**Exhibit10.12A**

 

 

**UNSECURED REVOLVING CREDITAGREEMENT**

** **

 

**AMONG**

** **

 

**AMERIVEST PROPERTIES INC.**

** **

 

**AND**

** **

 

**FLEET NATIONAL BANK, ASADMINISTRATIVE AGENT**

** **

 

**AND**

** **

 

**THE LENDERS PARTY HERETO**

** **

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**TABLEOF CONTENTS**

 
| §1. | DEFINITIONS AND  RULES OF INTERPRETATION |                               |
|----------|------------------------------------------|------------------------------------|
|     |                                     |                               |   |
|     | §1.1                                | Definitions                        |   |
|     | §1.2                                | Rules of Interpretation            |   |
|     |                                     |                               |   |
| §2. | REVOLVING LOAN FACILITY                  |                               |
|     |                                     |                               |   |
|     | §2.1                                | Commitment to  Lend                |   |
|     | §2.2                                | The Notes                          |   |
|     | §2.3                                | Interest on  Loans                 |   |
|     | §2.4                                | Conversion  Options                |   |
|     | §2.5                                | Requests  for Loans                |   |
|     | §2.6                                | Funds  for Loans                   |   |
|     |                                     |                               |   |
| §3. | REPAYMENT OF THE LOANS                   |                               |
|     |                                     |                               |   |
|     | §3.1                                | Maturity                           |   |
|     | §3.2                                | Mandatory  Repayments of Loan      |   |
|     | §3.3                                | Optional  Repayments of Loans      |   |
|     |                                     |                               |   |
| §4. | CERTAIN GENERAL PROVISIONS               |                               |
|     |                                     |                               |   |
|     | §4.1                                | Facility  Fees                     |   |
|     | §4.2                                | Unused Fee                         |   |
|     | §4.3                                | Funds  for Payments                |   |
|     | §4.4                                | Computations                       |   |
|     | §4.5                                | Additional  Costs, Etc             |   |
|     | §4.6                                | Capital  Adequacy                  |   |
|     | §4.7                                | Certificate                        |   |
|     | §4.8                                | Indemnity                          |   |
|     | §4.9                                | Default  Interest and Late Charges |   |
|     | §4.10                               | Inability to Determine LIBOR  Rate |   |
|     | §4.11                               | Illegality                         |   |
|     | §4.12                               | Replacement of Lenders             |   |
|     | §4.13                               | Limitation on Interest             |   |
|     |                                     |                               |   |
| §5. | NO LIMITATION ON RECOURSE                |                               |
|     |                                     |                               |   |
|     | §5.1                                | [Intentionally Omitted.]           |   |
|     | §5.2                                | No Limitation on Recourse          |   |
|     |                                     |                               |   |
| §6. | REPRESENTATIONS  AND WARRANTIES          |                               |
|     |                                     |                               |   |
|     | §6.1                                | Authority; Etc                     |   |
|     | §6.2                                | Governmental Approvals             |   |
|     | §6.3                                | Title to Properties; Leases        |   |
|     | §6.4                                | Financial Statements               |   |

 

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|     | §6.5                                   | No Material  Changes                                              |   |
|----------|---------------------------------------------|-------------------------------------------------------------------|--------|
|     | §6.6                                   | Franchises,  Patents, Copyrights, Etc                             |   |
|     | §6.7                                   | Litigation                                                        |   |
|     | §6.8                                   | No  Materially Adverse Contracts, Etc                             |   |
|     | §6.9                                   | Compliance  With Other Instruments, Laws, Etc                     |   |
|     | §6.10                                  | Tax Status                                                        |   |
|     | §6.11                                  | Event  of Default                                                 |   |
|     | §6.12                                  | Investment  Company Act                                           |   |
|     | §6.13                                  | Absence of Financing Statements,  Etc                             |   |
|     | §6.14                                  | [Intentionally  Omitted.]                                         |   |
|     | §6.15                                  | Certain Transactions                                              |   |
|     | §6.16                                  | Benefit  Plans; Multiemployer Plans; Guaranteed Pension Plans     |   |
|     | §6.17                                  | Regulations  U and X                                              |   |
|     | §6.18                                  | Environmental  Compliance                                         |   |
|     | §6.19                                  | Subsidiaries and Affiliates                                       |   |
|     | §6.20                                  | Leases                                                            |   |
|     | §6.21                                  | Loan  Documents                                                   |   |
|     | §6.22                                  | Property                                                          |   |
|     |                                        |                                                              |   |
| §7. | AFFIRMATIVE COVENANTS OF THE  BORROWER      |                                                              |
|     |                                        |                                                              |   |
|     | §7.1                                   | Punctual  Payment                                                 |   |
|     | §7.2                                   | Maintenance  of Office                                            |   |
|     | §7.3                                   | Records and  Accounts                                             |   |
|     | §7.4                                   | Financial  Statements, Certificates and Information               |   |
|     | §7.5                                   | Notices                                                           |   |
|     | §7.6                                   | Existence; Maintenance of REIT  Status; Maintenance of Properties |   |
|     | §7.7                                   | Insurance                                                         |   |
|     | §7.8                                   | Taxes                                                             |   |
|     | §7.9                                   | Inspection of  Properties and Books                               |   |
|     | §7.10                                  | Compliance with Laws, Contracts,  Licenses, and Permits           |   |
|     | §7.11                                  | Use of  Proceeds                                                  |   |
|     | §7.12                                  | Reserved                                                          |   |
|     | §7.13                                  | [Intentionally Omitted.]                                          |   |
|     | §7.14                                  | Interest  Rate Protection                                         |   |
|     | §7.15                                  | Further Assurance                                                 |   |
|     | §7.16                                  | Reserved                                                          |   |
|     | §7.17                                  | Environmental  Indemnification                                    |   |
|     | §7.18                                  | Response  Actions                                                 |   |
|     | §7.19                                  | Environmental Assessments                                         |   |
|     | §7.20                                  | Employee Benefit Plans                                            |   |
|     | §7.21                                  | More  Restrictive Agreements                                      |   |
|     |                                        |                                                              |   |
| §8. | CERTAIN NEGATIVE COVENANTS OF THE  BORROWER |                                                              |

 

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|      | §8.1                            | Restrictions  on Indebtedness                                      |   |
|-----------|--------------------------------------|--------------------------------------------------------------------|--------|
|      | §8.2                            | Restrictions on Liens, Etc                                         |   |
|      | §8.3                            | Restrictions on Investments                                        |   |
|      | §8.4                            | Merger, Consolidation,  Acquisition and Disposition of Properties  |   |
|      | §8.5                            | Sale  and Leaseback                                                |   |
|      | §8.6                            | Compliance  with Environmental Laws                                |   |
|      | §8.7                            | Distributions                                                      |   |
|      | §8.8                            | [Intentionally  Omitted.]                                          |   |
|      | §8.9                            | Related Companies                                                  |   |
|      |                                 |                                                               |   |
| §9.  | FINANCIAL COVENANTS OF THE BORROWER  |                                                               |
|      |                                 |                                                               |   |
|      | §9.1                            | Reserved                                                           |   |
|      | §9.2                            | Reserved                                                           |   |
|      | §9.3                            | Total  Liabilities to Gross Asset Value                            |   |
|      | §9.4                            | Adjusted  EBITDA to Interest Expense                               |   |
|      | §9.5                            | EBITDA to Fixed  Charges                                           |   |
|      | §9.6                            | Minimum Tangible Net  Worth                                        |   |
|      |                                 |                                                               |   |
| §10. | CONDITIONS TO EFFECTIVENESS          |                                                               |
|      |                                 |                                                               |   |
|      | §10.1                           | Loan Documents                                                     |   |
|      | §10.2                           | Good Standing Certificates  and Certified Copies                   |   |
|      | §10.3                           | By-laws; Resolutions                                               |   |
|      | §10.4                           | Incumbency  Certificate; Authorized Signers                        |   |
|      | §10.5                           | Opinions  of Counsel Concerning Organization and Loan Documents    |   |
|      | §10.6                           | Payment  of Fees                                                   |   |
|      | §10.7                           | Compliance Certificate                                             |   |
|      |                                 |                                                               |   |
| §11. | CONDITIONS TO ALL BORROWINGS         |                                                               |
|      |                                 |                                                               |   |
|      | §11.1                           | Representations  True; No Event of Default; Compliance Certificate |   |
|      | §11.2                           | No Legal Impediment                                                |   |
|      | §11.3                           | Governmental  Regulation                                           |   |
|      | §11.4                           | Proceedings  and Documents                                         |   |
|      |                                 |                                                               |   |
| §12. | EVENTS OF DEFAULT; ACCELERATION; ETC |                                                               |
|      |                                 |                                                               |   |
|      | §12.1                           | Events of  Default and Acceleration                                |   |
|      | §12.2                           | Termination  of Commitments                                        |   |
|      | §12.3                           | Remedies                                                           |   |
|      | §12.4                           | Distribution  of Proceeds                                          |   |
|      |                                 |                                                               |   |
| §13. | SETOFF                               |                                                               |
|      |                                 |                                                               |   |
| §14. | THE AGENT                            |                                                               |

 

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|      | §14.1                                          | Authorization                                                   |   |
|-----------|-----------------------------------------------------|-----------------------------------------------------------------|--------|
|      | §14.2                                          | Employees and Agents                                            |   |
|      | §14.3                                          | No  Liability                                                   |   |
|      | §14.4                                          | No  Representations                                             |   |
|      | §14.5                                          | Payments                                                        |   |
|      | §14.6                                          | Holders  of Notes                                               |   |
|      | §14.7                                          | Indemnity                                                       |   |
|      | §14.8                                          | Agent as Lender                                                 |   |
|      | §14.9                                          | Resignation                                                     |   |
|      | §14.10                                         | Notification  of Defaults and Events of Default                 |   |
|      | §14.11                                         | Duties in the Case of  Enforcement                              |   |
|      |                                                |                                                            |
| §15. | EXPENSES                                            |                                                            |
|      |                                                |                                                            |
| §16. | INDEMNIFICATION                                     |                                                            |
|      |                                                |                                                            |
| §17. | SURVIVAL  OF COVENANTS, ETC                         |                                                            |
|      |                                                |                                                            |
| §18. | ASSIGNMENT; PARTICIPATIONS; ETC                     |                                                            |
|      |                                                |                                                            |
|      | §18.1                                          | Conditions to  Assignment by Lenders                            |   |
|      | §18.2                                          | Certain Representations and  Warranties; Limitations; Covenants |   |
|      | §18.3                                          | Register                                                        |   |
|      | §18.4                                          | New Notes                                                       |   |
|      | §18.5                                          | Participations                                                  |   |
|      | §18.6                                          | Pledge  by Lender                                               |   |
|      | §18.7                                          | No  Assignment by Borrower                                      |   |
|      | §18.8                                          | Disclosure                                                      |   |
|      |                                                |                                                            |
| §19. | NOTICES,  ETC                                       |                                                            |
|      |                                                |                                                            |
| §20. | GOVERNING LAW; CONSENT TO JURISDICTION AND  SERVICE |                                                            |
|      |                                                |                                                            |
| §21. | HEADINGS                                            |                                                            |
|      |                                                |                                                            |
| §22. | COUNTERPARTS                                        |                                                            |
|      |                                                |                                                            |
| §23. | ENTIRE  AGREEMENT                                   |                                                            |
|      |                                                |                                                            |
| §24. | WAIVER OF JURY TRIAL AND CERTAIN DAMAGE  CLAIMS     |                                                            |
|      |                                                |                                                            |
| §25. | CONSENTS,  AMENDMENTS, WAIVERS, ETC                 |                                                            |
|      |                                                |                                                            |
| §26. | SEVERABILITY                                        |                                                            |

 

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| §27. | RELATIONSHIP               |   |
|-----------|----------------------------|--------|
|      |                       |   |
| §28. | DEALINGS WITH THE BORROWER |   |
|      |                       |   |
| §29. | NO UNWRITTEN AGREEMENTS    |   |
|      |                       |   |
| §30. | TIME  OF THE ESSENCE       |   |
|      |                       |   |
| §31. | RIGHTS OF THIRD PARTIES    |   |

 

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**UNSECURED REVOLVING CREDIT AGREEMENT**

** **

This **UNSECURED REVOLVING CREDIT AGREEMENT** ismade as of the 15th day of December, 2003, by and among **AMERIVEST PROPERTIES INC.**, aMaryland corporation (the “Borrower”), and **FLEET NATIONAL BANK**, a national bankingassociation (“FNB”), the other lending institutions which are listed on Schedule 1or hereafter become a party hereto, (the “Lenders”) and **FLEET NATIONAL BANK**, as agentfor itself and such other lending institutions (the “Agent”).

 

WHEREAS, the Borrower has requested and FNBhas agreed to provide a revolving credit facility in the principal amount of upto $30,000,000.00, and portions of such facility may be assigned to otherlending institutions.

 

NOW, THEREFORE, to accomplish these purposes,the Agent, the Borrower and the Lenders hereby agree as follows:

 

**§1.****                               DEFINITIONS AND RULES OFINTERPRETATION**

 

§1.1                          Definitions. The following terms shall have the meanings set forth in this §l orelsewhere in the provisions of this Agreement referred to below:

 

Adjusted EBITDA.  EBITDA minus the Reserve Amount for all RealEstate Assets owned by Borrower or any of the Related Companies.

 

Affiliated Lenders.  Any commercial bank which is (i) the parentcorporation of any of the Lenders originally listed on Schedule 1,(ii) a wholly-owned subsidiary of any of the Lenders or (iii) a wholly-ownedsubsidiary of the parent corporation of any of the Lenders.

 

Agent.  Fleet National Bank acting as agent for theLenders or any successor agent.

 

Agent’s Head Office.  The Agent’s head office located at 100Federal Street, Boston, Massachusetts 02110, or at such other location as theAgent may designate from time to time.

 

Agreement.  This Unsecured Revolving Credit Agreement,including the Schedules and Exhibits hereto.

