Principal
Balance This
Date    Notation Made
By

 

C-2-3

Form of Swing Line Note

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

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,

 

To: KeyBank National Association, as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Senior Secured Credit Agreement, dated as of
December 13, 2011 (as amended, restated, amended and restated, extended,
supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among Apartment Investment and Management Company, a Maryland corporation (the
“REIT”), AIMCO Properties, L.P., a Delaware limited partnership (“AIMCO”), and
AIMCO/Bethesda Holdings, Inc., a Delaware corporation (“AIMCO/Bethesda”) (the
REIT, AIMCO, and AIMCO/Bethesda, collectively referred to as the “Borrowers”),
the Lenders from time to time party thereto, and KeyBank National Association,
as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                      of the Borrowers, and that,
as such, he/she is authorized to execute and deliver this Compliance Certificate
to the Administrative Agent on the behalf of the Borrowers, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal year of the REIT
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(b) of the Agreement for the fiscal quarter of the REIT ended as
of the above date. Such financial statements fairly present the financial
condition, results of operations, shareholders’ equity and cash flows of the
REIT in accordance with GAAP as at such date and for such period, subject only
to normal year-end audit adjustments and the absence of footnotes.

 

D-1

Form of Compliance Certificate

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

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Borrowers during the accounting period covered by the attached financial
statements.

3. A review of the activities of the Borrowers during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Borrowers performed and observed all their
Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period, the
Borrowers performed and observed each covenant and condition of the Loan
Documents applicable to it.]

—or—

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default and its nature and status:]

4. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Compliance
Certificate.

 

D-2

Form of Compliance Certificate

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

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of             ,             .

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:      
Name:     Title:  

 

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:  

AIMCO-GP, Inc., a Delaware corporation,

its General Partner

  By:         Name:       Title:  

 

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:       Name:     Title:
 

 

D

Form of Compliance Certificate

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

For the Quarter/Year ended                      (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

 

I

     Section 7.11(a) – Fixed Charge Coverage Ratio.         A.       Adjusted
Total EBITDA for the four quarter period ended on Statement Date:   
$                  B.       Fixed Charges for the four quarter period ended on
Statement Date:    $                  C.       Fixed Charge Coverage Ratio (Line
I.A. ÷ Line I.B.):             to 1

II

     Section 7.11(b) – Debt Service Coverage Ratio.         A.       Adjusted
Total EBITDA for the four quarter period ended on Statement Date (See Line I.A.
above):    $                  B.       Actual Debt Service for the four quarter
period ended on Statement Date:    $                  C.       Debt Service
Coverage Ratio (Line II.A. ÷ Line II.B.):             to 1

III

     Section 7.11(c) – Secured Indebtedness Ratio.         A.       Total
Secured Indebtedness at Statement Date:    $                  B.       Gross
Asset Value at Statement Date:    $                  C.       Secured
Indebtedness Ratio (Line III.A. ÷ Line III.B.):             to 1

IV

     Section 7.11(d) – Leverage Ratio.         A.       Total Funded
Indebtedness at Statement Date:    $                  B.       Gross Asset Value
at Statement Date (See Line III.B. above):    $                  C.      
Leverage Ratio (Line IV.A. ÷ Line IV.B.):             to 1

 

D

Form of Compliance Certificate

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

V

   Section 7.11(e) – Adjusted Tangible Net Worth.       A.    85% of Adjusted
Tangible Net Worth as of the Closing Date:    $                B.    85% of net
issuance proceeds at Statement Date of all issuances to Persons other than the
Borrowers or Subsidiaries of Stock or Partnership Units from and after the
Closing Date:    $                C.    Sum of A and C:    $                D.
   Actual Adjusted Tangible Net Worth at Statement Date:    $                E.
   D > C    Yes     No    

VI

   Section 7.11(f) – Cross Collateralized and Cross-Defaulted Indebtedness.   
   A.    Borrowing Group’s Share of all cross collateralized or cross-defaulted
Indebtedness at Statement Date:    $                B.    15% of Total Funded
Indebtedness at Statement Date (See Line IV.A. above):       C.    A < B   
Yes     No    

VII

   Section 7.11(g) – Variable Rate Debt Ratio.       A.    Variable Rate
Indebtedness at Statement Date:    $                B.    Total Funded
Indebtedness at Statement Date: (See Line IV.A. above):    $                C.
   Variable Rate Debt Ratio (Line VII.A ÷ Line VII.B.):             to 1

VIII

   Section 7.11(h) – Aggregate Recourse Indebtedness.       A.    Borrowing
Group’s Share of Aggregate Recourse Indebtedness, exclusive of the Commitments
and the Total Outstandings    $                B.    A < $100,000,000   
Yes     No    

IX

   Section 7.11(i) – Mezzanine Indebtedness.       A.    Aggregate outstanding
principal amount (including paid-in-kind or other non current cash pay interest
which is added to principal) of Mezzanine Indebtedness       B.    A <
$20,000,000    Yes     No    

 

D

Form of Compliance Certificate

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

X

   Section 7.11(j) – Total Unsecured Indebtedness.       A.    Total Unsecured
Indebtedness at Statement Date:      $                   B.    Free Cash Flow at
Statement Date:      $                   C.    Free Cash Flow at Statement Date
divided by (y) a constant of 17.53% (based on a 7-year amortization and a 6%
interest rate):      $                   D.    A < C      Yes     No        

 

D

Form of Compliance Certificate

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

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “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 Senior Secured Credit Agreement identified below
(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 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 credit facility identified below
(including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facility) 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, but not limited to, 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]]

 

3. Borrowers: Apartment Investment and Management Company, AIMCO Properties,
L.P., and AIMCO/Bethesda Holdings, Inc.

 

4. Administrative Agent: KeyBank National Association, as the administrative
agent under the Credit Agreement

 

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Form of Assignment and Assumption

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5. Credit Agreement: Senior Secured Credit Agreement, dated as of December 13,
2011, among Apartment Investment and Management Company, AIMCO Properties, L.P.,
AIMCO/Bethesda Holdings, Inc., the Lenders from time to time party thereto, and
KeyBank National Association, as Administrative Agent, L/C Issuer, and Swing
Line Lender.

 

6. Assigned Interest:

 

Aggregate

Amount of

Commitment/Loans

for all Lenders*1

  

Amount of

Commitment/Loans

Assigned*

  

Percentage

Assigned of

Commitment/Loans2

  

CUSIP Number

$            

  

$            

               %   

$            

  

$            

               %   

$            

  

$            

               %   

 

[7.

Trade Date:                             ]3

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:       Name:   Title: ASSIGNEE [NAME OF ASSIGNEE]
By:       Name:   Title:

 

1 

Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

2 

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

3 

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

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Form of Assignment and Assumption

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[Consented to and]4 Accepted:

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent

By:       Name:   Title: [Consented to:]5 By:      

Name:

Title:

[Consented to:]6 APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
a Maryland corporation By:       Name:   Title:

AIMCO PROPERTIES, L.P.,
a Delaware limited partnership By:   AIMCO-GP, Inc.,
a Delaware corporation,
its General Partner   By:        

Name:

Title:

 

4 

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

5 

To be added only if the consent of other parties (e.g. L/C Issuer and/or Swing
Line Lender) is required by the terms of the Credit Agreement.

6 

To be added only if the consent of the Borrowers is required by the terms of the
Credit Agreement.

 

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Form of Assignment and Assumption

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AIMCO/BETHESDA HOLDINGS, INC.,
a Delaware corporation By:      

Name:

Title:

 

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Form of Assignment and Assumption

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

[                         ]

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, (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 (iv) it is [not] a Defaulting Lender; 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 Borrowers, any of their Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrowers, 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 meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement),
(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 6.01 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, (v) attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement (including, without limitation, Section 3.01 thereof), duly completed
and executed by the Assignee and (vi) it is not a Defaulting Lender; 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.

 

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Form of Assignment and Assumption

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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.

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.

 

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Form of Assignment and Assumption

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EXHIBIT F

FORM OF CONTINUING GUARANTY

FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in
consideration of any credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to Apartment Investment and
Management Company, a Maryland corporation (the “REIT”), AIMCO Properties, L.P.,
a Delaware limited partnership (“AIMCO”) and AIMCO/Bethesda Holdings, Inc., a
Delaware corporation (“AIMCO/Bethesda”) (the REIT, AIMCO and AIMCO/Bethesda,
collectively referred to herein as the “Borrowers” and individually as a
“Borrower”) by the Administrative Agent (as hereinafter defined) and the Lenders
(as hereinafter defined), the undersigned Guarantor (each such Person,
individually, a “Guarantor” and, collectively, the “Guarantors”) hereby
furnishes its guaranty (this “Guaranty”) of the Guaranteed Obligations (as
hereinafter defined) as follows:

1. Guaranty. Each Guarantor hereby absolutely and unconditionally guarantees,
jointly with the other Guarantors and severally, as a guarantee of payment and
not merely as a guarantee of collection, prompt payment when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter,
the Obligations (as such term is defined in that certain Senior Secured Credit
Agreement, dated as of December 13, 2011, among the Borrowers, the lenders from
time to time party thereto (collectively referred to herein as the “Lenders” and
individually as a “Lender”), and KeyBank National Association, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”) (as
amended, restated, amended and restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”; capitalized terms
used in this Guaranty without definition have the meanings specified in the
Credit Agreement), including all out of pocket expenses incurred by the
Administrative Agent, the L/C Issuers and the Lenders (including the reasonable
fees, charges and disbursements of any counsel (including internal legal
counsel) to the Administrative Agent, the L/C Issuers and the Lenders) in
connection with the collection or enforcement thereof (collectively, the
“Guaranteed Obligations”). Each of the Guarantors further agrees that the
Obligations may be modified, extended or renewed, in whole or in part, without
notice to or further assent from it, and that it will remain bound upon its
guarantee notwithstanding any modification, extension or renewal of any
Obligation. The Administrative Agent’s books and records showing the amount of
the Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, against or involving the Guarantors, and shall be binding upon the
Guarantors and conclusive (absent manifest error) for the purpose of
establishing the amount of the Guaranteed Obligations. This Guaranty shall not
be affected by the genuineness, validity, regularity or enforceability of the
Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection, or
extent of any collateral therefor, or by any fact or circumstance relating to
the Guaranteed Obligations (other than satisfaction in full of the Obligations)
which might otherwise constitute a defense to the obligations of the Guarantors
under this Guaranty. The obligations of the Guarantors hereunder shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations hereunder subject to avoidance under Section 548 of the
Bankruptcy Code (Title 11, United States Code) or any comparable provisions of
any applicable state law.

 

F-1

Form of Continuing Guaranty

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2. No Setoff or Deductions; Taxes. All payments by any Guarantor hereunder shall
be paid in full, without setoff or counterclaim or any deduction or withholding
whatsoever, including, without limitation, for any and all present and future
taxes, except to the extent such deduction or withholding would have been
permitted if made by the Borrowers under Section 3.01 of the Credit Agreement.

3. No Termination; Release. This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations (other than
contingent indemnity obligations as to which no claim is then pending) are
indefeasibly paid in full and any commitments of the Lenders to lend under the
Credit Agreement are terminated and the L/C Obligations have reduced to zero
(other than L/C Obligations that have been fully Cash Collateralized or
supported by a backstop letter in accordance with Section 2.14 of the Credit
Agreement. At the Administrative Agent’s option, all payments under this
Guaranty shall be made to an office of the Administrative Agent located in the
United States and in U.S. Dollars. A Guarantor shall be automatically released
from its obligations under this Guaranty if such Person ceases to be a
Subsidiary of the Borrowers as a result of a transaction not prohibited by the
Loan Documents (it being acknowledged and understood that the Guaranteed
Obligations of such Guarantor under this Guaranty and the other Loan Documents
shall automatically terminate and be of no further force and effect upon the
consummation of any such transaction). In connection with any such termination
or release of any Guarantor pursuant to this Section 3, the Administrative Agent
shall promptly execute and deliver to such Guarantor and at the expense of such
Guarantor, all documents that such Guarantor shall reasonably request to
evidence such termination or release.

4. Waiver of Notices. Each Guarantor waives notice of the acceptance of this
Guaranty and of the extension or continuation of the Guaranteed Obligations or
any part thereof. Each Guarantor further waives presentment, protest, notice,
dishonor or default, demand for payment and any other notices to which such
Guarantor might otherwise be entitled.

