exv10w1



 






EXECUTION COPY




 





EXHIBIT 10.1




CREDIT AGREEMENT




dated as of




May 29, 2007




among




ARCHSTONE-SMITH OPERATING TRUST,

as Borrower




and




ARCHSTONE-SMITH TRUST,

as Parent




and




MORGAN STANLEY SENIOR FUNDING, INC.

as Administrative Agent




and




the Lenders Party Hereto




 





MORGAN STANLEY SENIOR FUNDING, INC.

as Sole Lead Arranger and Sole Bookrunner





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	1. Definitions
	 	 	1	 
	 
	 	 	 	 
	2. The Loans
	 	 	11	 
	2.1 Advances
	 	 	11	 
	2.2 Payments
	 	 	11	 
	2.3 Pro Rata Treatment
	 	 	13	 
	2.4 Non-Receipt of Funds by the Agent
	 	 	13	 
	2.5 Sharing of Payments, Etc.
	 	 	13	 
	2.6 Facility Fees
	 	 	14	 
	2.7 Reduction of Commitment
	 	 	14	 
	2.8 Additional Guarantees
	 	 	15	 
	 
	 	 	 	 
	3. Conditions
	 	 	15	 
	3.1 All Loans
	 	 	15	 
	3.2 First Loan
	 	 	15	 
	3.3 Interest Options Available
	 	 	15	 
	3.4 Designation and Conversion
	 	 	15	 
	3.5 Special Provisions Applicable to Eurodollar Rate Borrowings
	 	 	16	 
	3.6 Funding Offices; Adjustments Automatic
	 	 	18	 
	3.7 Funding Sources, Payment Obligations
	 	 	18	 
	3.8 Mitigation, Non-Discrimination
	 	 	18	 
	 
	 	 	 	 
	4. Representations and Warranties
	 	 	19	 
	4.1 Organization
	 	 	19	 
	4.2 Financial Statements
	 	 	19	 
	4.3 Enforceable Obligations; Authorization
	 	 	19	 
	4.4 Other Debt
	 	 	19	 
	4.5 Litigation
	 	 	19	 
	4.6 Taxes
	 	 	19	 
	4.7 Regulation U
	 	 	19	 
	4.8 Securities Act of 1933
	 	 	19	 
	4.9 No Contractual or Corporate Restrictions
	 	 	20	 
	4.10 Investment Company Act Not Applicable
	 	 	20	 
	4.11 ERISA Not Applicable
	 	 	20	 
	4.12 Environmental Matters
	 	 	20	 
	 
	 	 	 	 
	5. Affirmative Covenants
	 	 	20	 
	5.1 Taxes, Insurance, Existence, Regulations, Property, etc.
	 	 	20	 
	5.2 Financial Statements and Information
	 	 	20	 
	5.3 Financial Tests
	 	 	21	 
	5.4 Inspection
	 	 	21	 
	5.5 Further Assurances
	 	 	21	 
	5.6 Books and Records
	 	 	21	 
	5.7 Insurance
	 	 	21	 
	5.8 Notice of Certain Matters
	 	 	21	 
	5.9 Use of Proceeds
	 	 	21	 
	5.10 Expenses of and Claims Against the Agent and the Lenders
	 	 	21	 
	5.11 Legal Compliance; Indemnification
	 	 	22	 
	5.12 Borrower’s Performance
	 	 	22	 
	5.13 Professional Services
	 	 	22	 
	5.14 Capital Adequacy
	 	 	23	 






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	 	 	Page
	5.15 Property Pool
	 	 	23	 
	5.16 DC Holdings
	 	 	24	 
	 
	 	 	 	 
	6. Negative Covenants
	 	 	24	 
	6.1 Mergers, Consolidations and Acquisitions of Assets
	 	 	24	 
	6.2 Redemption
	 	 	24	 
	6.3 Nature of Business
	 	 	24	 
	6.4 Transactions with Related Parties
	 	 	25	 
	6.5 Limiting Agreements
	 	 	25	 
	6.6 Parent Negative Covenants
	 	 	25	 
	 
	 	 	 	 
	7. Events of Default and Remedies
	 	 	25	 
	7.1 Events of Default
	 	 	25	 
	7.2 Remedies Cumulative
	 	 	26	 
	7.3 Guaranty Proceeds
	 	 	26	 
	 
	 	 	 	 
	8. The Agent
	 	 	27	 
	8.1 Appointment, Powers and Immunities
	 	 	27	 
	8.2 Reliance
	 	 	28	 
	8.3 Defaults
	 	 	28	 
	8.4 Rights as a Lender
	 	 	28	 
	8.5 Indemnification
	 	 	29	 
	8.6 Non-Reliance on Agent and Other Lenders
	 	 	29	 
	8.7 Failure to Act
	 	 	29	 
	8.8 Resignation of Agent
	 	 	29	 
	8.9 No Partnership
	 	 	30	 
	 
	 	 	 	 
	9. Miscellaneous
	 	 	30	 
	9.1 No Waiver, Amendments
	 	 	30	 
	9.2 Notices
	 	 	30	 
	9.3 Submission to Jurisdiction
	 	 	30	 
	9.4 Choice of Law
	 	 	31	 
	9.5 Survival; Parties Bound; Successors and Assigns
	 	 	31	 
	9.6 Counterparts
	 	 	33	 
	9.7 Usury Not Intended
	 	 	33	 
	9.8 Captions
	 	 	33	 
	9.9 Severability
	 	 	33	 
	9.10 Disclosures
	 	 	33	 
	9.11 Limitation of Liability
	 	 	33	 
	9.12 Entire Agreement
	 	 	33	 
	9.13 Waivers Of Jury Trial
	 	 	33	 
	9.14 USA Patriot Act
	 	 	33	 






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EXHIBITS:




A —  Officer’s Certificate

B —  Request for Loan

C —  Note

D —  Legal Opinion

E —  Assignment and Assumption

F —  Parent Guaranty

G —  Additional Guaranty




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CREDIT AGREEMENT




     THIS CREDIT AGREEMENT (the “Agreement”) is made and entered into as of May 29, 2007, by and
among ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust (the “Borrower”),
ARCHSTONE-SMITH TRUST, a Maryland real estate investment trust, and the parent of the Borrower (the
“Parent”), the financial institutions (the “Lenders”) which are now or may hereafter become
signatories hereto and MORGAN STANLEY SENIOR FUNDING, INC., a Delaware Corporation, as
administrative agent for the Lenders.



     WHEREAS, the Borrower desires to obtain Loans (as such term is hereinafter defined) from the
Lenders; and



     WHEREAS, subject to and upon the terms and conditions set forth herein, the Lenders are
willing to make Loans to the Borrower, as provided for herein;



     NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein, the adequacy of which is hereby acknowledged, the parties hereto hereby agree that the
aforementioned recitals are true and correct and hereby incorporated herein and that the parties
hereto hereby agree as follows:



Definitions.




     Unless a particular word or phrase is otherwise defined or the context otherwise requires,
capitalized words and phrases used in Credit Documents have the meanings provided below.



     Acceptable Credit Rating shall mean a Credit Rating from two of Standard & Poor’s
Rating Services, Moody’s Investors Service, Inc., or Fitch (one of which must be an S&P Rating or a
Moody’s Rating) equal to a Credit Rating from Fitch, or an S&P Rating of BBB- or better, or a
Moody’s Rating of Baa3 or better.



     Administrative Questionnaire shall mean an Administrative Questionnaire in a form
supplied by the Agent.



     Affiliate shall mean any Person controlling, controlled by or under common control
with any other Person. For purposes of this definition, “control” (including “controlled by” and
“under common control with”) shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.



     Agent shall mean Morgan Stanley Senior Funding, Inc., in its capacity as
administrative agent for itself and the Lenders hereunder, and any successor thereto under this
Agreement.



     Annual Audited Financial Statements shall mean the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance sheet as of the end
of such fiscal year and an income statement and a statement of cash flows, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all prepared in
conformity with Generally Accepted Accounting Principles and accompanied by a report and opinion of
independent certified public accountants satisfactory to the Agent, which shall state that such
financial statements, in the opinion of such accountants, present fairly the financial position of
such Person as of the date thereof and the results of its operations for the period covered thereby
in conformity with Generally Accepted Accounting Principles. Such statements shall be accompanied
by a certificate of such accountants that in making the appropriate audit and/or investigation in
connection with such report and opinion, such accountants did not become aware of any Default or,
if in the opinion of such accountant any such Default exists, a description of the nature and
status thereof. The Annual Audited Financial Statements shall be prepared on a consolidated basis
in accordance with Generally Accepted Accounting Principles.



     Annualized Net Operating Income shall mean with respect to any Real Property that has
reached the Calculation Date, the annualized Net Operating Income for the first three full calendar
quarters ending after the Calculation Date determined as follows: (i) with respect to the first
full calendar quarter, the Net Operating Income for the first full calendar quarter multiplied by
four (4), (ii) with respect to the second full calendar quarter after the Calculation Date, the sum
of the Net Operating Income for the first full calendar quarter and the second full calendar



1









 







quarter multiplied by two (2) and (iii) with respect to the third full calendar quarter after the
Calculation Date, the sum of the Net Operating Income for the first full calendar quarter, the
second full calendar quarter and the third full calendar quarter multiplied by one and one-third
(1.333).



     Applicable Margin shall mean (a) if a Credit Rating is obtained from more than one
agency, and one of the two highest Credit Ratings is an S&P Rating or a Moody’s Rating, the
following percentage based on the corresponding Credit Rating which is the second highest, or (b)
if one of the two highest Credit Ratings in clause (a) above is not an S&P Rating or a
Moody’s Rating, the following percentage based on the corresponding S&P Rating or Moody’s Rating
which is the highest, or (c) if only one Credit Rating is obtained, which must be an S&P Rating or
a Moody’s Rating, the following percentage based on the corresponding S&P Rating or Moody’s Rating:



APPLICABLE MARGIN




	 	 	 	 	 	 	 	 	 
	APPLICABLE	 	EURODOLLAR RATE	 	BASE RATE
	CREDIT RATING	 	BORROWING	 	BORROWING
	A/A2 or better
	 	 	0.325	%	 	 	0	 
	A-/A3
	 	 	0.350	%	 	 	0	 
	BBB+/Baa1
	 	 	0.400	%	 	 	0	 
	BBB/Baa2
	 	 	0.500	%	 	 	0	 
	BBB-/Baa3
	 	 	0.675	%	 	 	0	 
	Worse than BBB-/Baa3
or no Credit Rating
	 	 	1.000	%	 	 	0.25	%





Each Applicable Margin shall be in effect whenever and for so long as the corresponding Credit
Rating or no Credit Rating is in effect.




     Assignment and Assumption shall mean an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section
9.5), and accepted by the Agent, in the form of Exhibit E or any other form approved by
the Agent.



     Base Rate shall mean for any day a rate per annum equal to the Applicable Margin on
that day plus the greater on a daily basis of (a) the Prime Rate for that day, or (b) the Federal
Funds Effective Rate for that day plus one-half of one percent (1/2%).



     Base Rate Borrowing shall mean that portion of the principal balance of the Loans at
any time bearing interest at the Base Rate.



     Borrower shall have the meaning set forth in the preamble hereto.



     Business Day shall mean a day other than (a) a day when the main office of the Agent
is not open for business, or (b) a day that is a federal banking holiday in the United States of
America.



     Calculation Date shall mean the beginning of the first full calendar quarter after the
Stabilization Date.



     Capital Lease Obligations of any Person shall mean the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under Generally Accepted
Accounting Principles, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with Generally Accepted Accounting Principles.



     Ceiling Rate shall mean, on any day, the maximum nonusurious rate of interest
permitted for that day, if any. Without notice to the Borrower or any other person or entity, the
Ceiling Rate shall automatically fluctuate upward and downward as and in the amount by which such
maximum nonusurious rate of interest permitted by applicable law fluctuates.



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     Code shall mean the Internal Revenue Code of 1986, as amended, as now or hereafter in
effect, together with all regulations, rulings and interpretations thereof or thereunder by the
Internal Revenue Service.



     Commitment shall mean the commitment of the Lenders to lend funds under Section
2.1 of this Agreement, as such Commitment may be decreased pursuant to the terms of this
Agreement. The aggregate Commitment on the date hereof is $500,000,000.00.



     Construction Interest shall mean Borrower’s interest expense for the construction of
projects, which is capitalized in accordance with Generally Accepted Accounting Principles.



     Credit Documents shall mean this Agreement, the Notes, any Guaranty, all instruments,
certificates and agreements now or hereafter executed or delivered to the Agent or the Lenders
pursuant to any of the foregoing, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.



     Credit Rating shall mean the S&P Rating, the Moody’s Rating, or the rating assigned by
Fitch to Borrower’s senior unsecured indebtedness.



     DC Holdings Entities shall mean Metropolitan Acquisition Finance LP, Smith Property
Holdings Cronin’s Landing LP, Smith Property Holdings Crystal Towers LP, Smith Property Holdings
One LP, Smith Property Holdings Two LP, Smith Property Holdings Three LP, Smith Property Holdings
Four LP, Smith Property Holdings Five LP, Smith Property Holdings Six LP, Smith Property Holdings
Seven LP, Smith Property Holdings Alban Towers LLC, First Herndon Associates LP, Smith Property
Holdings One (DC) LP, Smith Property Holdings Two (DC) LP, Smith Property Holdings Three (DC) LP,
Smith Property Holdings Kenmore LP, Smith Property Holdings Five (DC) LP, Smith Property Holdings
Six (DC) LP, Smith Property Holdings Van Ness LP, Smith Property Holdings Consulate LLC and Smith
Property Holdings Columbia Road LP, Smith Property Holdings 4411 Connecticut Avenue LLC, ASN Dupont
LLC, ASN Hoboken I LLC, ASN Hoboken II LLC, Hacienda Cove LLC, Square 673 Apartments LLC, ASN
Virginia Holdings LLC, ASN Ventura LLC, any Person formed for the purpose of acquiring Real
Property to replace Real Property sold or otherwise disposed of by any of the foregoing Persons and
any Person formed solely for the purpose of owning Real Property in the District of Columbia.



     Debt to Total Asset Value Ratio shall mean the ratio (expressed as a percentage) of
(a) the sum of the Borrower’s and the Parent’s Indebtedness to (b) Total Asset Value.



     Disqualified Stock shall mean any of the Borrower’s capital stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable or
exercisable) (a) matures or is subject to mandatory redemption, pursuant to a sinking fund
obligation or otherwise, (b) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock, (c) is redeemable at the option of the holder of such stock, or (d)
otherwise requires any payments by Borrower, in each case on or before the Maturity Date.



     Draw Period shall mean the period commencing on the Closing Date and ending on the
earlier of (a) the date that is 90 days after the Closing Date and (b) the date on which the
aggregate outstanding principal amount of Loans equals the amount of the Commitment (as the
Commitment may have been reduced from time to time in accordance with Section 2.7).



     EBITDA shall mean an amount derived from (a) net income (including all net cash gains
and losses on dispositions of Real Property in accordance with Generally Accepted Accounting
Principles), including (without duplication) the Equity Percentage of EBITDA for the Borrower’s
Unconsolidated Affiliates, plus (b) to the extent included in the determination of net income,
depreciation, amortization, Interest Expense, income taxes, deferred taxes and other non-cash
charges, minority interest, extraordinary losses, prepayment penalties and make-whole costs paid in
connection with the prepayment of any Indebtedness, and payments made on Borrower’s preferred
stock, minus (c) to the extent included in the determination of net income, any extraordinary
gains, in each case, as determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.



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     Equity Percentage shall mean the aggregate ownership interest of Borrower in each
Unconsolidated Affiliate, which shall be calculated as Borrower’s economic ownership interest in
such Person, reflecting Borrower’s share of income and expenses of such Person.



     Eurodollar Business Day shall mean a Business Day on which transactions in United
States dollar deposits may be carried on in the London interbank dollar market.



     Eurodollar Interbank Rate shall mean, for each Interest Period, the rate of interest
per annum, quoted by Agent at or before 11:00 a.m., London time (or as soon thereafter as
practicable), on the date two (2) Eurodollar Business Days before the first day of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such Interest Period by
reference to the British Bankers Association Interest Settlement Rates for deposits in Dollars (as
reflected on the applicable Telerate Screen). In the event that the rate is not ascertainable
pursuant to foregoing provisions of this definition, the Eurodollar Interbank Rate shall be the
average rounded upward if necessary to the next 1/100th of 1% of rates offered for such
Interest Period to major banks in the London Interbank market by JPMorgan Chase Bank, N.A. at 11:00
a.m. London time on the date two (2) Eurodollar Business Days before the first day of such Interest
Period. Each determination by Agent of the Eurodollar Interbank Rate shall be prima facie evidence
thereof.



     Eurodollar Rate shall mean for any day a rate per annum equal to the sum of the
Applicable Margin for that day plus the Eurodollar Interbank Rate in effect on the first day of the
Interest Period for the applicable Eurodollar Rate Borrowing. Each Eurodollar Rate is subject to
adjustments for reserves, insurance assessments and other matters as provided for in Section
3.5 hereof.



     Eurodollar Rate Borrowing shall mean that portion of the principal balance of the
Loans at any time bearing interest at a Eurodollar Rate.



     Eurodollar Reserve Requirement shall mean, on any day, the cost incurred by a Lender
as a reserve requirement (including, without limitation, basic, supplemental, marginal and
emergency reserves) applicable to “Eurocurrency liabilities,” as currently defined in Regulation D,
all as specified by any Governmental Authority, including but not limited to those imposed under
Regulation D, because of that Lender making a Eurodollar Rate Borrowing available to the Borrower.



     Event of Default shall mean any of the events specified as an event of default in
Section 7 of this Agreement, and Default shall mean any of such events, whether or
not any requirement for notice, grace or cure has been satisfied.



     Facility Fee shall have the meaning provided in Section 2.6.



     Federal Funds Effective Rate shall to the extent necessary be determined by the Agent
separately for each day and shall for each such day be a 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, as published for each such day (or if any such day is not
a Business Day, for the next immediately preceding Business Day) by the Federal Reserve Bank of New
York, or if the weighted average of such rates is not so published for any such day which is a
Business Day, the average of the quotations for any such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the Agent.



     Fitch shall mean Fitch, Inc.



     Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower’s EBITDA
(calculated by adding the Parent’s Interest Expense) for the immediately preceding four (4)
calendar quarters, less Unit Capital Expenditures, to (b) dividends of any kind or character or
other proceeds paid or payable with respect to any Disqualified Stock, plus all of the Borrower’s
and the Parent’s Interest Expense, plus all of the principal payable and principal paid on the
Borrower’s and the Parent’s Indebtedness (but not including prepayment penalties and make-whole
costs not included in the calculation of EBITDA) other than (i) any final scheduled principal
payment on any Indebtedness which pays such Indebtedness in full, to the extent the amount of such
scheduled principal payment is greater than



4









 







the scheduled principal payment immediately preceding such final scheduled principal payment
and (ii) scheduled principal payments on the Borrower’s and the Parent’s Indebtedness incurred
prior to June 21, 2006 which has a rating from Standard & Poor’s Rating Services, Moody’s Investor
Service, Inc. or Fitch which is the equivalent of BBB-/Baa3 or better at the time of issuance, in
each case for the period used to calculate EBITDA.



     Funding Loss shall mean, with respect to (a) Borrower’s payment or prepayment of
principal of a Eurodollar Rate Borrowing on a day other than the last day of the applicable
Interest Period; (b) Borrower’s failure to borrow a Eurodollar Rate Borrowing on the date specified
by Borrower; (c) Borrower’s failure to make any prepayment of the Loans (other than Base Rate
Borrowings) on the date specified by Borrower; or (d) any cessation of a Eurodollar Rate to apply
to the Loans or any part thereof pursuant to Section 3.5, in each case whether voluntary or
involuntary, any loss or expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by a Lender to fund or maintain a Loan.