 

Agreement Regarding Fees.  The Agreement Regarding Fees of even dateherewith between Borrower and FNB.

 

Arranger.  Fleet Securities, Inc. or any successor.

 

Assignment and Acceptance.  See §18.

 

Balance Sheet Date.  September 30, 2003.

 

Borrower.  As defined in the preamble hereto.

 

Borrowing Date.  The date on which any Loan is made or is tobe made, and the date on which any Loan is converted or continued in accordancewith §2.4.

 

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Business Day.  Any day other than a Saturday, Sunday or daywhich shall be in the Commonwealth of Massachusetts a legal holiday or day onwhich banking institutions are required or authorized to close and, in the caseof LIBOR Loans, also a day which is a LIBOR Business Day.

 

Capitalized Leases.  Leases under which the Borrower is thelessee or obligor, the discounted future rental payment obligations under whichare required to be capitalized on the balance sheet of the Borrower inaccordance with Generally Accepted Accounting Principles.

 

CERCLA. See §6.18.

 

Change in Control.  The occurrence of any of the followingevents: (A) if during any twelve month period on or after the Closing Datewhile any portion of the Loan remains outstanding or Lenders have anyobligation to make further Loans, individuals who at the beginning of suchperiod constituted the Board of Directors of the Borrower (together with anynew directors whose election by the Board of Directors or whose nomination forelection by the shareholders of the Borrower was approved by a vote of at leasta majority of the members of the Board of Directors then in office who eitherwere members of the Board of Directors at the beginning of such period or whoseelection or nomination for election was previously so approved) cease for anyreason to constitute a majority of the members of the Board of Directors thenin office; or (B) if there occurs a change of control of the Borrower of anature that would be required to be reported in response to Item 1a of Form 8-Kfiled pursuant to Section 13 or 15 under the Securities Exchange Act of1934, or in any other filing by the Borrower with the Securities and ExchangeCommission; or (C) if the Borrower or any Related Company consolidates with, isacquired by, or merges into or with any Person.

 

Closing Date.  The date upon which this Agreement shallbecome effective pursuant to §10 and the initial Loan shall be advanced.

 

Code.  The Internal Revenue Code of 1986, asamended and in effect from time to time.

 

Commitment.  With respect to each Lender, the amount setforth from time to time on Schedule 1.1 hereto as the amount ofsuch Lender’s commitment to make Loans to the Borrower.

 

Compliance Certificate.  A certificate in the form of Exhibit C heretosigned by a Responsible Officer setting forth in reasonable detail computationsevidencing compliance with the covenants contained in §9.1 through §9.6,§8.3(d) and §8.7.

 

Controlled Unconsolidated Entity.  An Unconsolidated Entity to the extent thatthe Borrower has the authority to make management decisions on behalf of suchUnconsolidated Entity, or when this term is used with respect to the negativecovenants herein, an Unconsolidated Entity in which the Borrower has the rightor ability to prevent such Unconsolidated Entity from taking the action whichis prohibited by the applicable negative covenant.

 

Conversion Request.  A notice given by the Borrower to the Agentof its election to convert or continue a Loan in accordance with §2.4.

 

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Default. See §12.1.

 

Distribution.  The declaration or payment of any dividendor distribution of cash or cash equivalents to the shareholders of the Borroweror the limited partners of any operating partnership in which the Borrower is ageneral partner.

 

Dollars or $.  Dollars in lawful currency of the UnitedStates of America.

 

Domestic Lending Office.  Initially, the office of each Lenderdesignated as such in Schedule 1.1 hereto; thereafter, such otheroffice of such Lender, if any, located within the United States that will bemaking or maintaining Prime Rate Loans.

 

EBITDA.  For any period of calculation and withoutduplication, net income (loss) of Borrower for such period (determined inaccordance with Generally Accepted Accounting Principles, before allocations tominority interests and excluding all amounts attributable to the net income ornet losses of Unconsolidated Entities) plus the sum of the following amounts(but only to the extent included in determining net income (loss) for suchperiod):  (a) depreciation andamortization expense of Borrower for such period plus (b) Interest Expensefor such period plus (c) income tax expense of Borrower in respect of suchperiod plus (d) extraordinary losses of Borrower, losses from the sale ofassets of Borrower and losses resulting from forgiveness of debt by Borrower,all for such period minus (e) extraordinary gains of Borrower and gainsfrom the sale of assets of Borrower for such period plus (f) any cashdividends or distributions actually received (and not reinvested) by Borrowerfrom its Unconsolidated Entities.

 

Effective Date.  The date upon which this Agreement shallbecome effective pursuant to §10.

 

Eligible Assignee.  Any of (a) a commercial bank organized underthe laws of the United States, or any State thereof or the District ofColumbia, and having total assets in excess of $1,000,000,000; (b) a savingsand loan association or savings bank organized under the laws of the UnitedStates, or any State thereof or the District of Columbia, and having a networth of at least $100,000,000, calculated in accordance with GenerallyAccepted Accounting Principles; (c) a commercial bank organized under the lawsof any other country which is a member of the Organization for EconomicCooperation and Development (the “OECD”), or a political subdivision of anysuch country, and having total assets in excess of $1,000,000,000, providedthat such bank is acting through a branch or agency located in the country inwhich it is organized or another country which is also a member of the OECD;and (d) the central bank of any country which is a member of the OECD; (e) aninsurance company and other institutional investor having a net worth of atleast $100,000,000 that, in the reasonable judgment of the Agent, hassubstantial experience in real estate lending or investing in loans similar tothe Loans; (f) an investment fund or similar entity having a net worth of atleast $100,000,000 that is engaged in making, purchasing or holding bank loansor similar extensions of credit and that is managed by an investment advisorthat, in the reasonable judgment of the Agent, has substantial experience inreal estate lending or investing in loans similar to the Loans or (g) an AffiliatedLender, provided, however that neither the Borrower, any of the RelatedCompanies or any of the Unconsolidated Entities nor any affiliate thereof shallbe Eligible Assignees.

 

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Employee Benefit Plan.  Any employee benefit plan within the meaningof §3 (3) of ERISA maintained or contributed to by the Borrower or any ERISAAffiliate, other than a Multiemployer Plan.

 

Environmental Laws.  See §6.18(a).

 

ERISA.  The Employee Retirement Income Security Actof 1974, as amended and in effect from time to time.

 

ERISA Affiliate.  Any Person which is treated as a singleemployer with the Borrower under §414 of the Code.

 

ERISA Reportable Event.  A reportable event with respect to aGuaranteed Pension Plan within the meaning of §4043 of ERISA and theregulations promulgated thereunder as to which the requirement of notice hasnot been waived.

 

Eurocurrency Reserve Rate.  For any day with respect to a LIBOR Loan,the maximum rate (expressed as a decimal) at which any Lender subject theretowould be required to maintain reserves (a “Eurocurrency Reserve”) underRegulation D of the Board of Governors of the Federal Reserve System (or anysuccessor or similar regulations relating to such reserve requirements) against“Eurocurrency Liabilities” (as that term is used in Regulation D), if suchliabilities were outstanding. The Eurocurrency Reserve Rate shall be adjustedautomatically on and as of the effective date of any change in the EurocurrencyReserve Rate.

 

Event of Default.  See §12.1.

 

Facility Percentage.  With respect to each Lender, the percentageset forth from time to time on Schedule 1.1 hereto as such Lender’spercentage of the Total Commitment.

 

Fixed Charges.  With respect to any fiscal period of the Borrower,an amount equal to the sum of (i) Interest Expense, (ii) regularly scheduledinstallments of principal payable with respect to all Indebtedness of Borrowerand the Related Companies, excluding any balloon payments due at the maturityof such Indebtedness, plus (iii) all dividend payments due to the holders ofany preferred stock of the Borrower.

 

FNB. See preamble.

 

Funds From Operations.  With respect to any fiscal period of theBorrower, an amount equal to net income (computed in accordance with GenerallyAccepted Accounting Principles) from the operation of Real Estate Assets,excluding gains (or losses) from debt restructuring and sales of property, plusreal estate depreciation and amortization, and after adjustments forunconsolidated partnerships and joint ventures. Adjustments for unconsolidatedpartnerships and joint ventures will be calculated to reflect funds fromoperations on the same basis.

 

Generally Accepted Accounting Principles.  Principles that are (a) consistent with theprinciples promulgated or adopted by the Financial Accounting Standards Boardand its predecessors, as in effect from time to time and (b) consistentlyapplied with past financial statements of the Borrower adopting the sameprinciples; provided that a certified public

 

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accountantwould, insofar as the use of such accounting principles is pertinent, be in aposition to deliver an unqualified opinion (other than a qualificationregarding changes in Generally Accepted Accounting Principles) as to financialstatements in which such principles have been properly applied.

 

Gross Asset Value.  At any date, Borrower’s total assets,adjusted to add back the accumulated depreciation of its real estate assets,all as determined in accordance with Generally Accepted Accounting Principalsas of such date, plus $4,507,557 (which amount represents the differencebetween the purchase price and historical net book value of Sheridan Plaza uponBorrower’s acquisition in 2001).

 

Guaranteed Pension Plan.  Any employee pension benefit plan within themeaning of §3(2) of ERISA maintained or contributed to by the Borrower or anyERISA Affiliate the benefits of which are guaranteed on termination in full orin part by the PBGC pursuant to Title IV of ERISA, other than a MultiemployerPlan.

 

Hazardous Substances.  See §6.18(b).

 

Indebtedness.  All obligations, contingent and otherwise,that in accordance with Generally Accepted Accounting Principles should beclassified upon the obligor’s balance sheet as liabilities, or to whichreference should be made by footnotes thereto, including, without limitation,all of the following, whether or not so classified: (a) the Obligations, (b)all debt and similar monetary obligations, whether direct or indirect; (c) allliabilities secured by any mortgage, pledge, negative pledge, securityinterest, lien, negative lien, charge, or other encumbrance existing onproperty owned or acquired subject thereto, whether or not the liabilitysecured thereby shall have been assumed; (d) all guarantees, endorsements andother contingent obligations whether direct or indirect in respect ofindebtedness or obligations of others, including any liability as the generalpartner of a partnership, any obligation to supply funds to or in any manner toinvest in, directly or indirectly, the debtor, to purchase indebtedness, or toassure the owner of indebtedness against loss, through an agreement to purchasegoods, supplies, or services for the purpose of enabling the debtor to makepayment of the indebtedness held by such owner or otherwise, and theobligations to reimburse the issuer in respect of any letters of credit; and(e) such obligor’s liabilities, contingent or otherwise of the type set forthin (a) through (d) above, under any joint venture, limited liability company orpartnership agreement.

 

Intangible Assets.  Collectively, (i) the amount (to the extentreflected in determining Borrower’s total assets) of all write-ups (other thanwrite-ups resulting from foreign currency translations and write-ups of assetsof a going concern business made within 12 months after the acquisition of suchbusiness) in the book value of any asset (other than real property assets)owned by Borrower, and (ii) goodwill, patents, trademarks, service marks,trade names, anticipated future benefit of tax loss carry forwards, copyrights,organization or developmental expenses, deferred financing costs, and otherintangible assets.

 

Interest Expense.  With respect to any fiscal period of theBorrower, an amount equal to the sum of the following with respect to allIndebtedness of the Borrower and the Related Companies: (i) total interestexpense, accrued in accordance with Generally Accepted

 

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AccountingPrinciples plus (ii) all capitalized interest determined in accordance withGenerally Accepted Accounting Principles.

 

Interest Payment Date.  As to any Prime Rate Loan or LIBOR Loan, thefirst day of each calendar month.

 

Interest Period.  With respect to each Loan, (a) initially,the period commencing on the Borrowing Date of such Loan and ending on the lastday of one of the periods set forth below, as selected by the Borrower in aLoan Request or Conversion Request, as applicable, (i) for any Prime Rate Loan,the day on which such Prime Rate Loan is paid in full or converted to a LIBORLoan; and (ii) for any LIBOR Loan, 1, 2 or 3 months; and (b) thereafter, eachperiod commencing on the last day of the next preceding Interest Periodapplicable to such Loan and ending on the last day of one of the periods setforth above, as selected by the Borrower in a Conversion Request; provided thatall of the foregoing provisions relating to Interest Periods are subject to thefollowing:

 

(A)                              if any Interest Periodwith respect to a LIBOR Loan would otherwise end on a day that is not a LIBORBusiness Day, that Interest Period shall be extended to the next succeedingLIBOR Business Day unless the result of such extension would be to carry suchInterest Period into another calendar month, in which event such InterestPeriod shall end on the immediately preceding LIBOR Business Day;

 

(B)                                if any Interest Periodwith respect to a Prime Rate Loan would end on a day that is not a BusinessDay, that Interest Period shall end on the next succeeding Business Day;

 

(C)                                if the Borrower shallfail to give notice as provided in §2.4, the Borrower shall be deemed to haverequested a conversion of the affected LIBOR Loan to a Prime Rate Loan on thelast day of the then current Interest Period with respect thereto;

 

(D)                               any Interest Periodrelating to any LIBOR Loan that begins on the last LIBOR Business Day of acalendar month (or on a day for which there is no numerically corresponding dayin the calendar month at the end of such Interest Period) shall end on the lastLIBOR Business Day of a calendar month; and

 

(E)                                 any Interest Periodrelating to any LIBOR Loan that would otherwise extend beyond the Maturity Dateshall end on the Maturity Date.

 

Investments. Allexpenditures made and all liabilities incurred (contingently or otherwise) forthe acquisition of stock, partnership or membership interests or Indebtednessof, or for loans, advances, capital contributions or transfers of property to,or in respect of any guaranties (or other commitments as described underIndebtedness), or obligations of, any Person. In determining the aggregateamount of Investments outstanding at any particular time: (a) the amount of anyInvestment represented by a guaranty shall be taken at not less than theprincipal amount of the obligations guaranteed and still outstanding; (b) thereshall be included as an Investment all interest accrued with respect toIndebtedness constituting an Investment unless and until such interest is paid;(c) there shall be deducted in respect of each such Investment any amountreceived as a return of capital (but only by repurchase, redemption,retirement, repayment, liquidating dividend or liquidating distribution); (d)there shall not be

 

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deducted inrespect of any Investment any amounts received as earnings on such Investment,whether as dividends, interest or otherwise, except that accrued interestincluded as provided in the foregoing clause (b) may be deducted when paid; and(e) there shall not be deducted from the aggregate amount of Investments anydecrease in the value thereof.