5. Subrogation. No Guarantor shall exercise a right of subrogation, contribution
or similar rights with respect to any payments it makes under this Guaranty
until all of the Guaranteed Obligations (other than contingent indemnity
obligations as to which no claim is then pending) are indefeasibly paid in full
and any commitments of the Lenders to lend under the Credit Agreement are
terminated and the L/C Obligations have been reduced to zero (other than L/C
Obligations that have been fully Cash Collateralized or supported by a
“back-to-back” letter of credit in accordance with Section 2.14 of the Credit
Agreement. If any amounts are paid to any Guarantor in violation of the
foregoing limitation, then such amounts shall be held in trust for the benefit
of the Lenders and shall forthwith be paid to the Administrative Agent, for the
ratable benefit of the Lenders, to reduce the amount of the Guaranteed
Obligations, whether matured or unmatured.

6. Waiver of Suretyship Defenses. Each Guarantor agrees that the Administrative
Agent may, at any time and from time to time, and without notice to such
Guarantor, make any agreement with the Borrowers, any one or more of them, or
with any other person or entity liable on any of the Guaranteed Obligations or
providing collateral as security for the Guaranteed Obligations, for the
extension, renewal, payment, compromise, discharge or release of the Guaranteed
Obligations or any collateral (in whole or in part), or for any modification or

 

F-2

Form of Continuing Guaranty

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amendment of the terms thereof or of any instrument or agreement evidencing the
Guaranteed Obligations or the provision of collateral, all without in any way
impairing, releasing, discharging or otherwise affecting the obligations of such
Guarantor under this Guaranty. Each Guarantor waives any defense arising by
reason of any disability or other defense of the Borrowers or any other
guarantor, or the cessation from any cause whatsoever of the liability of the
Borrowers, or any claim that such Guarantor’s obligations exceed or are more
burdensome than those of the Borrowers and waives the benefit of any statute of
limitations affecting the liability of such Guarantor hereunder. Each Guarantor
waives any right to enforce any remedy which the Administrative Agent and any
Lender now has or may hereafter have against the Borrowers and waives any
benefit of and any right to participate in any security now or hereafter held by
the Administrative Agent or any Lender until all Guaranteed Obligations (other
than contingent indemnity obligations as to which a claim is then pending) are
indefeasibly paid in full. Further, each Guarantor consents to the taking of, or
failure to take, any action which might in any manner or to any extent vary the
risks of such Guarantor under this Guaranty or which, but for this provision,
might operate as a discharge of such Guarantor.

7. Exhaustion of Other Remedies Not Required. The obligations of each Guarantor
hereunder are those of primary obligor, and not merely as surety, and are
independent of the Guaranteed Obligations. Each Guarantor waives diligence by
the Administrative Agent and the Lenders and action on delinquency in respect of
the Guaranteed Obligations or any part thereof, including, without limitation
any provisions of law requiring the Administrative Agent and the Lenders to
exhaust any right or remedy or to take any action against the Borrowers, any one
of them, any other guarantor or any other person, entity or property before
enforcing this Guaranty against such Guarantor.

8. Reinstatement. Notwithstanding anything in this Guaranty to the contrary,
this Guaranty shall continue to be effective or be reinstated, as the case may
be, if and to the extent that at any time any payment of any portion of the
Guaranteed Obligations is revoked, terminated, rescinded or reduced or must
otherwise be restored or returned by the Administrative Agent, any L/C Issuer or
any Lender upon the insolvency, bankruptcy or reorganization of the Borrowers,
any one of them or any other person or entity or otherwise, as if such payment
had not been made and whether or not the Administrative Agent or any Lender is
in possession of or has released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction.

9. Subordination. Each Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Borrowers owing to such Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of the Borrowers to such Guarantor as subrogee of the Administrative Agent or
resulting from such Guarantor’s performance under this Guaranty, to the
indefeasible payment in full of all Guaranteed Obligations (it being understood
that, so long as no Event of Default has occurred and is continuing, nothing in
this Section 9 shall prohibit any Borrower from paying amounts in respect of
obligations and indebtedness of such Borrower owing to any Guarantor). If the
Administrative Agent so requests at any time after the occurrence and during the
continuance of an Event of Default, any such obligation or indebtedness of the
Borrowers to the Guarantor shall be enforced and performance received by the
Guarantor as trustee for the Administrative Agent and the proceeds thereof shall
be paid over to the Administrative Agent, for the ratable benefit of the
Lenders, on account of the Guaranteed Obligations, but without reducing or
affecting in any manner the liability of the Guarantor under this Guaranty.

 

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Form of Continuing Guaranty

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10. Information. Each Guarantor agrees to furnish promptly to the Administrative
Agent any and all financial or other information regarding such Guarantor or its
property as the Administrative Agent may reasonably request in writing.

11. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Guaranteed Obligations is stayed, upon the insolvency, bankruptcy
or reorganization of the Borrowers or any other person or entity, or otherwise,
all such amounts shall nonetheless be payable by the Guarantors immediately upon
demand by the Administrative Agent.

12. Expenses. The Guarantors shall pay on demand all reasonable out-of-pocket
expenses incurred by the Administrative Agent, any L/C Issuer or any Lender
(including reasonable attorneys’ fees and expenses and the allocated cost and
disbursements of internal legal counsel) in any way relating to the enforcement
or protection of the Administrative Agent’s and any Lender’s rights under this
Guaranty, including any incurred in the preservation, protection or enforcement
of any rights of the Administrative Agent and the Lenders in any case commenced
by or against the Guarantors under the Bankruptcy Code (Title 11, United States
Code) or any similar or successor statute. The obligations of the Guarantors
under the preceding sentence shall survive termination of this Guaranty.

13. Amendments. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the
Administrative Agent and the Guarantors.

14. No Waiver; Enforceability. No failure by the Administrative Agent and any
Lender to exercise, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy or power hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law or in
equity. The unenforceability or invalidity of any provision of this Guaranty
shall not affect the enforceability or validity of any other provision herein.

15. Assignment; Governing Laws; Jurisdiction. This Guaranty shall (a) bind the
Guarantors and their respective successors and assigns; provided, that, the
Guarantors may not assign their rights or obligations under this Guaranty
without the prior written consent of the Administrative Agent (and any attempted
assignment without such consent shall be void) (it being understood that a
merger or consolidation of a Guarantor with or into another member of the
Borrowing Group expressly permitted under the Credit Agreement shall not
constitute such an assignment), (b) inure to the benefit of the Administrative
Agent and its successors and assigns and the Administrative Agent may, without
notice to the Guarantor and without affecting the Guarantor’s obligations
hereunder, assign or sell participations in the Guaranteed Obligations and this
Guaranty, in whole or in part in accordance with the Credit Agreement, and
(c) be governed by, and construed in accordance with, the law of the State of
New York. Each Guarantor hereby irrevocably (i) submits to the non-exclusive
jurisdiction of the courts of the State of New York sitting in New York, County
and of the United States District Court of the

 

F-4

Form of Continuing Guaranty

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Southern District of New York and any appellate court from any thereof in any
action or proceeding arising out of or relating to this Guaranty, and
(ii) waives to the fullest extent permitted by law any defense asserting an
inconvenient forum in connection therewith. Service of process by the
Administrative Agent in connection with such action or proceeding shall be
binding on the Guarantors if sent in the manner provided for notices in
Section 10.02 of the Credit Agreement to the Guarantors at the address, telecopy
number or electronic mail address set forth for Borrowers on Schedule 10.02 of
the Credit Agreement or at such other address, telecopy number or electronic
mail address as shall be designated by any Guarantor in a written notice to
Administrative Agent at the address set forth on Schedule 10.02 to the Credit
Agreement. Subject to the provisions of Section 10.07 of the Credit Agreement,
each Guarantor agrees that the Administrative Agent and the Lenders may disclose
to any prospective purchaser and any purchaser of all or part of the Guaranteed
Obligations any and all information in the Administrative Agent’s and such
Lender’s possession concerning each Guarantor, this Guaranty and any security
for this Guaranty.

16. Condition of the Borrowers. Each Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Borrowers such information concerning the financial condition, business and
operations of the Borrowers as such Guarantor requires, and that the
Administrative Agent and the Lenders have no duty, and such Guarantor is not
relying on the Administrative Agent or the Lenders at any time, to disclose to
such Guarantor any information relating to the business, operations or financial
condition of the Borrowers.

17. Setoff. If an Event of Default shall have occurred and be continuing and to
the extent any payment is not made when due hereunder, the Administrative Agent
may setoff and charge from time to time any amount so due against any or all of
the Guarantors’ accounts or deposits with the Administrative Agent. The
Administrative Agent agrees to notify the Guarantors promptly after any such
setoff and charge, provided that the failure to give such notice shall not
affect the validity of such setoff and charge.

18. Other Guarantees. Unless otherwise agreed by the Administrative Agent and
the Guarantors in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by the Guarantors for
the benefit of the Administrative Agent or any term or provision thereof.

19. Representations and Warranties. Each Guarantor represents and warrants that
(i) it is duly organized or formed and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate or other organizational power and authority to execute, deliver and
perform this Guaranty; (ii) this Guaranty constitutes its legal, valid and
binding obligation enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law); (iii) except as would
not reasonably be expected to have a Material Adverse Effect, the making and
performance of this Guaranty does not and will not violate the provisions of any
applicable law, regulation or order, and does not and will not result in the
breach of, or constitute a default or require any consent under, any material
agreement, instrument, or document to which it is a party

 

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Form of Continuing Guaranty

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or by which it or any of its property may be bound or affected; (iv) all
consents, approvals, licenses and authorizations of, and filings and
registrations with, any governmental authority required under applicable law and
regulations for the making and performance of this Guaranty have been obtained
or made and are in full force and effect; and (v) by virtue of its relationship
with the Borrowers, the execution, delivery and performance of this Guaranty is
for the direct benefit of such Guarantor and it has received adequate
consideration for this Guaranty.

20. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE
LAW, EACH GUARANTOR AND THE ADMINISTRATIVE AGENT EACH WAIVE TRIAL BY JURY WITH
RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS
GUARANTY. THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.

[remainder of page intentionally left blank]

 

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Form of Continuing Guaranty

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IN WITNESS WHEREOF, the parties hereto have executed this Guaranty as of the
date and year first set forth above.

 

“GUARANTORS”

AIMCO EQUITY SERVICES, INC.,

a Virginia corporation

AIMCO HOLDINGS QRS, INC.,

a Delaware corporation

AIMCO-LP TRUST,

a Delaware trust

AIMCO PROPERTIES FINANCE CORP.,

a Delaware corporation

AMBASSADOR I, INC.,

a Delaware corporation

ANGELES REALTY CORPORATION II,

a California corporation

CONCAP EQUITIES, INC.,

a Delaware corporation

NHP A&R SERVICES, INC.,

a Virginia corporation

NHPMN STATE MANAGEMENT, INC.,

a Delaware corporation

AIMCO-GP, INC.,

a Delaware corporation

NHPMN-GP, INC.,

a Delaware corporation

By:       Name:   Patti K. Fielding   Title:   Executive Vice President and
Treasurer

 

AIMCO IPLP, L.P., a Delaware limited partnership By:   AIMCO/IPT, Inc., a
Delaware corporation, its General Partner   By:         Name:   Patti K.
Fielding     Title:   Executive Vice President and Treasurer

 

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Form of Continuing Guaranty

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AIMCO HOLDINGS, L.P., a Delaware limited partnership By:   AIMCO Holdings QRS,
Inc., a Delaware corporation, its General Partner   By:         Name:   Patti K.
Fielding     Title:   Executive Vice President and Treasurer

 

AMBASSADOR CRM FLORIDA PARTNERS LIMITED PARTNERSHIP, a Delaware limited
partnership By:   Ambassador Florida Partners Limited Partnership, a Delaware
limited partnership, its General Partner   By:   Ambassador Florida Partners,
Inc., a Delaware corporation, its General Partner     By:           Name:  
Patti K. Fielding       Title:   Executive Vice President and Treasurer

 