     Generally Accepted Accounting Principles shall mean, as to a particular Person, such
accounting practice as, in the opinion of the independent accountants of recognized national
standing regularly retained by such Person and acceptable to the Agent, conforms at the time to
generally accepted accounting principles, consistently applied. Generally accepted accounting
principles shall mean those principles and practices (a) which are recognized as such by the
Financial Accounting Standards Board, (b) which are applied for all periods after the date hereof
in a manner consistent with the manner in which such principles and practices were applied to the
most recent audited financial statements of the relevant Person furnished to the Lenders or where a
change therein has been concurred in by such Person’s independent auditors, and (c) which are
consistently applied for all periods after the date hereof so as to reflect properly the financial
condition, and results of operations and changes in financial position, of such Person. If there
is a change in such accounting practice as to the Borrower that could affect the Borrower’s ability
to comply with the terms of this Agreement, the parties hereto agree to review and discuss such
changes in accounting practice and the terms of this Agreement for a period of no more than thirty
(30) days with a view to amending this Agreement so that the financial measures of the Borrower’s
operating performance and financial condition are substantially the same after such change as they
were immediately before such change.



     Governmental Authority shall mean any foreign governmental authority, the United
States of America, any State of the United States and any political subdivision of any of the
foregoing, and any agency, department, commission, board, bureau, court or other tribunal having
jurisdiction over the Agent, any Lender or the Borrower or their respective Property.



     Guaranty shall mean the Guaranty in the form attached hereto as Exhibit F
executed by the Parent.



     Hedging Agreements shall mean any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or currency exchange
rate or commodity price hedging agreement.



     Historical Value shall mean the purchase price of Real Property (including
improvements) and ordinary related purchase transaction costs, plus the cost of subsequent capital
improvements made by the Borrower, less any provision for losses, all determined in accordance with
Generally Accepted Accounting Principles. If the Real Property is purchased as a part of a group
of properties, the Historical Value shall be calculated based upon a reasonable allocation of the
aggregate purchase price by the Borrower, and consistent with Generally Accepted Accounting
Principles.



     Indebtedness shall mean and include, without duplication (1) all obligations for
borrowed money, except accrued interest and expenses that are not yet payable, (2) all obligations
evidenced by bonds, debentures, notes or other similar agreements, (3) all obligations to pay the
deferred purchase price of Property or services, except accrued expenses and trade accounts payable
arising in the ordinary course of business, (4) all guaranties and endorsements and other
contingent obligations in respect of, or any obligations to purchase or otherwise acquire,
Indebtedness of others (provided that, where the guarantor is not the sole owner of the Person
whose Indebtedness is guaranteed, and where the guaranty is of that portion of the Indebtedness
remaining unpaid after the collection of the collateral for the Indebtedness, the amount guaranteed
that is less than twenty-five percent (25%) of the Historical Value of said related collateral will
not be included in the calculation of Indebtedness), (5) all Indebtedness secured by any Lien
existing on any interest of the Person with respect to which Indebtedness is being determined in



5









 







Property owned subject to such Lien whether or not the Indebtedness secured thereby shall have
been assumed, (6) dividends or distributions of any kind or character or other proceeds payable
with respect to any stock, except for dividends or distributions declared but not yet payable, (7)
payments received in consideration for sale of Borrower’s stock when the amount of the stock so
sold is determined, and the date of delivery is, more than one (1) month after receipt of such
payment and only to the extent that the obligation to deliver stock is not payable solely in stock
of the Borrower, (8) all net obligations under Hedging Agreements (calculated on a mark-to-market
basis as of the reporting date) other than Hedging Agreements related to interest rates or foreign
currency rates on identified outstanding borrowed money Indebtedness, and (9) all Capital Lease
Obligations of such Person. Indebtedness shall not include prepaid rents or security deposits made
under leases. Indebtedness shall be calculated on a consolidated basis in accordance with
Generally Accepted Accounting Principles, including (without duplication) the Equity Percentage of
Indebtedness for the Borrower’s Unconsolidated Affiliates.



     Interest Expense shall mean all of a Person’s paid, accrued or capitalized interest
expense on such Person’s Indebtedness (whether direct, indirect or contingent, and including,
without limitation, interest on all convertible debt), but excluding Construction Interest.



     Interest Options shall mean the Base Rate and the Eurodollar Rate, and “Interest
Option” means either of them.



     Interest Payment Dates shall mean (a) for Base Rate Borrowings, the first (1st) day of
each calendar month and the Maturity Date, and (b) for Eurodollar Rate Borrowings, the last day of
each Interest Period.



     Interest Period shall mean, for each Eurodollar Rate Borrowing, a period commencing on
the date such Eurodollar Rate Borrowing was made and ending on the numerically corresponding day
which is, subject to availability, (a) one (1), two (2) or three (3) months thereafter, or (b)
seven (7), fourteen (14) or twenty-one (21) days thereafter in connection with, or in anticipation
of, payments of the Loans because of debt and/or equity sales by the Borrower, changes in the
Lender Commitments, sales of major assets by the Borrower, or other similar reasons specifically
approved by the Agent; provided that, (v) any Interest Period which would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business
Day, unless such Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day; (w) any Interest Period
which begins on the last Eurodollar 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 Eurodollar Business Day of the appropriate calendar month; (x) no Interest Period
shall ever extend beyond the Maturity Date; and (y) Interest Periods shall be selected by Borrower
in such a manner that the Interest Period with respect to any portion of the Loans which shall
become due shall not extend beyond such due date .



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



     Lender Commitment shall mean, for any Lender, the amount set forth opposite such
Lender’s name on its signature page of this Agreement, or as may hereafter become a signatory
hereto, as adjusted to reflect assignments or amendments made in accordance with this Agreement.



     Lien shall mean any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment, negative pledge or other lien of any kind, whether based on common law,
constitutional provision, statute or contract, and shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other
title exceptions.



     Limiting Agreements shall mean any agreement, instrument or transaction, including,
without limitation, a Person’s Organizational Documents, which has or may have the effect of
prohibiting or limiting any Person’s ability to pledge assets in the Pool to secure Indebtedness.



     Loans shall mean the Loans described in Section 2.1 hereof. Loan shall mean
any such Loan.



6









 





     Majority Lenders shall mean the Lenders with an aggregate amount in excess of fifty
percent (50%) of the amount of the Commitment then outstanding, and after the Commitment has
expired or terminated, shall mean Lenders with an aggregate amount in excess of fifty percent (50%)
of the unpaid principal balance of the Loans.



     Material Adverse Change shall mean a change which could reasonably be expected to have
a Material Adverse Effect.



     Material Adverse Effect means a material adverse effect on (a) the financial
condition, or results of operations of Borrower and its Subsidiaries taken as a whole, (b) the
ability of Borrower to perform its material obligations under the Credit Documents to which it is a
party taken as a whole, (c) the validity or enforceability of such Credit Documents taken as a
whole, or (d) the material rights and remedies of Lenders and Agent under the Credit Documents
taken as a whole.



     Maturity Date shall mean December 31, 2007.



     Moody’s Rating shall mean the senior unsecured debt rating from time to time received
by the Borrower from Moody’s Investors Service, Inc.



     Net Offering Proceeds shall mean (a) all cash or other assets received by the Parent
or the Borrower as a result of (i) the sale of common shares of beneficial interest, preferred
shares of beneficial interest, partnership interests, limited liability company interests or other
ownership or equity interests in the Parent or the Borrower, or debt securities convertible into
any of the foregoing ownership or equity interests, or (ii) the issuance or offering of any
unsecured note, bond or debt instrument (other than borrowings under this Agreement or the Amended
and Restated Credit Agreement, dated as of June 21, 2006 among the Borrower, the Parent, the
lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and
the other parties thereto) and (b) all cash or other assets received by the Parent or the Borrower
as a result of the issuance or offering of any secured note, bond or debt instrument, but only if
the amount of such cash or other assets exceeds $25 million, less (in the case of either
clause (a) or (b) above) customary costs and discounts of issuance paid by, or reserves required in
connection therewith funded by, the Parent or the Borrower, as the case may be, and (in the case of
clause (b) above only) less any principal amount of or premium on other existing secured
debt refinanced with the proceeds thereof.



     Net Operating Income shall mean, for any income producing operating properties, the
difference between (a) any cash rentals, proceeds and other income received from such Property (but
excluding security or other deposits, or other income of an extraordinary and non-recurring nature)
during the determination period, less (b) all cash costs and expenses (excluding interest expense
and any expenditures that are capitalized in accordance with Generally Accepted Accounting
Principles) incurred as a result of, or in connection with, or properly allocated to, the operation
or leasing of such Property during the determination period. Net Operating Income shall be
calculated on a consolidated basis in accordance with Generally Accepted Accounting Principles, and
including (without duplication) the Equity Percentage of Net Operating Income for the Borrower’s
Unconsolidated Affiliates.



     Non-recourse Debt shall mean any Indebtedness the payment of which the Borrower or any
of its Subsidiaries is not obligated to make other than to the extent of any security therefor.



     Notes shall mean the promissory notes of Borrower described in Section 2.1
hereof, any and all renewals, extensions, modifications, rearrangements and replacements thereof
and any and all substitutions therefor, and Note shall mean any one of them.



     Obligations shall mean, as at any date of determination thereof, the sum of (a) the
outstanding principal amount of the Loans plus (b) all other liabilities, obligations and
Indebtedness of any Party under any Credit Document.



     Occupancy Level shall mean the occupancy level of a Property that is leased to bona
fide tenants paying rent under written leases, based on the average of the actual occupancy level
for the immediately preceding three (3) months.



7









 





     Officer’s Certificate shall mean a certificate in the form attached hereto as
Exhibit A.



     Organizational Documents shall mean, with respect to a corporation, the certificate of
incorporation, articles of incorporation and bylaws of such corporation; with respect to a
partnership, the partnership agreement establishing such partnership; with respect to a joint
venture, the joint venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all modifications thereof as
of the date of the Credit Document referring to such Organizational Document and any and all future
modifications thereof which are consented to by the Lenders.



     Parent shall have the meaning set forth in the preamble hereto.



     Parties shall mean all Persons other than the Agent or any Lender executing any Credit
Document, and “Party” shall mean any one of same.



     Past Due Rate shall mean, on any day, a rate per annum equal to the Base Rate plus an
additional two percent (2%) per annum, but in any event not to exceed the Ceiling Rate.



     Percentage shall mean the amount, expressed as a percentage, of each Lender Commitment
as compared to the Commitment (the “Total Percentage”) set forth opposite the Lender’s name on its
signature page of this Agreement, or as may hereafter become signatory hereto, as adjusted or
amended in accordance with this Agreement. If the Commitment has terminated or expired, the
Percentage shall be determined based on the aggregate outstanding principal amount of each Lender’s
Loans, giving effect to any assignments, as compared to the aggregate outstanding principal amount
of all Loans.



     Permitted Encumbrances shall mean (a) encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of Real Property, provided that such items do not
materially impair the use of such property for the purposes intended and none of which is violated
in any material respect by existing or proposed structures or land use; (b) the following: (i)
Liens for taxes not yet due and payable, or being diligently contested in good faith, or where no
Material Adverse Effect could reasonably be expected to result from such nonpayment or the
imposition of such Lien; or (ii) materialmen’s, mechanic’s, warehousemen’s and other like Liens
arising in the ordinary course of business, securing payment of Indebtedness whose payment is not
yet due, or that are being contested in good faith by appropriate proceedings diligently conducted,
and for or against which the Borrower has established adequate reserves in accordance with
Generally Accepted Accounting Principles; (c) Liens for taxes, assessments and governmental charges
or assessments, or judgment Liens not released within thirty (30) days after filing, that are being
contested in good faith by appropriate proceedings diligently conducted, and for or against which
the Borrower has established adequate reserves in accordance with Generally Accepted Accounting
Principles; (d) Liens on Real Property which are insured around or against by title insurance; (e)
Liens securing assessments or charges payable to a property owner association or similar entity
which assessments are not yet due and payable or are being diligently contested in good faith; (f)
Liens incurred or deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security; and (g) Liens securing
this Agreement and Indebtedness hereunder.



     Person shall mean any individual, corporation, trust, unincorporated organization,
Governmental Authority or any other form of entity.



     Pool shall have the meaning given to it in Section 5.15(a).



     Pool Value shall mean the Value of the Pool.



     Prime Rate shall mean, as of a particular date, the prime rate of interest per annum
publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at
its principal office in New York, New York; each change in the Prime Rate shall be effective on the
date such change is determined; which Prime Rate may not necessarily represent the Agent’s lowest
or best rate actually charged to a customer.



8









 





     Proper Form shall mean in form and substance reasonably satisfactory to the Agent and
the Majority Lenders.



     Property shall mean any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.



     QRS Entities shall mean Smith One, Inc., Smith Two, Inc., Smith Three, Inc., Smith
Four, Inc., Smith Five, Inc., Smith Six, Inc. and Smith Seven, Inc.



     Quarterly Unaudited Financial Statements shall mean the quarterly financial statements
of a Person, including all notes thereto, which statements shall include a balance sheet as of the
end of such quarter and an income statement for such fiscal quarter, and for the fiscal year to
date, a statement of cash flows for such quarter and for the fiscal year to date, subject to normal
year-end adjustments, and a detailed listing of the Borrower’s Property and the Historical Value
thereof, all setting forth in comparative form the corresponding figures for the corresponding
fiscal period of the preceding year (or, in the case of the balance sheet, the end of the preceding
fiscal year), prepared in accordance with Generally Accepted Accounting Principles except that the
Quarterly Unaudited Financial Statements may contain condensed footnotes as permitted by
regulations of the United States Securities and Exchange Commission, and certified as true and
correct by a managing director, senior vice president, controller, co-controller or vice president
of Borrower. The Quarterly Unaudited Financial Statements shall be prepared on a consolidated
basis in accordance with Generally Accepted Accounting Principles.



     Rate Designation Date shall mean 1:00 p.m., New York, New York time, on the date three
(3) Eurodollar Business Days preceding the first day of any proposed Interest Period.



     Real Property shall mean, collectively, all interest in any land and improvements
located thereon, together with all equipment, furniture, materials, supplies and personal property
now or hereafter located at or used in connection with the land and all appurtenances, additions,
improvements, renewals, substitutions and replacements thereof now or hereafter acquired by any
Person.



     Redevelopment Property shall mean Real Property (a) that is in the process of being
redeveloped or (b) with respect to any date of determination, whose redevelopment has been
completed during the last twelve (12) months prior to any such date.



     Regulation D shall mean Regulation D of the Board of Governors of the Federal Reserve
System from time to time in effect and shall include any successor or other regulation relating to
reserve requirements applicable to member lenders of the Federal Reserve System.



     Request for Loan shall mean a written request for a Loan substantially in the form of
Exhibit B.



     S&P Rating shall mean the senior unsecured debt rating from time to time received by
the Borrower from Standard & Poor’s Rating Services.



     Secured Debt shall mean the Indebtedness of the Borrower or the Parent secured by a
Lien, and any Indebtedness of any of the Borrower’s or the Parent’s Subsidiaries and Unconsolidated
Affiliates owed to a Person not an Affiliate of the Borrower or the Parent or such Subsidiary.



     Secured Debt to Total Asset Value Ratio shall mean the ratio (expressed as a
percentage) of Secured Debt to Total Asset Value.



     Sharing Event means (i) the occurrence of an Event of Default with respect to a Party
under Section 7.1(h) or (i), or (ii) the acceleration of the maturity date of the
Loans by the Agent upon the occurrence of an Event of Default.



9









 





     Stabilization Date shall mean, with respect to a property, the earlier of (a) eighteen
(18) months after substantial completion of construction or development of a new construction or
development property, and (b) the date on which the Occupancy Level is at least ninety-three
percent (93%).



     Stated Rate shall, on any day, mean whichever of the Base Rate or the Eurodollar Rate
has been designated and provided pursuant to this Agreement.



     Subsidiary shall mean, as to a particular parent entity, any entity of which more than
fifty percent (50%) of the indicia of voting equity or ownership rights (whether outstanding
capital stock or otherwise) is at the time directly or indirectly owned by, such parent entity, or
by one or more of its other Subsidiaries.



     Super-Majority Lenders shall mean the Lenders with an aggregate amount of sixty-six
and sixty-seven hundredths percent (66.67%) or more of the amount of the Commitment then
outstanding, and after the Commitment has expired or terminated, shall mean Lenders with an
aggregate amount of sixty-six and sixty-seven hundredths percent (66.67%) or more of the
outstanding principal amount of the Loans.



     Taxes shall mean any tax, levy, impost, duty, charge or fee imposed by any
Governmental Authority.



     Total Asset Value shall mean the sum of (without duplication) (a) the aggregate Value
of all of the Real Property owned by the Borrower and its Subsidiaries on a consolidated basis plus
(b) the amount of the Borrower’s cash and cash equivalents, excluding tenant security and other
restricted deposits, plus (c) the total book value of all of the Borrower’s other assets not
described in (a) or (b) above, excluding all intangibles and all equity investments in
Unconsolidated Affiliates, plus (d) the Value of the Real Property, and cash and other assets of
the type permitted, and as valued, in clauses (b) and (c) of this definition, owned
by each of the Borrower’s Unconsolidated Affiliates, multiplied by the Equity Percentage for that
Unconsolidated Affiliate, including gains on sales of assets to Unconsolidated Affiliates which
must be deferred in accordance with Generally Accepted Accounting Principles. Total Asset Value
shall be calculated on a consolidated basis in accordance with Generally Accepted Accounting
Principles.



     Unconsolidated Affiliate shall mean, in respect of any Person, any other Person that
is an Affiliate of such Person and in whom such Person holds a voting equity or other ownership
interest and whose financial results would not be consolidated under Generally Accepted Accounting
Principles with the financial results of such other Person on the consolidated financial statements
of such first mentioned Person.



     Unit Capital Expenditure shall mean, on an annual basis, an amount equal to the sum of
(a) the result of (i) the number of apartment units contained in each completed, operating Real
Property owned by Borrower and any Subsidiary as of the last day of each of the immediately
preceding four (4) calendar quarters, divided by four (4), and multiplied by (ii) $200.00; plus (b)
for Unconsolidated Affiliates, the result of (i) the amount in clause (a) above for
Unconsolidated Affiliates, multiplied by (ii) the Equity Percentage for each Unconsolidated
Affiliate.



     Value shall mean the sum of the following:



     (a) for Real Property, other than Redevelopment Property, (x) that has reached the Calculation
Date and that Borrower has owned for the full determination period or (y) that Borrower has owned
for more than twelve (12) months, the result of dividing (i) the aggregate Net Operating Income of
the subject property (for the purposes of clause (x), (1) beginning with the Calculation Date until
the end of the third full calendar quarter after the Calculation Date, based on the Annualized Net
Operating Income for each such calendar quarter, and (2) beginning with the fourth full calendar
quarter after the Calculation Date, based on the immediately preceding four (4) calendar quarter
period), by six and three fourths percent (6.75%); plus



     (b) for Real Property that is completed but has not reached the Calculation Date, that has not
been owned by Borrower for the full determination period, that has not been owned by Borrower for
more than twelve (12) months, or that is Redevelopment Property, the Historical Value of the
subject property; plus



     (c) for Real Property that is under construction or development, or that is undeveloped land,
the Historical Value of the subject property.



10









 





The Loans.




     Advances. (a) Subject to the terms and conditions of this Agreement, each Lender
severally agrees to make Loans to the Borrower from time to time during the Draw Period not to
exceed an amount at any one time outstanding equal to the difference between such Lender’s Lender
Commitment and the outstanding principal amount of such Lender’s Loans. Each such request for a
Loan shall be deemed a request for a Loan from each Lender equal to such Lender’s Percentage of the
aggregate amount so requested, and such aggregate amount shall be in an amount at least equal to
$1,000,000.00 and equal to a multiple of $100,000.00, or the difference between the Commitment and
the aggregate outstanding principal amount of all Loans, whichever is less. Each repayment of the
Loans shall be deemed a repayment of each Lender’s Loans equal to such Lender’s Percentage of the
amount so repaid. The obligations of the Lenders hereunder are several and not joint, and the
preceding two sentences will give rise to certain inappropriate results if special provisions are
not made to accommodate the failure of a Lender to fund a Loan as and when required by this
Agreement; therefore, notwithstanding anything herein to the contrary, (A) no Lender shall be
required to make Loans at any one time outstanding in excess of such Lender’s Percentage of the
Commitment, and (B) if a Lender fails to make a Loan as and when required hereunder and Borrower
subsequently makes a repayment on the Loans, such repayment shall be split among the non-defaulting
Lenders ratably in accordance with their respective Percentages until each Lender has its
Percentage of all of the outstanding Loans, and the balance of such repayment shall be divided
among all of the Lenders in accordance with their respective Percentages. The Loans shall be
evidenced by Notes substantially in the form of Exhibit C attached hereto. Anything
contained herein to the contrary notwithstanding, any amounts repaid or prepaid for any reason in
respect of the Loans may not be reborrowed.