 

Lenders.  FNB and the other lending institutionslisted from time to time on Schedule 1 hereto and any other Personwho becomes an assignee of any rights of a Lender pursuant to §18 or a Personwho acquires all or substantially all of the stock or assets of a Lender.

 

LIBOR.  As applicable to any LIBOR Loan, the rateper annum as determined on the basis of the offered rates for deposits in U.S.Dollars, for a period of time comparable to the Interest Period applicable tosuch LIBOR Loan which appears on the Telerate page 3750 as of 11:00 a.m. Londontime on the day that is two LIBOR Business Days preceding the first day of suchLIBOR Loan; provided, however, if the rate described above does not appear onthe Telerate System on any applicable interest determination date, the LIBORrate shall be the rate (rounded upward, if necessary, to the nearest onehundred-thousandth of a percentage point), determined on the basis of theoffered rates for deposits in U.S. dollars for a period of time comparable tothe Interest Period applicable to such LIBOR Loan which are offered by fourmajor banks in the London interbank market at approximately 11:00 a.m. Londontime, on the day that is two (2) LIBOR Business Days preceding the first day ofsuch LIBOR Loan as selected by the Agent. The principal London office of each of the four major London banks willbe requested to provide a quotation of its U.S. Dollar deposit offeredrate.  If at least two such quotationsare provided, the rate for that date will be the arithmetic mean of thequotations.  If fewer than twoquotations are provided as requested, the rate for that date will be determinedon the basis of the rates quoted for loans in U.S. dollars to leading Europeanbanks for a period of time comparable to the Interest Period applicable to suchLIBOR Loan offered by major banks in New York City at approximately 11:00 a.m.New York City time, on the day that is two Business Days preceding the firstday of such Interest Period applicable to such LIBOR Loan.  In the event that the Agent is unable toobtain any such quotation as provided above, it will be deemed that LIBORpursuant to a LIBOR Loan cannot be determined and §4.10 shall beapplicable.  In the event that the Boardof Governors of the Federal Reserve System shall impose a Eurocurrency Reservewith respect to LIBOR deposits of Agent, then for any period during which suchEurocurrency Reserve shall apply, LIBOR shall be equal to the amount determinedabove divided by an amount equal to 1 minus the Eurocurrency Reserve Rate.

 

LIBOR Business Day.  Any day on which commercial banks are openfor international business (including dealings in Dollar deposits) in London,England.

 

LIBOR Lending Office.  Initially, the office of each Lenderdesignated as such in Schedule 1.1 hereto; thereafter, such otheroffice of such Lender, if any, that shall be making or maintaining LIBOR Loans.

 

LIBOR Loans.  Loans bearing interest calculated byreference to LIBOR.

 

LIBOR Prepayment Fee.  See §3.3(a).

 

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Loan Documents.  This Agreement, the Notes, and any and allother agreements, documents and instruments now or hereafter evidencing,securing or otherwise relating to the Loans.

 

Loan Request.  See §2.5.

 

Loans.  The Loans made or to be made by the Lendersto the Borrower pursuant to §2.

 

Majority Lenders.  As of any date, the Lenders whose aggregateFacility Percentages constitute at least fifty-one percent (51%).

 

Material Adverse Effect.  A material adverse effect on (i) any of theReal Estate, (ii) the business, results of operations or financial condition ofthe Borrower and the Related Companies taken as a whole, (iii) the ability ofthe Borrower to perform its obligations under the Loan Documents, or (iv) thevalidity or enforceability of any of the Loan Documents or the remedies ormaterial rights of the Agent or the Lenders thereunder.

 

Maturity Date.  The earlier of (i) November 12, 2005 or(ii) such date as the Secured Revolving Credit Agreement may be terminated andthe loans thereunder prepaid, or such earlier date on which the Loans shallbecome due and payable pursuant to the terms hereof.

 

Multiemployer Plan.  Any multiemployer plan within the meaning of§3(37) of ERISA maintained or contributed to by the Borrower or any ERISAAffiliate.

 

Net Offering Proceeds.  All cash proceeds received after the ClosingDate by the Borrower, as a result of the sale of common, preferred or otherclasses of stock of the Borrower less customary costs and discounts of issuancepaid by Borrower in connection therewith.

 

Net OP Proceeds.  All cash proceeds received and the fairmarket value of all property contributed, after the Closing Date, as a resultof the issuance of any limited partnership interests, limited liability companyinterests or other equity interests in any entity that is a Related Company(such entities being sometimes called “operating partnerships”) less customarycosts and discounts of issuance paid by such operating partnership or Borrowerin connection therewith.

 

Net Operating Income.  With respect to any fiscal period of theBorrower and with respect to any one or more of the Real Estate Assets, thetotal rental and other income from the operation of such Real Estate Assets,after deducting all expenses and other proper charges incurred by the Borrowerin connection with the operation of such Real Estate Assets during such fiscalperiod, including, without limitation, real estate taxes and bad debt expenses,but before payment or provision for debt service charges, income taxes, anddepreciation, amortization, and other non-cash expenses, all as determined inaccordance with Generally Accepted Accounting Principles except that thereshall be no rent leveling adjustments made when computing Net Operating Income.

 

Notes. See §2.2.

 

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Obligations.  All indebtedness, obligations andliabilities of the Borrower to any of the Lenders and the Agent, individuallyor collectively, under this Agreement or any of the other Loan Documents or inrespect of any of the Loans or the Notes or other instruments at any timeevidencing any thereof, whether existing on the date of this Agreement orarising or incurred hereafter, direct or indirect, joint or several, absoluteor contingent, matured or unmatured, liquidated or unliquidated, secured orunsecured, arising by contract, operation of law of otherwise.

 

Outstanding.  With respect to the Loans, the aggregateunpaid principal thereof as of any date of determination.

 

Outstanding Obligations.  As of any date of determination, the sum ofthe outstanding principal amount of the Loans.

 

PBGC.  The Pension Benefit Guaranty Corporationcreated by §4002 of ERISA and any successor entity or entities having similarresponsibilities.

 

Permitted Liens.  Liens, security interests and otherencumbrances permitted by §8.2.

 

Person.  Any individual, corporation, partnership,trust, unincorporated association, business, or other legal entity, and anygovernment or any governmental agency or political subdivision thereof.

 

Prepayment Date.  See §3.3.

 

Prime Rate.  The variable per annum rate of interestdesignated from time to time by FNB as its Prime Rate. The Prime Rate is areference rate and does not necessarily represent the lowest or best rate beingcharged to any customer.  Changes in therate of interest resulting from changes in the Prime Rate shall take placeimmediately without notice or demand of any kind. 

 

Prime Rate Loans.  Those Loans bearing interest calculated byreference to the Prime Rate.

 

Properties.  All Real Estate Assets, Real Estate, and allother assets, including, without limitation, intangibles and personalty ownedby the Borrower.

 

Real Estate.  All real property at any time owned, leased(as lessee or sublessee) or operated by the Borrower, or any of the RelatedCompanies or any Controlled Unconsolidated Entity.

 

Real Estate Assets.  Those fixed and tangible properties consistingof land, buildings and/or other improvements owned by the Borrower, by any ofthe Related Companies or by any Controlled Unconsolidated Entity at therelevant time of reference thereto, but excluding all leaseholds other thanleaseholds under ground leases having an unexpired term of 30 years.

 

Record.  The grid attached to any Note, or thecontinuation of such grid, or any other similar record, including computerrecords, maintained by any Lender with respect to any Loan referred to in suchNote.

 

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Related Companies.  The entities listed and described on Schedule 1.3hereto, or thereafter, any entity whose financial statements are consolidatedor combined with the Borrower’s pursuant to Generally Accepted AccountingPrinciples, or any ERISA Affiliate.

 

Release.  See §6.18(c)(iii).

 

Reserve Amount.  With respect to any Real Estate Assets orgroup of Real Estate Assets, a normalized annual reserve for capitalexpenditures, replacement reserves and leasing costs at the rate of $0.25 peryear per square foot of net leasable area contained in all buildings on suchReal Estate Assets.

 

Responsible Officer.  With respect to the Borrower, any one of itsChairman, President, Chief Executive Officer, Chief Financial Officer, orExecutive Vice Presidents or Vice Presidents.

 

Secured Revolving Credit Agreement.  The Revolving Credit Agreement datedNovember 12, 2002 among the Borrower, FNB and other Lenders party theretoand FNB as Agent, as amended by a First Amendment dated February 6, 2003,and as further amended from time to time, pursuant to which FNB and otherLenders party thereto have provided Borrower with a revolving line of credit inthe maximum principal amount of $42,000,000.

 

Subsidiary.  Any corporation, association, trust, orother business entity of which the designated parent or other controllingPerson shall at any time own directly or indirectly through a Subsidiary orSubsidiaries at least a majority (by number of votes) of the outstanding VotingInterests.

 

Tangible Net Worth.  At any date, Borrower’s total assets,adjusted to add back the accumulated depreciation of its real estate assets,less its Intangible Assets, less its Total Liabilities, all as determined inaccordance with Generally Accepted Accounting Principals as determined as ofsuch date.  

 

Total Commitment.  The sum of the Commitments of the Lenders,as in effect from time to time.

 

Total Liabilities.  The sum, without duplication of (i) allconsolidated liabilities of the Borrower determined in accordance with theaccounting principles used in the preparation of the financial statementsdelivered pursuant to §7.4, including capital leases, accounts payable, accruedexpenses, mortgage payables, notes payable, senior notes, convertibledebentures, subordinated debentures, and secured or unsecured debt owed tobanks or other financial institutions, (ii) all Indebtedness of the Borrowerwhether or not so classified, including, without limitation, all outstandingLoans under this Agreement, (iii) the balance available for drawing underletters of credit issued for the account of the Borrower and (iv) Borrower’sUnconsolidated Entity Percentage of the Indebtedness of all UnconsolidatedEntities.

 

Type.  As to any Loan its nature as a Prime RateLoan or a LIBOR Loan.

 

Unconsolidated Entity.  As of any date, any Person in whom theBorrower or any Related Company holds an Investment, and whose financialresults would not be consolidated under

 

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GenerallyAccepted Accounting Principles with the financial statements of the Borrower,if such statements were prepared as of such date. Unconsolidated Entitiesexisting on the date hereof are set forth in Schedule 1.3.

 

Unconsolidated Entity Percentage.  With respect to any Unconsolidated Entity,the percentage interest of the Borrower or any Related Company in suchUnconsolidated Entity which shall be the greatest of the following: (a) therelative nominal direct and indirect ownership interest owned by Borrower orany Related Company (expressed as a percentage) in such Unconsolidated Entity,(b) the proportion (expressed as a percentage) of Borrower’s relativecontingent liability for the Indebtedness of such Unconsolidated Entity to thatentity’s total Indebtedness, or (c) the relative and indirect economic interestowned by Borrower or any Related Company (calculated as a percentage) in suchUnconsolidated Entity determined in accordance with the applicable provisionsof the declaration of trust, articles or certificate of incorporation, articlesof organization, partnership agreement, limited liability operating agreement,joint venture agreement or other applicable organizational document of suchUnconsolidated Entity.

 

Voting Interests.  Stock or similar ownership interests, of anyclass or classes (however designated), the holders of which are at the timeentitled, as such holders, (a) to vote for the election of a majority of thedirectors (or persons performing similar functions) of the corporation,association, partnership, trust or other business entity involved, or (b) tocontrol, manage or conduct the business of the corporation, partnership,association, trust or other business entity involved.

 

§1.2                          Rules of Interpretation.

 

(a)                                  Areference to any document or agreement shall include such document or agreementas amended, modified or supplemented from time to time in accordance with itsterms and the terms of this Agreement.

 

(b)                                 Thesingular includes the plural and the plural includes the singular.

 

(c)                                  Areference to any law includes any amendment or modification to such law.

 

(d)                                 Areference to any Person includes its permitted successors and permittedassigns.

 

(e)                                  Accountingterms not otherwise defined herein have the meanings assigned to them byGenerally Accepted Accounting Principles applied on a consistent basis by theaccounting entity to which they refer and, except as otherwise expresslystated, all use of accounting terms with respect to the Borrower shall reflectthe consolidation of the financial statements of Borrower and the RelatedCompanies.

 

(f)                                    Thewords “include”, “includes” and “including” are not limiting.

 

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(g)                                 Allterms not specifically defined herein or by Generally Accepted AccountingPrinciples, which terms are defined in the Uniform Commercial Code as in effectin Massachusetts, have the meanings assigned to them therein.

 

(h)                                 Referenceto a particular “§” refers to that section of this Agreement unlessotherwise indicated.

 

(i)                                     Thewords “herein”, “hereof”, “hereunder” and words of like import shall refer tothis Agreement as a whole and not to any particular section or subdivisionof this Agreement.

 

(j)                                     Thewords “so long as any Loan or Note is outstanding” shall mean so long as suchLoan or Note is not indefeasibly paid in full in cash.

 

**§2.****                               REVOLVING LOAN FACILITY**.

 

§2.1                          Commitment to Lend.  Subject to the provisions of §2.5 and the other terms andconditions set forth in this Agreement, each of the Lenders severally agrees tolend to the Borrower and the Borrower may borrow, repay, and reborrow from timeto time between the Effective Date and the Maturity Date upon notice by theBorrower to the Agent given and approved by the Agent in accordance with §2.5,such sums as are requested by the Borrower up to a maximum aggregate principalamount of Outstanding Obligations (after giving effect to all amountsrequested) at any one time equal to such Lender’s Commitment, provided that thesum of the Outstanding Obligations (after giving effect to all amountsrequested) shall not at any time exceed the Total Commitment. The Loans shallbe made pro rata in accordance with each Lender’s Facility Percentage and theLenders shall at all times immediately adjust *interse* any inconsistency between each Lender’s outstanding principalamount and each Lender’s Commitment. Each request for a Loan hereunder shall constitute a representation andwarranty by the Borrower that the conditions set forth in §10 or §11 (whicheveris applicable) have been satisfied in all material respects on the date of suchrequest and will be satisfied on the proposed Borrowing Date of the requestedLoan, provided that the making of such representation and warranty by Borrowershall not limit the right of any Lender not to lend upon a determination by theMajority Lenders that such conditions have not been satisfied.