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Form of Continuing Guaranty

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AMBASSADOR APARTMENTS, L.P.,

a Delaware limited partnership

By:   AIMCO QRS GP, LLC, a Delaware limited liability company, its General
Partner   By:   AIMCO Properties, L.P., a Delaware limited partnership, its
Member     By:   AIMCO-GP, Inc., a Delaware corporation, its General Partner    
  By:             Name:   Patti K. Fielding         Title:   Executive Vice
President and Treasurer

 

LAC PROPERTIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership By:  
AIMCO GP LA, L.P., a Delaware limited partnership, its General Partner   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name:   Patti K. Fielding       Title:   Executive Vice President and Treasurer

 

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Form of Continuing Guaranty

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GP-OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Member   By:   AIMCO-GP,
Inc., a Delaware corporation, its General Partner     By:           Name:  
Patti K. Fielding       Title:   Executive Vice President and Treasurer

 

NHPMN MANAGEMENT, L.P., a Delaware limited partnership By:   NHPMN-GP, Inc., a
Delaware corporation, its General Partner   By:         Name:   Patti K.
Fielding     Title:   Executive Vice President and Treasurer

 

NHPMN MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO/Bethesda
Holdings, Inc., a Delaware corporation, its General Manager   By:         Name:
  Patti K. Fielding     Title:   Executive Vice President and Treasurer

 

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Form of Continuing Guaranty

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OP PROPERTY MANAGEMENT, L.P., a Delaware limited partnership By:   NHPMN-GP,
Inc., a Delaware corporation, its Managing General Partner   By:         Name:  
Patti K. Fielding     Title:   Executive Vice President and Treasurer

 

OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its General Manager   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name:   Patti K. Fielding       Title:   Executive Vice President and Treasurer

 

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LAC PROPERTIES GP I LIMITED PARTNERSHIP, a Delaware limited partnership By:  
LAC Properties GP I LLC, a Delaware limited liability company, its General
Partner   By:   LAC Properties Operating Partnership, L.P., a Delaware limited
partnership, its Managing Member     By:   AIMCO GP LA, L.P., a Delaware limited
partnership, its General Partner       By:   AIMCO-GP, Inc., a Delaware
corporation, its General Partner         By:               Name:   Patti K.
Fielding           Title:   Executive Vice President and Treasurer

 

LAC PROPERTIES GP II LIMITED PARTNERSHIP, a Delaware limited partnership By:  
LAC Properties QRS II Inc., a Delaware corporation, its General Partner   By:  
      Name:   Patti K. Fielding     Title:   Executive Vice President and
Treasurer

 

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AIMCO SELECT PROPERTIES, L.P., a Delaware limited partnership By:  
AIMCO/Bethesda Holdings, Inc., a Delaware corporation, its General Partner   By:
        Name:   Patti K. Fielding     Title:   Executive Vice President and
Treasurer

 

THE NATIONAL HOUSING PARTNERSHIP, a District of Columbia limited partnership By:
  National Corporation for Housing Partnerships, a District of Columbia
corporation, its General Partner   By:         Name:   Patti K. Fielding    
Title:   Executive Vice President and Treasurer

 

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Form of Continuing Guaranty

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AGREED AND ACCEPTED:

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent

By:       Name:     Title:  

 

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Form of Continuing Guaranty

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EXHIBIT G

FORM OF INTRA-COMPANY LOAN SUBORDINATION AGREEMENT

This INTRA-COMPANY LOAN SUBORDINATION AGREEMENT (as amended, restated, amended
and restated, supplemented, extended or otherwise modified in writing from time
to time, this “Agreement”), is dated as of December             , 2011, by and
among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation (the
“REIT”), AIMCO PROPERTIES, L.P., a Delaware limited partnership (“AIMCO”) and
AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation (“AIMCO/Bethesda”) (the
REIT, AIMCO and AIMCO/Bethesda are jointly and severally collectively referred
to herein as the “Companies”), each of the Guarantors (as such term is defined
in the Credit Agreement (as defined herein)) party hereto (the “Guarantors”),
each of the parties designated as an “Intra-Company Lender” on Annex 1 attached
hereto (each, an “Intra-Company Lender”, and collectively, the “Intra-Company
Lenders”), and KEYBANK NATIONAL ASSOCIATION, as administrative agent for the
Lenders (in such capacity herein called the “Agent”). Capitalized terms used in
this Agreement without definition have the meanings specified in the Credit
Agreement.

RECITALS

A. In accordance with that certain Senior Secured Credit Agreement, dated as of
December 13, 2011 (as amended, restated, amended and restated, extended,
supplemented or otherwise modified in writing from time to time, the “Credit
Agreement”), by and among the Companies, the lenders from time to time party
thereto (each a “Lender”, and collectively, the “Lenders”) and KeyBank National
Association, as Administrative Agent and as a Lender, the Lenders have made a
revolving credit facility available to the Companies. As used herein, the term
“Credit Facility” shall refer to all Obligations and other indebtedness and
liabilities, including, without limitation, all obligations with respect to
principal, premium, if any, interest (including interest that accrues after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest is allowed in such proceeding),
and default interest, if any, now or hereafter owed by any Loan Party under any
of the Loan Documents.

B. Each of the Intra-Company Lenders has made a loan or loans (each, an
“Intra-Company Loan”, and collectively the “Intra-Company Loans”) to the
Companies and the Guarantors (collectively, the “Intra-Company Borrowers”).

C. To induce the Lenders to make the Loans under the Credit Agreement, each of
the Intra-Company Lenders desires to subordinate the Intra-Company Loan or
Intra-Company Loans made by such Intra-Company Lender to the Credit Facility and
to make certain agreements in favor of the Agent and the Lenders. (As used
herein, “Applicable Intra-Company Loan” means, with respect to any Intra-Company
Lender, an Intra-Company Loan made by such Intra-Company Lender to an
Intra-Company Borrower.)

 

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AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

1. Approval of Credit Facility. Each of the Intra-Company Lenders acknowledges
that it has received, and each Intra-Company Lender hereby consents to, the Loan
Documents.

2. Payment Subordination.

(a) Each Intra-Company Lender agrees that any Applicable Intra-Company Loan is
and shall be subject, subordinate and rendered junior, in right of payment, to
the prior indefeasible payment in full, for a period of time in excess of all
applicable preference or other similar periods under applicable bankruptcy,
insolvency or creditors’ rights laws, of the Credit Facility.

(b) While an Event of Default exists each Intra-Company Lender agrees not to
ask, demand, sue for, take or receive from an Intra-Company Borrower or any
other Person, directly or indirectly, in cash, securities or other property or
by set-off or in any other manner (including without limitation from or by way
of collateral), payment of all or any amounts owing with respect to any
Applicable Intra-Company Loan (a “Subordinated Debt Payment”) nor to accept any
such Subordinated Debt Payment; and, while an Event of Default exists each of
the Companies agrees to cause the Intra-Company Borrowers not to make, and each
of the Companies agrees not to make, or to permit any Intra-Company Borrower to
make, any such Subordinated Debt Payment; unless and until, in each such case,
the Credit Facility shall have been indefeasibly paid in full, for a period of
time in excess of all applicable preference or other similar periods under
applicable bankruptcy, insolvency or creditors’ rights laws.

3. In Furtherance of Subordination.

(a) Upon any distribution of all or any of the assets of any of the
Intra-Company Borrowers (i) in the event of any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to any of the Intra-Company
Borrowers or to any of their creditors, as such, or to its assets, (ii) in the
event of any liquidation, dissolution or other winding up of any of the
Intra-Company Borrowers, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, (iii) in the event of any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of any of
the Intra-Company Borrowers, or (iv) in any manner inconsistent with the
provisions of this Agreement (such events, collectively, the “Insolvency
Events”), then and in any such event all amounts due or to become due on account
of the Credit Facility, including post-petition interest thereon, shall first be
indefeasibly paid in full (whether or not an Event of Default has occurred or
the maturity of the Credit Facility has been declared due and payable prior to
the date on which it would otherwise have become due and payable) before any
Subordinated Debt Payment is made.

 

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(b) Except to the extent not prohibited under the Credit Agreement, each
Intra-Company Lender agrees that, so long as the Credit Facility shall remain
unpaid, such Intra-Company Lender shall not loan or advance any additional funds
to the Companies or the Guarantors, other than the Applicable Intra-Company
Loan.

(c) Subject to the provisions in Section 2(b) hereof, all payments with respect
to an Intra-Company Loan or distributions received by an Intra-Company Lender
contrary to the provisions of this Agreement shall be received in trust for the
benefit of the Lenders, shall be segregated from other funds and property held
by such Intra-Company Lender, and shall be forthwith paid over to the Agent for
the ratable benefit of the Lenders in the same form as so received (with any
necessary endorsement) to be applied (in the case of cash) to, or held as
collateral (in the case of non-cash property or securities) for, the payment or
prepayment of the Credit Facility.

4. No Commencement of Any Proceedings. Each Intra-Company Lender agrees that, so
long as the Credit Facility shall remain unpaid, such Intra-Company Lender
(a) will (i) not commence, or join with any creditor other than Lenders in
commencing, or cause the Intra-Company Borrower to commence, any Insolvency
Event, and (ii) execute, verify, deliver and file any proofs of claim in respect
of its Intra-Company Loans requested by Agent in connection with any such
proceeding and (b) irrevocably authorizes, empowers and appoints Agent on behalf
of the Lenders as such Intra-Company Lender’s agent and attorney-in-fact to
(i) execute, verify, deliver and file such proofs of claim upon the failure of
the Intra-Company Lender promptly to do so (and, in any event, prior to 30 days
before the expiration of the time to file any such proof) and (ii) upon the
election of Agent to have the exclusive right to vote such claim in any such
proceeding; provided, that, Agent shall have no obligation to execute, verify,
deliver, file and/or vote any such proof of claim. In the event that the
Administrative Agent votes any claim in accordance with the authority granted
hereby, the Intra-Company Lender shall not be entitled to change or withdraw
such vote.

5. No Disposition or Amendment of or Exercise of Remedies With Respect to an
Intra-Company Loan. So long as the Credit Facility remains unpaid, each
Intra-Company Lender agrees that it will not:

(a) Sell, assign, transfer, endorse, pledge, encumber or otherwise enter into
any Disposition of the Applicable Intra-Company Loan or any interest therein
except to the extent not prohibited under the Credit Agreement (it being
understood that a merger or consolidation of such Intra-Company Lender with or
into another member of the Borrowing Group expressly permitted under the Credit
Agreement shall not constitute such an assignment);

(b) Enter into any amendment, modification, extension, renewal or replacement of
or accept any collateral or guaranty for any Applicable Intra-Company Loan
except to the extent not prohibited under the Credit Agreement; or

 

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(c) Take, or permit to be taken, any action to assert, collect or enforce any
Applicable Intra-Company Loan or any part thereof, or to exercise any of such
Intra-Company Lender’s remedies with respect to any Applicable Intra-Company
Loan.

6. Rights and Obligations Hereunder Not Affected. All rights and interests of
the Agent and the Lenders hereunder, and all agreements and obligations of each
Intra-Company Lender, the Companies and the Guarantors under this Agreement,
shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of the Loan Documents or any other
documents evidencing or securing the Credit Facility;

(b) any change in the time, manner or place of payment of, or in any other term
of, the Credit Facility, or any other amendment or waiver of or any consent to
departure from the Loan Documents;

(c) any exchange, release or non-perfection of any collateral for or of any
Person liable for all or any of the Credit Facility; or

(d) the rescission or return of any payment on account of the Credit Facility by
any Lender upon the insolvency, bankruptcy or reorganization of the Companies or
any of the Guarantors, or otherwise, all as though such payment had not been
made.

7. Representations and Warranties. Each of the Companies and each Intra-Company
Lender, as applicable, represents and warrants to the Agent and the Lenders
that:

(a) Each Intra-Company Lender that is a corporation, partnership, or limited
liability company:

(i) Is duly organized or formed, as applicable, validly existing and in good
standing under the laws of the jurisdiction of its organization; and

(ii) Has all requisite corporate or other organizational power and authority and
all requisite governmental licenses, authorizations, consents and approvals to
perform its obligations under this Agreement.