     (b) Borrower shall give the Agent notice of each borrowing of a Loan to be made hereunder as
provided in Section 3.1, and the Agent shall deliver same to each Lender promptly
thereafter. Not later than 12:00 noon (New York, New York time) on the date specified for each
such borrowing of a Loan hereunder, each Lender shall make available the amount of the Loan, if
any, to be made by it on such date to the Agent at the Agent’s principal office in New York, New
York, in immediately available funds, for the account of Borrower. Such amounts received by the
Agent will be held in Agent’s general ledger account. The amounts so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available to the Borrower by wiring
or otherwise transferring, in immediately available funds not later than 1:00 p.m., New York, New
York time, such amount to an account designated by the Borrower and maintained with Wells Fargo
Bank, N.A. or any other account or accounts which the Borrower may from time to time designate to
the Agent by a written notice as the account or accounts to which borrowings hereunder are to be
wired or otherwise transferred.



     Payments.



          Except to the extent otherwise provided herein, all payments of principal, interest and other
amounts to be made by Borrower hereunder, under the Notes and under the other Credit Documents
shall be made in immediately available funds to the Agent at its principal office in New York, New
York (or in the case of a successor Agent, at the principal office of such successor Agent in the
United States), not later than 1:00 p.m., New York, New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).




          The Borrower hereby unconditionally promises to pay to the Agent, for the account of each
Lender, the then aggregate unpaid principal amount of the Loans on the Maturity Date.




          The Borrower may, at its option, prepay the Loans, in whole or in part, without premium or
penalty (other than any Funding Losses as provided below), at any time and from time to time by
notifying the Agent in writing by 12:00 noon, New York, New York time, (i) on the proposed
prepayment date in the case of Loans consisting of Base Rate Borrowings and (ii) at least two (2)
Business Days prior to the proposed prepayment date in the case of Loans consisting of Eurodollar
Rate Borrowings, in each case specifying the amount to be prepaid and the date of prepayment. Each
such notice shall be irrevocable and the amount specified in such notice shall be due and payable
on the date specified, together with accrued and unpaid interest to the date of such payment on the
amount prepaid. Upon receipt of any such notice, the Agent shall promptly notify each Lender of
the contents thereof. Partial prepayments of the Loans pursuant to this Section 2.2(c) shall be in an
aggregate minimum principal amount of $5,000,000.00 or such amount plus a whole multiple of
$1,000,000.00 in excess thereof, or, if less, the aggregate

11









 








outstanding principal balance of all
Loans. The Borrower shall pay any Funding Losses resulting from any optional prepayment pursuant
to this Section 2.2(c).




          In the event, and on each occasion, that Net Offering Proceeds are received by the Parent or
the Borrower in the form of cash, the Borrower shall (i) by 12:00 noon, New York, New York time, on
the date that is one (1) Business Day after such Net Offering Proceeds are so received, deliver to
the Agent a notice of the mandatory prepayment required pursuant to this Section 2.2(d),
and (ii) on the date that is three (3) Business Days after such Net Offering Proceeds are so
received, prepay the Loans in an aggregate principal amount equal to the lesser of (x) the
aggregate amount of such Net Offering Proceeds so received in cash and (y) the aggregate
outstanding principal amount of the Loans, in each case together with accrued and unpaid interest
to the date of such payment on the amount prepaid. Upon receipt of any notice from the Borrower
pursuant to the immediately preceding sentence, the Agent shall promptly notify each Lender of the
contents thereof. If, and to the extent that, the aggregate outstanding principal amount of the
Loans is less than the aggregate amount of such Net Offering Proceeds so received, the Commitment
shall be reduced, on the date the mandatory prepayment under this Section 2.2(b) is
required to be made, by an amount equal to the excess of the aggregate amount of such Net Offering
Proceeds over the aggregate outstanding principal amount of the Loans, such reduction to be applied
ratably to the Lender Commitment of each Lender based on its Percentage. The Borrower shall pay
any Funding Losses resulting from any mandatory prepayment pursuant to this Section 2.2(d).




          The Borrower may, at the time of making each payment hereunder, under any Note or under any
other Credit Document, specify to the Agent the Loans or other amounts payable by the Borrower
hereunder or thereunder to which such payment is to be applied (and in the event that it fails so
to specify, such payment shall be applied to the Loans or, if no Loans are outstanding, to other
amounts then due and payable, provided that if no Loans or other amounts are then due and payable
or an Event of Default has occurred and is continuing, the Agent may apply such payment to the
Obligations in such order as it may elect in its sole discretion, but subject to the other terms
and conditions of this Agreement, including without limitation Section 2.3 hereof). Each
payment received by the Agent hereunder, under any Note or under any other Credit Document for the
account of a Lender shall be paid promptly to such Lender, in immediately available funds. If the
Agent receives a payment for the account of a Lender prior to 1:00 p.m., New York, New York time,
such payment must be delivered to the Lender on that same day and if it is not so delivered due to
the fault of the Agent, the Agent shall pay to the Lender entitled to the payment the interest
accrued on the amount of the payment pursuant to said Lender’s Note from the date the Agent
receives the payment to the date the Lender received the payment.




          If the due date of any payment hereunder or under any Note falls on a day which is not a
Business Day or a Eurodollar Business Day, as the case may be, the due date for such payments shall
be extended to the next succeeding Business Day or Eurodollar Business Day, respectively, and
interest shall be payable for any principal so extended for the period of such extension; provided,
however, that with respect to Eurodollar Rate Borrowings if such extension would cause the
Eurodollar Business Day of payment to fall in another calendar month, the payment shall be due on
the Eurodollar Business Day next preceding the due date of the payment.




          All payments by the Borrower hereunder or under any other Credit Documents shall be made free
and clear of and without deduction for or on account of any Taxes, including withholding and other
charges of any nature whatsoever imposed by any taxing authority excluding in the case of each
Lender taxes imposed on or measured by its net income or franchise taxes imposed in lieu of net
income taxes by the jurisdiction in which it is organized or through which it acts for purposes of
this Agreement. If any withholding or deduction from any payment to be made to, or for the account
of, a Lender by the Borrower hereunder or under any other Credit Document is required in respect of
any Taxes pursuant to any applicable law, rule, or regulation, then the Borrower will (i) pay to
the relevant authority the full amount required to be so withheld or deducted; (ii) to the extent
available, promptly forward to the Agent an official receipt or other documentation satisfactory to
the Agent evidencing such payment to such authority; and (iii) pay to the Agent, for the account of
each affected Lender, such additional amount or amounts as are necessary to ensure that the net
amount actually received by such Lender will equal the full amount such Lender would have received
had no such withholding or deduction been required. Each Lender shall determine such additional
amount or amounts payable to it (which determination shall, in the absence of manifest error, be
conclusive and binding on the Borrower). If a Lender becomes aware that any such withholding or
deduction from any payment to be made by the Borrower hereunder or under any other Credit
Document is required, then such Lender shall promptly notify the Agent and the Borrower thereof
stating the reasons therefor and the





12









 




additional amount required to be paid under this Section. Each Lender shall execute and
deliver to the Agent and Borrower such forms as it may be required to execute and deliver pursuant
to subsection (h) below. To the extent that any such withholding or deduction results from
the failure of a Lender to provide a form required by subsection (h) below (unless such
failure is due to some prohibition under applicable Legal Requirements), the Borrower shall have no
obligation to pay the additional amount required by clause (iii) above. Anything in this
Section notwithstanding, if any Lender elects to require payment by the Borrower of any material
amount under this Section, the Borrower may, within 60 days after the date of receiving notice
thereof and so long as no Default shall have occurred and be continuing, elect to terminate such
Lender as a party to this Agreement; provided that, concurrently with such termination the Borrower
shall (1) if the Agent and each of the other Lenders shall consent, pay that Lender all principal,
interest and fees and other amounts owed to such Lender through such date of termination or (2)
have arranged for another institution approved by the Agent (such approval not to be unreasonably
withheld) as of such date, to become a substitute Lender for all purposes under this Agreement in
the manner provided in Section 9.5; provided further that, prior to substitution for any
Lender, the Borrower shall have given written notice to the Agent of such intention and the Lenders
shall have the option, but no obligation, for a period of 60 days after receipt of such notice, to
increase their Commitments pro rata based on their Lender Commitments in order to replace the
affected Lender in lieu of such substitution.




          With respect to each Lender which is organized under the laws of a jurisdiction outside the
United States, on the day of the initial borrowing from each such Lender hereunder and from time to
time thereafter if requested by the Borrower or the Agent, such Lender shall provide the Agent and
the Borrower with the forms prescribed by the Internal Revenue Service of the United States
certifying as to such Lender’s status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender hereunder or other
documents satisfactory to such Lender and the Agent indicating that all payments to be made to such
Lender hereunder are not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty. Unless the Borrower and the Agent shall have received
such forms or such documents indicating that payments hereunder are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Agent shall withhold taxes from such payments at the applicable statutory rate in
the case of payments to or for any Lender organized under the laws of a jurisdiction outside the
United States.




     Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each
borrowing from the Lenders under Section 2.1(a) hereof shall be made ratably from the
Lenders on the basis of their respective Percentages; (b) each payment of the Facility Fee shall be
made for the account of the Lenders, and shall be applied, pro rata, according to the Lenders’
respective Lender Commitment; and (c) each payment by the Borrower of principal or interest on the
Loans, of any other sums advanced by the Lenders pursuant to the Credit Documents, and of any other
amount owed to the Lenders other than the Facility Fee, or any other sums designated by this
Agreement as being owed to a particular Lender, shall be made to the Agent for the account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by
the Lenders.



     Non-Receipt of Funds by the Agent. Unless the Agent shall have been notified by a
Lender or the Borrower (the “Payor”) prior to the date on which such Lender is to make payment to
the Agent of the proceeds of a Loan to be made by it hereunder or the Borrower is to make a payment
to the Agent for the account of one or more of the Lenders, as the case may be (such payment being
herein called the “Required Payment”), which notice shall be effective upon receipt, that the Payor
does not intend to make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date and, if the Payor has not
in fact made the Required Payment to the Agent, the recipient of such payment shall, on demand, pay
to the Agent the amount made available by the Agent together with interest thereon in respect of
the period commencing on the date such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (a) the Base Rate for such period plus the
Applicable Margin if the recipient returning a Required Payment is the Borrower, or (b) the Federal
Funds Effective Rate for such period if the recipient returning a Required Payment is the Agent or
a Lender.



     Sharing of Payments, Etc. The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers’ lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled, at its option, to offset balances held by it for the account of the
Borrower at any of its offices, against any principal of or interest on



13









 







any of such Lender’s Loans
to the Borrower hereunder, or other Obligations of the Borrower hereunder, which is not paid
(regardless of whether such balances are then due to the Borrower), in which case it shall promptly
notify the
Borrower and the Agent thereof, provided that such Lender’s failure to give such notice shall
not affect the validity thereof. If a Lender shall obtain payment of any principal of or interest
on any Loan made by it under this Agreement, or other Obligation then due to such Lender hereunder,
through the exercise of any right of set-off, banker’s lien, counterclaim or similar right, or
otherwise, it shall promptly purchase from the other Lenders portions of the Loans made or other
Obligations held by the other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the benefit of such payment
(net of any expenses which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with the unpaid principal and interest on the Obligations then due to each
of them. To such end all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must otherwise be
restored. Nothing contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower.



     Facility Fees. The Borrower shall pay a facility fee (the “Facility Fee”) to the
Agent for the account of each Lender equal to the following percentage per annum multiplied by (i)
during the Draw Period, the Commitment (as it may be reduced from time to time in accordance with
this Agreement), and (ii) after the end of the Draw Period, the aggregate outstanding principal
amount of all Loans, which will be in effect whenever and for so long as the Borrower has received
the corresponding Credit Rating (the method of determining the Credit Rating based on multiple
ratings to be the same as set forth and used to determine the Credit Rating for the definition of
Applicable Margin):



	 	 	 	 	 
	CREDIT RATING	 	FACILITY FEE
	A-/A3 or better
	 	 	0.100	%
	BBB+/Baa1
	 	 	0.125	%
	BBB/Baa2
	 	 	0.150	%
	BBB-/Baa3
	 	 	0.200	%





If the Credit Rating is worse than BBB-/Baa3, or if there is no Credit Rating, then for that
calendar quarter and for so long thereafter as the Credit Rating is worse than BBB-/Baa3 or if
there is no Credit Rating, the Facility Fee will be equal to the daily unused amount of the
Commitment multiplied by 0.250% per annum. The Facility Fee is payable in arrears on or before the
tenth (10th) day of each January, April, July and October prior to termination or expiration of the
Commitment, and on demand thereafter. The Facility Fee shall not be refundable (except as required
by Section 3.1(c) of this Agreement). Any portion of the Facility Fee which is not paid by the
Borrower when due shall bear interest at the Past Due Rate from the date due until the date paid by
the Borrower. The Fee shall be calculated on the actual number of days elapsed in a year deemed to
consist of 360 days.




     Reduction of Commitment.



          Unless previously terminated, the Commitment shall terminate at the end of the Draw Period.




          The Borrower may from time to time reduce or terminate the Commitment; provided that
(i) each reduction in the Commitment shall be a minimum of $50,000,000, and (ii) no reduction in
the Commitment will be allowed if a Default is then in existence.




          The Borrower shall notify the Agent of any election to reduce the Commitment under Section
2.7(b) at least two (2) Business Days prior to the effective date of such reduction, specifying
such election and the effective date thereof. Promptly following receipt of any notice, the Agent
shall advise the Lenders of the contents thereof. Each notice delivered pursuant to this Section
shall be irrevocable. Any reduction of the Commitment shall be permanent. Each reduction in the
Commitment shall be made ratably among the Lenders in accordance with their respective Lender
Commitments.




          Unless previously terminated, the Commitment shall be automatically reduced by the aggregate
principal amount of any prepayment of the Loans.




14









 








          Unless previously terminated, the Commitment shall be mandatorily reduced as, and to the
extent, provided in Section 2.2 (d).




          Any reduction of the Commitment pursuant to this Section 2.7 shall be permanent and shall be
made ratably among the Lenders in accordance with their respective Lender Commitments.




     Additional Guarantees. From time to time, certain of the direct or indirect owners of
legal interests in the Borrower may request to guarantee collection of the unpaid balance of the
Loans remaining after application of other recoveries against the Loans by the Agent and the
Lenders. If the Borrower notifies the Agent of such a guarantee request and (a) supplies the Agent
with the Organizational Documents of the proposed guarantor and any other information regarding the
proposed guarantor as reasonably requested by the Agent or any of the Lenders, including any
information that the Agent is required to obtain for any guarantor pursuant to applicable Legal
Requirements, and (b) so long as the acceptance of the guarantee from the proposed guarantor does
not violate any Legal Requirement applicable to the Agent or any of the Lenders, the Agent agrees,
on behalf of the Lenders, to accept a guarantee from such proposed guarantor in the form attached
hereto as Exhibit G.



Conditions.




     All Loans. The obligation of any Lender to make any Loan is subject to the accuracy
of all representations and warranties of the Borrower on the date of such Loan, to the performance
by the Borrower of its obligations under the Credit Documents and to the satisfaction of the
following further conditions: (a) the Agent shall have received the following, all of which shall
be duly executed and in Proper Form: (1) a Request for Loan (i) by 12:00 noon, New York, New York
time, one (1) Business Day before the date (which shall also be a Business Day) of the proposed
Loan which is to be a Base Rate Borrowing, or (ii) by the Rate Designation Date of the proposed
Loan which is to be a Eurodollar Rate Borrowing; and (2) such other documents as the Agent may
reasonably require to satisfy itself or the request of any Lender; (b) no Default or Event of
Default shall have occurred and be continuing; (c) the making of the Loan shall not be prohibited
by any Legal Requirement (in which event the applicable portion of the Facility Fee will not be
charged to the Borrower); (d) the Borrower shall have paid all legal fees and expenses of the type
described in Section 5.10 hereof through the date of such Loan; and (e) the Agent shall
have received an Officer’s Certificate certifying the information set forth therein as of the end
of the immediately preceding fiscal quarter.



     First Loan. In addition to the matters described in Section 3.1 hereof, the
obligation of the Lenders to make the first Loan under this Agreement is subject to the receipt by
the Lenders of each of the following, in Proper Form: (a) the Note, executed by the Borrower; (b)
the Guaranty, executed by the Parent; (c) a separate certificate executed by each of the Secretary
of the Borrower and the Secretary of the Parent dated as of the date hereof; (d) a separate
certificate from the Secretary of State or other appropriate public official of Maryland as to the
continued existence and good standing of each of the Parent and the Borrower; (e) a legal opinion
from independent counsel for the Parent and the Borrower as to the matters set forth on Exhibit
D acceptable to the Lenders; and (f) an Officer’s Certificate in the form of Exhibit A
as of the end of the immediately preceding fiscal quarter; and to the further condition that, at
the time of the initial Loan, all legal matters incident to the transactions herein contemplated
shall be satisfactory to Davis Polk & Wardwell, counsel for the Agent.



     Interest Options Available. The outstanding principal balance of the Notes shall bear
interest at the Base Rate; provided, that (1) all past due amounts, both principal and accrued
interest, shall bear interest at the Past Due Rate, and (2) subject to the provisions hereof,
Borrower shall have the option of having all or any portion of the principal balance of the Notes
from time to time outstanding bear interest at a Eurodollar Rate. The records of the Lenders with
respect to Interest Options, Interest Periods and the amounts of Loans to which they are applicable
shall be prima facie evidence thereof. Interest on the Loans shall be calculated at the Base Rate
except where it is expressly provided pursuant to this Agreement that a Eurodollar Rate is to
apply.



     Designation and Conversion. Borrower shall have the right to designate or convert its
Interest Options in accordance with the provisions hereof. Provided no Event of Default has
occurred and is continuing and subject to the provisions of Section 3.5, Borrower may elect
to have a Eurodollar Rate apply or continue to apply to all or any portion of the principal balance
of the Notes. Each change in Interest Options shall be a conversion of the rate of interest
applicable to the specified portion of the Loans, but such conversion shall not change the
respective



15









 







outstanding principal balance of the Notes. The Interest Options shall be designated or
converted in the manner provided below:



          Borrower shall give Agent a Request for Loan. Each such written notice shall specify the
amount of Loan which is the subject of the designation, if any; the amount of borrowings into which
such borrowings are to be converted or for which an Interest Option is designated; the proposed
date for the designation or conversion; and the Interest Period, if any, selected by Borrower. The
Request for Loan shall be irrevocable and shall be given to Agent no later than the applicable Rate
Designation Date. The Agent shall promptly deliver the Request for Loan to the Lenders.




          No more than twelve (12) Eurodollar Rate Borrowings with twelve (12) Interest Periods shall be
in effect at any time.




          Each designation or conversion of a Eurodollar Rate Borrowing shall occur on a Eurodollar
Business Day.




          Except as provided in Section 3.5 hereof, no Eurodollar Rate Borrowing shall be
converted on any day other than the last day of the applicable Interest Period.




          Unless a Request for Loan to the contrary is received as provided in this Agreement, each
Eurodollar Rate Borrowing will convert to a Base Rate Borrowing after the expiration of the
Interest Period.




     Special Provisions Applicable to Eurodollar Rate Borrowings.