 

§2.2                          The Notes.  TheLoans shall be evidenced by separate promissory notes of the Borrower insubstantially the form of Exhibit A hereto (each a “Note”), and completed withappropriate insertions.  One or moreNotes shall be payable to the order of each Lender in an aggregate principalamount equal to such Lender’s Commitment. The Borrower irrevocably authorizeseach Lender to make or cause to be made, at or about the time of the BorrowingDate of any Loan or at the time of receipt of any payment of principal on suchLender’s Note, an appropriate notation on such Lender’s Record reflecting themaking of such Loan or (as the case may be) the receipt of such payment. Theoutstanding amount of the Loans set forth on such Lender’s Record shall (absentmanifest error) be prima facie evidence of the principal amount thereof owingand unpaid to such Lender, but the failure to record, or any error in sorecording, any such amount on the Record shall not limit or otherwise affectthe obligations of the Borrower hereunder or under any Note to make payments ofprincipal of or interest on any Note when due. Upon receipt of an affidavit ofan officer of any Lender as to the loss, theft, destruction or

 

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mutilation of its Note or anyother security document which is not of public record, and, in the case of anysuch loss, theft, destruction or mutilation, upon cancellation of such Note orother security document, Borrower will issue, in lieu thereof, a replacementNote or other security document in the same principal amount thereof andotherwise of like tenor.

 

§2.3                          Interest on Loans.

 

(a)                                  EachPrime Rate Loan shall bear interest for the period commencing with theBorrowing Date thereof and ending on the last day of the Interest Period withrespect thereto at the rate equal to 2.5% per annum above the Prime Rate.

 

(b)                                 EachLIBOR Loan shall bear interest for the period commencing with the BorrowingDate thereof and ending on the last day of the Interest Period with respectthereto at the rate equal to 4.0% per annum above LIBOR determined for suchInterest Period.

 

(c)                                  TheBorrower unconditionally promises to pay interest on each Loan in arrears oneach Interest Payment Date with respect thereto.

 

§2.4                          Conversion Options.

 

(a)                                  TheBorrower may elect from time to time to convert any outstanding Loan to a Loanof another Type, provided that (i) with respect to any such conversion of aLIBOR Loan to a Prime Rate Loan, the Borrower shall give the Agent at leastthree (3) Business Days, prior written notice of such election; (ii) withrespect to any such conversion of a LIBOR Loan into a Prime Rate Loan, suchconversion shall only be made on the last day of the Interest Period withrespect thereto; (iii) subject to the further proviso at the end of thissection and subject to §2.4(b) and §2.4(d) hereof with respect to any suchconversion of a Prime Rate Loan to a LIBOR Loan, the Borrower shall give theAgent at least three (3) LIBOR Business Days, prior written notice of suchelection and (iv) no Loan may be converted into a LIBOR Loan when any Defaultor Event of Default has occurred and is continuing. On the date on which suchconversion is being made, each Lender shall take such action as is necessary totransfer its Facility Percentage of such Loans to its Domestic Lending Officeor its LIBOR Lending Office, as the case may be. All or any part of outstandingLoans of any Type may be converted as provided herein, provided further thateach Conversion Request relating to the conversion of a Prime Rate Loan to aLIBOR Loan shall be for an amount equal to $5,000,000 or an integral multipleof $1,000,000 in excess thereof and shall be irrevocable by the Borrower.

 

(b)                                 AnyLoans of any Type may be continued as such upon the expiration of an InterestPeriod with respect thereto by compliance by the Borrower with the noticeprovisions contained in §2.4(a); provided that no LIBOR Loan may be continuedas such when any Default or Event of Default has occurred and is continuing butshall be automatically converted to a Prime Rate Loan on the last day of thefirst Interest Period relating thereto ending during the continuance of any Defaultor Event of Default of which the officers of the Agent active upon theBorrower’s account have actual knowledge.

 

(c)                                  Inthe event that the Borrower does not notify the Agent of its election hereunderwith respect to any Loan, such Loan shall be automatically converted to a PrimeRate Loan at the end of the applicable Interest Period.

 

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(d)                                 TheBorrower may not elect to convert a Prime Rate Loan to a LIBOR Loan pursuant to§2.4(a) or elect to continue a LIBOR Loan pursuant to §2.4(b) if, after givingeffect thereto, there would be greater than five (5) LIBOR Loansoutstanding.  Any Loan Request for aLIBOR Loan that would create greater than five (5) LIBOR Loans outstandingshall be deemed to be a Conversion Request for a Prime Rate Loan.

 

§2.5                          Requests for Loans.  The Borrower shall give to the Agent written notice in the formof Exhibit B hereto of each Loan requested hereunder (a “Loan Request”)no less than (a) one (1) Business Day prior to the proposed Borrowing Date ofany Prime Rate Loan and (b) three (3) LIBOR Business Days prior to the proposedBorrowing Date of any LIBOR Loan.  Eachsuch notice shall specify (i) the principal amount of the Loan requested, (ii)the proposed Borrowing Date of such Loan, (iii) the Interest Period for suchLoan, and (iv) the Type of such Loan, and shall be accompanied by a ComplianceCertificate based on the most recent certificate deliver pursuant to §7.4(d)with updated calculations evidencing compliance with the covenants contained in§9.3 through §9.6 hereof after giving effect to such requested Loan.  Within one (1) Business Day after receipt ofa Loan Request, the Agent shall provide to each of the Lenders by facsimile acopy of such Loan Request and accompanying Compliance Certificate and eachLender shall, within 24 hours thereafter, notify the Agent if it believes thatany of the conditions contained in §11 of this Agreement has not been met orwaived.  If such a notice is given theMajority Lenders shall promptly determine whether all of the conditionscontained in §11 of this Agreement have been met or waived.  If no such notice is given by any Lender orif following such notice the Majority Lenders determine that the conditionscontained in §11 have been met or waived, each of the Lenders shall beobligated to fund its Facility Percentage of the requested Loans.  Each such Loan Request shall be irrevocableand binding on the Borrower and the Borrower shall be obligated to accept theLoan requested from the Lenders on the proposed Borrowing Date.  Each Loan Request shall be in a minimumaggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excessthereof.

 

§2.6                          Funds for Loans.

 

(a)                                  Subjectto §2.5 and the other provisions of this Agreement, not later than 11:00 a.m.(Boston time) on the proposed Borrowing Date of any Loans, each of the Lenderswill make available to the Agent, at the Agent’s Head Office, in immediatelyavailable funds, the amount of such Lender’s Facility Percentage of the amountof the requested Loans.  Upon receiptfrom each Lender of such amount, and upon receipt of the documents required by§§10 or 11 (whichever is applicable) and the satisfaction of the otherconditions set forth therein, to the extent applicable, the Agent will makeavailable to the Borrower the aggregate amount of such Loans made available tothe Agent by the Lenders.  The failureor refusal of any Lender to make available to the Agent at the aforesaid timeand place on any Borrowing Date the amount of its Facility Percentage of therequested Loans shall not relieve any other Lender from its several obligationhereunder to make available to the Agent the amount of such other Lender’sFacility Percentage of any requested Loans but shall not obligate any otherLender or Agent to fund more than its Facility Percentage of the requestedLoans or to increase its Facility Percentage. 

 

(b)                                 TheAgent may, unless notified to the contrary by any Lender prior to a BorrowingDate, assume that such Lender has made available to the Agent on such BorrowingDate the amount of such Lender’s Facility Percentage of the Loans to be made onsuch

 

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Borrowing Date, and the Agentmay (but it shall not be required to), in reliance upon such assumption, makeavailable to the Borrower a corresponding amount.  If any Lender makes available to the Agent such amount on a dateafter such Borrowing Date, such Lender shall pay to the Agent on demand anamount equal to the product of (i) the average computed for the period referredto in clause (iii) below, of the weighted average interest rate paid by theAgent for federal funds acquired by the Agent during each day included in suchperiod, times (ii) the amount of such Lender’s Facility Percentage of suchLoans, time (iii) a fraction, the numerator of which is the number of days orportion thereof that elapsed from and including such Borrowing Date to the dateon which the amount of such Lender’s Commitment Percentage of such Loans shallbecome immediately available to the Agent, and the denominator of which is365.  A statement of the Agent submittedto such Lender with respect to any amounts owing under this paragraph shall beprima facie evidence of the amount due and owing to the Agent by suchLender.  If such Lender does not paysuch corresponding amount upon the Agent’s demand therefor, the Agent willpromptly notify the Borrower, and the Borrower shall promptly pay suchcorresponding amount to the Agent.  TheAgent shall also be entitled to recover from the Borrower interest on suchcorresponding amount in respect of each day from the date such correspondingamount was made available by the Agent to the Borrower to the date suchcorresponding amount is recovered by the Agent at a per annum rate equal to theapplicable rate for such Loan.

 

**§3.****                               REPAYMENT OF THE LOANS**.

 

§3.1                          Maturity.  TheBorrower unconditionally promises to pay on the Maturity Date, and there shallbecome absolutely due and payable on the Maturity Date, all of the Loansoutstanding on such date, together with any and all accrued and unpaid interestand charges thereon.

 

§3.2                          Mandatory Repayments of Loan.  If at any time the sum of the OutstandingObligations exceeds the Total Commitment, then the Borrower shall immediatelypay the amount of such excess to the Agent for the respective accounts of theLenders for application to the Loans. Borrower further covenants and agrees that, notwithstanding anything tothe contrary contained herein (if anything), at least one (1) time during eachcalendar year during the term of this Agreement, Borrower shall repay alloutstanding Loans (and accrued and unpaid interest thereon and other amountspayable hereunder (including all amount payable in connection with suchprepayment)) such that there shall be a zero balance hereunder and Borrowershall maintain such zero balance for a period of not less than thirty (30) daysfrom the date of such prepayment.

 

§3.3                          Optional Repayments of Loans.  The Borrower shall have the right, at its election,to repay the outstanding amount of the Loans, as a whole or in part, on anyBusiness Day, without penalty or premium; provided that the full or partialprepayment of the outstanding amount of any LIBOR Loans made pursuant to this§3.3 may be made only on the last day of the Interest Period relating thereto,except as set forth below in this §3.3. The Borrower shall give the Agent nolater than 10:00 a.m., Boston time, at least two (2) Business Days’ priorwritten notice of any prepayment pursuant to this §3.3 of any Prime Rate Loansand four (4) LIBOR Business Days, notice of any proposed repayment pursuant tothis §3.3 of any LIBOR Loans, specifying the proposed date of payment of Loansand the principal amount to be paid. The Agent shall promptly notify each Lender of the principal amount ofsuch payment to be received

 

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by such Lender. Each such partial prepayment of theLoans shall be in an integral multiple of $1,000,000 and, to the extentrequested by the Agent, shall be accompanied by the payment of all chargesoutstanding on all Loans and of accrued interest on the principal repaid to thedate of payment. The principal payments so received shall be applied first tothe principal of Prime Rate Loans and then to the principal of LIBORLoans.  Notwithstanding anythingcontained herein to the contrary, the Borrower may make a full or partialprepayment of a LIBOR Loan on a date other than the last day of the InterestPeriod relating thereto, if all optional prepayments (in whole or in part) onsuch Loans shall be accompanied by, and the Borrower hereby promises to pay, aprepayment fee in an amount determined by the Agent in the following manner:

 

(a)                                  LIBORPrepayment Fee.  Borrower acknowledgesthat prepayment or acceleration of a LIBOR Loan during an Interest Period shallresult in the Lenders incurring additional costs, expenses and/or liabilitiesand that it is extremely difficult and impractical to ascertain the extent ofsuch costs, expenses and/or liabilities. (For all purposes of this Section, any Loan not being made as a LIBORLoan in accordance with the Loan Request or Conversion Request therefor, as aresult of Borrower’s cancellation thereof, shall be treated as if such LIBORLoan had been prepaid.)  Therefore, onthe date a LIBOR Loan is prepaid or the date all sums payable hereunder becomedue and payable, by acceleration or otherwise (“Prepayment Date”), Borrowerwill pay to Agent, for the account of each Lender, (in addition to all othersums then owing), an amount (“LIBOR Prepayment Fee”) determined by the Agent asfollows: The current rate for United States Treasury securities (bills on adiscounted basis shall be converted to a bond equivalent) with a maturity dateclosest to the end of the Interest Period as to which prepayment is made, shallbe subtracted from the interest rate applicable to the LIBOR Loan beingprepaid.  If the result is zero or anegative number, there shall be no LIBOR Prepayment Fee.  If the result is a positive number, then theresulting percentage shall be multiplied by the amount of the prepayment of theLIBOR Loan.  The resulting amount shallbe divided by 360 and multiplied by the number of days remaining in theInterest Period as to which the prepayment is being made. The resulting amountshall be the LIBOR Prepayment Fee.

 

(b)                                 Uponthe written notice to Borrower from Agent, Borrower shall immediately pay toAgent, for the account of the Lenders, the LIBOR Prepayment Fee.  Such written notice (which shall includecalculations in reasonable detail) shall, in the absence of manifest error, beconclusive and binding on the parties hereto.

 

(c)                                  Borrowerunderstands, agrees and acknowledges the following:  (i) no Lender has any obligation to purchase, sell and/ormatch funds in connection with the use of the LIBOR Rate as a basis forcalculating the rate of interest on a LIBOR Loan; (ii) the LIBOR Rate isused merely as a reference in determining such rate; and (iii) Borrowerhas accepted the LIBOR Rate as a reasonable and fair basis for calculating suchrate and a LIBOR Prepayment Fee. Borrower further agrees to pay the LIBOR Prepayment Fee, if any, whetheror not a Lender elects to purchase, sell and/or match funds.