(b) The execution, delivery and performance by each Intra-Company Lender of this
Agreement has been duly authorized by all necessary partnership or other
organizational action, and do not and will not:

(i) Contravene the terms of any Intra-Company Lender’s Organization Documents
except as could not reasonably be expected to have a Material Adverse Effect;

 

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(ii) Conflict with, or result in any breach or contravention of, or the creation
of any Lien under, any document evidencing any Contractual Obligation, to which
each Intra-Company Lender is a party or any order, injunction, writ or decree of
any Governmental Authority to which such Intra-Company Lender or its properties
are subject, in each case except as could not reasonably be expected to have a
Material Adverse Effect; or

(ii) Violate any Law, except as could not reasonably be expected to have a
Material Adverse Effect.

(c) No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery or performance by, or enforcement
against, each Intra-Company Lender of this Agreement.

(d) This Agreement constitutes the legal, valid and binding obligation of each
Intra-Company Lender, enforceable against each such Intra-Company Lender in
accordance with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general equitable
principles relating to enforceability (whether enforcement is sought by
proceedings in equity or at law).

(e) All representations and warranties of the Companies with respect to each
Intra-Company Lender and each Intra-Company Borrower (whether expressly or as a
Subsidiary) set forth in Article V of the Credit Agreement and the other Loan
Documents are true and correct in all material respects to the knowledge of the
Companies on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects to the knowledge of
the Companies only as of such earlier date.

8. Waivers. No waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing and signed by the Agent with any
required consent from the Lenders as provided in the Credit Agreement, and then
only in the specific instance and for the specific purpose for which given. Any
waiver, forbearance, failure or delay by the Agent or any Lender in exercising
any right, power or remedy, shall not preclude the further, simultaneous or
later exercise thereof, and every right, power or remedy of the Agent or any
Lender shall continue in full force and effect until such right, power or remedy
is specifically waived in a writing executed by the Agent with any required
consent from the Lenders as provided in the Credit Agreement.

 

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9. Cumulative Rights. The rights, powers and remedies of the Agent and the
Lenders under this Agreement shall be in addition to all rights, powers and
remedies given to the Agent and the Lenders by virtue of any statute or rule of
law, the Credit Agreement, or any other agreement, all of which rights, powers
and remedies shall be cumulative and may be exercised successively or
concurrently.

10. Assignment; Successors and Assigns. Each Intra-Company Lender hereby
represents to the Agent and the Lenders that it has not assigned or sold any
interest in any Applicable Intra-Company Loan as of the Closing Date. This
Agreement shall bind the Agent, the Lenders, each Intra-Company Lender, the
Companies and the Guarantors and their successors and assigns and shall inure to
the benefit of their respective successors and assigns.

11. Counterpart Originals. This Agreement may be executed in counterpart
originals, each of which shall constitute the same agreement. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or other
electronic image (e.g., “PDF” or “TIF” via electronic mail) shall be as
effective as delivery of a manually executed counterpart of this Agreement.

12. Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

13. Severability. Every provision of this Agreement is intended to be severable.
In the event any term, provision, section or subsection of this Agreement is
declared to be illegal or invalid, for any reason whatsoever, by a court of
competent jurisdiction, such illegality or invalidity shall not affect the other
terms, provisions, sections or subsections of this Agreement, which shall remain
binding and enforceable.

14. Integration; Modifications. This Agreement (a) integrates all the terms and
conditions mentioned in or incidental to this Agreement, (b) supersedes all oral
negotiations and prior writings with respect to their subject matter, and (c) is
intended by the parties as the final expression of the agreement with respect to
the terms and conditions set forth in this Agreement. No representation,
understanding, promise or condition shall be enforceable against any party
unless it is contained in the Loan Documents. This Agreement may not be modified
except in a writing signed by the Agent with any required consent of the Lenders
as provided in the Credit Agreement, the Companies, the Guarantors and with
respect to any Intra-Company Loan affected thereby, the applicable Intra-Company
Borrower and Intra-Company Lender.

15. Other Intra-Company Indebtedness. If any Company, or any of the
Intra-Company Lenders are either an obligor or an obligee with respect to
“Intra-Company Debt” to the extent such Intra-Company Debt is owed by a Borrower
or Guarantor (each as defined in the Credit Agreement) (and whether any such
parties originated the applicable loan or accepted such loan by assignment, or
originally incurred such debt or assumed such debt) each of the Companies and
the Intra-Company Lenders agrees that such Intra-Company Debt shall be
considered an “Intra-Company Loan” for all purposes hereunder, the applicable
obligor and obligee with respect to such Intra-Company Loan shall be deemed an
Intra-Company Borrower or Intra-Company Lender, respectively, hereunder, and all
representations, warranties, covenants, and other provisions herein shall apply
with respect thereto. Each of the Companies

 

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agrees to cause each of its Subsidiaries to subordinate the obligations owed by
any Borrower or Guarantor to such Subsidiary under any Intra-Company Debt to the
Obligations of each Guarantor or Borrower under the Loan Documents on the
subordination terms set forth in this Agreement.

16. Further Assurances. Each of the Companies, the Intra-Company Lenders, and
the Intra-Company Borrowers agrees to execute and deliver such additional
instruments and agreements and to undertake such further acts as may be deemed
reasonably necessary or appropriate by the Agent or the Lenders in order to
effectuate the provisions of this Agreement.

17. Consent to Jurisdiction and Service of Process. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST INTRA-COMPANY LENDERS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH INTRA-COMPANY LENDER, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 10.02 OF THE CREDIT AGREEMENT TO EACH SUCH INTRA-COMPANY LENDER AT ITS
ADDRESS SET FORTH IN ANNEX 1 ATTACHED HERETO; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER EACH SUCH INTRA-COMPANY LENDER IN ANY SUCH PROCEEDING IN ANY SUCH COURT,
AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT AGENT RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY INTRA-COMPANY LENDER IN THE
COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS
SECTION 17 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW.

18. Waiver of Jury Trial. EACH INTRA-COMPANY LENDER AND EACH OTHER PARTY TO THIS
AGREEMENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope
of this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement for the parties hereto to
enter into a business relationship, that each party hereto has already relied on
this waiver in entering into this Agreement and that each will continue to rely
on this waiver in their related future dealings. Each party hereto further
warrants and represents that each has reviewed this waiver with its

 

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legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 18 AND EXECUTED BY
EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.

19. Provisional Remedies, Self-Help and Foreclosure. No provision of this
Agreement shall limit the right of any party to exercise self-help remedies such
as setoff, foreclosure against or sale of any real or personal property
collateral or security.

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first set forth above.

 

EACH OF THE COMPANIES APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland
corporation By:     Name:     Title:    

 

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner   By:       Name:       Title:    

 

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:     Name:     Title:  
 

 

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EACH OF THE GUARANTORS AIMCO EQUITY SERVICES, INC., a Virginia corporation AIMCO
HOLDINGS QRS, INC., a Delaware corporation AIMCO-LP TRUST, a Delaware trust
AIMCO PROPERTIES FINANCE CORP., a Delaware corporation AMBASSADOR I, INC., a
Delaware corporation ANGELES REALTY CORPORATION II, a California corporation
CONCAP EQUITIES, INC., a Delaware corporation NHP A&R SERVICES, INC., a Virginia
corporation NHPMN STATE MANAGEMENT, INC., a Delaware corporation AIMCO-GP, INC.,
a Delaware corporation NHPMN-GP, INC., a Delaware corporation By:       Name:  
Patti K. Fielding   Title:   Executive Vice President and Treasurer

 

 

AIMCO IPLP, L.P., a Delaware limited partnership By:  

AIMCO-IPT, Inc., a Delaware corporation,

its General Partner

 

 

  By:         Name: Patti K. Fielding     Title: Executive Vice President and
Treasurer

 

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AIMCO HOLDINGS, L.P., a Delaware limited partnership By:   AIMCO Holdings QRS,
Inc., a Delaware corporation, its General Partner   By:         Name: Patti K.
Fielding     Title: Executive Vice President and Treasurer

 

AMBASSADOR CRM FLORIDA PARTNERS LIMITED PARTNERSHIP, a Delaware limited
partnership By:   Ambassador Florida Partners Limited Partnership, a Delaware
limited partnership, its General Partner   By:   Ambassador Florida Partners,
Inc., a Delaware corporation, its General Partner     By:           Name: Patti
K. Fielding       Title: Executive Vice President and Treasurer

 

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AMBASSADOR APARTMENTS, L.P., a Delaware limited partnership By:   AIMCO QRS GP,
LLC, a Delaware limited liability company, its General Partner   By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Member     By:   AIMCO-GP,
Inc., a Delaware corporation, its General Partner       By:             Name:
Patti K. Fielding         Title: Executive Vice President and Treasurer

 

LAC PROPERTIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership By:  
AIMCO GP LA, L.P., a Delaware limited partnership, its General Partner   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name: Patti K. Fielding       Title: Executive Vice President and Treasurer

 

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GP-OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Member   By:   AIMCO-GP,
Inc., a Delaware corporation, its General Partner     By:           Name: Patti
K. Fielding       Title: Executive Vice President and Treasurer

 

NHPMN MANAGEMENT, L.P., a Delaware limited partnership By:   NHPMN-GP, Inc., a
Delaware corporation, its General Partner   By:         Name: Patti K. Fielding
    Title: Executive Vice President and Treasurer

 

NHPMN MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO/Bethesda
Holdings, Inc., a Delaware corporation, its General Manager   By:         Name:
Patti K. Fielding     Title: Executive Vice President and Treasurer

 

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OP PROPERTY MANAGEMENT, L.P., a Delaware limited partnership By:   NHPMN-GP,
Inc., a Delaware corporation, its Managing General Partner   By:         Name:
Patti K. Fielding     Title: Executive Vice President and Treasurer

 

OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its General Manager   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name: Patti K. Fielding       Title: Executive Vice President and Treasurer

 

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LAC PROPERTIES GP I LIMITED PARTNERSHIP, a Delaware limited partnership By:  
LAC Properties GP I LLC, a Delaware limited liability company, its General
Partner   By:   LAC Properties Operating Partnership, L.P., a Delaware limited
partnership, its Managing Member     By:   AIMCO GP LA, L.P., a Delaware limited
partnership, its General Partner       By:   AIMCO-GP, Inc., a Delaware
corporation, its General Partner         By:               Name: Patti K.
Fielding           Title: Executive Vice President and Treasurer

 

LAC PROPERTIES GP II LIMITED PARTNERSHIP, a Delaware limited partnership By:  
LAC Properties QRS II Inc., a Delaware corporation, its General Partner   By:  
      Name: Patti K. Fielding     Title: Executive Vice President and Treasurer

 

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AIMCO SELECT PROPERTIES, L.P., a Delaware limited partnership By:  
AIMCO/Bethesda Holdings, Inc., a Delaware corporation, its General Partner   By:
        Name: Patti K. Fielding     Title: Executive Vice President and
Treasurer

 

THE NATIONAL HOUSING PARTNERSHIP, a District of Columbia limited partnership By:
  National Corporation for Housing Partnerships, a District of Columbia
corporation, its General Partner   By:         Name: Patti K. Fielding    
Title: Executive Vice President and Treasurer

 

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EACH OF THE INTRA-COMPANY LENDERS OXFORD HOLDING CORPORATION, a Delaware
corporation By:     Name:     Title:    

 

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner   By:       Name:       Title:    

 

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:     Name:     Title:  
 

 

G

Form of Intra-Company Loan Subordination Agreement

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KEYBANK NATIONAL ASSOCIATION, as Administrative Agent By:     Name:     Title:  
 

 

G

Form of Intra-Company Loan Subordination Agreement

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ANNEX 1

INTRA-COMPANY LENDERS

Oxford Holding Corporation

AIMCO Properties, L.P.

AIMCO/Bethesda Holdings, Inc.

 

G

Form of Intra-Company Loan Subordination Agreement

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EXHIBIT H

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT (this “Agreement”), dated as of                     
    , 20         is entered into by and between
                                         (the “Additional Lender”) and the
Administrative Agent (as hereinafter defined) pursuant to that certain Senior
Secured Credit Agreement, dated as of December 13, 2011 (as amended, restated,
amended and restated, supplemented, extended or otherwise modified in writing
from time to time, the “Credit Agreement”), among Apartment Investment and
Management Company, a Maryland corporation (the “REIT”), AIMCO Properties, L.P.,
a Delaware limited partnership (“AIMCO”), AIMCO/Bethesda Holdings, Inc., a
Delaware corporation (“AIMCO/Bethesda”) and (collectively, the “Borrowers”), and
each lender from time to time party thereto (the “Existing Lenders” and together
with the Additional Lender, the “Lenders”), KeyBank National Association, as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). Capitalized terms not otherwise defined herein are defined in the
Credit Agreement.