          If the adoption of any applicable Legal Requirement or any change in any applicable Legal
Requirement or in the interpretation or administration thereof by any Governmental Authority or
compliance by the Lenders with any request or directive (whether or not having the force of law) of
any central bank or other Governmental Authority shall at any time make it unlawful or impossible
for any Lender to permit the establishment of or to maintain any Eurodollar Rate Borrowing, the
commitment of the Lenders to establish or maintain such Eurodollar Rate Borrowing shall forthwith
be suspended until such condition shall cease to exist and Borrower shall forthwith, upon demand by
Agent to Borrower, (1) convert the Eurodollar Rate Borrowing with respect to which such demand was
made to a Base Rate Borrowing; (2) pay all accrued and unpaid interest to date on the amount so
converted; and (3) pay any amounts required to compensate the Lenders for any additional cost or
expense which the Lenders may incur as a result of such adoption of or change in such Legal
Requirement or in the interpretation or administration thereof and any Funding Loss which the
Lenders may incur as a result of such conversion. If, when Agent so notifies Borrower pursuant to
this Section 3.5(a) that an adoption of or change in Legal Requirements has occurred with
the effects described herein, Borrower has given a Request for Loan specifying a Eurodollar Rate
Borrowing but the selected Interest Period has not yet begun, such Request for Loan shall be deemed
to be of no force and effect, as if never made, and the balance of the Loans specified in such
Request for Loan shall bear interest at the Base Rate until a different available Interest Option
shall be designated in accordance herewith.




          If the adoption of any applicable Legal Requirement or any change in any applicable Legal
Requirement or in the interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive of general applicability (whether or not
having the force of law) of any central bank or Governmental Authority shall at any time as a
result of any portion of the principal balance of the Notes being maintained on the basis of a
Eurodollar Rate:





	 	(1)	 	subject any Lender (or make it apparent that any Lender is
subject) to any Taxes, or any deduction or withholding for any Taxes, on or
from any payment due under any Eurodollar Rate Borrowing or other amount due
hereunder, other than income and franchise taxes of the United States and its
political subdivisions; or
	 
	 	(2)	 	change the basis of taxation of payments due from Borrower to
any Lender under any Eurodollar Rate Borrowing (otherwise than by a change in
the rate of taxation of the overall net income of a Lender); or




16









 






	 	(3)	 	impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement included in the
calculation of the applicable interest
rate), special deposit requirement or similar requirement (including, but
not limited to, state law requirements and Regulation D) imposed, modified,
increased or deemed applicable by any Governmental Authority against assets
held by any Lender, or against deposits or accounts in or for the account of
any Lender, or against loans made by any Lender, or against any other funds,
obligations or other property owned or held by any Lender; or
	 
	 	(4)	 	impose on any Lender any other condition regarding any
Eurodollar Rate Borrowing;




and the result of any of the foregoing is to increase the cost to any Lender of agreeing to make or
of making, renewing or maintaining such Eurodollar Rate Borrowing, or reduce the amount of
principal or interest received by any Lender, then, upon demand by Agent, Borrower shall pay to
such Lender, from time to time as specified by such Lender, additional amounts which shall
compensate such Lender for such increased cost or reduced amount. Agent will promptly notify
Borrower in writing of any event which will entitle any Lender to additional amounts pursuant to
this paragraph. A Lender’s determination of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be prima facie evidence thereof. Borrower shall have
the right, if it receives from Agent any notice referred to in this paragraph, upon three Business
Days’ notice to Agent, either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or (ii) to convert the
Eurodollar Rate Borrowing which is the subject of the notice to a Base Rate Borrowing; provided,
that any such repayment or conversion shall be accompanied by payment of (x) the amount required to
compensate a Lender for the increased cost or reduced amount referred to in the preceding
paragraph; (y) all accrued and unpaid interest to date on the amount so repaid or converted, and
(z) any Funding Loss which any Lender may incur as a result of such repayment or conversion.




          If for any reason with respect to any Interest Period Agent shall have determined (which
determination shall be prima facie evidence thereof) that:





(1) Agent is unable through its customary general practices to determine any
applicable Eurodollar Rate, or




(2) by reason of circumstances affecting the applicable market generally, Agent is
not being offered deposits in United States dollars in such market, for the
applicable Interest Period and in an amount equal to the amount of any applicable
Eurodollar Rate Borrowing requested by Borrower, or




(3) any applicable Eurodollar Rate will not adequately and fairly reflect the cost
to the Lenders of making and maintaining such Eurodollar Rate Borrowing hereunder
for any proposed Interest Period,




then Agent shall give Borrower notice thereof and thereupon, (A) any Request for
Loan previously given by Borrower designating the applicable Eurodollar Rate
Borrowing which has not commenced as of the date of such notice from Agent shall be
deemed for all purposes hereof to be of no force and effect, as if never given, and
(B) until Agent shall notify Borrower that the circumstances giving rise to such
notice from Agent no longer exist, each Request for Loan requesting the applicable
Eurodollar Rate shall be deemed a request for a Base Rate Borrowing, and any
applicable Eurodollar Rate Borrowing then outstanding shall be converted, without
any notice to or from Borrower, upon the termination of the Interest Period then in
effect with respect to it, to a Base Rate Borrowing.



          Borrower shall indemnify the Agent and each Lender against and hold the Agent and each Lender
harmless from any Funding Loss. The indemnification in this Section 3.5(d) shall survive
the payment of the Notes. A certificate as to any additional amounts payable pursuant to this
subsection and setting forth the reasons for the Funding Loss submitted by Agent to Borrower shall
be prima facie evidence thereof.




17









 








          The Borrower shall pay to the Agent or a Lender the Eurodollar Reserve Requirement incurred by
that Lender within thirty (30) days after written demand by Agent to the Borrower. The demand
setting forth the Eurodollar Reserve Requirement shall be prima facie evidence thereof.




     Funding Offices; Adjustments Automatic. Any Lender may, if it so elects, fulfill its
obligation as to any Eurodollar Rate Borrowing by causing a branch or affiliate of such Lender to
make such Loan and may transfer and carry such Loan at, to, or for the account of, any branch
office or affiliate of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of Borrower to repay
such Loan shall nevertheless be to such Lender and shall be deemed held by it for the account of
such branch or affiliate. Without notice to Borrower or any other person or entity, each rate
required to be calculated or determined under this Agreement shall automatically fluctuate upward
and downward in accordance with the provisions of this Agreement.



      Funding Sources, Payment Obligations. Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or
any part of the Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if each Lender had
actually funded and maintained each Eurodollar Rate Borrowing during each Interest Period through
the purchase of deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the interest rate for such Interest Period. Notwithstanding the foregoing,
Funding Losses, increased costs and other obligations relating to Eurodollar Rate Borrowings
described in Section 3.5 of this Agreement will only be paid by the Borrower as and when
actually incurred by the Lenders.



     Mitigation, Non-Discrimination. Each Lender will notify the Borrower through the
Agent of any event occurring after the date of this Agreement which will require or enable such
Lender to take the actions described in Sections 3.5(a) or (b) of this Agreement as
promptly as practicable after it obtains knowledge thereof and determines to request such action,
and (if so requested by the Borrower through the Agent) will designate a different lending office
of such Lender for the applicable Eurodollar Rate Borrowing or will take such other action as the
Borrower reasonably requests if such designation or action is consistent with the internal policy
of such Lender and legal and regulatory restrictions, can be undertaken at no additional cost, will
avoid the need for, or reduce the amount of, such action and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender (provided that such Lender will have no obligation to
designate a different lending office which is located in the United States of America).



          None of the Lenders shall be able to pass through to the Borrower changes and costs under
Section 3.5 of this Agreement on a discriminating basis, such that such changes and costs
are not also passed through by each Lender to other customers of such Lender similarly situated
where such customer is subject to documents providing for such pass through.




          If any Lender elects under Section 3.5 of this Agreement to suspend or terminate the
availability of Eurodollar Rate Borrowings for any material period of time, and the event giving
rise to such election is not generally applicable to all of the Lenders, the Borrower may within
sixty (60) days after notification of such Lender’s election, and so long as no Event of Default is
then in existence, either (i) demand that such Lender, and upon such demand, such Lender shall
promptly, assign its Lender Commitment to another financial institution subject to and in
accordance with the provisions of Section 9.5 of this Agreement for a purchase price equal
to the unpaid balance of principal, accrued interest, the unpaid balance of the Facility Fee and
expenses owing to such Lender pursuant to this Agreement, or (ii) pay such Lender the unpaid
balance of principal, accrued interest, the unpaid balance of the Facility Fee and expenses owing
to such Lender pursuant to this Agreement, whereupon, such Lender shall no longer be a party to
this Agreement or have any rights or obligations hereunder or under any other Credit Documents, and
the Commitment shall immediately and permanently be reduced by an amount equal to the Lender
Commitment of such Lender.




18









 








Representations and Warranties.




     To induce the Lenders to enter into this Agreement and to make the Loans, the Borrower
represents and warrants to the Agent and the Lenders as follows:



     Organization. The Borrower is duly organized, validly existing and in good standing
as a real estate investment trust under the laws of the state of Maryland; has all power and
authority to conduct its business as presently conducted; and is duly qualified to do business and
in good standing in every state where the location of its Property requires it to be qualified to
do business, unless the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.



     Financial Statements. The financial statements delivered to the Agent fairly present,
in accordance with Generally Accepted Accounting Principles (provided, however, that the Quarterly
Unaudited Financial Statements are subject to normal year-end adjustments and may contain condensed
footnotes as permitted by regulations of the United States Securities and Exchange Commission), the
financial condition and the results of operations of the Borrower as at the dates and for the
periods indicated. No Material Adverse Change has occurred since the dates of such financial
statements. The Borrower is not subject to any instrument or agreement which would materially
prevent it from conducting its business as it is now conducted or as it is contemplated to be
conducted.



     Enforceable Obligations; Authorization. The Credit Documents are legal, valid and
binding obligations of the Parties, enforceable in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights generally
and by general equitable principles. The execution, delivery and performance of the Credit
Documents have all been duly authorized by all necessary action; are within the power and authority
of the Parties; do not and will not contravene or violate any Legal Requirement or the
Organizational Documents of the Parties; do not and will not result in the breach of, or constitute
a default under, any agreement or instrument by which the Parties or any of their respective
Property may be bound or affected, except where such breach or default could not reasonably be
expected to have a Material Adverse Effect; and do not and will not result in the creation of any
Lien upon any Property of any of the Parties except as expressly contemplated therein. All
necessary permits, registrations and consents for such making and performance have been obtained
except where the lack thereof could not reasonably be expected to have a Material Adverse Effect.



     Other Debt. The Borrower is not in default in the payment of any other Indebtedness
or under any agreement, mortgage, deed of trust, security agreement or lease to which it is a party
which default could reasonably be expected to have a Material Adverse Effect.



     Litigation. There is no litigation or administrative proceeding pending or, to the
knowledge of the Borrower, threatened against, or any outstanding judgment, order or decree
affecting, the Borrower before or by any Governmental Authority which is not adequately covered by
insurance or which, if determined adversely to the Borrower could reasonably be expected to have a
Material Adverse Effect. The Borrower is not in default with respect to any judgment, order or
decree of any Governmental Authority which default could reasonably be expected to have a Material
Adverse Effect.



     Taxes. The Borrower has filed all tax returns required to have been filed and paid
all taxes shown thereon to be due, except those for which extensions have been obtained, those
which are being contested in good faith and those for which the Borrower’s failure to file a return
or pay could not reasonably be expected to have a Material Adverse Effect.



     Regulation U. None of the proceeds of any Loan or Letter of Credit will be used for
the purpose of purchasing or carrying directly or indirectly any margin stock or for any other
purpose that would constitute this transaction a “purpose credit” within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System.



     Securities Act of 1933. Other than the Agent’s efforts in syndicating the Loans (for
which the Agent is responsible) neither the Borrower nor any agent acting for it has offered the
Notes or any similar obligation of the Borrower for sale to or solicited any offers to buy the
Notes or any similar obligation of the Borrower from any



19









 







Person other than the Agent or any Lender, and neither the Borrower nor any agent acting for
it will take any action which would subject the sale of the Note to the provisions of Section 5 of
the Securities Act of 1933, as amended.



     No Contractual or Corporate Restrictions. The Borrower is not a party to, or bound
by, any contract, agreement or charter or other corporate restriction materially and adversely
affecting its business, Property, assets, operations or condition, financial or otherwise.



     Investment Company Act Not Applicable. The Borrower is not an “investment company”,
or a company “controlled” by an “investment company”, within the meaning of the Investment Company
Act of 1940, as amended.



     ERISA Not Applicable. The Borrower is not subject to any requirements of the Employee
Retirement Income Security Act of 1974 as amended from time to time, or any rules, regulations,
rulings or interpretations adopted by the Internal Revenue Service or the Department of Labor
thereunder.



     Environmental Matters. The Borrower is not aware of any conditions or risks related
to hazardous materials or environmental matters applicable to Pool Real Estate which could
reasonably be expected to have a Material Adverse Effect.



Affirmative Covenants.




     The Borrower covenants and agrees with the Agent and the Lenders that prior to the termination
of this Agreement it will do, and if necessary cause to be done, each and all of the following:



     Taxes, Insurance, Existence, Regulations, Property, etc. At all times (a) pay when
due all taxes and governmental charges of every kind upon it or against its income, profits or
Property, unless and only to the extent that the same shall be contested in good faith and reserves
which are adequate under Generally Accepted Accounting Principles have been established therefor,
or unless such failure to pay could not reasonably be expected to have a Material Adverse Effect;
(b) do all things necessary to preserve its existence, qualifications, rights and franchises in all
States where such qualification is necessary or desirable, except where failure to obtain the same
could not reasonably be expected to have a Material Adverse Effect; (c) comply with all applicable
Legal Requirements in respect of the conduct of its business and the ownership of its Property
except where failure to so comply could not reasonably be expected to have a Material Adverse
Effect; and (d) cause its Property to be protected, maintained and kept in good repair (reasonable
wear and tear excepted) and make all replacements and additions to its Property as may be
reasonably necessary to conduct its business.



     Financial Statements and Information. Furnish or caused to be furnished (which may be
by electronic access) to the Agent each of the following: (a) as soon as available and in any event
within 90 days after the end of each fiscal year of the Parent, Annual Audited Financial Statements
of the Borrower and the Parent; (b) as soon as available and in any event within 50 days after the
end of each quarter (except the last quarter) of each fiscal year of the Parent, Quarterly
Unaudited Financial Statements of the Borrower and the Parent; (c) concurrently with the financial
statements provided for in Sections 5.2(a) and (b) hereof, an Officer’s
Certificate, together with such schedules, computations and other information (including, without
limitation, if provided to Borrower information as to Unconsolidated Affiliates of the Borrower),
in reasonable detail, as may be required by the Agent to demonstrate compliance with the covenants
set forth herein or reflecting any non-compliance therewith as of the applicable date, all
certified as true, correct and complete by a managing director, vice president, senior vice
president, controller, a co-controller of Borrower and of the Parent; (d) promptly after the filing
thereof, all reports to or filings made by the Parent or the Borrower or any of its Subsidiaries
with the Securities and Exchange Commission, including, without limitation, registration
statements, but not including reports on Forms 10-K, 10-Q and 8-K (or their equivalents); (e)
within two (2) Business Days after the receipt thereof, a copy of the notification to the Borrower
or to the Parent of the respective Credit Rating of each, or negative change therein, and (f) such
other information relating to the financial condition and affairs of the Borrower and the Parent as
from time to time may be reasonably requested by any Lender. The Agent will send to each Lender
the information received by the Agent pursuant to this Section 5.2 promptly after the
receipt thereof by Agent. The financial calculations for Sections 5.3, 5.15 and
6.4 shall be made (1) on the date of each Loan using the best information available to the
Borrower, and (2) on the last day of each of the Parent’s fiscal quarters.



20









 





     Financial Tests. Have and maintain on a consolidated basis in accordance with
Generally Accepted Accounting Principles:



          a Secured Debt to Total Asset Value Ratio no greater than forty percent (40%);




          a Fixed Charge Coverage Ratio of not less than 1.50:1.00; and




          a Debt to Total Asset Value Ratio no greater than sixty percent (60%), provided, however, that
same may increase from time to time up to sixty-five percent (65%) for no more than two (2)
consecutive calendar quarters.




     Inspection. In order to permit the Agent to ascertain compliance with the Credit
Documents, during normal business hours permit the Agent to inspect its Property, to examine its
files, books and records and make and take away copies thereof, and to discuss its affairs with its
officers and accountants, all at such times and intervals and to such extent as a Lender may
reasonably desire.



     Further Assurances. Promptly execute and deliver any and all other and further
instruments which may be requested by the Agent to cure any defect in the execution and delivery of
any Credit Document or more fully to describe particular aspects of the Borrower’s agreements set
forth in the Credit Documents or so intended to be.



     Books and Records. Maintain books of record and account in accordance with Generally
Accepted Accounting Principles.



     Insurance. Maintain insurance with such insurers, on such of its properties, in such
amounts and against such risks as is consistent with insurance maintained by businesses of
comparable type and size in the industry, and furnish the Agent satisfactory evidence thereof
promptly upon request.



     Notice of Certain Matters. Notify the Agent promptly upon acquiring knowledge of the
occurrence of any of the following: the institution or threatened institution of any lawsuit or
administrative proceeding affecting the Borrower in which the claim exceeds $50,000,000.00 and if
determined adversely could have a Material Adverse Effect; when the Borrower believes that there
has been a Material Adverse Change; or the occurrence of any Event of Default or any Default. The
Borrower will notify the Agent in writing at least thirty (30) Business Days prior to the date that
the Borrower changes its name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records.



     Use of Proceeds. The proceeds of the Loans will be used solely to repay Indebtedness
or for other general business purposes reasonably acceptable to the Agent. None of the proceeds of
the Loans will be used to finance, fund or complete any hostile acquisition of any Person.



     Expenses of and Claims Against the Agent and the Lenders. To the extent not
prohibited by applicable law, the Borrower will pay all reasonable costs and expenses incurred to
third parties and reimburse the Agent and each Lender, as the case may be, for any and all
reasonable expenditures of every character incurred or expended from time to time, in connection
with (a) regardless of whether a Default or Event of Default shall have occurred, the Agent’s
preparation, negotiation and completion of the Credit Documents, and (b) during the continuance of
an Event of Default, all costs and expenses relating to the Agent’s and such Lender’s exercising
any of its rights and remedies under this or any other Credit Document, including, without
limitation, attorneys’ fees, legal expenses, and court costs; provided, that no rights or option
granted by the Borrower to the Agent or any Lender or otherwise arising pursuant to any provision
of this or any other instrument shall be deemed to impose or admit a duty on the Agent or any
Lender to supervise, monitor or control any aspect of the character or condition of any property or
any operations conducted in connection with it for the benefit of the Borrower or any other person
or entity other than the Agent or such Lender. Notwithstanding the foregoing, the Borrower shall
not be charged with any cost or expense incurred by the Agent or any Lender relating to disputes or
claims among or between the Agent, the Lenders, or any of them unless during the continuance of an
Event of Default and related to details of enforcement of the Lenders’ rights under the Credit
Documents.



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     Legal Compliance; Indemnification.



          The Borrower shall operate its Property and businesses in full compliance with all Legal
Requirements. It shall not constitute an Event of Default if there is a failure to comply with any
Legal Requirement which failure could not reasonably be expected to have a Material Adverse Effect.
The Borrower shall indemnify the Agent and each Lender, their directors, officers, employees and
shareholders (the “Indemnified Parties”) for and defend and hold the Indemnified Parties harmless
against any and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without limitation,
interest, penalties, attorneys’ fees, and amounts paid in settlement) threatened or incurred by
reason of, arising out of or in any way related to (i) any failure of the Borrower to so comply
with the provisions of any Legal Requirement, this Agreement or the other Credit Documents, or (ii)
the Agent or any Lender’s making of the Loans, or any other acts or omissions taken or made in
connection with the Loans, and any and all matters arising out of any act, omission, event or
circumstance, regardless of whether the act, omission, event or circumstance constituted a
violation of any such Legal Requirement, this Agreement or the other Credit Documents at the time
of its existence or occurrence; provided that the indemnification in this Section 5.11
shall not apply to the extent that the act, omission, facts, circumstances or conditions giving
rise to an indemnification claim by an Indemnified Party arose from the gross negligence or willful
misconduct of such Indemnified Party.