 

**§4.****                               CERTAIN GENERAL PROVISIONS**.

 

§4.1                          Facility Fees. On the Closing Date, and on other dates specified in the AgreementRegarding Fees, the Borrower shall pay to FNB the fees with respect to the Loanin the amounts

 

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specified in the Agreement Regarding Fees.  All such fees shall be fully earned whenpaid and nonrefundable under any circumstances.

 

§4.2                          Unused Fee. The Borrower shall pay to the Agent for the accounts of the Lenders inaccordance with their respective Facility Percentages an Unused Fee calculatedat the rate of 0.75% per annum on the daily amount by which the TotalCommitment exceeds the Outstanding Obligations for each calendar month.  The Unused Fee shall be payable monthly inarrears on or before the third Business Day of each calendar month for theimmediately preceding calendar month commencing on the first such datefollowing the date hereof, with a final payment on the Maturity Date or anyearlier date on which the Commitments shall terminate.

 

§4.3                          Funds for Payments.

 

(a)                                  Allpayments of principal, interest, closing fees, commitment fees and any otheramounts due hereunder (other than as provided in §4.1, §4.5 and §4.6) or underany of the other Loan Documents, and all prepayments, shall be made to theAgent, for the respective accounts of the Lenders, at the Agent’s Head Office,in each case in Dollars in immediately available funds.

 

(b)                                 Allpayments by the Borrower hereunder and under any of the other Loan Documentsshall be made without setoff or counterclaim and free and clear of and withoutdeduction for any taxes, levies, imposts, duties, charges, fees, deductions,withholdings, compulsory liens, restrictions or conditions of any nature now orhereafter imposed or levied by any jurisdiction or any political subdivisionthereof or taxing or other authority therein unless the Borrower is compelledby law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to anyamount payable by it hereunder or under any of the other Loan Documents, theBorrower shall pay to the Agent, for the account of the Lenders or (as the casemay be) the Agent, on the date on which such amount is due and payablehereunder or under such other Loan Document, such additional amount in Dollarsas shall be necessary to enable the Lenders or the Agent to receive the samenet amount which the Lenders or the Agent would have received on such due datehad no such obligation been imposed upon the Borrower. The Borrower willdeliver promptly to the Agent certificates or other valid vouchers for alltaxes or other charges deducted from or paid with respect to payments made bythe Borrower hereunder or under such other Loan Document.

 

§4.4                          Computations. All computations of interest on the Loans and of other fees to theextent applicable shall be made on the basis of 360-day year and the actualnumber of days elapsed. Except as otherwise provided in the definition of theterm “Interest Period” with respect to LIBOR Loans, whenever a paymenthereunder or under any of the other Loan Documents becomes due on a day that isnot a Business Day, the due date for such payment shall be extended to the nextsucceeding Business Day, and such extension of time shall be included incomputing interest and fees in connection with such payment. The outstandingamount of the Loans as reflected on the Records from time to time shall (absentmanifest error) be considered correct and binding on the Borrower unless withinthirty (30) Business Days after receipt by the Agent or any of the Lenders fromBorrower of any notice by the Borrower of such outstanding amount, the Agent orsuch Lender shall notify the Borrower to the contrary.

 

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§4.5                          Additional Costs, Etc.  If any present or future applicable law(which expression, as used herein, includes statutes, rules and regulationsthereunder and interpretations thereof by any competent court or by anygovernmental or other regulatory body or official charged with theadministration or the interpretation thereof and requests, directives,instructions and notices at any time or from time to time hereafter made uponor otherwise issued to any Lender or the Agent by any central bank or otherfiscal, monetary or other authority, whether or not having the force of law),shall:

 

(a)                                  subjectany Lender or the Agent to any tax, levy, impost, duty, charge, fee, deductionor withholding of any nature with respect to this Agreement, the other LoanDocuments, such Lender’s Commitment or the Loans (other than taxes based uponor measured by the income or profits of such Lender or the Agent), or

 

(b)                                 materiallychange the basis of taxation (except for changes in taxes on income or profits)of payments to any Lender of the principal of or the interest on any Loans orany other amounts payable to any Lender under this Agreement or the other LoanDocuments, or

 

(c)                                  imposeor increase or render applicable (other than to the extent specificallyprovided for elsewhere in this Agreement) any special deposit, reserve,assessment, liquidity, capital adequacy or other similar requirements (whetheror not having the force of law) against assets held by, or deposits in or forthe account of, or Loans by, or commitments of an office of any Lender, or

 

(d)                                 imposeon any Lender any other conditions or requirements with respect to thisAgreement, the other Loan Documents, the Loans, the Commitment, or any class ofLoans or commitments of which any of the Loans or the Commitment forms a part;

 

and the result of any of the foregoing is

 

(i)                                     toincrease the cost to such Lender of making, funding, issuing, renewing,extending or maintaining any of the Loans or such Lender’s Commitment, or

 

(ii)                                  toreduce the amount of principal, interest or other amount payable to such Lenderor the Agent hereunder on account of the Commitments or any of the Loans, or

 

(iii)                               torequire such Lender or the Agent to make any payment or to forego any interestor other sum payable hereunder, the amount of which payment or foregoneinterest or other sum is calculated by reference to the gross amount of any sumreceivable or deemed received by such Lender or the Agent from the Borrowerhereunder,

 

then, and in each such case, the Borrowerwill, upon demand made by such Lender or (as the case may be) the Agent at anytime and from time to time and as often as the occasion therefor may arise, payto such Lender or the Agent, to the extent permitted by law, such additionalamounts as will be sufficient to compensate such Lender or the Agent for suchadditional cost, reduction, payment or foregone interest or other sum.

 

§4.6                          Capital Adequacy.  If any present or future law, governmental rule, regulation,policy, guideline or directive (whether or not having the force of law) or theinterpretation

 

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thereof by a court or governmental authority withappropriate jurisdiction affects the amount of capital required or expected tobe maintained by banks or bank holding companies and any Lender or the Agentdetermines that the amount of capital required to be maintained by it isincreased by or based upon the existence of the Loans made or deemed to be madepursuant hereto, then such Lender or the Agent may notify the Borrower of suchfact, and the Borrower shall pay to such Lender or the Agent from time to timeon demand, as an additional fee payable hereunder, such amount as such Lenderor the Agent shall determine in good faith and certify in a notice to theBorrower to be an amount that will adequately compensate such Lender or theAgent in light of these circumstances for its increased costs of maintainingsuch capital. Each Lender and the Agent shall allocate such cost increasesamong its customers in good faith and on an equitable basis.

 

§4.7                          Certificate. A certificate setting forth any additional amounts payable pursuant to§§4.5 or 4.6 and a brief explanation of such amounts which are due, submittedby any Lender or the Agent to the Borrower, shall be prima facie evidence thatsuch amounts are due and owing.

 

§4.8                          Indemnity.  Inaddition to the other provisions of this Agreement regarding any such matters,the Borrower agrees to indemnify each Lender and to hold each Lender harmlessfrom and against any loss, cost or reasonable expense (including loss of anticipatedprofits) that such Lender may sustain or incur as a consequence of (a) adefault by the Borrower in payment of the principal amount of or any intereston any LIBOR Loans as and when due and payable, including any such loss orexpense caused by Borrower’s breach or other default and arising from interestor fees payable by such Lender to lenders of funds obtained by it in order tomaintain its LIBOR Loans, (b) a default by the Borrower in making a borrowingor conversion after the Borrower has given (or is deemed to have given) a LoanRequest or a Conversion Request, (c) the making of any payment of a LIBOR Loanor the making of any conversion of a LIBOR Loan to a Prime Rate Loan on a daythat is not the last day of the applicable Interest Period with respectthereto, including interest or fees payable by such Lender to lenders of fundsobtained by it in order to maintain any such LIBOR Loan and (d) any failure bythe Borrower to prepay a LIBOR Loan on the date specified in a prepaymentnotice given by the Borrower.

 

§4.9                          Default Interest and Late Charges.  During any period when an Event of Defaulthas occurred and is continuing, or after the Maturity Date or after judgmenthas been rendered on any Note, Borrower’s right to select LIBOR Loans shallcease and the unpaid principal of all Loans shall, at the option of each Lenderbear interest at a rate which is four (4) percentage points per annum greaterthan that which would otherwise be applicable to Prime Rate Loans. If theentire amount of any required principal and/or interest is not paid in fullwithin ten (10) days after the same is due, Borrower shall pay to the Agent alate fee equal to five percent (5%) of the required payment.

 

§4.10                    Inabilityto Determine LIBOR Rate. In the event, prior to the commencement of any Interest Period relatingto any LIBOR Loan, the Agent shall reasonably determine that adequate andreasonable methods do not exist for ascertaining the LIBOR Rate that wouldotherwise determine the rate of interest to be applicable to any LIBOR Loanduring any Interest Period, the Agent shall forthwith give notice of suchdetermination (which shall be conclusive and binding on the Borrower) to theBorrower. In such event (a) any Loan Request or Conversion Request with respectto LIBOR Loans shall be automatically withdrawn and shall be 

 

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deemed a request for Prime Rate Loans, (b) each LIBORLoan will automatically, on the last day of the then current Interest Periodthereof, become a Prime Rate Loan, and (c) the obligations of the Lenders tomake LIBOR Loans shall be suspended until the Agent reasonably determines thatthe circumstances giving rise to such suspension no longer exist, whereupon theAgent shall so notify the Borrower.

 

§4.11                    Illegality.  Notwithstanding any other provisions herein,if any present or future law, regulation, treaty or directive or in theinterpretation or application thereof shall make it unlawful for any Lender tomake or maintain LIBOR Loans, such Lender shall forthwith give notice of suchcircumstances to the Borrower and thereupon (a) the Commitment of such Lenderto make LIBOR Loans or convert Loans of another Type to LIBOR Loans shallforthwith be suspended and (b) the LIBOR Loans then outstanding shall beconverted automatically to Prime Rate Loans on the last day of each InterestPeriod applicable to such LIBOR Loans or within such earlier period as may berequired by law. The Borrower hereby agrees promptly to pay to the Agent forthe account of such Lender, upon demand, any additional amounts necessary tocompensate such Lender for any costs incurred by such Lender in making anyconversion in accordance with this §4.11, including any interest or feespayable by such Lender to lenders of funds obtained by it in order to make ormaintain its LIBOR Loans hereunder. If, at any time, the rate of interest,together with all amounts which constitute interest and which are reserved,charged or taken by the Lenders as compensation for fees, services or expenses incidentalto the making, negotiating or collection of the Loans or the other Obligations,shall be deemed by any competent court of law, governmental agency or tribunalto exceed the maximum rate of interest permitted to be charged by any Lender toBorrower under applicable law, then, during such time as such rate of interestwould be deemed excessive, that portion of each sum paid attributable to thatportion of such interest rate that exceeds the maximum rate of interest sopermitted shall be deemed a voluntary prepayment of principal without penalty(including, without limitation, prepayment fees required pursuant to §3.3(a)hereof).  As used herein, the term“applicable law” shall mean the law in effect as of the date hereof, provided,however, that in the event there is a change in the law which results in ahigher permissible rate of interest, then this Agreement and the Notes shall begoverned by such new law as of its effective date.

 

§4.12                    Replacementof Lenders.  If any of theLenders shall make a notice or demand upon the Borrower pursuant to §4.5, §4.6,or §4.11 based on circumstances or laws which are not generally applicable tothe Lenders organized under the laws of the United States or any State thereof,the Borrower shall have the right to replace such Lender with an EligibleAssignee selected by the Borrower and approved by the Agent.  In such event the assignment shall takeplace on a date set by the Agent at which time the assigning Lender and the EligibleAssignee shall enter into an Assignment and Acceptance as contemplated by §18.1(and clause (d) thereof shall not be applicable) and the assigning Lender shallreceive from the Eligible Assignee a sum equal to the outstanding principalamount of the Loans owed to the assigning Lender together with accrued interestthereon plus all other amounts then due to the assigning Lender hereunder.

 

§4.13                    Limitationon Interest.  Notwithstandinganything in this Agreement to the contrary, all agreements between the Borrowerand the Lenders and the Agent, whether now existing or hereafter arising andwhether written or oral, are hereby limited so that in no contingency, whetherby reason of acceleration of the maturity of any of the Obligations orotherwise, shall the interest contracted for, charged or received by theLenders exceed the

 

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maximum amount permissible under applicable law.  If, from any circumstance whatsoever,interest would otherwise by payable to the Lenders in excess of the maximum lawfulamount, the interest payable to the Lenders shall be reduced to the maximumamount permitted under applicable law; and if from any circumstance the Lendersshall ever receive anything of value deemed interest by applicable law inexcess of the maximum lawful amount, an amount equal to any excessive interestshall be applied to the reduction of the principal balance of the Obligationsand to the payment of interest or, if such excessive interest exceeds theunpaid balance of principal of the Obligations, such excess shall be refundedto the Borrower.  All interest paid oragreed to be paid to the Lenders shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated and spread throughout the full perioduntil payment in full of the principal of the Obligations (including the periodof any renewal or extension thereof) so that the interest thereon for such fullperiod shall not exceed the maximum amount permitted by applicable law.  This section shall control allagreements between the Borrower and the Lenders and the Agent. 

 

**§5.****                               NO LIMITATION ON RECOURSE**.

 

§5.1                          [Intentionally Omitted.]

 

§5.2                          No Limitation on Recourse.  The Obligations are full recourse obligations of the Borrower andall of its Real Estate Assets and other properties and assets shall beavailable for the indefeasible payment in full in cash and performance of theObligations.

 

**§6.****                               REPRESENTATIONS AND WARRANTIES**.  The Borrower represents and warrants to theAgent and each of the Lenders as of the Closing Date and as of the date of eachLoan hereunder as follows.