The Additional Lender desires to become a Lender pursuant to the terms of the
Credit Agreement.

Accordingly, the Additional Lender hereby agrees as follows with the
Administrative Agent:

1. The Additional Lender hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Additional Lender will be deemed to be a party
to the Credit Agreement and a “Lender” for all purposes of the Credit Agreement
and the other Loan Documents, and shall have all of the rights and obligations
of a Lender thereunder as fully as if it has executed the Credit Agreement and
the other Loan Documents. The Additional Lender hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Credit Agreement and in the Loan Documents which are binding
upon the Lenders, including, without limitation all of the authorizations of the
Lenders set forth in Article IX of the Credit Agreement, as supplemented from
time to time in accordance with the terms thereof.

2. The Administrative Agent confirms that all of the obligations of the Existing
Lenders under the Credit Agreement are, and upon the Additional Lender becoming
a Lender shall continue to be, in full force and effect. The Administrative
Agent further confirms that immediately upon execution of this Agreement by the
parties hereto, that the Additional Lender shall become a Lender under the
Credit Agreement.

3. The Additional Lender agrees (i) that, concurrently herewith, it will execute
and deliver to the Agent the Agent Questionnaire attached hereto as Schedule 1,
and (ii) that, at any time and from time to time, upon the written request of
the Administrative Agent, it will execute and deliver such further documents and
do such further acts and things as the Administrative Agent may reasonably
request in order to effect the purposes of this Agreement.

 

H-1

Form of Joinder Agreement

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4. The Additional Lender agrees to provide its Commitment, as set forth below:

 

      Aggregate Amount of
Commitments/Loans for all
Lenders      Amount of
Commitment/Loans for
Additional Lender      Additional Lender’s
Percentage of Aggregate
Amount of
Commitment/Loans      $ _______________       $ _______________        
_______________ % 

The terms of the Commitment provided herein, and the Revolving Loans to be made
thereunder, shall be as set forth for Commitments and Revolving Loans,
respectively, in the Credit Agreement.

5. The Additional Lender (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement, (ii) from and after the date hereof, it shall
be bound by the provisions of the Credit Agreement and, to the extent of its
Applicable Percentage of the Commitments, shall have the rights and obligations
of a Lender thereunder, (iii) it has received a copy of the Credit Agreement and
the Schedules and Exhibits thereto, and the other Loan Documents, together with
copies of the most recent financial statements delivered pursuant to
Section 6.01 thereof, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement on the basis of which it has made such analysis and decision, and
(iv) attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement (including Section 3.01 thereof),
duly completed and executed by the Additional Lender; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent 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.

6. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute one contract. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy or other electronic image (e.g., “PDF” or “TIF”
via electronic mail) shall be as effective as delivery of a manually executed
counterpart of this Agreement.

7. This Agreement may not be amended, modified or waived except by an instrument
or instruments in writing signed and delivered on behalf of each of the parties
hereto and the Borrowers.

8. This Agreement shall be governed by, and construed in accordance with, the
law of the State of New York.

 

H-2

Form of Joinder Agreement

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[Remainder of Page Intentionally Left Blank]

 

H-3

Form of Joinder Agreement

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

IN WITNESS WHEREOF, the Administrative Agent and the Additional Lender have
caused this Agreement to be duly executed by its authorized officers, and the
Borrowers have caused the same to be accepted by their authorized officers,
respectively, as of the day and year first above written.

 

[________________________________] By:     Name:     Title:    

 

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent for itself and the other Existing Lenders

By:     Name:     Title:    

 

Consented to:

 

BORROWERS

 

APARTMENT INVESTMENT AND

MANAGEMENT COMPANY,

a Maryland corporation

By:     Name:     Title:    

 

AIMCO PROPERTIES, L.P.,

a Delaware limited partnership

By:  

AIMCO-GP, Inc.,

a Delaware corporation,

its General Partner

By:     Name:     Title:    

 

H

Form of Joinder Agreement

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

AIMCO/BETHESDA HOLDINGS, INC.,

a Delaware corporation

By:     Name:     Title:    

 

H

Form of Joinder Agreement

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

SCHEDULE 1

AGENT QUESTIONNAIRE

 

Schedule 1

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

EXHIBIT I-1

FORM OF BORROWERS PLEDGE AGREEMENT

See Attached

 

I-1-1

Form of Borrowers Pledge Agreement

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SECURITY AGREEMENT

(Securities)

1. Grant of Security Interest. As security for any and all Indebtedness (as
defined below), each of the undersigned APARTMENT INVESTMENT AND MANAGEMENT
COMPANY, a Maryland corporation (the “REIT”), AIMCO PROPERTIES, L.P., a Delaware
limited partnership (“AIMCO”) and AIMCO/BETHESDA HOLDINGS, INC., a Delaware
corporation (“AIMCO/Bethesda”) (each, a “Pledgor” and collectively, the
“Pledgors”), hereby irrevocably and unconditionally grants a security interest
in and pledges to KeyBank National Association, as administrative agent for the
Lenders (as defined below) under the Credit Agreement (as defined below), and
its successors and assigns (in such capacity, “Administrative Agent”), all
property of such Pledgor described in Exhibit A attached hereto and incorporated
herein, as hereafter amended or supplemented from time to time (the
“Collateral”).

2. Indebtedness. “Indebtedness” means the Obligations (as defined in that
certain Senior Secured Credit Agreement, dated as of December 13, 2011, among
the Pledgors (collectively referred herein as the “Borrowers” and individually
as a “Borrower”), the lenders from time to time party thereto (collectively
referred to herein as the “Lenders” and individually as a “Lender”), and
Administrative Agent (as amended, restated, amended and restated, supplemented,
extended or otherwise modified in writing from time to time, the “Credit
Agreement”), (including all renewals, extensions and modifications thereof and
all out of pocket expenses incurred by the Administrative Agent, the L/C Issuers
and the Lenders (including the reasonable fees, charges and disbursements of any
counsel to the Administrative Agent, the L/C Issuers and the Lenders) in
connection with the collection or enforcement thereof).

3. Pledgor’s Covenants, Warranties and Representations. Each Pledgor covenants,
represents and warrants that unless compliance is waived by Administrative Agent
in writing:

(a) The Collateral constituting Stock has been duly authorized and is fully paid
and non-assessable.

(b) Except as otherwise agreed by Administrative Agent in writing, such Pledgor
owns all of the Collateral purported to be owned by it free and clear of any and
all liens, encumbrances, or interests of any third parties other than the Lien
of Administrative Agent, and will keep all of the Collateral free of all liens,
claims, security interests and encumbrances of any kind or nature, whether
voluntary or involuntary, except the Liens of Administrative Agent.

(c) Such Pledgor has good right and lawful authority to pledge, assign,
transfer, deliver, deposit, set over and confirm unto Administrative Agent the
Collateral as provided herein and will warrant and defend the title thereto and
the Lien therein conveyed to Administrative Agent by this Security Agreement (as
amended, restated, amended and restated, supplemented or otherwise modified in
writing from time to time, this “Agreement”) against all claims of all persons
and will maintain and preserve such security interest.

 

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Form of Borrowers Pledge Agreement

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(d) The execution, delivery and performance of this Agreement and the pledge
and/or delivery of the Collateral to Administrative Agent do not contravene any
agreement, commitment, indenture, contract or other obligation or restriction
affecting such Pledgor except as would not reasonably be expected to have a
Material Adverse Effect.

(e) This Agreement is a valid, legal, and binding obligation of such Pledgor,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

(f) Except as would not reasonably be expected to have a Material Adverse
Effect, this Agreement will not violate any provision of law applicable to such
Pledgor.

(g) No authorization, approval or other action by and no notice to or filing
with, any governmental authority is required for the pledge by such Pledgor of
the Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by such Pledgor (except as may be required in
connection with a disposition of Collateral by laws affecting the offering and
sale of securities generally).

(h) Such Pledgor shall, at such Pledgor’s expense, take all actions necessary or
advisable from time to time to maintain the first priority and perfection of the
Lien granted to the Administrative Agent hereunder and shall not take any
actions that would alter, impair or eliminate said priority or perfection
(except in connection with any transfer or disposition not prohibited by the
Loan Documents).

(i) Such Pledgor agrees to pay prior to delinquency all taxes, charges, liens
and assessments against the Collateral, and upon the failure of such Pledgor to
do so, Administrative Agent at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.

(j) Such Pledgor’s exact legal name as of the date hereof is correctly set forth
on Annex I attached hereto. Such Pledgor will provide Administrative Agent with
at least 30 days’ (or such shorter period as Administrative Agent may agree)
prior written notice of any change in such Pledgor’s name or identity.

(k) As of the date hereof, such Pledgor’s chief executive office is, and has
been for the four-month period preceding the date hereof, located in the state
specified on Annex I attached hereto. In addition, as of the date hereof, such
Pledgor is an organization of the type and is incorporated under the laws of the
state specified on Annex I attached hereto. Such Pledgor shall give
Administrative Agent at least 30 days’ (or such shorter period as Administrative
Agent may agree) notice before changing the location of its chief executive
office, type of organization, business structure or state of incorporation or
organization.

 

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Form of Borrowers Pledge Agreement

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(l) Such Pledgor’s organizational identification number as of the date hereof,
if any, assigned by its state of incorporation or organization is correctly set
forth on Annex I attached hereto. Such Pledgor shall promptly notify
Administrative Agent (i) of any change of its organizational identification
number, or (ii) if such Pledgor does not have an organizational identification
number and later obtains one, of such organizational identification number.

4. Powers of Administrative Agent. At any time after the occurrence and during
the continuance of an Event of Default, without notice unless expressly required
elsewhere in this Agreement or in the Credit Agreement, and at the expense of
Pledgors and the Borrowers, Administrative Agent in its name or in the name of
Pledgors may, but shall not be obligated to:

(a) Collect by legal proceedings or otherwise, endorse, receive and receipt for
all dividends, interest, principal payments and other sums now or hereafter
payable upon or on account of the Collateral.

(b) Make any compromise or settlement it deems desirable or proper with
reference to the Collateral.

(c) Insure, process and preserve the Collateral.

(d) Participate in any recapitalization, reclassification, reorganization,
consolidation, redemption, stock split, merger or liquidation of any issuer of
securities which constitute Collateral, and in connection therewith may deposit
or surrender control of the Collateral, accept money or other property in
exchange for the Collateral, and take such action as it deems proper in
connection therewith, and any money or property received on account of or in
exchange for the Collateral shall be applied to the Indebtedness or held by
Administrative Agent thereafter as Collateral pursuant to the provisions hereof.

(e) Cause Collateral to be transferred to its name or to the name of its
nominee.

(f) Exercise as to the Collateral all the rights, powers and remedies of an
owner necessary to exercise its rights under this Agreement, including without
limitation, the right to sell or otherwise dispose of all or any part of the
Collateral after the occurrence and during the continuance of an Event of
Default under this Agreement. Administrative Agent shall not vote any securities
constituting Collateral, unless an Event of Default has occurred and is
continuing under this Agreement and Administrative Agent has delivered to
Pledgors a written notice of Administrative Agent’s intent to exercise such
voting rights.

 

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Form of Borrowers Pledge Agreement

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Each Pledgor hereby appoints Administrative Agent its attorney-in-fact to carry
out any of the powers granted by this paragraph at any time after the occurrence
and during the continuance of an Event of Default. Without limiting the
generality of the foregoing, each Pledgor hereby appoints Administrative Agent
its attorney-in-fact to execute and deliver any necessary stock powers,
endorsements, assignments or other documents and agreements necessary to carry
out any of the foregoing powers at any time after the occurrence and during the
continuance of an Event of Default. The foregoing appointments shall be deemed
coupled with an interest of Administrative Agent and shall not be revoked
without Administrative Agent’s written consent. To the extent permitted by law,
each Pledgor hereby ratifies all said attorney-in-fact shall lawfully do by
virtue hereof.