          The Parent will comply with all Legal Requirements to maintain, and will at all times elect,
qualify as and maintain, its status as a real estate investment trust under Section 856(c)(1) of
the Code.




          The Parent will (i) maintain at least one class of common shares of the Parent having trading
privileges on the New York Stock Exchange or the American Stock Exchange, or which is listed on The
NASDAQ Stock Market’s National Market; (ii) own, directly or indirectly, at least fifty-one percent
(51%) of (1) the shares of beneficial interest of the Borrower, and (2) the Class A-2 Common Units
of the Borrower and any other class of security issued by the Borrower with the power to elect the
Trustees of the Borrower; (iii) maintain management and control of the Borrower; (iv) not sell,
transfer or convey any of the shares of beneficial interest of the Borrower owned by the Parent,
except (A) in payment of the purchase price of Property (including mergers with and acquisitions of
Persons) acquired by the Borrower, (B) upon conversion or redemption of securities of the Borrower
in accordance with their terms or (C) upon any repurchase by the Borrower of the Borrower’s
securities from the Parent in connection with a repurchase by the Parent of the Parent’s
securities; and (v) hold all of its assets and conduct all of its operations through the Borrower,
the QRS Entities in existence on October 31, 2001 and one or more of the Borrower’s Subsidiaries.




     Borrower’s Performance. If the Borrower should fail to comply with any of the
agreements, covenants or obligations of the Borrower under this Agreement or any other Credit
Document which requires the payment of money, then the Agent (in the Borrower’s name or in Agent’s
name) may, if such payment has not been made within ten (10) days after written request from Agent
and after expiration of any grace or cure periods provided in any Credit Document, perform or cause
to be performed such agreement, covenant or obligation, for the account of the Borrower and at the
Borrower’s sole expense, but shall not be obligated to do so. Any and all reasonable expenses thus
incurred or paid by the Agent and by any Lender shall be the Borrower’s demand obligations to the
Agent or such Lender and shall bear interest from the date of demand therefor until the date that
the Borrower repays it to the Agent or the applicable Lender at the Past Due Rate. Upon making any
such payment or incurring any such expense, the Agent or the applicable Lender shall be fully
subrogated to all of the rights of the Person receiving such payment. Any amounts owing by the
Borrower to the Agent or any Lender pursuant to this provision or any other provision of this
Agreement shall automatically and without notice be secured by collateral, if any, provided by the
Credit Documents. The amount and nature of any such expense and the time when paid shall, absent
manifest error, be fully established by the affidavit of the Agent or the applicable Lender or any
of the Agent’s or the applicable Lender’s officers or agents.



     Professional Services. Promptly upon the Agent’s request to satisfy itself or the
request of any Lender, the Borrower shall: (a) allow an inspection and/or appraisal of the
Borrower’s Property to be made by a Person approved by the Agent in its sole discretion; and (b) if
the Agent believes that an Event of Default has occurred or is about to occur, cause to be
conducted or prepared any other written report, summary, opinion, inspection, review, survey, audit
or other professional service relating to the Borrower’s Property or any operations in connection
with it (all as designated in the Agent’s request), including, without limitation, any accounting,
auctioneering, architectural,



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consulting, engineering, design, legal, management, pest control, surveying, title abstracting
or other technical, managerial or professional service relating to such property or its operations.
So long as no Event of Default has occurred and is continuing, the foregoing shall not be at the
Borrower’s expense.



     Capital Adequacy.



          If after the date of this Agreement, the Agent or any Lender shall have determined that the
adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy of
general applicability, or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Agent or any Lender with any request
or directive regarding capital adequacy of general applicability (whether or not having the force
of law) of any such Governmental Authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the Agent’s or any Lender’s capital as a consequence
of its obligations hereunder to a level below that which the Agent or such Lender could have
achieved but for such adoption, change or compliance (taking into consideration the Agent’s or such
Lender’s policies with respect to capital adequacy) by an amount deemed by the Agent or such Lender
to be material, then from time to time, the Borrower shall pay to the Agent or such Lender such
additional amount or amounts as will compensate the Agent or such Lender for such reduction.




          A certificate of the Agent or such Lender setting forth such amount or amounts as shall be
necessary to compensate the Agent or such Lender as specified in Section 5.14(a) hereof and
making reference to the applicable law, rule or regulation shall be delivered as soon as
practicable to the Borrower and shall be prima facie evidence thereof. The Borrower shall pay the
Agent or such Lender the amount shown as due on any such certificate within fourteen (14) Business
Days after the Agent or such Lender delivers such certificate. In preparing such certificate, the
Agent or such Lender may employ such assumptions and allocations of costs and expenses as it shall
in good faith deem reasonable and may use any reasonable averaging and attribution method.




     Property Pool.



     The Borrower (or a Subsidiary of the Borrower or a Subsidiary of a QRS Entity if the
conditions in clause (b) below are satisfied) will at all times own fee simple title to a pool (the
“Pool”) of Real Property that is not subject to any Lien other than Permitted Encumbrances (the
“Pool Real Estate”) and except as permitted by Section 6.5, and is not subject to or affected by
any Limiting Agreement except as permitted by Section 6.5, with an aggregate Pool Value of at least
one hundred fifty percent (150%) of the Borrower’s Indebtedness other than Secured Debt outstanding
from time to time.


If requested by the Agent, the Borrower will provide to the Agent written assessments from third
party independent environmental consultants for all Pool Real Estate acquired after the date of
this Agreement. If Super Majority Lenders determine that there are material environmental
conditions existing on or risks to such properties, the properties will be excluded from the Pool.




          Notwithstanding the foregoing, (i) the maximum Pool Value that can be attributable to the
Value of land not improved for multifamily use (not including land that is either under development
for multifamily use or planned for commencement of development for multifamily use within three (3)
years after the date of acquisition) is five percent (5%) of the Pool Value after adding the effect
of said land; and (ii) the maximum Pool Value that can be attributable to the Value (in the
aggregate) of Real Property that is under construction or development, that has not reached the
Calculation Date, that has reached the Calculation Date but the Occupancy Level is less than eighty
percent (80%), unimproved land that is planned for commencement of development within three (3)
years after the date of acquisition, and land not improved for multifamily use, is twenty-five
percent (25%) of the Pool Value after adding the effect of said Real Property and land.




          If any Pool Real Estate is owned by a Subsidiary of the Borrower or of a QRS Entity, then it
may be included in the Pool only if:




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     the owner of the Pool Real Estate is either (1) a wholly owned Subsidiary of the
Borrower or of a QRS Entity or (2) if not a wholly owned Subsidiary of the Borrower or of a
QRS Entity, then (x) the value of the Pool Real Estate owned by such Subsidiary (“Partial
Subsidiary Real Estate”) to be used in the calculation in clause (a) above shall be
as provided in clause (a) multiplied by the cumulative percentage interest of the
Subsidiary legally owned by the Borrower or such QRS Entity, as the case may be, and (y) the
Borrower or such QRS Entity, as the case may be controls the right to create a Lien on the
Partial Subsidiary Real Estate to secure the Borrower’s Indebtedness, and to sell, transfer
or otherwise dispose of the Partial Subsidiary Real Estate;




     the owner of the Pool Real Estate (1) has no Indebtedness other than Non-recourse Debt,
and other than Indebtedness to the Borrower subordinated to the Indebtedness incurred under
this Agreement on terms satisfactory to the Agent; and (2) would not at any time be in
default of Sections 7.1(g), (h), (i), (j), or (k),
if said subsections were applicable to said owner; and




     the indicia of ownership of the Subsidiary of the Borrower (or of its owners if not a
direct Subsidiary of the Borrower) or of the QRS Entity is not subject to a Lien (other than
Permitted Encumbrances).



     DC Holdings. The Borrower shall maintain at least 99.5% aggregate ownership of the
indicia of ownership of each DC Holdings Entity, and shall maintain management and control of each
DC Holdings Entity.



Negative Covenants.




     The Borrower covenants and agrees with the Agent and the Lenders that prior to the termination
of this Agreement it will not do any of the following:



     Mergers, Consolidations and Acquisitions of Assets. In any single transaction or
series of related transactions, directly or indirectly: (a) liquidate or dissolve; (b) be a party
to any merger or consolidation other than a merger or consolidation in which (i) the Borrower is
the surviving entity after such merger or consolidation, or (ii) the individuals constituting the
Borrower’s Board of Trustees immediately prior to such merger or consolidation represent a majority
of the surviving entity’s Board of Directors or Board of Trustees after such merger or
consolidation; or (c) sell, convey or lease all or substantially all of its assets.



     Redemption. At any time redeem, retire or otherwise acquire, directly or indirectly,
any shares of its capital stock if such action would cause the Borrower to not be in compliance
with this Agreement.



     Nature of Business. Change its primary business, which is and will be the ownership,
operation, development and redevelopment of multi-family residential properties, and may include
other business initiatives, investments and activities which are related, but incidental, to
Borrower’s primary business; provided, however, that the aggregate value of the specific loans and
investments described below (“Specified Permitted Holdings”) shall not at any time exceed thirty
percent (30%) of the Total Asset Value after giving effect to the Specified Permitted
Holdings. “Specified Permitted Holdings” shall mean the following: securities received in settlement
of liabilities created in the ordinary course of business;



          investments in Unconsolidated Affiliates that are engaged primarily in Borrower’s primary
business as described in this Section;




          loans, advances, and extensions of credit to Persons (who are not Affiliates of the Borrower);




          investments in Persons not included in any other Specified Permitted Holdings;




          investments in income producing Real Property that is not primarily multifamily residential
property (property will be considered as primarily multifamily residential property even if it
includes other non-primary uses which are incidental to the residential use, such as retail or
office);




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          investments in land not improved for multifamily use (not including land that is either under
development or planned for commencement of development within three (3) years after the date of
acquisition); and




          investments of any kind not included in any other Specified Permitted Holdings and which are
not incidental to Borrower’s primary business as described in this Section.




     Transactions with Related Parties. Enter into any transaction or agreement with any
officer, director, or holder of more than five percent (5%) (based on voting rights) of the issued
and outstanding capital stock of the Borrower (or any Affiliate of the Borrower), unless the same
is upon terms substantially similar to those obtainable from qualified wholly unrelated sources,
and, if such transaction or series of related transactions has a value in excess of $10,000,000.00,
is approved by the majority of the Borrower’s non-interested trustees.



     Limiting Agreements. Neither Borrower nor any of its Subsidiaries has entered into,
and after the date hereof, neither Borrower nor any of its Subsidiaries shall enter into, any
Limiting Agreements; provided that so long as the Borrower has received a Credit Rating from two of
Standard & Poor’s Rating Services, Moody’s Investors Service, Inc. or Fitch equal to a Credit
Rating from Fitch that is BBB or better, an S&P Rating that is BBB or better or a Moody’s Rating
that is Baa2 or better, up to five percent (5%) of the Pool Value (after adding the effect of said
property) may be subject to debt-related agreements (but not the related mortgages or pledges) that
require the owner of the project to mortgage and pledge the project to secure Indebtedness if any
of the Borrower’s Credit Ratings are below BBB-/Baa3, or the equivalent.



     Parent Negative Covenants. The Parent will not (a) have any Subsidiary that is a
“qualified REIT subsidiary” under Section 856 of the Code other than the QRS Entities; (b) own any
Property other than the ownership interests of the Borrower, and the Parent’s ownership interests
as of October 31, 2001 in the QRS Entities; (c) give or allow any Lien on any of its Property
including the ownership interests of the Borrower; and (d) except for the Guaranty, create, incur,
suffer or permit to exist, or assume or guarantee, directly or indirectly, contingently or
otherwise, or become or remain liable with respect to (i) any Indebtedness if the aggregate of such
Indebtedness and the Indebtedness of the Borrower would violate Sections 5.3(a), (b), or (c) if
such aggregate Indebtedness is treated as the Borrower’s Indebtedness, and (ii) any Indebtedness of
a Person other than the Parent.



Events of Default and Remedies.




     Events of Default. If any of the following events shall occur, then, as to the events
described in Sections 7.1(b), (c), and (d), if the event has not been
waived, cured or remedied within twenty (20) days after the Agent gives the Borrower notice of such
event, at any time thereafter, and as to all of the other events described herein, at any time, the
Agent may do any or all of the following: (1) without notice to the Borrower, declare the Notes to
be, and thereupon the Notes shall forthwith become, immediately due and payable, together with all
accrued interest thereon, without notice of any kind, notice of acceleration or of intention to
accelerate, presentment and demand or protest, all of which are hereby expressly waived; (2)
without notice to the Borrower, terminate the Commitment; (3) exercise, as may any other Lender,
its rights of offset against each account and all other Property of the Borrower in the possession
of the Agent or any such Lender, which right is hereby granted by the Borrower to the Agent and
each Lender; and (4) exercise any and all other rights pursuant to the Credit Documents:



          The Borrower shall fail to pay or prepay any principal of or interest on the Notes or any fee
or any other obligation hereunder within five (5) days after it was due; or




          The Borrower or the Parent shall fail to pay when due (whether on the scheduled maturity date
or otherwise), or within any applicable period of grace, any principal of or interest on any other
Indebtedness, other than Disqualified Stock, in excess of $50,000,000.00 in principal amount; or




          Any written representation or warranty made in any Credit Document by or on behalf of the
Borrower, when taken as a whole shall prove to have been incorrect, false or misleading in any
material respect; or




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          Default shall occur in the punctual and complete performance of any covenant of the Borrower
or any other Person other than the Agent or the Lenders contained in any Credit Document not
specifically set forth in this Section; or




          A final judgment or judgments in the aggregate for the payment of money in excess of
$50,000,000.00 shall be rendered against the Borrower or the Parent (other than any judgment as to
which, and only to the extent, an insurance company having a rating of “A-” or better by A.M. Best
Co. in Best’s Rating Guide, has acknowledged coverage of such claim in writing), and the same shall
remain undischarged for a period of thirty (30) days during which execution shall not be
effectively stayed; or




          The Borrower shall not be in compliance with any provision of Section 6.3 during the
period covered by an Officer’s Certificate and such non-compliance remains in existence on the date
the next Officer’s Certificate is required to be presented to the Agent under Section
5.2(c) of this Agreement; provided, however, that such right to defer compliance shall be
available to the Borrower for each such provision no more than once every twelve (12) months; or




          Any order shall be entered in any proceeding against the Borrower or the Parent decreeing the
dissolution, liquidation or split-up thereof, and such order shall remain in effect for more than
thirty (30) days; or




          The Borrower or the Parent shall make a general assignment for the benefit of creditors or
shall petition or apply to any tribunal for the appointment of a trustee, custodian, receiver or
liquidator of all or any substantial part of its business, estate or assets or shall commence any
proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect; or




          Any such petition or application shall be filed or any such proceeding shall be commenced
against the Borrower or the Parent and the Borrower or the Parent by any act or omission shall
indicate approval thereof, consent thereto or acquiescence therein, or an order shall be entered
appointing a trustee, custodian, receiver or liquidator of all or any substantial part of the
assets of such Person or granting relief to such Person or approving the petition in any such
proceeding, and such order shall remain in effect for more than ninety (90) days; or




          The Borrower or the Parent shall fail generally to pay its debts as they become due or suffer
any writ of attachment or execution or any similar process to be issued or levied against it or any
substantial part of its Property which is not released, stayed, bonded or vacated within thirty
(30) days after its issue or levy; or




          The Borrower or the Parent shall have concealed, removed, or permitted to be concealed or
removed, any part of its Property, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its Property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any transfer of its Property
to or for the benefit of a creditor at a time when other creditors similarly situated have not been
paid.




     Remedies Cumulative. No remedy, right or power conferred upon the Agent or the
Lenders is intended to be exclusive of any other remedy, right or power given hereunder or now or
hereafter existing at law, in equity, or otherwise, and all such remedies, rights and powers shall
be cumulative.



     Guaranty Proceeds.



          Notwithstanding any other provision of any Credit Document to the contrary, any funds, claims,
or distributions actually received by Agent for the account of any Lender as a result of the
enforcement of, or pursuant to, the Guaranty, net of Agent’s and Lenders’ expenses of collection
thereof (such net amount, “Guaranty Proceeds”), shall be made available for distribution equally
and ratably (in proportion to the aggregate amount of principal, interest and other amounts then
owed in respect of the Obligations or of an issuance of Public Debt (as defined below), as the case
may be) among the Agent, the Lenders and the trustee or trustees of any Indebtedness not
subordinated to the Obligations (or to the holders thereof), issued by Borrower, before or after
the date of this Agreement, in offerings registered under the Securities Act of 1933, as amended,
or in transactions exempt from

26









 








registration pursuant to rule 144A thereof (“Public Debt”). Agent is hereby authorized by
Borrower, by each Lender and by the Parent (by its execution and delivery of the Guaranty) to make
such Guaranty Proceeds so available. No Lender shall have any interest in any amount paid over by
Agent to the trustee or trustees in respect of any Public Debt (or to the holders thereof) pursuant
to the foregoing authorization. This Section 7.3(a) shall apply (i) solely to Guaranty
Proceeds and not to any payments, funds, claims or distributions received by Agent or Lenders
directly or indirectly from Borrower or any other Person other than from the Parent pursuant to the
Guaranty, and (ii) as to Public Debt issued after December 20, 2000, only if the documents
governing the Public Debt provide for the same sharing with the Lenders of guaranty proceeds
recovered to pay the Public Debt. Borrower is aware of the terms of the Guaranty, and specifically
understands and agrees with Agent and the Lenders that, to the extent Guaranty Proceeds are
distributed to holders of Public Debt or their respective trustees, the Parent has agreed that the
Obligations will not be deemed reduced by any such distributions, and the Parent shall continue to
make payments pursuant to the Guaranty until such times as the Obligations have been paid in full
(and the Commitment has been terminated and any LC Exposure reduced to zero), after taking into
account any such distributions of Guaranty Proceeds in respect of Indebtedness other than the
Obligations.




          Nothing contained herein shall be deemed (i) to limit, modify, or alter the rights of Agent
and Lenders under the Guaranty, (ii) to subordinate the Obligations to any Public Debt, or (iii) to
give any holder of Public Debt (or any trustee for such holder) any rights of subrogation.




          This Agreement and the Guaranty are for the sole benefit of Agent and the Lenders and their
respective successors and assigns. Nothing contained herein or in the Guaranty shall be deemed for
the benefit of any holder of Public Debt, or any trustee for such holder; nor shall anything
contained herein or therein be construed to impose on Agent or Lenders any fiduciary duties,
obligations or responsibilities to the holder of any Public Debt or their trustees (including, but
not limited to, any duty to pursue the Parent for payment under the Guaranty).




The Agent.




     Appointment, Powers and Immunities.



          Each Lender hereby irrevocably appoints and authorizes the Agent to act as its agent hereunder
and under the other Credit Documents with such powers as are specifically delegated to the Agent by
the terms hereof and thereof, together with such other powers as are reasonably incidental thereto.
The Agent (i) shall not have any duties or responsibilities except those expressly set forth in
this Agreement and the other Credit Documents, and shall not by reason of this Agreement or any
other Credit Document be a trustee for any Lender; (ii) shall not be responsible to any Lender for
any recitals, statements, representations or warranties contained in this Agreement or any other
Credit Document, or in any certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or any other Credit Document, or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing, registration,
collectibility, recording, perfection, existence or sufficiency of this Agreement or any other
Credit Document or any other document referred to or provided for herein or therein or any property
covered thereby or for any failure by any Party or any other Person to perform any of its
obligations hereunder or thereunder, and shall not have any duty to inquire into or pass upon any
of the foregoing matters; (iii) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or any other Credit Document except to the extent requested by the
Majority Lenders; (iv) SHALL NOT BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN
OR OMITTED TO BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN CONNECTION HEREWITH OR THEREWITH,
INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS OWN NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to
recognize any agreement among or between the Borrower, the Agent, and any Lender other than this
Agreement and the other Credit Documents, regardless of whether the Agent has knowledge of the
existence of any such agreement or the terms and provisions thereof; (vi) shall not be charged with
notice or knowledge of any fact or information not herein set out or provided to the Agent in
accordance with the terms of this Agreement or any other Credit Document; (vii) shall not be
responsible for any delay, error, omission or default of any mail, telegraph, cable or wireless
agency or operator, and (viii) shall not be responsible for the acts or edicts of any Governmental
Authority. The Agent may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable
care.