 

§6.1                          Authority; Etc.

 

(a)                                  Organization;Good Standing.  The Borrower (i) isa Maryland corporation duly organized, validly existing and in good standingunder the laws of the State of Maryland, (ii) has all requisite power to ownits properties and conduct its business as now conducted and as presentlycontemplated, and (iii) to the extent required by law is in good standing as aforeign entity and is duly authorized to do business in the State of Coloradoand in each other jurisdiction where such qualification is necessary exceptwhere a failure to be so qualified in such other jurisdiction would not have aMaterial Adverse Effect. Each Related Company is a corporation, partnership orlimited liability company duly organized, validly existing and in good standingunder the laws of the State of its formation, has all requisite power to ownits properties and conduct its business as presently contemplated and is dulyauthorized to do business in the State in which the property owned by it islocated and in each other jurisdiction where such qualification is necessary.

 

(b)                                 Authorization.  The execution, delivery and performance ofthis Agreement and the other Loan Documents to which the Borrower is to becomea party and the transactions contemplated hereby and thereby (i) are within theauthority of the Borrower, (ii) have been duly authorized by all necessaryproceedings on the part of the Borrower, (iii) do not conflict with or resultin any breach or contravention of any provision of law, statute, rule orregulation to which the Borrower is subject or any judgment, order, writ,injunction, license or

 

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permit applicable to the Borrower and (iv) do notconflict with any provision of its charter documents or bylaws of, or anyagreement or other instrument binding upon, the Borrower or to which any of itsproperties are subject.

 

(c)                                  Enforceability.  Assuming due authorization, execution anddelivery by all other parties thereto, the execution and delivery of thisAgreement and the other Loan Documents to which the Borrower is or is to becomea party will result in valid and legally binding obligations of the Borrowerenforceable against it in accordance with the respective terms and provisionshereof and thereof, except as enforceability is limited by bankruptcy,insolvency, reorganization, moratorium or other laws relating to or affectinggenerally the enforcement of creditors’ rights and except to the extent that availabilityof the remedy of specific performance or injunctive relief is subject to thediscretion of the court before which any proceeding therefor may be brought.

 

§6.2                          Governmental Approvals.  The execution, delivery and performance bythe Borrower of this Agreement and the other Loan Documents to which theBorrower is or is to become a party and the transactions contemplated herebyand thereby do not require the approval or consent of, or filing with, anygovernmental agency or authority other than those already obtained.

 

§6.3                          Title to Properties; Leases.

 

(a)                                  EachRelated Company holds good and clear record and marketable (or indefeasible,with respect to Real Estate located in Texas) fee simple or leasehold title, asapplicable, to the Real Estate, subject to no rights of others, including anymortgages, conditional sales agreements, title retention agreements, liens orencumbrances except for the Permitted Liens.

 

(b)                                 Exceptas indicated on Schedule 6.3 hereto, the Borrower owns all of theproperties reflected in the balance sheet of the Borrower as of the BalanceSheet Date or acquired since that date (except properties sold or otherwisedisposed of in the ordinary course of business since that date), subject to norights of others, including any mortgages, leases, conditional salesagreements, title retention agreements, liens or other encumbrances exceptPermitted Liens.

 

§6.4                          Financial Statements.  The following financial statements have beenfurnished to each of the Lenders.

 

(a)                                  Abalance sheet of the Borrower as of the Balance Sheet Date, and a statement ofincome, statement of changes in shareholders’ equity and statement of cashflows for the fiscal year then ended, accompanied by an auditor’s reportprepared without qualification. Such balance sheet and statements of income, ofchanges in shareholders’ equity and of cash flows have been prepared inaccordance with Generally Accepted Accounting Principles and fairly present thefinancial condition of the Borrower in all material respects as of the close ofbusiness on the date thereof and the results of operations, changes inshareholders’ equity and cash flows for the fiscal year then ended. There areno contingent liabilities of the Borrower as of such date involving materialamounts, known to the officers of the Borrower not disclosed in said balancesheet and the related notes thereto.

 

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(b)                                 Abalance sheet and a statement of income, statement of changes in shareholders,equity and statement of cash flows of the Borrower for each of the fiscalquarters of the Borrower ended since the Balance Sheet Date certified byBorrower’s chief financial officer to have been prepared in accordance withGenerally Accepted Accounting Principles consistent with those used in thepreparation of the annual audited statements delivered pursuant to paragraph(a) above and to fairly present the financial condition of the Borrower in allmaterial respects as of the close of business on the dates thereof and theresults of operations, of changes in shareholders’ equity and of cash flows forthe fiscal quarters then ended (subject to year-end adjustments). There are nocontingent liabilities of the Borrower as of such dates involving materialamounts, known to the officers of the Borrower, not disclosed in such balancesheets and the related notes thereto.

 

§6.5                          No Material Changes.  Since the Balance Sheet Date, there hasoccurred no material adverse change in the financial condition or assets orbusiness of the Borrower as shown on or reflected in the balance sheet of theBorrower as of the Balance Sheet Date, or the statement of income for thefiscal year then ended, other than changes in the ordinary course of businessthat have not had a Material Adverse Effect.

 

§6.6                          Franchises, Patents, Copyrights, Etc.  The Borrower possesses (either directly orthrough the Related Companies) all franchises, patents, copyrights, trademarks,trade names, licenses and permits, and rights in respect of the foregoing,adequate for the conduct of its business substantially as now conducted withoutknown conflict with any rights of others, including all Permits.

 

§6.7                          Litigation. Except as listed and described on Schedule 6.7 hereto, thereare no actions, suits, proceedings or investigations of any kind pending or, toBorrower’s knowledge, threatened against the Borrower or any of the RelatedCompanies before any court, tribunal or administrative agency or board that, ifadversely determined, might, either in any case or in the aggregate, have aMaterial Adverse Effect or materially impair the right of the Borrower or anyof the Related Companies to carry on business substantially as now conducted byit, or result in any material liability not adequately covered by insurance, orfor which adequate reserves are not maintained on the balance sheet of theBorrower.

 

§6.8                          No Materially Adverse Contracts, Etc.  The Borrower is not subject to any charter,trust or other legal restriction, or any judgment, decree, order, rule orregulation that has or is expected in the future to have a Material AdverseEffect. The Borrower is not a party to any contract or agreement that has or isexpected, in the judgment of the Borrower’s officers, to have a MaterialAdverse Effect. None of the Related Companies is subject to any charter, trustor other legal restriction, or any judgment, decree, order, rule or regulationthat has or is expected in the future, in the judgment of the Borrower’sofficers, to have a Material Adverse Effect. None of the Related Companies is aparty to any contract or agreement that has or is expected, in the judgment ofthe Borrower’s officers, to have any Material Adverse Effect.

 

§6.9                          Compliance With Other Instruments, Laws, Etc.  Neither the Borrower nor any Related Companyis in violation of any provision of its charter documents, by-laws, or anyagreement or instrument to which it may be subject or by which it or any of itsproperties may be

 

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bound or any decree, order, judgment, statute,license, rule or regulation, in any of the foregoing cases in a manner thatcould have a Material Adverse Effect.

 

§6.10                    Tax Status.  The Borrower (a) has made or filed allfederal and state income and all other tax returns, reports and declarationsrequired by any jurisdiction to which it is subject, (b) has paid all taxes andother governmental assessments and charges shown or determined to be due onsuch returns, reports and declarations, except those being contested in goodfaith and by appropriate proceedings, and (c) has set aside on its booksreserves reasonably adequate for the payment of all taxes for periodssubsequent to the periods to which such returns, reports or declarationsapply.  There are no delinquent taxes inany material amount claimed to be due by the taxing authority of anyjurisdiction, and the officers of the Borrower know of no basis for any suchclaim.

 

§6.11                    Event ofDefault.  No Default or Event ofDefault has occurred and is continuing.

 

§6.12                    InvestmentCompany Act.  Neither theBorrower nor any Related Company is an “investment company”, or an “affiliatedcompany” or a “principal underwriter” of an “investment company”, as such termsare defined in the Investment Company Act of 1940.

 

§6.13                    Absenceof Financing Statements, Etc. There is no financing statement, security agreement, chattel mortgage,real estate mortgage, equipment lease, financing lease, option, encumbrance orother document existing, filed or recorded with any filing records, registry,or other public office, that purports to cover, affect or give notice of anypresent or possible future lien or encumbrance on, or security interest in, anyproperty of the Borrower, except Permitted Liens.

 

§6.14                    [IntentionallyOmitted.]

 

§6.15                    CertainTransactions.  Except as setforth on Schedule 6.15 hereto, none of the officers or employees ofthe Borrower is presently a party to any transaction with the Borrower or anyRelated Company (other than for services as employees, officers and trustees),including any contract, agreement or other arrangement providing for thefurnishing of services to or by, providing for rental of real or personalproperty to or from, or otherwise requiring payments to or from any officer,trustee or such employee or, to the knowledge of the Borrower, any corporation,partnership, trust or other entity in which any officer, trustee or any suchemployee or natural Person related to such officer, trustee or employee orother Person in which such officer, trustee or employee has a direct or indirectbeneficial interest has a substantial interest or is an officer or trustee.

 

§6.16                    BenefitPlans; Multiemployer Plans; Guaranteed Pension Plans.  As of the date hereof as to anyMultiemployer Plan or Guaranteed Pension Plan, neither the Borrower nor anyERISA Affiliate maintains or contributes to any Multiemployer Plan orGuaranteed Pension Plan. To the extent that Borrower or any ERISA Affiliatehereafter maintains or contributes to any Employee Benefit Plan or GuaranteedPension Plan, it shall at all times do so in compliance with §7.20 hereof.

 

§6.17                    RegulationsU and X.  No portion ofany Loan shall be used, in whole or in part, for the purpose of purchasing orcarrying any “margin security” or “margin stock” as such terms

 

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are used in Regulations U and X of the Board ofGovernors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

 

§6.18                    EnvironmentalCompliance.  To the best ofBorrower’s knowledge, Borrower makes the following representations andwarranties:

 

(a)                                  Exceptas may be set forth on Schedule 6.18 attached hereto, none of theBorrower, any of the Related Companies or any operator of the Real Estate orany portion thereof, or any operations thereon is in violation, or allegedmaterial violation, of any judgment, decree, order, law, license, rule orregulation pertaining to environmental matters (hereinafter collectivelyreferred to as the “Environmental Laws”), including without limitation, thosearising under the Resource Conservation and Recovery Act (“RCRA”), theComprehensive Environmental Response, Compensation and Liability Act of 1980 asamended (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986(“SARA”), the Federal Clean Water Act, the Federal Clean Air Act, the ToxicSubstances Control Act, or any state or local statute, regulation, ordinance,order or decree relating to health, safety or the environment, including,without limitation, the environmental statutes, regulations, orders and decreesof the States in which any of the Real Estate may be located, which violationinvolves the Real Estate or would have a Material Adverse Effect.

 

(b)                                 Exceptas set forth on Schedule 6.18 attached hereto, none of the Borroweror the Related Companies has received written notice from any third partyincluding, without limitation any federal, state or local governmentalauthority, (i) that it has been identified by the United States EnvironmentalProtection Agency (“EPA”) as a potentially responsible party under CERCLA withrespect to a site listed on the National Priorities List, 40 C.F.R. Part 300Appendix B (1986) ; (ii) that any hazardous waste, as defined by 42 U.S.C.§9601(5), any hazardous substances as defined by 42 U.S.C. §9601(14), anypollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxicsubstances, oil or hazardous materials or other chemicals or substancesregulated by any Environmental Laws (“Hazardous Materials”) which it hasgenerated, transported or disposed of have been found at any site at which afederal, state or local agency or other third party has conducted or hasordered that the Borrower or any of the Related Companies conduct a remedialinvestigation, removal or other response action pursuant to any EnvironmentalLaw; or (iii) that it is or shall be a named party to any claim, action, causeof action, complaint, or legal or administrative proceeding (in each case,contingent or otherwise) arising out of any third party’s incurrence of costs,expenses, losses or damages of any kind whatsoever in connection with therelease of Hazardous Materials.

 

(c)                                  Exceptas set forth on Schedule 6.18 attached hereto, (i) no portion ofthe Real Estate has been used for the handling, processing, storage or disposalof Hazardous Materials except in material compliance with applicableEnvironmental Laws; and except as set forth on Schedule 6.18, nounderground tank or other underground storage receptacle for HazardousMaterials is located on any portion of the Real Estate; (ii) in the course ofany activities conducted by the Borrower, any of the Related Companies or theoperators of the Real Estate, no Hazardous Materials have been generated or arebeing used on the Real Estate except in material compliance with applicableEnvironmental Laws; (iii) there has been no present, or to the best ofBorrower’s knowledge past, releasing, spilling, leaking, pumping, pouring,emitting, emptying, discharging, injecting, escaping, disposing or dumping (a“Release”) or threatened

 

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Release of Hazardous Materials on, upon, into or fromthe Real Estate; (iv) to the best of Borrower’s knowledge, there have been noReleases on, upon, from or into any real property in the vicinity of any of theReal Estate which, through soil or groundwater contamination, may have come tobe located on, and which would have a material adverse effect on the value of,such Real Estate; and (v) to the best of Borrower’s knowledge, any HazardousMaterials that have been generated on any of the Real Estate have beentransported off-site only by carriers having an identification number issued bythe EPA, treated or disposed of only by treatment or disposal facilitiesmaintaining valid permits as required under applicable Environmental Laws, whichtransporters and facilities have been and are, to the best of the Borrower’sknowledge, operating in material compliance with such permits and applicableEnvironmental Laws. Notwithstanding that any representation contained hereinmay be limited to the knowledge of the Borrower, any such limitation shall notaffect the covenants specified in §7.10 or elsewhere in this Agreement.

 

§6.19                    Subsidiariesand Affiliates.  The Borrowerhas no Subsidiaries except for the Related Companies listed on Schedule 1.3.The Borrower is not a partner in any partnership and is not a member of anylimited liability company, other than the Unconsolidated Entities listed on Schedule 1.3.