5. Events of Default. Any Event of Default as defined in the Credit Agreement
shall be an Event of Default hereunder (“Event of Default”).

6. Remedies. If an Event of Default has occurred and is continuing,
Administrative Agent may do any one or more of the following:

(a) Exercise as to any or all of the Collateral all the rights, powers and
remedies of an owner; provided, however, that, Administrative Agent shall not
have the right to vote any securities constituting Collateral until
Administrative Agent has provided written notice to Pledgors after the
occurrence and during the continuance of an Event of Default of Administrative
Agent’s intent to exercise such right.

(b) Enforce the security interest given hereunder pursuant to the Uniform
Commercial Code as in effect in any applicable state (the “UCC”) and any other
applicable law.

(c) Sell all or any part of the Collateral at public or private sale in
accordance with the UCC, without advertisement, in such manner and order as
Administrative Agent may elect. Administrative Agent may purchase the Collateral
for its own account at any such sale. Administrative Agent shall give Pledgors
such notice of any public or private sale as may be required by the UCC;
provided, that, if Administrative Agent fails to comply with this sentence in
any respect, its liability for such failure shall be limited to the liability
(if any) imposed on it as a matter of law under the UCC. Each Pledgor
acknowledges that Collateral may be sold at a loss to such Pledgor, and that, in
such event, Administrative Agent shall have no liability or responsibility to
such Pledgor for such loss. Each Pledgor further acknowledges that a private
sale may result in less proceeds than a public sale.

(d) Exercise any other remedy provided under this Agreement or by any applicable
law. Each Pledgor acknowledges that all such rights and remedies are cumulative,
and the exercise of any right or remedy shall not preclude the further exercise
of any other right or remedy.

 

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Form of Borrowers Pledge Agreement

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(e) Comply with any applicable state or federal law requirements in connection
with a disposition of the Collateral and such compliance will not be considered
to affect adversely the commercial reasonableness of any sale of the Collateral.

(f) Sell the Collateral without giving any warranties as to the Collateral.
Administrative Agent may specifically disclaim any warranties of title or the
like. This procedure will not be considered to affect adversely the commercial
reasonableness of any sale of the Collateral.

7. Waivers. Except as expressly provided in the Loan Documents, Administrative
Agent shall be under no duty or obligation whatsoever (a) to make or give any
presentment, demands for performances, notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any obligations or
evidences of indebtedness held by Administrative Agent as Collateral, or in
connection with any obligation or evidences of indebtedness which constitute in
whole or in part the Indebtedness, or (b) to give any Pledgor notice of, or to
exercise, any subscription rights or privileges, any rights or privileges to
exchange, convert or redeem or any other rights or privileges relating to or
affecting any Collateral except as otherwise expressly provided herein.

8. Return and Release of Collateral. Administrative Agent may at any time
deliver the Collateral or any part thereof to Pledgors and the receipt of
Pledgors shall be a complete and full acquittance for the Collateral so
delivered, and Administrative Agent shall thereafter be discharged from any
liability or responsibility therefor. The Collateral and Liens granted on the
Collateral shall be released as provided in Section 9.10 of the Credit
Agreement.

9. Custody of Collateral. Administrative Agent may, in its discretion, hold some
or all of the Collateral in an account with a custody unit of Administrative
Agent. Administrative Agent shall not be liable for any loss to the Collateral
resulting from acts of God, war, civil commotion, terrorist activity, fire,
earthquake, or other disaster beyond the reasonable control of Administrative
Agent, or for any other loss or damage to the Collateral unless shown to have
arisen from Administrative Agent’s intentional misconduct or lack of reasonable
care.

10. Costs. All reasonable out of pocket expenses, incurred by the Administrative
agent, any L/C Issuer or any Lender (including reasonable fees, charges and
disbursements of any counsel to the Administrative Agent, the L/C Issuers and
the Lenders) in connection with enforcement or protection of its rights
conferred by this Agreement and including the reasonable charges and expenses of
Administrative Agent’s custody unit or of any Securities Intermediary, shall
become a part of the Indebtedness secured hereunder and shall be paid to
Administrative Agent by Pledgors promptly following demand (accompanied by
reasonable back-up documentation), with interest thereon at an annual rate equal
to the highest rate of interest of any Indebtedness secured by this Agreement
(or, if there is no such interest rate, at the maximum interest rate permitted
by law for interest on judgments). Such costs and attorneys’ fees shall include,
without limitation, the allocated cost of in-house counsel.

11. Notices. Unless otherwise provided or agreed to herein or required by law,
notice and communications provided for in this Agreement shall be given in the
manner provided for notices and communications in Section 10.02 of the Credit
Agreement.

 

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Form of Borrowers Pledge Agreement

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12. Miscellaneous.

(a) Any waiver, express or implied, of any provision hereunder and any delay or
failure by Administrative Agent to enforce any provision shall not preclude
Administrative Agent from enforcing any such provision thereafter.

(b) Each Pledgor hereby authorizes Administrative Agent to file one or more
financing statements describing all or part of the Collateral, and continuation
statements, or amendments thereto, relative to all or part of the Collateral as
authorized by applicable law. Such financing statements, continuation statements
and amendments will contain any other information required by the UCC for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether such Pledgor is an organization, the
type of organization and any organizational identification number issued to such
Pledgor. Such Pledgor agrees to furnish any such information to Administrative
Agent promptly upon request.

(c) Such Pledgor shall, at the request of Administrative Agent, execute such
other agreements, documents or instruments in connection with this Agreement as
Administrative Agent may reasonably deem necessary to evidence or perfect the
security interests granted herein, to maintain the first priority of the
security interests, or to effectuate the rights granted to Administrative Agent
herein.

(d) This Agreement shall be governed by and construed in accordance with, the
law of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies are governed by the
laws of any other jurisdiction. Each Pledgor hereby irrevocably (i) submits to
the non-exclusive jurisdiction of the courts of the State of New York sitting in
New York County and of the United States District Court of the Southern District
of New York and any appellate court from any thereof in any action or proceeding
arising out of or relating to this Agreement, and (ii) waives to the fullest
extent permitted by law any defense asserting an inconvenient forum in
connection therewith. Service of process by Administrative Agent in connection
with such action or proceeding shall be binding on any Pledgor if sent in the
manner provided for notices in Section 10.02 of the Credit Agreement. Subject to
the confidentiality provisions set forth in the Credit Agreement, each Pledgor
agrees that Administrative Agent may disclose to any prospective purchaser and
any purchaser of all or part of the Indebtedness any and all information in
Administrative Agent’s possession concerning such Pledgor, this Agreement and
the Collateral.

(e) Capitalized terms used herein (including capitalized terms used in Exhibit
A) that are defined in the UCC as in effect from time to time in the State of
New York (“NYUCC”) and not defined in this Agreement or the Credit Agreement
shall have the meaning given to such terms in the NYUCC, when used in this
Agreement and capitalized terms used in this Agreement without definition have
the meanings given to them in the Credit Agreement.

 

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Form of Borrowers Pledge Agreement

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(f) This Agreement shall benefit Administrative Agent’s successors and assigns
and shall bind each Pledgor’s successors and assigns, except that no Pledgor may
assign its rights and obligations under this Agreement without the prior written
consent of the Administrative Agent (it being understood that a merger or
consolidation expressly permitted under the Credit Agreement shall not
constitute such an assignment).

(g) All rights and remedies herein provided are cumulative and not exclusive of
any rights or remedies otherwise provided by law. Any single or partial exercise
of any right or remedy shall not preclude the further exercise of any other
right or remedy.

(h) Each Pledgor shall promptly deliver to Administrative Agent any
certificates, documents or instruments representing or evidencing Collateral now
or hereafter in such Pledgor’s possession and, after the occurrence and during
the continuance of an Event of Default, each Pledgor shall hold all dividends,
interest, principal payments and other sums paid to such Pledgor on account of
the Collateral in trust for Administrative Agent, will not commingle such
payments with other funds of such Pledgor or any other Person and will
immediately pay and deliver in kind, all such payments directly to
Administrative Agent (with such endorsements and assignments as may be necessary
to transfer title to Administrative Agent).

(i) In all cases where more than one party executes this Agreement, all words
used herein in the singular shall be deemed to have been used in the plural
where the context and construction so require, and the obligations and
undertakings hereunder are joint and several.

13. WAIVER OF JURY TRIAL. TO THE EXTENT ALLOWED BY APPLICABLE LAW, EACH PLEDGOR
AND ADMINISTRATIVE AGENT EACH WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION,
CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS AGREEMENT.

14. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION WITH THIS SECURITY AGREEMENT REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[remainder of page left intentionally left blank]

 

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IN WITNESS WHEREOF, each Pledgor has executed this Agreement by its duly
authorized officer, as of the date first written above.

 

APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation By:    
Name:   Title:  

 

AIMCO PROPERTIES, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner   By:       Name:     Title:  

 

AIMCO/BETHESDA HOLDINGS, INC., a Delaware corporation By:       Name:   Title:

 

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Form of Non-Borrowers Pledge Agreement

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AGREED AND ACCEPTED:

 

KEYBANK NATIONAL ASSOCIATION,

as Administrative Agent

By:      

Name:

Title:

 

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Form of Non-Borrowers Pledge Agreement

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Exhibit A to Security Agreement

Description of Collateral

(a) All investment property, certificated securities, uncertificated securities,
general intangibles, and all other investments or property now or hereafter
listed on Schedule 1 attached hereto, as amended from time to time in writing,
whether held in a securities account or otherwise.

(b) (i) All present and future income, proceeds, earnings, and property received
in exchange or substitution for the foregoing property of every kind and nature,
including without limitation all payments, interest, profits, distributions,
benefits, rights, options, warrants, dividends, stock dividends, stock splits,
stock rights, regulatory dividends, subscriptions, monies, claims for money due
and to become due, proceeds of any insurance on the foregoing property, shares
of stock of different par value or no par value issued in substitution or
exchange for shares included in the foregoing property, and (ii) all other
property received, or which Pledgor is entitled to receive, on account of the
foregoing property, including accounts, documents, instruments, chattel paper,
and general intangibles.

 

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Form of Non-Borrowers Pledge Agreement

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EXHIBIT I-2

FORM OF NON-BORROWERS PLEDGE AGREEMENT

See Attached

 

I-2

Form of Non-Borrowers Pledge Agreement

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SECURITY AGREEMENT

(Securities)

1. Grant of Security Interest. As security for any and all Indebtedness (as
defined below) and to induce the Lenders (as defined below) to extend such
Indebtedness, each of the undersigned AIMCO/IPT, INC., a Delaware corporation,
NHP A&R SERVICES, INC., a Virginia corporation, AIMCO HOLDINGS QRS, INC., a
Delaware corporation, NHPMN-GP, INC., a Delaware corporation, LAC PROPERTIES QRS
II INC., a Delaware corporation, AIMCO LP LA, L.P., a Delaware limited
partnership, GP-OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability
company, AIMCO GP LA, L.P., a Delaware limited partnership, LAC PROPERTIES
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, AIC REIT PROPERTIES
LLC, a Delaware limited liability company, AMBASSADOR APARTMENTS, L.P., a
Delaware limited partnership, AIMCO HOLDINGS, L.P., a Delaware limited
partnership, AMBASSADOR FLORIDA PARTNERS LIMITED PARTNERSHIP, a Delaware limited
partnership, LAC PROPERTIES SUB LLC, a limited liability company, LAC PROPERTIES
GP I LLC, a Delaware limited liability company, NATIONAL CORPORATION FOR HOUSING
PARTNERSHIPS, a District of Columbia corporation, NHP PARTNERS TWO LIMITED
PARTNERSHIP, a Delaware limited partnership, and AIMCO QRS GP, LLC, a Delaware
limited liability company (each, a “Pledgor” and collectively, the “Pledgors”)
hereby irrevocably and unconditionally grants a security interest in and pledges
to KeyBank National Association, as administrative agent for the Lenders (as
defined below) under the Credit Agreement (as defined below), and its successors
and assigns (in such capacity, “Administrative Agent”), all property of such
Pledgor described in Exhibit A attached hereto and incorporated herein, as
hereafter amended or supplemented from time to time (the “Collateral”).