27









 








          Without the prior written consent of Agent and all of the Lenders, Agent shall not (i) modify
or amend in any respect whatsoever the interest rate provisions of the Credit Documents, (ii)
increase the Commitment, (iii) extend the Maturity Date, (iv) extend or reduce the due date for, or
change the amount of, the scheduled payments of principal or interest on the Loans, the LC
Disbursements or the fees set forth in Section 2.6, (v) amend the definitions of Majority
Lenders or Super Majority Lenders or any requirement that certain actions be taken only with the
consent of a certain number of the Lenders, (vi) amend or waive any provisions of Section
5.15 of this Agreement, or (vii) release the Parent from the Guaranty. From time to time upon
Agent’s request, each Lender shall execute and deliver such documents and instruments as may be
reasonably necessary to enable Agent to effectively administer and service the Loan in its capacity
as lead lender and servicer and in the manner contemplated by the provisions of this Agreement.




          Without the prior written consent of the Majority Lenders, Agent shall not modify, amend or
waive in any respect whatsoever the provisions of (i) Section 5.3 or the definitions of the
financial covenants (or any component thereof) described in Section 5.3, (ii) Section
5.11(c)(i), or (iii) Section 6.1.




          All information provided to the Agent under or pursuant to the Credit Documents, and all
rights of the Agent to receive or request information, or to inspect information or Property, shall
be by the Agent on behalf of the Lenders. If any Lender requests that it be able to receive or
request such information, or make such inspections, in its own right rather than through the Agent,
the Borrower will cooperate with the Agent and such Lender in order to obtain such information or
make such inspection as such Lender may reasonably require.




          The Borrower shall be entitled to rely upon a written notice or a written response from the
Agent as being pursuant to concurrence or consent of the Majority Lenders unless otherwise
expressly stated in the Agent’s notice or response.




     Reliance. The Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, facsimile, telegram or cable) believed by
it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel (which may be counsel for the
Borrower), independent accountants and other experts selected by the Agent. The Agent shall not be
required in any way to determine the identity or authority of any Person delivering or executing
the same. As to any matters not expressly provided for by this Agreement or any other Credit
Document, the Agent shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Majority Lenders, and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders. If any order,
writ, judgment or decree shall be made or entered by any court affecting the rights, duties and
obligations of the Agent under this Agreement or any other Credit Document, then and in any of such
events the Agent is authorized, in its sole discretion, to rely upon and comply with such order,
writ, judgment or decree which it is advised by legal counsel of its own choosing is binding upon
it under the terms of this Agreement, the relevant Credit Document or otherwise; and if the Agent
complies with any such order, writ, judgment or decree, then it shall not be liable to any Lender
or to any other Person by reason of such compliance even though such order, writ, judgment or
decree may be subsequently reversed, modified, annulled, set aside or vacated.



     Defaults. The Agent shall not be deemed to have constructive knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest on Loans) unless it
has received notice from a Lender or the Borrower specifying such Default and stating that such
notice is a “Notice of Default”. In the event that the Agent receives such a notice of the
occurrence of a Default, or whenever the Agent has actual knowledge of the occurrence of a Default,
the Agent shall give prompt written notice thereof to the Lenders (and shall give each Lender
prompt notice of each such non-payment). The Agent shall (subject to Section 8.7 hereof)
take such action with respect to such Default as shall be directed by the Majority Lenders and
within its rights under the Credit Documents and at law or in equity, provided that, unless and
until the Agent shall have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, permitted hereby with respect to such Default
as it shall deem advisable in the best interests of the Lenders and within its rights under the
Credit Documents in order to preserve, protect or enhance the collectibility of the Loans, at law
or in equity.



     Rights as a Lender. With respect to the Commitment and the Loans made, Agent, in its
capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same



28









 







as though it were not acting in its agency capacity, and the term “Lender” or “Lenders” shall,
unless the context otherwise indicates, include the Agent in its individual capacity. The Agent
may (without having to account therefor to any other Lender) as a Lender, and to the same extent as
any other Lender, accept deposits from, lend money to and generally engage in any kind of banking,
trust, letter of credit, agency or other business with the Borrower (and any of its Affiliates) as
if it were not acting as the Agent but solely as a Lender. The Agent may accept fees and other
consideration from the Borrower (in addition to the fees heretofore agreed to between the Borrower
and the Agent) for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.



     Indemnification. The Lenders agree to indemnify the Agent, its officers, directors,
agents and Affiliates, ratably in accordance with each Lender’s respective Percentage, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this Agreement or any other
Credit Document or any other documents contemplated by or referred to herein or therein, or the
transactions contemplated hereby or thereby (including, without limitation, interest, penalties,
reasonable attorneys’ fees and amounts paid in settlement in accordance with the terms of this
Section 8, but excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or thereof or of any such other documents, provided that
no Lender shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified, or from the Agent’s default in the
express obligations of the Agent to the Lenders provided for in this Agreement. The obligations of
the Lenders under this Section 8.5 shall survive the termination of this Agreement and the
repayment of the Obligations.



     Non-Reliance on Agent and Other Lenders. Each Lender agrees that it has received
current financial information with respect to the Borrower and that it has, independently and
without reliance on the Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Borrower and decision to enter into
this Agreement and that it will, independently and without reliance upon the 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 analysis and decisions in taking or not taking action under this Agreement
or any of the other Credit Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by any Party of this Agreement or any of the other Credit
Documents or any other document referred to or provided for herein or therein or to inspect the
properties or books of the Borrower or any Party except as specifically required by the Credit
Documents. Except for notices, reports and other documents and information expressly required to
be furnished to the Lenders by the Agent hereunder or the other Credit Documents, the Agent shall
not have any duty or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any other Party (or any
of their affiliates) which may come into the possession of the Agent. Each Lender assumes all risk
of loss in connection with its Percentage in the Loans to the full extent of its Percentage
therein. The Agent assumes all risk of loss in connection with its Percentage in the Loans to the
full extent of its Percentage therein.



     Failure to Act. Except for action expressly required of the Agent, as the case may
be, hereunder, or under the other Credit Documents, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder and thereunder unless it shall receive further assurances
to its satisfaction by the Lenders of their indemnification obligations under Section 8.5
hereof against any and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.



     Resignation of Agent. Subject to the appointment and acceptance of a successor Agent
as provided below, the Agent may resign at any time by giving notice thereof to the Lenders and the
Borrower. The Agent shall resign if it has assigned all of its Lender Commitment and Loans and is
not an Issuing Bank. Upon any such resignation, (i) the Majority Lenders with the consent of the
Borrower, so long as no Default is in existence, shall have the right to appoint a successor Agent
so long as such successor Agent is also a Lender at the time of such appointment and (ii) the
Majority Lenders shall have the right to appoint a successor Agent that is not a Lender at the time
of such appointment so long as the Borrower consents to such appointment (which consent shall not
be unreasonably withheld). If no successor Agent shall have been so appointed by the Majority
Lenders and accepted such appointment within 30 days after the retiring Agent’s giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, and with the consent of the
Borrower which shall not be unreasonably withheld, appoint a



29









 







successor Agent. Any successor Agent shall be a bank which has an office in the United States
and a combined capital and surplus of at least $500,000,000.00. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations as Agent thereafter arising
hereunder and under any other Credit Documents, but shall not be discharged from any liabilities
for its actions as Agent prior to the date of discharge. Such successor Agent shall promptly
specify by notice to the Borrower its principal office referred to in Section 2.1 and
Section 2.2 hereof. After any retiring Agent’s resignation hereunder as Agent, the
provisions of this Section 8 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.



     No Partnership. Neither the execution and delivery of this Agreement nor any of the
other Credit Documents nor any interest the Lenders, the Agent or any of them may now or hereafter
have in all or any part of the Obligations shall create or be construed as creating a partnership,
joint venture or other joint enterprise between the Lenders or among the Lenders and the Agent.
The relationship between the Lenders, on the one hand, and the Agent, on the other, is and shall be
that of principals and agent only, and nothing in this Agreement or any of the other Credit
Documents shall be construed to constitute the Agent as trustee or other fiduciary for any Lender
or to impose on the Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.



Miscellaneous.




     No Waiver, Amendments. No waiver of any Default shall be deemed to be a waiver of any
other Default. No failure to exercise or delay in exercising any right or power under any Credit
Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right or power preclude any further or other exercise thereof or the exercise of any other right or
power. Except as may be prohibited by Section 8.1 hereof, no amendment, modification or
waiver of any Credit Document shall be effective unless the same is in writing and signed by the
Borrower and the Majority Lenders. No notice to or demand on the Borrower or any other Person
shall entitle the Borrower or any other Person to any other or further notice or demand in similar
or other circumstances.



     Notices. All notices under the Credit Documents shall be in writing and either (i)
delivered against receipt therefor, or (ii) mailed by registered or certified mail, return receipt
requested, in each case addressed as set forth herein, or to such other address as a party may
designate. Notices shall be deemed to have been given (whether actually received or not) when
delivered (or, if mailed, on the next Business Day). Provided, however, that as between the Agent
and the Lenders and among the Lenders, notice may be given by telecopy or facsimile effective upon
the earlier of actual receipt or confirmation of receipt by telephone.



     Submission to Jurisdiction. THE BORROWER AND PARENT EACH HEREBY IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND AGREES AND CONSENTS THAT SERVICE OF
PROCESS MAY BE MADE UPON IT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
OF THE OTHER CREDIT DOCUMENTS BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, POSTAGE PREPAID, TO BORROWER OR PARENT, AS THE CASE MAY BE, AT THE ADDRESS
ESTABLISHED PURSUANT TO SECTION 10.2 HEREOF. THE BORROWER AND PARENT EACH HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER CREDIT DOCUMENTS IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER AND THE PARENT EACH (A) AGREES TO
DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF NEW YORK IN CONNECTION WITH
ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO THE



30









 







AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY PROVIDING SUCH SERVICE OF
PROCESS TO SUCH AGENT FOR SERVICE OF PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT
OR THE LENDERS TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER OR PARENT IN
ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER AND
THE PARENT EACH HEREBY IRREVOCABLY AGREES THAT ANY SUIT, ACTION OR PROCEEDING AGAINST THE AGENT OR
ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS SHALL
BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, OR THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.



     Choice of Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PERSONS EXECUTING
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED ENTIRELY WITHIN THAT
STATE.



     Survival; Parties Bound; Successors and Assigns.



          All representations, warranties, covenants and agreements made by or on behalf of the Borrower
in connection herewith shall survive the execution and delivery of the Credit Documents, shall not
be affected by any investigation made by any Person, and shall bind the Borrower and its
successors, trustees, receivers and assigns and inure to the benefit of the successors and assigns
of the Agent and the Lenders; provided, however, that (i) the Borrower may not assign or transfer
any of its rights or obligations hereunder without the prior written consent of the Agent and all
of the Lenders, and any such assignment or transfer without such consent shall be null and void,
and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. 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 paragraph (c) of this Section)
and, to the extent expressly contemplated hereby, the Affiliates of each of the Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.




          (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Lender Commitment and the Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld) of:





     (A) the Borrower, provided that no consent of the Borrower shall be required if
a Default has occurred and is continuing; and




     (B) the Agent.




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




     (A) except in the case of an assignment of the entire remaining amount of the assigning
Lender’s Lender Commitment or Loans, the amount of the Lender Commitment or 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 Agent) shall not be less
than $10,000,000 unless each of the Borrower and the Agent otherwise consent,
provided that no such consent of the Borrower shall be required if a Default has
occurred and is continuing;




     (B) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement;



31









 






     (C) the parties to each assignment shall execute and deliver to the Agent an Assignment
and Assumption, together with a processing and recordation fee paid by the assigning Lender
of $2,500; and




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



          For the purposes of this Section 10.5, the term “Approved Fund” has the
following meaning:




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




          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of
this Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.5, 5.10, 5.11 and 9.7). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply with this Section
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.




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




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




          A Lender may sell participating interests to an Affiliate of the Lender with written notice to
the Agent and the Borrower but not any consent of the Agent, the Borrower or any other Lender, and
may sell participating interests in any of its Loans to an Approved Fund so long as such
participation shall (1) limit the voting rights of the participant, if any, to the ability to vote
for changes in the amount of the Commitment, the interest rate on the Loans, and the Maturity Date,
(2) if the participant is not an Affiliate of the participating Lender, require the written consent
of the Borrower (so long as no Default is in existence) and the Agent, such consent not to be
unreasonably withheld, (3) be in a minimum principal amount of at least $10,000,000.00 if
participated to a Person not already a Lender, and (4) not reduce the Lender’s Lender Commitment
which has not been participated to less than $10,000,000.00. In connection with any sale of a
participating interest made in compliance with this Agreement, (i) the participating Lender shall
continue to be liable for its Lender Commitment and its other obligations under the Credit
Documents, (ii) the Agent, the Borrower and the other Lenders shall continue to deal solely and
directly with the participating Lender in connection with such Lender’s rights and obligations
under the Credit Documents, and (iii) the participant may not require the participating Lender to
take or refrain from taking any action under the Credit Documents that is in conflict with the
terms and provisions of the Credit Documents.





32










 





          Notwithstanding any provision hereof to the contrary, (i) any Lender may assign and
pledge all or any portion of its Lender Commitment and Loans to a Federal Reserve Bank; provided,
however, that any such assignment or pledge shall not relieve such Lender from its obligations
under the Credit Documents; and (ii) the Agent may not assign or participate its Lender Commitment
so that its Lender Commitment after such assignment or participation is less than $15,000,000.00,
to any Person other than an Affiliate of the Agent without the prior written consent of the
Borrower, so long as no Default is in existence.




          The term of this Agreement shall be until the final maturity of the Notes and the payment of
all amounts due under the Credit Documents.




     Counterparts. This Agreement may be executed in several identical counterparts,
and by the parties hereto on separate counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such separate counterparts shall
constitute but one and the same instrument.



     Usury Not Intended. It is the intent of the parties in the execution and performance
of this Agreement to contract in strict compliance with applicable usury laws from time to time in
effect. In furtherance thereof, the Agent, the Lenders and the Borrower stipulate and agree that
none of the terms and provisions contained in this Agreement or the other Credit Documents shall
ever be construed to create a contract to pay for the use, forbearance or detention of money with
interest at a rate in excess of an applicable Ceiling Rate, if any. The provisions of this
paragraph shall control over all other provisions of the Credit Documents which may be in apparent
conflict herewith.



     Captions. The headings and captions appearing in the Credit Documents have been
included solely for convenience and shall not be considered in construing the Credit Documents.



     Severability. If any provision of any Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired thereby.



     Disclosures. Every reference in the Credit Documents to disclosures of the Borrower
to the Agent and the Lenders in writing, to the extent that such references refer to disclosures at
or prior to the execution of this Agreement, shall be deemed strictly to refer only to written
disclosures delivered to the Agent and the Lenders in an orderly manner concurrently with the
execution hereof.



Limitation of Liability. NO OBLIGATION OR LIABILITY WHATSOEVER OF THE BORROWER WHICH MAY ARISE AT ANY TIME UNDER THIS
AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER CREDIT
DOCUMENT SHALL BE PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO
THE PRIVATE PROPERTY OF, ANY OF THE BORROWER’S TRUSTEES OR SHAREHOLDERS REGARDLESS OF WHETHER SUCH
OBLIGATION OR LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE.




     Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TOGETHER REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.



     WAIVERS OF JURY TRIAL. THE BORROWER, THE PARENT, THE AGENT, THE LENDERS AND ANY OTHER
PERSON EXECUTING THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.



     USA Patriot Act. Each Lender that is subject to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby
notifies the Borrower that pursuant to the



33









 






requirements of the Act, it is required to obtain,
verify and record information that identifies the Borrower, which information includes the name and
address of the Borrower and other information that will allow such Lender to identify the Borrower
in accordance with the Act.



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set
forth above.



	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael R. Berman
 

Michael R. Berman
	 	 
	 

	 	Title:
	 	Group Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	9200 E. Panorama Circle	 	 
	 	 	Suite 400	 	 
	 	 	Englewood, Colorado 80112	 	 
	 	 	Attention: Corporate Finance	 	 





The Parent joins in the execution of this Agreement to evidence its agreement to the provisions of
Sections 5.2, 5.11(b) and (c), and 6.6 of this Agreement.




	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Michael R. Berman
 

Michael R. Berman
	 	 
	 

	 	Title:
	 	Group Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	9200 E. Panorama Circle	 	 
	 	 	Suite 400	 	 
	 	 	Englewood, Colorado 80112	 	 
	 	 	Attention: Corporate Finance	 	 







34









 








	 	 	 	 	 	 	 
	Lender Commitment: $500,000,000

Percentage: 100%	 	MORGAN STANLEY SENIOR FUNDING, INC.

as Agent and as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	1585 Broadway	 	 
	 	 	New York, NY 10036	 	 
	 	 	Attention: Daniel Twenge	 	 
	 
	 	 	 	 	 	 
	 	 	Telephone No: 212 761-2225	 	 
	 	 	Telecopy No.: 212 507-2577	 	 







35









 








EXHIBIT A




OFFICER’S CERTIFICATE




     Archstone-Smith Operating Trust (the “Borrower”), Archstone-Smith Trust (the “Parent”), Morgan
Stanley Senior Funding, Inc., as Agent (the “Agent”) and certain other Lenders (the “Lenders”)
entered into that certain (the “Agreement”) dated as of May 29, 2007, as the same may be amended.
Any capitalized term used herein and not otherwise defined shall have the meaning ascribed to it in
the Agreement.



     The undersigned hereby certifies that:




	I.	 	I am a Vice President of the Borrower and a Vice President of the Parent, and I make these
certifications on behalf of the Borrower or the Parent, as applicable.






	II.	 	The Parent’s financial statements as of ___ as filed with the Securities and Exchange
Commission (“SEC”), and the Borrower’s financial statements as of ___ delivered to
the Agent, were prepared in conformity with generally accepted accounting principles
consistently applied and present fairly the financial position of the Parent and of the
Borrower, respectively, as of the date thereof and the results of its operations for the
period covered thereby subject to normal year-end adjustments.