 

§6.20                    Leases.  Upon request from Agent the Borrower willdeliver to the Agent a rent roll for each parcel of Real Estate which shallaccurately and completely sets forth all relevant information with respect tothe leases, the rents payable by tenants, and a description of any tenantimprovements or work to be done, furnished or paid for by the landlord, orcredited or allowed to a tenant.

 

§6.21                    LoanDocuments.  All of therepresentations and warranties of the Borrower made in the other Loan Documentsor any document or instrument delivered or to be delivered to the Agent or theLenders pursuant to or in connection with any of such Loan Documents are trueand correct in all material respects.

 

§6.22                    Property.  All of the Borrower’s, the RelatedCompanies’ and the Controlled Unconsolidated Entities’ properties are in goodrepair and condition, subject to ordinary wear and tear.  The Borrower has completed or caused to becompleted an appropriate investigation of the environmental condition of eachsuch property as of the later of the date of the Borrower’s, the RelatedCompanies’ or the Controlled Unconsolidated Entities’ purchase thereof or thedate upon which such property was last security for Indebtedness of suchPerson, including preparation of a “Phase I” report and, if appropriate, a“Phase II” report, in each case prepared by a recognized environmental engineerin accordance with customary standards which discloses that such property isnot in violation of the representations and covenants set forth in thisAgreement, unless such violation has been disclosed in writing to the Agent andremediation actions satisfactory to Agent are being taken.  There are no unpaid or outstanding realestate or other taxes or assessments on or against any property of theBorrower, the Related Companies or the Controlled Unconsolidated Entities whichare payable by such Person (except only real estate or other taxes orassessments, that are not yet due and payable).  Except as set forth in Schedule 6.22 hereto, thereare no pending eminent domain proceedings against any property of the Borrower,the Related Companies or the Controlled Unconsolidated Entities or any partthereof, and, to the knowledge of the Borrower, no such proceedings arepresently threatened or

 

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contemplated by any taking authority which mayindividually or in the aggregate have any materially adverse effect on thebusiness or financial condition of the Borrower.  To Borrower’s knowledge after due inquiry and investigation noneof the property of Borrower, the Related Companies or the ControlledUnconsolidated Entities is now damaged or injured as a result of any fire,explosion, accident, flood or other casualty in any manner which individuallyor in the aggregate would have any materially adverse effect on the business orfinancial condition of the Borrower.

 

**§7.****                               AFFIRMATIVE COVENANTS OF THE BORROWER**.  Borrower covenants and agrees as follows, solong as any Loan or Note is outstanding or the Lenders have any obligations tomake Loans:

 

§7.1                          Punctual Payment.  The Borrower will unconditionally duly and punctually pay theprincipal and interest on the Loans and all other amounts provided for in theNote, this Agreement, and the other Loan Documents all in accordance with theterms of the Note, this Agreement and the other Loan Documents.

 

§7.2                          Maintenance of Office.  The Borrower will maintain its chiefexecutive office at 1780 S. Bellaire Street, Suite 515, Denver, CO 80222 or atsuch other place in the United States of America as the Borrower shalldesignate upon written notice to the Agent to be delivered within fifteen (15)days of such change, where notices, presentations and demands to or upon theBorrower in respect of the Loan Documents may be given or made.

 

§7.3                          Records and Accounts.  The Borrower will (a) keep true and accurate(in all material respects) records and books of account in which full, true andcorrect entries (in all material respects) will be made in accordance withGenerally Accepted Accounting Principles and (b) maintain adequate accounts andreserves for all taxes (including income taxes), depreciation and amortizationof its properties, contingencies, and other reserves.

 

§7.4                          Financial Statements, Certificates and Information.  The Borrower will deliver to each of theLenders:

 

(a)                                  assoon as practicable, but in any event not later than ninety (90) days after theend of each fiscal year of the Borrower, the audited balance sheet of theBorrower at the end of such year, and the related audited statement of income,statement of changes in shareholders, equity and statement of cash flows forsuch year, each setting forth in comparative form the figures for the previousfiscal year and all such statements to be in reasonable detail, prepared inaccordance with Generally Accepted Accounting Principles, and accompanied by anauditor’s report prepared without qualification by or by an independentcertified public accountant reasonably acceptable to the Agent;

 

(b)                                 assoon as practicable, but in any event not later than forty-five (45) days afterthe end of each of the first three (3) fiscal quarters of the Borrower, copiesof the unaudited balance sheets of the Borrower as at the end of such quarter,and the related unaudited statement of income, statement of changes inshareholders’ equity and statement of cash flows for the portion of theBorrower’s fiscal year then elapsed, all in reasonable detail and prepared inaccordance with Generally Accepted Accounting Principles, together with acertification by the

 

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principal financial or accounting officer of theBorrower that the information contained in such financial statements fairlypresents the financial position of the Borrower on the date thereof (subject toyear-end adjustments);

 

(c)                                  assoon as practicable, but in any event no later than forty-five (45) days afterthe end of each fiscal quarter of the Borrower, the Borrower will provide theAgent with, for each parcel of Real Estate: (i) a rent roll dated as of the endof such fiscal quarter in form reasonably satisfactory to the Agent, (ii) astatement of the Net Operating Income for each parcel of Real Estate for suchfiscal quarter and year to date and (iii) after the last quarter of each year,a detailed statement of all income and expenses for each parcel of Real Estate forsuch year;

 

(d)                                 simultaneouslywith the delivery of the financial statements referred to in subsections (a)and (b) above, a Compliance Certificate;

 

(e)                                  assoon as practicable, but in any event not later than ninety (90) days after theend of each fiscal year of the Borrower, copies of the Form 10-K statementfiled with the Securities and Exchange Commission (“SEC”) for such fiscal year,and as soon as practicable, but in any event not later than forty-five (45)days after the end of each fiscal quarter, copies of the Form 10-Q statementfiled with the SEC for such fiscal quarter, provided that in either case if theSEC has granted an extension for the filing of such statements, Borrower shalldeliver such statements to the Agent simultaneously with the filing thereofwith the SEC;

 

(f)                                    promptlyfollowing the filing or mailing thereof, copies of all other material of afinancial nature filed with the SEC, and each Lender will be included onBorrower’s mailing list so that it will receive copies of all press releasesissued by the Borrower;

 

(g)                                 assoon as practicable, but in any event not later than sixty (60) days prior tothe beginning of each fiscal year of the Borrower a cash flow budget for theBorrower and a property budget for each parcel of Real Estate for such fiscalyear; and

 

(h)                                 fromtime to time such other financial data and information as the Agent mayreasonably request;

 

§7.5                          Notices.

 

(a)                                  Defaults.  The Borrower will promptly notify the Agentin writing of the occurrence of any Default or Event of Default. If any Personshall give any notice or take any other action in respect of a claimed default(whether or not constituting a Default or an Event of Default under thisAgreement) under any note, evidence of Indebtedness, indenture or other obligationto which or with respect to which the Borrower or any of the Related Companiesis a party or obligor, whether as principal or surety, and such default wouldpermit the holder of such note or obligation or other evidence of Indebtednessto accelerate the maturity thereof, the Borrower shall forthwith give writtennotice thereof to the Agent and each of the Lenders, describing the notice oraction and the nature of the claimed default.

 

(b)                                 EnvironmentalEvents.  The Borrower will promptlynotify the Agent in writing of any of the following events: (i) upon Borrower’sobtaining knowledge of any violation of any Environmental Law regarding anyReal Estate or Borrower’s operations which violation

 

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could have a Material Adverse Effect; (ii) uponBorrower’s obtaining knowledge of any potential or known Release, or threat ofRelease, of any Hazardous Substance at, from, or into any Real Estate which itreports in writing or is reportable by it in writing to any governmentalauthority and which is material in amount or nature or which could materiallyaffect the value of such Real Estate; (iii) upon Borrower’s receipt of anynotice of violation of any Environmental Laws or of any Release or threatened Releaseof Hazardous Substances, including a notice or claim of liability or potentialresponsibility from any third party (including without limitation any federal,state or local governmental officials) and including notice of any formalinquiry, proceeding, demand, investigation or other action with regard to (A)Borrower’s or any Person’s operation of any Real Estate to the extent it mayresult in a Material Adverse Effect, (3) contamination on, from or into anyReal Estate to the extent it may result in a Material Adverse Effect, or (C)investigation or remediation of off-site locations at which Borrower or any ofits predecessors are alleged to have directly or indirectly disposed ofHazardous Substances; or (iv) upon Borrower’s obtaining knowledge that anyexpense or loss has been incurred by such governmental authority in connectionwith the assessment, containment, removal or remediation of any HazardousSubstances with respect to which Borrower or any of the Related Companies maybe liable or for which a lien may be imposed on any Real Estate to the extentsuch liability may result in a Material Adverse Effect.

 

(c)                                  Notificationof Claims.  The Borrower will,immediately upon becoming aware thereof, notify the Agent in writing of anysetoff, claims (including, with respect to any of the Real Estate,environmental claims), withholdings or other defenses which could have aMaterial Adverse Effect.

 

(d)                                 Noticeof Litigation and Judgments.  TheBorrower will give notice to the Agent in writing within fifteen (15) days ofbecoming aware of any litigation or proceedings threatened in writing or anypending litigation and proceedings affecting any of the Real Estate oraffecting the Borrower or any of the Related Companies or to which the Borroweror any of the Related Companies is or is to become a party involving anuninsured claim (or as to which the insurer reserves rights) against theBorrower or any of the Related Companies that at the time of giving of noticecould reasonably be expected to have a Materially Adverse Effect, and statingthe nature and status of such litigation or proceedings. The Borrower will givenotice to the Agent, in writing, in form and detail reasonably satisfactory tothe Agent, within ten (10) days of any judgment not covered by insurance, finalor otherwise, against the Borrower or any Related Company in an amount inexcess of $50,000.

 

§7.6                          Existence; Maintenance of REIT Status;Maintenance of Properties.  TheBorrower will do or cause to be done all things necessary to preserve and keepin full force and effect its existence as a Maryland corporation and its statusas a self administered real estate investment trust under the Code. TheBorrower will do or cause to be done all things necessary to preserve and keepin full force and effect the existence of each Related Company.  Borrower will comply in all materialrespects with all applicable rules and regulations of the SEC relating to itspublicly held stock. Borrower will continue to have its stock listed on one ofthe major stock exchanges in the United States, and will comply in all materialrespects with all applicable rules of the stock exchange where the stock is solisted. The Borrower will do or cause to be done all things necessary topreserve and keep in full force all of its rights and franchises which in thejudgment of the Borrower may be necessary to properly and advantageouslyconduct the

 

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businesses being conducted by it, or by any of theRelated Companies. The Borrower will continue to engage primarily in thebusinesses now conducted by it and in related businesses.

 

§7.7                          Insurance. With respect to the properties and businesses of Borrower and theRelated Companies, the Borrower will maintain or cause to be maintainedinsurance with financially sound and reputable insurers against such casualtiesand contingencies as shall be in accordance with the general practices ofbusinesses engaged in similar activities in similar geographic areas and inamounts, containing such terms, in such forms and for such periods as may bereasonable and prudent.

 

§7.8                          Taxes.  TheBorrower will pay real estate taxes, other taxes, assessments and othergovernmental charges against the Real Estate before the same become delinquent,and will duly pay and discharge, or cause to be paid and discharged, before thesame shall become overdue, all taxes, assessments and other governmentalcharges imposed upon it and its other properties, sales and activities, or anypart thereof, or upon the income or profits therefrom, as well as all claimsfor labor, materials, or supplies that if unpaid might by law become a lien orcharge upon any of its properties; provided that any such tax, assessment,charge, levy or claim need not be paid if the validity or amount thereof shallcurrently be contested in good faith by appropriate proceedings and if theBorrower shall have set aside on its books adequate reserves with respectthereto; and provided further that the Borrower will pay all such taxes,assessments, charges, levies or claims forthwith upon the commencement ofproceedings to foreclose any lien that may have attached as security therefor.Promptly after payment of real estate taxes, other taxes, assessments and othergovernmental charges against the Real Estate, Borrower will provide evidence ofsuch payments to the Agent, in the form of receipted tax bills or other formreasonably acceptable to the Agent. 

 

§7.9                          Inspection of Properties and Books.  The Borrower shall permit the Lenders,through the Agent’s or any Lender’s other designated representatives, at theBorrower’s expense to visit and inspect any of the Real Estate or any ofBorrower’s offices, to examine the books of account of the Borrower and theRelated Companies (and to make copies thereof and extracts therefrom) and todiscuss the affairs, finances and accounts of the Borrower with, and to beadvised as to the same by, its officers, all at such reasonable times andintervals as the Agent or any Lender may reasonably request.

 

§7.10                    Compliancewith Laws, Contracts, Licenses, and Permits.  The Borrower will comply, and will cause allRelated Companies to comply, with (a) all applicable laws and regulations nowor hereafter in effect wherever its business is conducted, including allEnvironmental Laws, (b) the provisions of all applicable partnershipagreements, charter documents and by-laws, (c) all agreements and instrumentsto which it is a party or by which it or any of its Real Estate Assets may bebound including any leases, and (d) all applicable decrees, orders, andjudgments. If at any time any Permit from any governmental Person shall becomenecessary or required in order that the Borrower may fulfill or be incompliance with any of its obligations hereunder or under any of the Loan Documents,the Borrower will promptly take or cause to be taken all reasonable stepswithin the power of the Borrower to obtain such authorization, consent,approval, permit or license and furnish the Agent and the Lenders with evidencethereof.

 

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§7.11                    Use ofProceeds.  Subject to theprovisions of §2.5 hereof, the proceeds of the Loans shall be used by theBorrower to refinance the existing $15,000,000.00 loan from FNB to Borrower,for making Investments permitted by §8.3, and for working capital and otherpurposes consistent with the covenants contained herein.

 

§7.12                    Reserved.

 

§7.13                    [IntentionallyOmitted.]