2. Indebtedness. “Indebtedness” means the Obligations (as defined in that
certain Senior Secured Credit Agreement, dated as of December 13, 2011, among
Apartment Investment and Management Company, a Maryland corporation (the
“REIT”), AIMCO Properties, L.P., a Delaware limited partnership (“AIMCO”) and
AIMCO/Bethesda Holdings, Inc., a Delaware corporation (“AIMCO/Bethesda”) (the
REIT, AIMCO and AIMCO/Bethesda, collectively referred to herein as the
“Borrowers” and individually as a “Borrower”), the lenders from time to time
party thereto (collectively referred to herein as the “Lenders” and individually
as a “Lender”), and Administrative Agent (as amended, restated, amended and
restated, supplemented, extended or otherwise modified in writing from time to
time, the “Credit Agreement”), (including all renewals, extensions and
modifications thereof and all out of pocket expenses incurred by the
Administrative Agent, the L/C Issuers and the Lenders (including reasonable
fees, charges and disbursements of any counsel to the Administrative Agent, the
L/C Issuers and the Lenders) in connection with the collection or enforcement
thereof). Notwithstanding anything contained herein to the contrary, with
respect to the obligations of any Pledgor hereunder that is not a Guarantor,
neither the Administrative Agent nor any Lender shall have any claims against
such Pledgor other than recourse to the Collateral pledged by such Pledgor to
the Administrative Agent under this Agreement and any other Pledge Agreement
executed by such Pledgor

3. Pledgor’s Covenants, Warranties and Representations. Each Pledgor covenants,
represents and warrants that unless compliance is waived by Administrative Agent
in writing:

(a) The Collateral constituting Stock has been duly authorized and is fully paid
and non-assessable.

 

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(b) Except as otherwise agreed by Administrative Agent in writing, such Pledgor
owns all of the Collateral, purported to be owned by it, free and clear of any
and all liens, encumbrances, or interests of any third parties other than the
Lien of Administrative Agent, and will keep all of the Collateral free of all
liens, claims, security interests and encumbrances of any kind or nature,
whether voluntary or involuntary, except the Liens of the Administrative Agent.

(c) Such Pledgor has good right and lawful authority to pledge, assign,
transfer, deliver, deposit, set over and confirm unto Administrative Agent the
Collateral as provided herein and will warrant and defend the title thereto and
the security interest therein conveyed to Administrative Agent by this Security
Agreement (as amended, restated, amended and restated, supplemented or otherwise
modified in writing from time to time, this “Agreement”) against all claims of
all persons and will maintain and preserve such security interest.

(d) The execution, delivery and performance of this Agreement and the pledge
and/or delivery of the Collateral to Administrative Agent do not contravene any
agreement, commitment, indenture, contract or other obligation or restriction
affecting such Pledgor except as would not reasonably be expected to have a
Material Adverse Effect.

(e) This Agreement is a valid, legal, and binding obligation of such Pledgor,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

(f) Except as would not reasonably be expected to have a Material Adverse
Effect, this Agreement will not violate any provision of law applicable to such
Pledgor.

(g) No authorization, approval or other action by and no notice to or filing
with, any governmental authority is required for the pledge by such Pledgor of
the Collateral pursuant to this Agreement or for the execution, delivery, or
performance of this Agreement by such Pledgor (except as may be required in
connection with a disposition of Collateral by laws affecting the offering and
sale of securities generally).

(h) Such Pledgor shall, at such Pledgor’s expense, take all actions necessary or
advisable from time to time to maintain the first priority and perfection of the
Lien granted to the Administrative Agent hereunder and shall not take any
actions that would alter, impair or eliminate said priority or perfection
(except in connection with any transfer or disposition not prohibited by the
Loan Documents).

(i) Such Pledgor agrees to pay prior to delinquency all taxes, charges, liens
and assessments against the Collateral, and upon the failure of such Pledgor to
do so, Administrative Agent at its option may pay any of them and shall be the
sole judge of the legality or validity thereof and the amount necessary to
discharge the same.

 

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(j) Such Pledgor’s exact legal name as of the date hereof is correctly set forth
on Annex I attached hereto. Such Pledgor will provide Administrative Agent with
at least 30 days’ (or such shorter period as Administrative Agent may agree)
prior written notice of any change in Pledgor’s name or identity.

(k) As of the date hereof, such Pledgor’s chief executive office is, and has
been for the four-month period preceding the date hereof (or, if less, the
entire period of the existence of such Pledgor), located in the state specified
on Annex I attached hereto. In addition, as of the date hereof, such Pledgor is
an organization of the type and (if not an unregistered entity) is incorporated
in or organized under the laws of the state specified on Annex I attached
hereto. Such Pledgor shall give Administrative Agent at least 30 days’ (or such
shorter period as Administrative Agent may agree) notice before changing the
location of its chief executive office, type of organization, business structure
or state of incorporation or organization.

(l) Such Pledgor’s organizational identification number as of the date hereof,
if any, assigned by its state of incorporation or organization is correctly set
forth on Annex I attached hereto Such Pledgor shall promptly notify
Administrative Agent (i) of any change of its organizational identification
number, or (ii) if such Pledgor does not have an organizational identification
number and later obtains one, of such organizational identification number.

(m) By virtue of its relationship with the Borrowers, the execution, delivery
and performance of this Agreement is for the direct benefit of such Pledgor and
such Pledgor has received adequate consideration for this Agreement.

4. Powers of Administrative Agent. At any time after the occurrence and during
the continuance of an Event of Default, without notice unless expressly required
elsewhere in this Agreement or in the Credit Agreement, and at the expense of
Pledgors and the Borrowers, Administrative Agent in its name or in the name of
such Pledgor may, but shall not be obligated to:

(a) Collect by legal proceedings or otherwise, endorse, receive and receipt for
all dividends, interest, principal payments and other sums now or hereafter
payable upon or on account of the Collateral.

(b) Make any compromise or settlement it deems desirable or proper with
reference to the Collateral.

(c) Insure, process and preserve the Collateral.

(d) Participate in any recapitalization, reclassification, reorganization,
consolidation, redemption, stock split, merger or liquidation of any issuer of
securities which constitute Collateral, and in connection therewith may deposit
or surrender control of the Collateral, accept money or other property in
exchange for the Collateral, and take such action as it deems proper in
connection therewith, and any money or property received on account of or in
exchange for the Collateral shall be applied to the Indebtedness or held by
Administrative Agent thereafter as Collateral pursuant to the provisions hereof.

 

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(e) Cause Collateral to be transferred to its name or to the name of its
nominee.

(f) Exercise as to the Collateral all the rights, powers and remedies of an
owner necessary to exercise its rights under this Agreement, including without
limitation, the right to sell or otherwise dispose of all or any part of the
Collateral after the occurrence and during the continuance of an Event of
Default under this Agreement. Administrative Agent shall not vote any securities
constituting Collateral, unless an Event of Default has occurred and is
continuing under this Agreement and Administrative Agent has delivered to
Pledgors a written notice of Administrative Agent’s intent to exercise such
voting rights.

Each Pledgor hereby appoints Administrative Agent its attorney-in-fact to carry
out any of the powers granted by this paragraph at any time after the occurrence
and during the continuance of an Event of Default. Without limiting the
generality of the foregoing, each Pledgor hereby appoints Administrative Agent
its attorney-in-fact to execute and deliver any necessary stock powers,
endorsements, assignments or other documents and agreements necessary to carry
out any of the foregoing powers at any time after the occurrence and during the
continuance of an Event of Default. The foregoing appointments shall be deemed
coupled with an interest of Administrative Agent and shall not be revoked
without Administrative Agent’s written consent. To the extent permitted by law,
each Pledgor hereby ratifies all said attorney-in-fact shall lawfully do by
virtue hereof.

5. Events of Default. Any Event of Default as defined in the Credit Agreement
shall be an Event of Default hereunder (“Event of Default”).

6. Remedies. If an Event of Default has occurred and is continuing,
Administrative Agent may do any one or more of the following:

(a) Exercise as to any or all of the Collateral all the rights, powers and
remedies of an owner; provided, however, that, Administrative Agent shall not
have the right to vote any securities constituting Collateral until
Administrative Agent has provided written notice to Pledgors after the
occurrence and during the continuance of an Event of Default of Administrative
Agent’s intent to exercise such right.

(b) Enforce the security interest given hereunder pursuant to the Uniform
Commercial Code as in effect in any applicable state (the “UCC”) and any other
applicable law.

(c) Sell all or any part of the Collateral at public or private sale in
accordance with the UCC, without advertisement, in such manner and order as
Administrative Agent may elect. Administrative Agent may purchase the Collateral
for its own account at any such sale. Administrative Agent shall give Pledgors
such notice of any public or private sale as may be required by the UCC;
provided, that, if Administrative Agent fails to comply with this sentence in
any respect, its liability for such failure shall be limited to the liability
(if any) imposed on it as a matter of law under the UCC. Each Pledgor
acknowledges that Collateral may be sold at a loss to such Pledgor, and that, in
such event, Administrative Agent shall have no liability or responsibility to
such Pledgor for such loss. Each Pledgor further acknowledges that a private
sale may result in less proceeds than a public sale.

 

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(d) Exercise any other remedy provided under this Agreement or by any applicable
law. Each Pledgor acknowledges that all such rights and remedies are cumulative,
and the exercise of any right or remedy shall not preclude the further exercise
of any other right or remedy.

(e) Comply with any applicable state or federal law requirements in connection
with a disposition of the Collateral and such compliance will not be considered
to affect adversely the commercial reasonableness of any sale of the Collateral.

(f) Sell the Collateral without giving any warranties as to the Collateral.
Administrative Agent may specifically disclaim any warranties of title or the
like. This procedure will not be considered to affect adversely the commercial
reasonableness of any sale of the Collateral.

7. Waivers. Except as expressly provided in the Loan Documents, Administrative
Agent shall be under no duty or obligation whatsoever (a) to make or give any
presentment, demands for performances, notices of nonperformance, protests,
notices of protest or notices of dishonor in connection with any obligations or
evidences of indebtedness held by Administrative Agent as Collateral, or in
connection with any obligation or evidences of indebtedness which constitute in
whole or in part the Indebtedness, or (b) to give Pledgors notice of, or to
exercise, any subscription rights or privileges, any rights or privileges to
exchange, convert or redeem or any other rights or privileges relating to or
affecting any Collateral except as otherwise expressly provided herein.

8. Additional Waivers. Each Pledgor waives any right to require Administrative
Agent to (a) proceed against any person, (b) proceed against or exhaust any
collateral, or (c) pursue any other remedy in Administrative Agent’s power; and
waives any defense arising by reason of any disability or other defense of any
Borrower or any other person, or by reason of the cessation from any cause
whatsoever of the liability of any Borrower or any other person. Until the
Indebtedness (other than contingent indemnity obligations as to which no claim
is then pending) is paid in full, each Pledgor waives any right of subrogation,
reimbursement, indemnification, and contribution (contractual, statutory or
otherwise), including without limitation any claim or right of subrogation under
the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute,
arising from the existence or performance of this Agreement, and each Pledgor
waives any right to enforce any remedy which Administrative Agent now has or may
hereafter have against Borrowers or against any other person and waives any
benefit of and any right to participate in any Collateral or security whatsoever
now or hereafter held by Administrative Agent. Pledgor authorizes Administrative
Agent without notice or demand and without affecting Pledgor’s liability
hereunder, from time to time to: (a) renew, extend, accelerate or otherwise
change the time for payment of or otherwise change the terms of the Indebtedness
or any part thereof, including increase or decrease of the rate of interest
thereon; (b) take and hold security, other than the Collateral, for the payment
of the Indebtedness or any part thereof, and exchange, enforce, waive and
release the Collateral or any part thereof or any such other security; and
(c) release or substitute any Borrower or any one or more of them, or any of

 

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the endorsers or guarantors of the Indebtedness or any part thereof, or any
other parties thereto. Each Pledgor agrees that it is solely responsible for
keeping itself informed as to the financial condition of the Borrowers and of
all circumstances which bear upon the risk of nonpayment or the risk of
liquidation of the Collateral.

9. Return and Release of Collateral. Administrative Agent may at any time
deliver the Collateral or any part thereof to Pledgors and the receipt of
Pledgors shall be a complete and full acquittance for the Collateral so
delivered, and Administrative Agent shall thereafter be discharged from any
liability or responsibility therefor. The Collateral and Liens granted on the
Collateral shall be released as provided in Section 9.10 of the Credit
Agreement.