	III.	 	Borrower hereby certifies the following as of the end of the period covered by the financial
statements described above:





	 	 	 	 	 	 	 	 	 
	 
	 	1.	 	Maximum Debt to Total Asset Value Ratio Calculation
(Section 5.3 (c))	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(A)	 	Indebtedness (Borrower and Parent)	 	 	 	 
	 
	 	 	 	Total Unsecured Debt (per GAAP)	$	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Total Secured Debt (per GAAP)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Guarantees, Endorsements and Other Contingent Obligations	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Net Obligations under Hedging Agreements	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Equity Percentage of Indebtedness of Unconsolidated Affiliates	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Other (pursuant to the Agreement)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Total Indebtedness	$	 			 	 
	 
	 	 	 	 	 	 	 
	 
	 	(B)	 	Total Asset Value:	 	 	 	 
	 
	 	 	 	Aggregated Net Operating Income from stabilized properties
and from properties owned for more than twelve months divided by 6.75%	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Historical Value of pre-stabilized properties and properties owned for 12 months or less	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Historical Value of properties under construction	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Historical Value of undeveloped land	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Historical Value of Redevelopment Property	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Other assets (excluding intangibles as defined by GAAP)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Equity Percentage of the Total Asset Value attributed to Unconsolidated Affiliates	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Total Asset Value	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(C)	 	Maximum Debt to Total Asset Value (Ratio of 1(A) to 1(B))	 	 	 	 






 









 






	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Required:  Maximum:	 	 	[60%] [65%] 1/	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.	 	Maximum Secured Debt to Total Asset Value Ratio Calculation
(Section 5.3 (a))	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	(A)           Secured Debt	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	(B)     Total Asset Value	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	(C)     Maximum Secured Debt to Total Asset Value
(Ratio of 2(A) to 2(B))	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	Required: Maximum:	 	 	40	%
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.	 	Fixed Charge Coverage Ratio Calculation
(Section 5.3(b))	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(A)	 	Borrower’s EBITDA (calculated by adding the Parent’s Interest Expense) for the immediately preceding
four (4) calendar quarters	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(B)	 	Unit Capital Expenditures	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(C)	 	Clause (A) minus Clause (B)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(D)	 	Interest Expense, as defined, of Borrower and Parent	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(E)	 	Payments and Payables on Disqualified Stock	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(F)	 	Regularly Scheduled Principal Paid and Payable
(Borrower and Parent)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(G)	 	Sum of 4(D), 4(E) and 4(F)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(H)	 	Fixed Charge Coverage Ratio (Ratio of 4(C) to 4(G))	 	 	1.0	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	Required:	 	Minimum of 1.50 to 1.0	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.	 	Property Pool
(Section 5.15)	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(A)	 	Pool Value	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(B)	 	Outstanding unsecured indebtedness	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(C)	 	Pool Value divided by outstanding unsecured
Indebtedness (6(A) divided by 6(B))	 	 	%	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Required:	 	Minimum of 150%	 
	 
	 	 	 	 	 	 	 	 
	 
	 	(D)	 	Pool Value attributable to unimproved land (Maximum-5%)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 
	 	(E)	 	Pool Value attributable to unimproved land, land under
construction or development, projects that reached the Calculation Date but have an Occupancy Level
of less than 80%, non-multifamily land, projects that have not
reached the Calculation Date (Maximum-25%)	$	 		 	 
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	5.	 	Specified Permitted Holdings
(Section 6.3)	 	 	 	 








 




	
	1/ May increase to 65% from time to time for no
more than two (2) consecutive calendar quarters.





 









 





	 	 	 	 	 	 	 	 	 
	 
	 	(A)	 	Securities received in settlement liabilities created in the
ordinary course of business	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(B)	 	Unconsolidated Affiliates engaged in primarily
the same business as the Borrower’s primary business	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(C)	 	Loans to unaffiliated Persons	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(D)	 	Other investments in Persons not included in any
other specified Permitted Holdings	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(E)	 	Income producing properties that are not multifamily residential properties	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(F)	 	Investments in land not improved for multifamily use	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	(G)	 	Unrelated, non-incidental investments	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	Aggregate Value of the Specified Permitted Holdings

(sum of 5(A) through 5(G)) (Maximum 30%)	 	 	 	 
	 
	 	 	 	 	 	 	 






	IV.	 	A review of the activities of the Borrower during the period covered by the financial
statements has been made under my supervision and with a view to determining whether during
such period the Borrower has kept, observed, performed and fulfilled all of its obligations
under the Agreement.
	 
	 	 	The Parent has made available its financial statements and related footnotes for the most
recent period ended ___, as filed with the SEC and can be accessed at
http://www.sec.gov/. The Borrower has delivered to the Agent its financial statements and
related footnotes for the most recent period ended ___. The Parent’s and the
Borrower’s earnings press releases and supplemental information for such period have been
posted to the Parent’s website (                    ). The financial statements
were prepared in conformity with generally accepted accounting principles consistently
applied (except for the omission of footnote disclosures and appropriately disclosed
consistency exceptions) and present fairly the financial position of the Parent and the
Borrower, respectively, as of the date thereof and the results of its operations for the
period covered thereby subject to normal year-end adjustments.
	 
	V.	 	(Check either (A) or (B))
	 
	 	 	[ ] (A) The Borrower has kept, observed, performed and fulfilled each and every one of
its obligations under the Agreement during the period covered by the applicable financial
statements.
	 
	 	 	[ ] (B) The Borrower has kept, observed, performed and fulfilled each and every one of
its obligations under the Agreement during the period covered by the applicable financial
statements except for the following matters: [Describe all such defaults, specifying the
nature, duration and status thereof and what action the Borrower has taken or proposes to
take with respect thereto].
	 
	VI.	 	The Parent hereby certifies the
following as to itself as of the
end of the period covered by the
financial statements dated
                     as filed with the
SEC:





	 	 	 	 	 	 	 	 	 
	 
	 	1.	 	Indebtedness	$	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	2.	 	Interest Expense	$	 	 	 
	 
	 	 	 	 	 	 	 






	VII.	 	Check either (A) or (B)
	 
	 	 	[ ] (A) The Parent has kept, observed, performed and fulfilled each and every one of its
obligations under the Agreement during the period covered by the applicable financial
statements.




 









 






	 	 	[ ] (B) The Parent has kept, observed, performed and fulfilled each and every one of its
obligations under the Agreement during the period covered by the applicable financial
statements except for the following matters: [Describe all such defaults, specifying the
nature, duration and status thereof and what action the Parent has taken or proposes to
take with respect thereto].





	 	 	 	 	 	 	 
	Date:                                        

	 	Name:	 	 	 	 
	 

	 	 	 	 

[Vice President Name]
	 	 





(A manually signed Officer’s Certificate is available at the request of the Agent or any Lender.)




 









 








POOL PROPERTY LIST





List each property separately showing the Historical Value and the components, the city,
the state, the Occupancy Level for the past three months, the number of units, the age of
the property and net operating income.




 









 








EXHIBIT B




REQUEST FOR LOAN




Date:                     , 2007




Morgan Stanley Senior Funding, Inc.

(“Agent”)




	 	 	 	 	 
	 

	 	RE:
	 	Request for Loan Under Credit Agreement (as amended from
time to time, the “Credit Agreement”) dated as of May 29,
2007, among Archstone-Smith Operating Trust (the “Borrower”),
Archstone-Smith Trust, the Agent and the Lenders as signatory to the
Credit Agreement





Gentlemen:




     Borrower hereby requests [check as applicable] o a conversion of an existing Loan as provided
below, and/or o  an advance under the Credit Agreement, which is allowed pursuant to Section 5.9 of
the Credit Agreement, in the amount of $                     [minimum of $1,000,000.00 and in multiples of
$100,000.00].



	 	 	 	 	 	 	 	 	 	 	 
	 	 	Maximum Principal Amount	 	 	[$500,000,000.00]	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Less the amount outstanding under the Credit Agreement	 	(	$                    .                    	)
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Available amount	 	$	                    .                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Less amount requested	 	(	$                    .                    	)
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Amount remaining to be advanced	 	$	                    .                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	The advance or conversion is to be made as follows:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Base Rate Borrowing.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	1.	 	Amount of Base Rate Borrowing:	 	$	                    .                    	 
	 
	 	 	 	2.	 	Date of Base Rate Borrowing	 	 	                    , 2007	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Eurodollar Rate Borrowing:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	1.	 	Amount of Eurodollar Rate Borrowing:	 	$	                    .                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	2.	 	Amount of conversion of existing Loan to Eurodollar Rate Borrowing:	 	$	                    .                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	3.	 	Number of Eurodollar Rate Borrowing(s) now in effect: [cannot exceed 12]	 	 	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	4.	 	Date of Eurodollar Rate Borrowing or conversion:	 	 	                    , 2007	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	5.	 	Interest Period:	 	 	                    	 






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	6.	 	Expiration date of current Interest Period as to this conversion:	 	 	                    , 2007                     	 






     Borrower hereby represents and warrants that the amounts set forth above are true and correct,
that the representations and warranties contained in the Credit Agreement are true and correct as
if made as of this date (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material respects as of such
earlier date), and that Borrower has kept, observed, performed and fulfilled each and every one of
its obligations under the Credit Agreement as of the date hereof [except as follows:]



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 







 









 








EXHIBIT C




NOTE




			
	$[                    ]
	 	                    , 2007






     FOR VALUE RECEIVED ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust
(herein called “Maker”) promises to pay to the order of
[                                        ], a [                    ] (“Payee”), at the offices
of Morgan Stanley Senior Funding, Inc., as “Agent” under the Credit Agreement, at
[                    ], New York, New York ___, or at such other place as the holder
(the “Holder”, whether or not Payee is such holder) of this note may hereafter designate in
writing, in immediately available funds and in lawful money of the United States of America, the
principal sum of [                    ] Dollars ($[                                        ]) (or the unpaid
balance of all principal advanced against this note, if that amount is less), together with
interest on the unpaid principal balance of this note from time to time outstanding at the Stated
Rate and interest on all past due amounts, both principal and accrued interest, at the Past Due
Rate; provided, that for the full term of this note the interest rate produced by the
aggregate of all sums paid or agreed to be paid to the Holder of this note for the use, forbearance
or detention of the debt evidenced hereby (including, but not limited to, all interest on this note
at the Stated Rate) shall not exceed the Ceiling Rate.



          1. Definitions. Any terms not defined herein shall have the meaning given to them in the
Credit Agreement dated as of May 29, 2007 among the Maker, Archstone-Smith Trust, the Agent and
certain other Lenders (as the same may be amended or modified the “Credit Agreement”).




          2. Rates Change Automatically and Without Notice. Without notice to Maker or any other person
or entity and to the full extent allowed by applicable law from time to time in effect, the Prime
Rate and the Ceiling Rate shall each automatically fluctuate upward and downward as and in the
amount by which Agent’s said prime rate, and such maximum nonusurious rate of interest permitted by
applicable law, respectively, fluctuate.




          3. Calculation of Interest. Interest for Eurodollar Rate Borrowings shall be computed for the
actual number of days elapsed in a calendar year (up to 365, or 366 in a leap year) deemed to
consist of 360 days. Interest for Base Rate Borrowings shall be computed on the basis of the
actual number of days elapsed in the applicable calendar year in which it accrued.




          4. Payment Schedule. The principal of this note shall be due and payable on the Maturity
Date. Accrued and unpaid interest shall be due and payable on each Interest Payment Date.




          5. Prepayment. Maker may prepay this note only as provided in the Credit Agreement.




 









 








          6. Borrowings. Upon and subject to the terms and conditions of the Credit Agreement and the
other provisions of this note, Maker may borrow against this note at any time during the Draw
Period unless and until a Default has occurred which the Holder has not declared to have been fully
cured or waived, and (except as the Credit Agreement or any of the other Credit Documents may
otherwise provide) there is no limit on the number of advances against this note so long as the
total unpaid principal of this note at any time outstanding does not exceed the Payee’s Lender
Commitment. Interest on the amount of each advance against this note shall be computed on the
amount of the unpaid balance of that advance from the date it is made until the date it is repaid.
If Maker’s right (if any) to borrow against this note shall ever lapse because of the occurrence of
any default, it shall not be reinstated (or construed from any course of conduct or otherwise to
have been reinstated) unless and until the Agent shall declare in a signed writing that it has been
cured or waived. The unpaid principal balance of this note at any time shall be the total of all
principal lent against this note to Maker or for Maker’s account less the sum of all principal
payments and permitted prepayments on this note received by the Holder. Absent manifest error, the
Holder’s computer records shall on any day conclusively evidence the unpaid balance of this note
and its advances and payments history posted up to that day. All loans and advances and all
payments and permitted prepayments made on this note may be (but are not required to be) endorsed
by the Holder on the schedule attached hereto (which is hereby made a part hereof for all purposes)
or otherwise recorded in the Holder’s computer or manual records; provided, that any Holder’s
failure to make notation of (a) any principal advance or accrual of interest shall not cancel,
limit or otherwise affect Maker’s obligations or any Holder’s rights with respect to that advance
or accrual, or (b) any payment or permitted prepayment of principal or interest shall not cancel,
limit or otherwise affect Maker’s entitlement to credit for that payment as of the date of its
receipt by the Holder.




          7. Credit Agreement. This note has been issued pursuant to the terms of the Credit Agreement,
to which reference is made for all purposes. Advances against this note by Payee or other Holder
hereof shall be governed by the Credit Agreement. Payee is entitled to the benefits of the Credit
Agreement. Maker hereby grants to Payee and all other present and future Holders a contractual
right of setoff in and to, all property and any and all deposits (general or special, time or
demand, provisional or final) at any time held by the Payee or other Holder for any Maker’s credit
or account.




          8. Defaults and Remedies. Upon the occurrence of any Event of Default the Holder may elect to
exercise any or all rights, powers and remedies afforded (a) under the Credit Agreement and all
other Credit Documents and (b) by law, including the right to accelerate the maturity of this
entire note.




          In addition to and cumulative of such rights, the Holder is hereby authorized at any time and
from time to time after any such default, at Holder’s option, without notice to Maker or any other
person or entity (all rights to any such notice being hereby waived), to set off and apply any and
all of any Maker’s deposits at any time held by the Holder, and any other debt at any time owing by
the Holder to or for the credit or account of any





 









 








          Maker, against the outstanding balance of this note, in such order and manner as Holder may
elect in its sole discretion.




          9. Waivers. Except only for any notices which are specifically required by the Credit
Agreement, Maker and any and all co-makers, endorsers, guarantors and sureties severally waive
notice (including, but not limited to, notice of intent to accelerate and notice of acceleration,
notice of protest and notice of dishonor), demand, presentment for payment, protest, diligence in
collecting and the filing of suit for the purpose of fixing liability and consent that the time of
payment hereof may be extended and re-extended from time to time without notice to any of them.
Each such person agrees that his, her or its liability on or with respect to this note shall not be
affected by any release of or change in any guaranty at any time existing or by the partial or
complete unenforceability of any guaranty or other surety obligation, in each case in whole or in
part, with or without notice and before or after maturity.




          10. Governing Law, Jurisdiction and Venue. This note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.




          11. Participations and Assignments. Payee and each other Holder reserves the right,
exercisable in such Holder’s discretion and without notice to Maker or any other person, to sell
participations, assign interests or both, in all or any part of this note or the debt evidenced by
this note, in accordance with the Credit Agreement.




          12. Limitation of Liability. No obligation or liability whatsoever of Maker which may arise
at any time under this promissory note or any obligation or liability which may be incurred by it
pursuant to any other instrument, transaction or undertaking contemplated hereby shall be
personally binding upon, nor shall resort for the enforcement thereof be had to the private
property of, any of Maker’s trustees or shareholders regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.




          13. WAIVERS OF JURY TRIAL. MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS NOTE AND FOR ANY COUNTERCLAIM THEREIN




	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 







 









 








EXHIBIT D




ASSIGNMENT AND ASSUMPTION




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




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




	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]2]
	 
	 	 	 	 	 	 
	3.	 	Borrower:	 	Archstone-Smith Operating Trust
	 
	 	 	 	 	 	 
	4.	 	Administrative Agent:	 	Morgan Stanley Senior Funding, Inc., as the administrative agent under the Credit Agreement
	 
	 	 	 	 	 	 
	5.	 	Credit Agreement:	 	The Credit Agreement dated as of May 29, 2007 among Archstone-Smith Operating Trust,
	 	 	 	 	Archstone-Smith Trust, the Lenders parties thereto, Morgan Stanley Senior Funding, Inc., as
	 	 	 	 	Administrative Agent, and the other lenders parties thereto








 




			
	2	 	Select as applicable.




 









 







	6.	 	Assigned Interest:





	 	 	 	 	 	 	 	 	 
	          Aggregate Amount of	 	Amount of	 	 	 	 
	      Commitment/Loans for all	 	Commitment/Loans	 	 	Percentage Assigned of	 
	                    Lenders	 	Assigned	 	 	Commitment/Loans3	 
	$
	 	$	 	 	 	 	%	 
	$
	 	$	 	 	 	 	%	 
	$
	 	$	 	 	 	 	%	 





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



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




	 	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	          Title:	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	          Title:	 	 








 




			
	3	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.




 









 










[Consented to and]4 Accepted:




MORGAN STANLEY SENIOR FUNDING, INC., as Administrative Agent




	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	     Title:	 	 
	 
	 	 	 	 
	[Consented to and]5 Accepted:	 	 
	 
	 	 	 	 
	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	     Title:	 	 








 




			
	4	 	To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.
	 
	5	 	Consent not required if an Event of Default
has occurred and is continuing.




 









 










ANNEX 1




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




     1. Representations and Warranties.



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



     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.2 thereof, as
applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Documents are required to be performed by it as a
Lender.



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



     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 and interpreted in accordance with, the laws of the State of New York.




 









 








EXHIBIT E




GUARANTY




     THIS GUARANTY dated as of May 29, 2007, is executed and delivered by ARCHSTONE-SMITH TRUST, a
Maryland real estate investment trust (“Guarantor”), in favor of (a) MORGAN STANLEY SENIOR FUNDING,
INC., in its capacity as Agent (the “Agent”) for the Lenders under that certain Credit Agreement
dated as of May 29, 2007 by and among ARCHSTONE-SMITH OPERATING TRUST (the “Borrower”),
Archstone-Smith Trust, the financial institutions party thereto and their assignees in accordance
therewith (the “Lenders”), and the Agent (as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms, the “Credit Agreement”) and (b)
the Lenders.



     WHEREAS, pursuant to the Credit Agreement, the Lenders have made available to the Borrower
certain financial accommodations on the terms and conditions set forth in the Credit Agreement;



     WHEREAS, Guarantor is the direct or indirect parent of the Borrower;




     WHEREAS, the Borrower and Guarantor, though separate legal entities, are mutually dependent on
each other in the conduct of their respective businesses as an integrated operation and have
determined it to be in their mutual best interests to obtain financing from the Agent and the
Lenders through their collective efforts;



     WHEREAS, Guarantor acknowledges that it will receive direct and indirect benefits from the
Agent and the Lenders making such financial accommodations available to the Borrower under the
Credit Agreement and, accordingly, Guarantor is willing to guarantee the Borrower’s obligations to
the Agent and the Lenders on the terms and conditions contained herein; and



     WHEREAS, Guarantor’s execution and delivery of this Guaranty is one of the conditions
precedent to the Agent and the Lenders making, or continuing to make, such financial accommodations
to the Borrower.



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



     Section 1. Guaranty. Guarantor hereby absolutely and unconditionally guaranties the
due and punctual payment and performance of all of the following (collectively referred to as the
“Obligations”): (a) all indebtedness and obligations owing by the Borrower to any of the Lenders or
the Agent under or in connection with the Credit Agreement and any other Credit Document, including
without limitation, the repayment of all principal of the Loans made by the Lenders to the Borrower
under the Credit Agreement and the payment of all interest, fees, charges, reasonable attorneys
fees and other amounts payable to any Lender or the Agent thereunder or in connection therewith;
(b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing;
and (c) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements,
that are incurred by the Lenders or the Agent in the enforcement of any of the foregoing or any
obligation of Guarantor hereunder.



     Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a guaranty of
payment, and not of collection, and a debt of Guarantor for its own account. Accordingly, the
Lenders and the Agent shall not be obligated or required before enforcing this Guaranty against
Guarantor: (a) to pursue any right or remedy the Lenders or the Agent may have against the
Borrower, any other guarantor or any other Person or commence any suit or other proceeding against
the Borrower, any other guarantor or any other Person in any court or other tribunal; (b) to make
any claim in a liquidation or bankruptcy of the Borrower, any other guarantor or any other Person;
or (c) to make demand of the Borrower, any other guarantor or any other Person or to enforce or
seek to enforce or realize upon any collateral security held by the Lenders or the Agent which may
secure any of the Obligations. In this connection, Guarantor hereby waives its right to require any
holder of the Obligations to take action against the Borrower as provided by any Legal Requirement.



     Section 3. Guaranty Absolute. Guarantor guarantees that the Obligations will be paid
strictly in accordance with the terms of the documents evidencing the same, regardless of any Legal
Requirement now or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Lenders with respect thereto.



 









 




The liability of Guarantor under this Guaranty shall be absolute and unconditional in
accordance with its terms and shall remain in full force and effect without regard to, and shall
not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including without limitation, the following (whether or not Guarantor
consents thereto or has notice thereof):




     (a) (i) any change in the amount, interest rate or due date or other term of any of the
Obligations, (ii) any change in the time, place or manner of payment of all or any portion of the
Obligations, (iii) any amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Credit Agreement, any other Credit Document, or any other document or
instrument evidencing or relating to any Obligations, or (iv) any waiver, renewal, extension,
addition, or supplement to, or deletion from, or any other action or inaction under or in respect
of, the Credit Agreement, any of the other Credit Documents, or any other documents, instruments or
agreements relating to the Obligations or any other instrument or agreement referred to therein or
evidencing any Obligations or any assignment or transfer of any of the foregoing;



     (b) any lack of validity or enforceability of the Credit Agreement, any of the other Credit
Documents, or any other document, instrument or agreement referred to therein or evidencing any
Obligations or any assignment or transfer of any of the foregoing;



     (c) any furnishing to the Agent or the Lenders of any security for the Obligations, or any
sale, exchange, release or surrender of, or realization on, any collateral security for the
Obligations;



     (d) any settlement or compromise of any of the Obligations, any security therefor, or any
liability of any other party with respect to the Obligations, or any subordination of the payment
of the Obligations to the payment of any other liability of the Borrower;



     (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any other guarantor, the Borrower or any other
Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any
court, in any such proceeding;



     (f) any nonperfection of any security interest or other Lien on any of the collateral securing
any of the Obligations;



     (g) any act or failure to act by the Borrower or any other Person which may adversely affect
Guarantor’s subrogation rights, if any, against the Borrower to recover payments made under this
Guaranty;



     (h) any application of sums paid by the Borrower or any other Person with respect to the
liabilities of the Borrower to the Agent or the Lenders, regardless of what liabilities of the
Borrower remain unpaid;



     (i) any defect, limitation or insufficiency in the borrowing powers of the Borrower or in the
exercise thereof; or



     (j) any other circumstance which might otherwise constitute a defense available to, or a
discharge of, Guarantor hereunder.



     Section 4. Action with Respect to Obligations. The Lenders and the Agent may, at any
time and from time to time, without the consent of, or notice to, Guarantor, and without
discharging Guarantor from its obligations hereunder take any and all actions described in
Section 3 and may otherwise: (a) amend, modify, alter or supplement the terms of any of the
Obligations, including, but not limited to, extending or shortening the time of payment of any of
the Obligations or the interest rate that may accrue on any of the Obligations; (b) amend, modify,
alter or supplement the Credit Agreement or any other Credit Document; (c) sell, exchange, release
or otherwise deal with all, or any part, of any collateral securing any of the Obligations; (d)
release any Person liable in any manner for the payment or collection of the Obligations; (e)
exercise, or refrain from exercising, any rights against the Borrower or any other Person
(including, without limitation, any other guarantor); and (f) apply any sum, by whomsoever paid or
however realized, to the Obligations in such order as the Lenders or the Agent shall elect.



     Section 5. [Reserved]



 









 





     Section 6. Covenants. Guarantor specifically agrees that to the extent Guaranty
Proceeds (as defined in Section 7.3(a) of the Credit Agreement) are distributed to holders
of Public Debt or their respective trustees (as defined in Section 7.3(a) of the Credit
Agreement) pursuant to Section 7.3 of the Credit Agreement, the Obligations will not be
deemed to be reduced by any such distributions and Guarantor shall continue to make payments under
this Guaranty until such time as the Obligations have been paid in full (and the Commitment has
been terminated), after taking into account any such distributions of payments hereunder in report
of Indebtedness other than the Obligations.



     Section 7. Waiver. Guarantor, to the fullest extent permitted by applicable law,
hereby waives notice of acceptance hereof or any presentment, demand, protest or notice of any
kind, and any other act or thing, or omission or delay to do any other act or thing, which in any
manner or to any extent might vary the risk of Guarantor or which otherwise might operate to
discharge Guarantor from its obligations hereunder.



     Section 8. Inability to Accelerate Loan. If the Agent and/or the Lenders are
prevented from demanding or accelerating payment thereof by reason of any automatic stay or
otherwise, the Agent and/or the Lenders shall be entitled to receive from Guarantor, upon demand
therefor, the sums which otherwise would have been due had such demand or acceleration occurred.



     Section 9. Reinstatement of Obligations. Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, with respect to any Obligations if
at any time payment of any such Obligations is rescinded or otherwise must be restored by the Agent
and/or the Lenders upon the bankruptcy or reorganization of the Borrower or Guarantor or otherwise.



     Section 10. Subrogation. Until all of the Obligations shall have been indefeasibly
paid in full, Guarantor shall not have any right of subrogation and Guarantor hereby waives any
right to enforce any remedy which the Agent and/or the Lenders now have or may hereafter have
against the Borrower, and Guarantor hereby waives any benefit of, and any right to participate in,
any security or collateral given to the Agent and the Lenders to secure payment or performance of
any of the Obligations.



     Section 11. Payments Free and Clear. All sums payable by Guarantor hereunder,
whether of principal, interest, fees, expenses, premiums or otherwise, shall be paid in full,
without set-off or counterclaim or any deduction or withholding whatsoever (including any
withholding tax or liability imposed by any Governmental Authority, or any Legal Requirement
promulgated thereby), and if Guarantor is required by such Legal Requirement or by such
Governmental Authority to make any such deduction or withholding, Guarantor shall pay to the Agent
and the Lenders such additional amount as will result in the receipt by the Agent and the Lenders
of the full amount payable hereunder had such deduction or withholding not occurred or been
required.



     Section 12. Set-off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, each Lender is hereby authorized by
Guarantor, at any time or from time to time, without notice to Guarantor or to any other Person,
any such notice being hereby expressly waived, but subject to receipt of Agent’s prior written
consent, to set-off and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by such Lender or any Affiliate
of such Lender, to or for the credit or the account of Guarantor against and on account of any of
the Obligations then due and owing after the expiration of any applicable grace periods. Guarantor
agrees, to the fullest extent it may effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the applicable provisions of the
Credit Agreement, may exercise rights of setoff or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct creditor of
Guarantor in the amount of such participation.



     Section 13. Subordination. Guarantor hereby expressly covenants and agrees for the
benefit of the Agent and the Lenders that all obligations and liabilities of the Borrower to
Guarantor of whatever description, including without limitation, all intercompany receivables of
Guarantor from the Borrower (collectively, the “Junior Claims”) shall be subordinate and junior in
right of payment to all Obligations. If an Event of Default shall have occurred and be continuing,
then Guarantor shall not accept any direct or indirect payment (in cash, property, securities by
setoff



 









 







or otherwise) from the Borrower on account of or in any manner in respect of any Junior Claim
until all of the Obligations have been indefeasibly paid in full.



     Section 14. Avoidance Provisions. It is the intent of Guarantor, the Agent and the
Lenders that in any Proceeding, Guarantor’s maximum obligation hereunder shall equal, but not
exceed, the maximum amount which would not otherwise cause the obligations of Guarantor hereunder
(or any other obligations of Guarantor to the Agent and the Lenders) to be avoidable or
unenforceable against Guarantor in such Proceeding as a result of applicable law, including without
limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and
(b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The applicable
laws under which the possible avoidance or unenforceability of the obligations of Guarantor
hereunder (or any other obligations of Guarantor to the Agent and the Lenders) shall be determined
in any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly, to the extent
that the obligations of Guarantor hereunder would otherwise be subject to avoidance under the
Avoidance Provisions, the maximum Obligations for which Guarantor shall be liable hereunder shall
be reduced to that amount which, as of the time any of the Obligations are deemed to have been
incurred under the Avoidance Provisions, would not cause the obligations of Guarantor hereunder (or
any other obligations of Guarantor to the Agent and the Lenders), to be subject to avoidance under
the Avoidance Provisions. This Section is intended solely to preserve the rights of the Agent and
the Lenders hereunder to the maximum extent that would not cause the obligations of Guarantor
hereunder to be subject to avoidance under the Avoidance Provisions, and neither Guarantor nor any
other Person shall have any right or claim under this Section as against the Agent and the Lenders
that would not otherwise be available to such Person under the Avoidance Provisions.



     Section 15. Information. Guarantor assumes all responsibility for being and keeping
itself informed of the financial condition of the Borrower and of all other circumstances bearing
upon the risk of nonpayment of any of the Obligations and the nature, scope and extent of the risks
that Guarantor assumes and incurs hereunder, and agrees that none of the Agent or any Lender shall
have any duty whatsoever to advise Guarantor of information regarding such circumstances or risks.



     Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED
IN AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE.



     Section 17. JURISDICTION, VENUE. GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE
MADE UPON IT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF THIS GUARANTY OR ANY OF THE OTHER
CREDIT DOCUMENTS BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN
RECEIPT REQUESTED, TO GUARANTOR AT THE ADDRESS SET FORTH AFTER ITS SIGNATURE. GUARANTOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTY OR ANY OF THE OTHER CREDIT DOCUMENTS IN THE COURTS OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. GUARANTOR (A) AGREES TO
DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF NEW YORK IN CONNECTION WITH
ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO THE AGENT EVIDENCE THEREOF AND (B)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY PROVIDING SUCH SERVICE OF PROCESS TO SUCH AGENT FOR SERVICE OF
PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST GUARANTOR IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
MANNER PERMITTED BY APPLICABLE LAW. GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY SUIT, ACTION OR
PROCEEDING AGAINST THE AGENT OR ANY LENDER ARISING



 









 







OUT OF OR IN CONNECTION WITH THIS GUARANTY OR THE OTHER CREDIT DOCUMENTS SHALL BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.



     Section 18. Loan Accounts. The Agent may maintain books and accounts setting forth
the amounts of principal, interest and other sums paid and payable with respect to the Obligations,
and in the case of any dispute relating to any of the outstanding amount, payment or receipt of
Obligation or otherwise, the entries in such account shall be binding upon Guarantor as to the
outstanding amount of such Obligations and the amounts paid and payable with respect thereto absent
manifest error. The failure of the Agent to maintain such books and accounts shall not in any way
relieve or discharge Guarantor of any of its obligations hereunder.



     Section 19. Waiver of Remedies. No delay or failure on the part of the Agent or the
Lenders in the exercise of any right or remedy it may have against Guarantor hereunder or otherwise
shall operate as a waiver thereof, and no single or partial exercise by the Agent or the Lenders of
any such right or remedy shall preclude other or further exercise thereof or the exercise of any
other such right or remedy.



     Section 20. Successors and Assigns. Each reference herein to the Agent or the
Lenders shall be deemed to include such Person’s respective successors and assigns (including, but
not limited to, any holder of the Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to Guarantor shall be deemed to include the Guarantor’s
successors and assigns, upon whom this Guaranty also shall be binding. The Lenders and the Agent
may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell
any Obligation, or grant or sell participation in any Obligations, to any Person or entity without
the consent of, or notice to, Guarantor and without releasing, discharging or modifying Guarantor’s
obligations hereunder. Guarantor hereby consents to the delivery by the Agent or any Lender to any
assignee, transferee or participant of any financial or other information regarding the Borrower or
Guarantor. Guarantor may not assign or transfer its obligations hereunder to any Person.



     Section 21. Amendments. This Guaranty may not be amended except as provided in the
Credit Agreement.



     Section 22. Payments. All payments made by Guarantor pursuant to this Guaranty shall
be made in Dollars, in immediately available funds to the Agent at its address set forth in the
Credit Agreement, not later than 12:00 noon, New York, New York time on the date one (1) Business
Day after demand therefor.



     Section 23. Notices. All notices, requests and other communications hereunder shall
be in writing and shall be given as provided in the Credit Agreement. Guarantor’s address for
notice is set forth below its signature hereto.



     Section 24. Severability. In case any provision of this Guaranty shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.



     Section 25. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.



     Section 26. Definitions. (a) For the purposes of this Guaranty:



     “Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning Guarantor shall be commenced under the Bankruptcy Code or any other applicable
bankruptcy laws; (ii) a custodian (as defined in the Bankruptcy Code or any other applicable
bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property
of Guarantor; (iii) any other proceeding under any applicable law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of debts, whether
now or hereafter in effect, is commenced relating to Guarantor; (iv) Guarantor is adjudicated
insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding
is entered by a court of competent jurisdiction; (vi) Guarantor makes a general assignment for the
benefit of creditors; (vii) Guarantor shall fail to pay, or shall state



 









 







that it is unable to pay, or shall be unable to pay, its debts generally as they become due;
(viii) Guarantor shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; (ix) Guarantor shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by
Guarantor for the purpose of effecting any of the foregoing.



     (b) Capitalized terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.



     Section 27. WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND FOR ANY
COUNTERCLAIM THEREIN.



     IN WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as of the date and
year first written above.



	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 	 	9200 E. Panorama Circle	 	 
	 	 	Suite 400	 	 
	 	 	Englewood, Colorado 80112	 	 
	 	 	Attention: Corporate Finance	 	 







 









 








EXHIBIT F




GUARANTY OF COLLECTION




     THIS GUARANTY (this “Guaranty”), dated as of                      is made by                     
(the “Guarantor”), in favor of (a) Morgan Stanley Senior Funding, Inc., in its capacity as
Administrative Agent (the “Agent”) for the Lenders under that certain Credit Agreement dated as of
May 29, 2007 by and among Archstone-Smith Operating Trust (the “Borrower”), Archstone-Smith Trust,
the financial institutions party thereto and their assignees in accordance therewith (the
“Lenders”), and the Agent (as the same may be amended, restated, supplemented, or otherwise
modified from time to time in accordance with its terms, the “Credit Agreement”) and (b) the
Lenders.



     PRELIMINARY STATEMENT. Capitalized terms not otherwise defined herein shall have the
respective meanings assigned thereto under the Credit Agreement. The Guarantor is a beneficial
common unitholder of the Borrower and therefore the Guarantor has determined that the making of the
Loan by the Lenders benefited, directly or indirectly, the Guarantor. If other beneficial common
unitholders of the Borrower have entered into similar guaranty agreements (the “Other Guarantees”)
with the Agent as this Guaranty, they shall be referred to in this Guaranty as the “Other
Guarantors.”



     NOW, THEREFORE, in consideration of the premises, the Guarantor hereby agrees as follows:



     SECTION 1. Guaranty. This guaranty constitutes a limited guaranty of collection. The
Guarantor hereby guarantees the punctual collection when due, on a several basis, whether at stated
maturity, by demand, acceleration or otherwise, of (a) that portion of the principal and interest
outstanding on the indebtedness of the Borrower under the Credit Agreement that remains outstanding
equal to $ ___ [THIS NUMBER IS INTENDED TO BE THE ACTUAL AMOUNT OF GUARANTEE] less such
amounts as the Agent has collected upon exercising all rights, assertion of all claims and demands
and enforcement of all remedies available to it (other than this Guaranty and the Other Guarantees)
under the Credit Documents, and (b) reasonable attorney’s fees and all costs and expenses incurred
in enforcing any rights under this Guaranty (such obligations being the “Obligations”). An
objective of this guaranty is that the Obligation shall be a “recourse liability” as defined in
Treasury Regulation §1.752-1(a)(1), and the Guarantor shall bear the economic risk of loss with
respect to such portion of the liabilities as is equal to the Obligations within the meaning of
Treasury Regulation §1.752-2.



     SECTION 2. Guaranty Absolute. The Guarantor hereby guarantees that the Obligations
will be paid strictly in accordance with their terms, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the
Agent with respect thereto. The liability of the Guarantor under this Guaranty shall be absolute
and unconditional irrespective of:




	 	(a)	 	Any lack of validity or enforceability of the Credit Agreement or any other
Credit Documents or agreement relating thereto or executed in connection therewith;
	 
	 	(b)	 	Any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Credit Documents or any other documents
or agreement relating thereto or executed in connection therewith;
	 
	 	(c)	 	Any exchange, release or non-perfection of collateral, if any, or any release
or amendment or waiver of or consent to departure from any guaranty, for all or any of
the Obligations; or
	 
	 	(d)	 	Any other circumstance which might otherwise constitute a defense available to,
or a discharge of, the Borrower, any subsidiary of the Borrower or any other person
that is a party to the Credit Agreement, any other Credit Documents or any other
document or agreement related thereto or executed in connection therewith (including
any guarantor) in respect to the Obligations.




 









 










This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned by the Agent or
any Lender upon the insolvency, bankruptcy or reorganization of the Borrower or Guarantor or
otherwise, all as though such payment had not been made. The obligations of the Guarantor under
this Guaranty shall not be subject to reduction, termination or other impairment by reason of any
setoff, recoupment, counterclaim or defense or for any other reason. This Guaranty is to be in
addition to and is not to prejudice or be prejudiced by any other securities or guaranties
(including any guaranty signed by the Guarantor) which the Agent may now or hereafter hold from or
on account of the Borrower and is to be binding on the Guarantor as a continuing guaranty
notwithstanding any payments from time to time made to the Agent or any settlement of account or
disability or incapacity affecting the Guarantor or any other thing whatsoever.




     SECTION 3. Representations and Warranties. Guarantor hereby represents and warrants
that it has the requisite power and authority to execute and deliver and to carry out this Guaranty
and the transactions contemplated herein; and to perform its obligations hereunder. This Guaranty
has been duly and validly executed and delivered by the Guarantor and constitutes a valid and
legally binding agreement of the Guarantor, enforceable in accordance with its terms.



     SECTION 4. Waiver. The Guarantor waives any notice with respect to any of the
Obligations and this Guaranty (it being the understanding of the Agent and the Guarantor that this
Guaranty is a guaranty of collection and not of payment).



     SECTION 5. No Subrogation. The Guarantor will not exercise any rights which it may
acquire by way of subrogation under this Guaranty or in respect of any security for the
Obligations, by any payment made hereunder or otherwise.



     SECTION 6. Amendments, Etc. No amendment or waiver of any provision of this Guaranty
nor consent to any departure by the Guarantor herefrom, shall be effective unless the same is in
writing and signed by the Agent and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.



     SECTION 7. Notices. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing or by facsimile, telegraph or cable
and mailed or sent or delivered as to each party hereto at the address for notices set forth under
its name on the signature page hereof or, in the case of each party, at such other address as shall
be designated by such party in a written notice to all other parties. All such notices and other
communications shall be effective when received, and in the case of notice by facsimile, telegraph
or cable, when sent, and upon receipt of an answer back, in each case addressed as set forth above.



     SECTION 8. No Waiver; Cumulative Remedies. No failure on the part of the Agent or any
Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.



     SECTION 9. Absolute and Continuing Guaranty. This Guaranty is an absolute and
continuing guaranty and shall (a) remain in full force and effect until full payment of the
Obligations or all amounts payable under this Guaranty, (b) be binding upon the Guarantor and its
successors and assigns, and (c) inure to the benefit of the Agent and its successors and assigns.



     SECTION 10. Savings Clause. Nothing herein is intended to contract for, take,
reserve, charge or receive interest or other consideration for the use, forbearance or detention of
money at a rate in excess of the highest rate permitted by applicable laws (“Highest Lawful Rate”)
nor shall the Guarantor be required to pay unearned interest.



     SECTION 11. Governing Law. This Guaranty shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.



 









 





     SECTION 12. Release of Claims. Guarantor hereby releases, discharges and acquits
forever the Agent, the Lenders and their respective officers, directors, trustees, agents,
employees and counsel (in each case, past, present or future) from any and all Claims existing as
of the date hereof (or the date of actual execution hereof by Guarantor, if later). As used
herein, the term “Claim” shall mean any and all liabilities, claims, defenses, demands,
actions, causes of action, judgments, deficiencies, interest, liens, costs or expenses (including
court costs, penalties, attorneys’ fees and disbursements, and amounts paid in settlement) of any
kind and character whatsoever, including claims for usury, breach of contract, breach of
commitment, negligent misrepresentation or failure to act in good faith, in each case whether now
known or unknown, suspected or unsuspected, asserted or unasserted or primary or contingent, and
whether arising out of written documents, unwritten undertakings, course of conduct, tort,
violations of laws or regulations or otherwise.



 









 





          IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered
as of the date first above written.



	 	 	 	 	 	 	 
	 	 	[Name of Guarantor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	[Address of Guarantor]