10. Continuing Agreement. This is a continuing Security Agreement and all the
rights, powers and remedies hereunder shall apply to all past, present and
future Indebtedness of the Borrowers or any one or more of them to the Lenders,
including that arising under successive transactions which shall either continue
the Indebtedness, increase or decrease it, or from time to time create new
Indebtedness after all or any prior Indebtedness has been satisfied, and
notwithstanding the death, incapacity, cessation of business, dissolution or
bankruptcy of the Borrowers or any one or more of them, or any other event or
proceeding affecting the Borrowers or any one or more of them.

11. Continuing Powers. Until all Indebtedness (other than contingent indemnity
obligations as to which no claim is then pending) shall have been paid in full,
the power of sale and all other rights, powers and remedies granted to
Administrative Agent hereunder shall continue to exist and may be exercised by
Administrative Agent at the time specified hereunder irrespective of the fact
that the Indebtedness or any part thereof may have become barred by any statute
of limitations, or that the personal liability of the Borrowers or any one or
more of them may have ceased. Each Pledgor waives the benefit of any statute of
limitations as applied to this Agreement.

12. Custody of Collateral. Administrative Agent may, in its discretion, hold
some or all of the Collateral in an account with a custody unit of
Administrative Agent. Administrative Agent shall not be liable for any loss to
the Collateral resulting from acts of God, war, civil commotion, terrorist
activity, fire, earthquake, or other disaster beyond the reasonable control of
Administrative Agent, or for any other loss or damage to the Collateral unless
shown to have arisen from Administrative Agent’s intentional misconduct or lack
of reasonable care.

13. Costs. All reasonable out of pocket expenses, incurred by the Administrative
Agent, any L/C Issuer or any Lender (including reasonable fees, charges and
disbursements of any counsel to the Administrative Agent, the L/C Issuers and
the Lenders) in connection with enforcement or protection of its rights
conferred by this Agreement, and including the reasonable charges and expenses
of Administrative Agent’s custody unit or of any Securities Intermediary, shall
become a part of the Indebtedness secured hereunder and shall be paid to
Administrative Agent by the Borrowers and Pledgors promptly following demand
(accompanied by reasonable back-up documentation), with interest thereon at an
annual rate equal to the highest rate of interest of any Indebtedness secured by
this Agreement (or, if there is no such interest rate, at the maximum interest
rate permitted by law for interest on judgments). Such costs and attorneys’ fees
shall include, without limitation, the allocated cost of in-house counsel.

 

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14. Notices. Unless otherwise provided or agreed to herein or required by law,
notice and communications provided for in this Agreement shall be given in the
manner provided for notices and communications in Section 10.02 of the Credit
Agreement to Pledgors at the address, telecopy number or electronic mail address
set forth for Borrowers on Schedule 10.02 to the Credit Agreement or at such
other address, telecopy number or electronic mail address as shall be designated
by any Pledgor in a written notice to Administrative Agent at the address set
forth on Schedule 10.02 to the Credit Agreement.

15. Miscellaneous.

(a) Any waiver, express or implied, of any provision hereunder and any delay or
failure by Administrative Agent to enforce any provision shall not preclude
Administrative Agent from enforcing any such provision thereafter.

(b) Each Pledgor hereby authorizes Administrative Agent to file one or more
financing statements describing all or part of the Collateral, and continuation
statements, or amendments thereto, relative to all or part of the Collateral as
authorized by applicable law. Such financing statements, continuation statements
and amendments will contain any other information required by the UCC for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including whether such Pledgor is an organization, the
type of organization and any organizational identification number issued to such
Pledgor. Each Pledgor agrees to furnish any such information to Administrative
Agent promptly upon request.

(c) Each Pledgor shall, at the request of Administrative Agent, execute such
other agreements, documents or instruments in connection with this Agreement as
Administrative Agent may reasonably deem necessary to evidence or perfect the
security interests granted herein, to maintain the first priority of the
security interests, or to effectuate the rights granted to Administrative Agent
herein.

(d) This Agreement shall be governed by, and construed in accordance with, the
law of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies are governed by the
laws of any other jurisdiction. Each Pledgor hereby irrevocably (i) submits to
the non-exclusive jurisdiction of the courts of the State of New York sitting in
New York County and of the United States District Court of the Southern District
of New York and any appellate court from any thereof in any action or proceeding
arising out of or relating to this Agreement, and (ii) waives to the fullest
extent permitted by law any defense asserting an inconvenient forum in
connection therewith. Service of process by Administrative Agent in connection
with such action or proceeding shall be binding on any Pledgor if sent to
Pledgor in the manner provided for notices in Section 14. Subject to the
confidentiality provisions set forth in the Credit Agreement, each Pledgor
agrees that Administrative Agent may disclose to any prospective purchaser and
any purchaser of all or part of the Indebtedness any and all information in
Administrative Agent’s possession concerning such Pledgor, this Agreement and
the Collateral.

 

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(e) Capitalized terms used herein (including capitalized terms used in Exhibit
A) that are defined in the UCC as in effective from time to time in the State of
New York (“NYUCC”) and not defined in this Agreement or the Credit shall have
the meaning given to such terms in the NYUCC, when used in this Agreement and
capitalized terms used in this Agreement without definition have the meanings
given to them in the Credit Agreement.

(f) This Agreement shall benefit Administrative Agent’s successors and assigns
and shall bind each Pledgor’s successors and assigns, except that no Pledgor may
assign its rights and obligations under this Agreement with the prior written
consent of the Administrative Agent (it being understood that a merger or
consolidation expressly permitted under the Credit Agreement shall not
constitute such an assignment).

(g) All rights and remedies herein provided are cumulative and not exclusive of
any rights or remedies otherwise provided by law. Any single or partial exercise
of any right or remedy shall not preclude the further exercise of any other
right or remedy.

(h) Each Pledgor shall promptly deliver to Administrative Agent any
certificates, documents or instruments representing or evidencing Collateral now
or hereafter in such Pledgor’s possession and, after the occurrence and during
the continuance of an Event of Default, each Pledgor shall hold all dividends,
interest, principal payments and other sums paid to such Pledgor on account of
the Collateral in trust for Administrative Agent, will not commingle such
payments with other funds of such Pledgor or any other Person and will
immediately pay and deliver in kind, all such payments directly to
Administrative Agent (with such endorsements and assignments as may be necessary
to transfer title to Administrative Agent).

(i) In all cases where more than one party executes this Agreement, all words
used herein in the singular shall be deemed to have been used in the plural
where the context and construction so require, and the obligations and
undertakings hereunder are joint and several.

16. WAIVER OF JURY TRIAL. TO THE EXTENT ALLOWED BY APPLICABLE LAW, EACH PLEDGOR,
AND ADMINISTRATIVE AGENT EACH WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION,
CLAIM, SUIT OR PROCEEDING ON OR ARISING OUT OF THIS AGREEMENT.

17. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION WITH THIS SECURITY AGREEMENT REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[remainder of page left intentionally left blank]

 

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IN WITNESS WHEREOF, each Pledgor has executed this Agreement by its duly
authorized officer, as of the date first written above.

 

AIMCO/IPT, INC., a Delaware corporation, NHP A&R SERVICES, INC., a Virginia
corporation AIMCO HOLDINGS QRS, INC., a Delaware corporation NHPMN-GP, INC., a
Delaware corporation LAC PROPERTIES QRS II INC., a Delaware corporation By:    
  Name: Patti K. Fielding   Title: Executive Vice President and Treasurer

 

AIMCO LP LA, L.P., a Delaware limited partnership By:   AIMCO LA QRS, Inc., a
Delaware corporation, its General Partner   By:         Name: Patti K. Fielding
    Title: Executive Vice President and Treasurer

 

GP-OP PROPERTY MANAGEMENT, LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Member   By:   AIMCO-GP,
Inc., a Delaware corporation, its General Partner     By:           Name: Patti
K. Fielding       Title: Executive Vice President and Treasurer

 

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AIMCO GP LA, L.P., a Delaware limited partnership By:   AIMCO-GP, Inc., a
Delaware corporation, its General Partner   By:         Name: Patti K. Fielding
    Title: Executive Vice President and Treasurer

 

LAC PROPERTIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership By:  
AIMCO GP LA, L.P., a Delaware limited partnership, its General Partner   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name: Patti K. Fielding       Title Executive Vice President and Treasurer

 

AIC REIT PROPERTIES LLC, a Delaware limited liability company By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Managing Member   By:  
AIMCO-GP, Inc., a Delaware corporation, its General Partner     By:          
Name: Patti K. Fielding       Title: Executive Vice President and Treasurer

 

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AMBASSADOR APARTMENTS, L.P., a Delaware limited partnership By:   AIMCO QRS GP,
LLC, a Delaware limited liability company, its General Partner   By:   AIMCO
Properties, L.P., a Delaware limited partnership, its Member     By:   AIMCO-GP,
Inc., a Delaware corporation, its General Partner       By:             Name:
Patti K. Fielding         Title: Executive Vice President and Treasurer

 

AIMCO HOLDINGS, L.P., a Delaware limited partnership By:   AIMCO Holdings QRS,
Inc., a Delaware corporation, its General Partner   By:         Name: Patti K.
Fielding     Title: Executive Vice President and Treasurer

 

AMBASSADOR FLORIDA PARTNERS LIMITED PARTNERSHIP, a Delaware limited partnership
By:   Ambassador Florida Partners, Inc., a Delaware corporation, its General
Partner   By:         Name: Patti K. Fielding     Title: Executive Vice
President and Treasurer

 

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LAC PROPERTIES SUB LLC, a Delaware limited liability company By:   LAC
Properties Operating Partnership, L.P., a Delaware limited partnership, its
Managing Member   By:   AIMCO GP LA, L.P., a Delaware limited partnership, its
General Partner     By:   AIMCO-GP, Inc., a Delaware corporation, its General
Partner       By:             Name: Patti K. Fielding         Title: Executive
Vice President and Treasurer

 

LAC PROPERTIES GP I LLC, a Delaware limited liability company By:   LAC
Properties Operating Partnership, L.P., a Delaware limited partnership, its
Managing Member   By:   AIMCO GP LA, L.P., a Delaware limited partnership, its
General Partner     By:   AIMCO-GP, Inc., a Delaware corporation, its General
Partner       By:             Name: Patti K. Fielding         Title: Executive
Vice President and Treasurer

 

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NATIONAL CORPORATION FOR HOUSING PARTNERSHIPS, a District of Columbia
corporation By:       Name: Patti K. Fielding   Title: Executive Vice President
and Treasurer

 

NHP PARTNERS TWO LIMITED PARTNERSHIP, a Delaware limited partnership By:   AIMCO
Holdings, L.P., a Delaware limited partnership, its General Partner   By:  
AIMCO Holdings QRS, Inc., a Delaware corporation, its General Partner     By:  
        Name: Patti K. Fielding       Title: Executive Vice President and
Treasurer

 

AIMCO QRS GP, LLC, a Delaware limited liability company By:   AIMCO Properties,
L.P., a Delaware limited partnership, its sole member   By:   AIMCO-GP, Inc.,
Delaware corporation, its General Partner     By:           Name: Patti K.
Fielding       Title: Executive Vice President and Treasurer

 

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AGREED AND ACCEPTED:

 

KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent By:       Name:   Title:

 

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Exhibit A to Security Agreement

Description of Collateral

(a) All investment property, certificated securities, uncertificated securities,
general intangibles, and all other investments or property now or hereafter
listed on Schedule 1 attached hereto, as amended from time to time in writing,
whether held in a securities account or otherwise.

(b)(i) All present and future income, proceeds, earnings, and property received
in exchange or substitution from or for the foregoing property of every kind and
nature, including without limitation all payments, interest, profits,
distributions, benefits, rights, options, warrants, dividends, stock dividends,
stock splits, stock rights, regulatory dividends, subscriptions, monies, claims
for money due and to become due, proceeds of any insurance on the foregoing
property, shares of stock of different par value or no par value issued in
substitution or exchange for shares included in the foregoing property, and
(ii) all other property received, or which Pledgor is entitled to receive, on
account of the foregoing property, including accounts, documents, instruments,
chattel paper, and general intangibles.

 

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