 

§7.14                    InterestRate Protection. Borrower shall maintain in effect interest rate caps, swaps or otherinterest hedging contracts with counterparties and in form and substancereasonably satisfactory to the Agent covering such portion of Borrower’svariable rate debt as may be required by the Agent.

 

§7.15                    Further Assurance.  The Borrower will cooperate with the Agentand the Lenders and execute such further instruments and documents and performsuch further acts as the Agent and the Lenders shall reasonably request tocarry out to their satisfaction the transactions contemplated by this Agreementand the other Loan Documents.

 

§7.16                    Reserved.

 

§7.17                    Environmental Indemnification.  The Borrower covenants and agrees that itwill indemnify and hold the Agent and each Lender harmless from and against anyand all claims, expense, damage, loss or liability incurred by the Agent or anyLender (including all reasonable costs of legal representation incurred by theAgent or any Lender, but excluding, as applicable, for the Agent or a Lenderany claim, expense, damage, loss or liability as a result of the gross negligenceor willful misconduct of the Agent or such Lender) relating to (a) any Releaseor threatened Release of Hazardous Substances on any Real Estate; (b) anyviolation of any Environmental Laws with respect to conditions at any RealEstate or the operations conducted thereon; or (c) the investigation orremediation of off-site locations at which the Borrower or its predecessors arealleged to have directly or indirectly disposed of Hazardous Substances. It isexpressly acknowledged by the Borrower that this covenant of indemnificationshall survive any modification, release or discharge of any or all of the LoanDocuments or the payment of the Loans and shall inure to the benefit of theAgent and the Lenders, and their successors and assigns.

 

§7.18                    ResponseActions.  The Borrower covenantsand agrees that if any Release or disposal of Hazardous Substances shall occuror shall have occurred on any Real Estate, the Borrower will cause the promptcontainment and removal of such Hazardous Substances and remediation of suchReal Estate as necessary to comply with all Environmental Laws or to preservethe value of such Real Estate.

 

§7.19                    EnvironmentalAssessments.  If the Agent inits good faith judgment, after discussion with the Borrower, has reason to believethat the environmental condition of any Real Estate has deteriorated, afterreasonable notice by the Agent, whether or not a Default or an Event of Defaultshall have occurred, the Agent may, from time to time, for the purpose ofassessing and ensuring the value of such Real Estate, obtain one or moreenvironmental assessments or audits of such Real Estate prepared by anindependent engineer or other qualified

 

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consultant or expert approved by the Agent to evaluateor confirm (i) whether any Hazardous Substances are present in the soil orwater at such Real Estate and (ii) whether the use and operation of such RealEstate complies with all Environmental Laws. Environmental assessments mayinclude without limitation detailed visual inspections of such Real Estateincluding, without limitation, any and all storage areas, storage tanks,drains, dry wells and leaching areas, and the taking of soil samples, surfacewater samples and ground water samples, as well as such other investigations oranalyses as the Agent deems appropriate. All such environmental assessmentsshall be at the sole cost and expense of the Borrower.

 

§7.20                    EmployeeBenefit Plans.  

 

(a)                                  Representation.  The Borrower and its ERISA Affiliates do notcurrently maintain or contribute to any Guaranteed Pension Plan orMultiemployer Plan.

 

(b)                                 Notice.  The Borrower will obtain the consent of theAgent, which consent shall not be unreasonably withheld, conditioned ordelayed, prior to the establishment of any Employee Benefit Plan or GuaranteedPension Plan by the Borrower or any ERISA Affiliate.

 

(c)                                  InGeneral.  Each Employee Benefit Planmaintained by the Borrower or any ERISA Affiliate will be operated incompliance in all material respects with the provisions of ERISA and, to theextent applicable, the Code, including but not limited to the provisionsthereunder respecting prohibited transactions.

 

(d)                                 Terminabilityof Welfare Plans.  With respect toeach Employee Benefit Plan maintained by the Borrower or an ERISA Affiliatewhich is an employee welfare benefit plan within the meaning of §3(1) or§3(2)(B) of ERISA, the Borrower, or the ERISA Affiliate, as the case may be,has the right to terminate each such plan at any time (or at any time subsequentto the expiration of any applicable bargaining agreement) without liabilityother than liability to pay claims incurred prior to the date of termination.

 

(e)                                  MultiemployerPlans.  Without the consent of theAgent, the Borrower will not enter into, maintain or contribute to, anymultiemployer Plan.

 

(f)                                    Unfundedor Underfunded Liabilities.  TheBorrower will not, at any time, have accruing unfunded or underfundedliabilities with respect to any Employee Benefit Plan, Guaranteed Pension Planor Multiemployer Plan, or permit any condition to exist under any MultiemployerPlan that would create a withdrawal liability.

 

§7.21                    MoreRestrictive Agreements. Without limiting the terms of §8.1, should the Borrower enter into ormodify any agreements or documents pertaining to any existing or futureIndebtedness, which agreements or documents include covenants (whetheraffirmative or negative), warranties, representations, defaults or events ofdefault (or any other provision which may have the same practical effect as anyof the foregoing) which are individually or in the aggregate more restrictiveagainst the Borrower than those set forth herein or in any of the other LoanDocuments, the Borrower shall promptly notify the Agent and, if requested byMajority Lenders, the Borrower, the Agent and the Majority Lenders shallpromptly amend this Agreement and the other Loan Documents to include some orall or such more restrictive provisions as determined by the Majority Lendersin their sole discretion.  Notwithstandingthe

 

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foregoing, this §7.21 shall not apply to covenants inagreements or documents relating to Indebtedness that relate only to specificReal Estate that is collateral for such Indebtedness.

 

**§8.****                               CERTAIN NEGATIVE COVENANTS OF THE BORROWER**.  The Borrower covenants and agrees asfollows, so long as any Loan or Note is outstanding or the Lenders have anyobligation to make any Loans:

 

§8.1                          Restrictions on Indebtedness.  The Borrower will not, and the Borrower willnot permit any of the Related Companies or any Controlled Unconsolidated Entityto create, incur, assume, guarantee or become or remain liable, contingently orotherwise, with respect to any Indebtedness other than:

 

(a)                                  Indebtednessarising under the Secured Revolving Credit Agreement or under any of the LoanDocuments;

 

(b)                                 currentliabilities of the Borrower incurred in the ordinary course of business but notincurred through (i) the borrowing of money, or (ii) the obtaining of creditexcept for credit on an open account basis customarily extended and in factextended in connection with normal purchases of goods and services;

 

(c)                                  Indebtednessin respect of taxes, assessments, governmental charges or levies and claims forlabor, materials and supplies to the extent that payment therefor shall not atthe time be required to be made in accordance with the provisions of §7.8;

 

(d)                                 Indebtednessin respect of judgments or awards that have been in force for less than theapplicable period for taking an appeal so long as execution is not leviedthereunder or in respect of which the Borrower shall at the time in good faithbe prosecuting an appeal or proceedings for review and in respect of which astay of execution shall have been obtained pending such appeal or review;

 

(e)                                  endorsementsfor collection, deposit or negotiation and warranties of products or services,in each case incurred in the ordinary course of business;

 

(f)                                    Indebtednessof Borrower or the Related Companies to the extent the same does not create aviolation of §9.3, §9.4 or §9.5 and is subject to terms and conditionsconsistent with conventional commercial real estate lending practices, providedthat upon the creation or assumption of any such Indebtedness in an amountexceeding $5,000,000 Borrower shall provide the Agent with a notice describingthe terms of such Indebtedness and the security therefor and a ComplianceCertificate with updated calculations reflecting such Indebtedness.

 

§8.2                          Restrictions on Liens, Etc.  The Borrower will not, and the Borrower willnot permit any Related Company or Controlled Unconsolidated Subsidiary to, (a)create or incur or agree not to create or incur or suffer to be created orincurred or to exist any lien, encumbrance, mortgage, pledge, charge, restrictionor other security interest of any kind upon any of its assets or properties ofany character, or upon the rents, income or profits therefrom; (b) suffer toexist for a period of more than thirty (30) days after the same shall have beenincurred any Indebtedness (not permitted by §8.1(c)) or claim or demand againstit that if unpaid might by law or upon bankruptcy or insolvency, or otherwise,be given any priority whatsoever over its

 

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general creditors; or (c) sell, assign, pledge orotherwise transfer any rents, issues, profits, accounts, contract rights,general intangibles, chattel paper or instruments relating to any of its assetsor properties of any character other than in connection with the sale of theReal Estate to which they pertain as permitted hereunder; provided that theBorrower may create or incur or suffer to be created or incurred or to exist:

 

(i)                                     liensto secure taxes, assessments and other governmental charges in respect of obligationsnot overdue, the Indebtedness with respect to which is permitted by §8.1(c);

 

(ii)                                  depositsor pledges made in connection with, or to secure payment of, workerscompensation, unemployment insurance, old age pensions or other social securityobligations;

 

(iii)                               liensin respect of judgments or awards, the Indebtedness with respect to which ispermitted by §8.1(d);

 

(iv)                              liensof carriers, warehousemen, mechanics and materialmen, and other like liens inexistence less than 60 days from the date of creation thereof in respect ofobligations not overdue, the Indebtedness with respect to which is permitted by§8.1(c);

 

(v)                                 encumbrancesconsisting of leases, easements, rights of way, covenants, restrictions on theuse of real property and defects and irregularities in the title thereto;  and other minor liens or encumbrances noneof which in the opinion of the Borrower interferes materially with the use ofthe property affected in the ordinary conduct of the business of the Borrower,and which matters (x) do not individually or in the aggregate have a materiallyadverse effect on the use or value of the Real Estate and (xx) do not maketitle to such property unmarketable by the conveyancing standards in effectwhere such property is located; and

 

(vi)                              lienson Real Estate to secure the Indebtedness permitted by §8.1(f).

 

§8.3                          Restrictions on Investments.  The Borrower will not, and will not permitany of the Related Companies or any Controlled Unconsolidated Entity to make orpermit to exist or to remain outstanding any Investment except Investments in:

 

(a)                                  marketabledirect or guaranteed obligations of the United States of America that maturewithin one (1) year from the date of purchase by the Borrower;

 

(b)                                 demanddeposits, certificates of deposit, bankers acceptances and time deposits ofUnited States banks having total assets in excess of $1,000,000,000;

 

(c)                                  securitiescommonly known as “commercial paper” issued by a corporation organized andexisting under the laws of the United States of America or any state thereofthat at the time of purchase have been rated and the ratings for which are notless than “P 1” if rated by Moody’s Investors Services, Inc., and not less than“A 1” if rated by Standard and Poor’s;

 

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(d)                                 Investmentsin office properties (but not including office properties that are underconstruction) consistent with Borrower’s business plan submitted to the Agentprior to the date hereof and Investments in the following categories so long asthe aggregate amount of each of the following categories of Investments doesnot exceed the specified percentage of Gross Asset Value set forth in thefollowing table and so long as the aggregate amount, without duplication, ofall Investments described in such categories does not exceed, at any time,fifteen percent (15%) of Gross Asset Value:

 
| **Category of Investment**                                                                                                  |   | **Maximum  Percentage of Gross Asset Value** |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|
| Real Estate Assets that are not office  buildings or office parks                                                           |   | 5                                            | %      |
| Unconsolidated Entities primarily engaged  in either the business of ownership of real estate located in the United  States |   | 10                                           | %      |
| Undeveloped land                                                                                                            |   | 5                                            | %      |
| Mortgages and notes receivable                                                                                              |   | 5                                            | %      |

 

§8.4                          Merger, Consolidation, Acquisition and Disposition ofProperties.

 

(a)                                  TheBorrower will not, and will not permit any of the Related Companies or anyControlled Unconsolidated Entity to become a party to any merger orconsolidation, or agree to or effect any stock acquisition, or enter into anypartnership or joint venture other than partnerships or joint ventures relatingto Unconsolidated Entities to the extent allowed by §8.3(d).

 

(b)                                 [IntentionallyOmitted.]

 

(c)                                  Borrowerwill not, and will not permit any of the Related Companies or any ControlledUnconsolidated Entity to acquire or sell or otherwise dispose of Real EstateAssets pursuant to a single transaction or a series of related transactions ifthe aggregate price or other consideration exceeds $5,000,000 unless prior tosuch acquisition, sale or transfer, the Borrower shall provide the Agent with anotice describing the terms of such transaction and a Compliance Certificatewith updated calculations reflecting such transaction, and, if the aggregateprice or other consideration for an acquisition of Real Estate Assets exceeds $30,000,000,unless prior to such acquisition, the Borrower shall have obtained the consentof the Majority Lenders.

 

(d)                                 TheBorrower shall not transfer any assets to any of the Related Companies or anyUnconsolidated Entity, and shall not make any other material changes to thestructure of its corporate organization or the manner in which it operates itsbusiness, except with the prior written consent of the Agent.

 

§8.5                          Sale and Leaseback.  The Borrower will not enter into any arrangement, directly orindirectly, whereby the Borrower shall sell or transfer any property owned byit in order then or thereafter to lease such property or lease other propertythat the Borrower intends to use for substantially the same purpose as theproperty being sold or transferred. The Borrower will not

 

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permit any of the Related Companies or any ControlledUnconsolidated Entity to enter into any such arrangement.

 

§8.6                          Compliance with Environmental Laws.  The Borrower will not do, and will notpermit any of the Related Companies or any Controlled Unconsolidated Entity todo, any of the following: (a) use any of the Real Estate or any portion thereofas a facility for the handling, processing, storage or disposal of Hazardous Materialsexcept for immaterial amounts of Hazardous Materials used in the routinemaintenance and operation of the Real Estate and in compliance with applicablelaw, (b) cause or permit to be located on any of the Real Estate anyunderground tank or other underground storage receptacle for HazardousMaterials except in material compliance with Environmental Laws, (c) generateany Hazardous Materials on any of the Real Estate except in material compliancewith Environmental Laws, or (d) conduct any activity at any Real Estate or useany Real Estate in any manner so as to cause a Release.

 

§8.7                          Distributions. Borrower shall not permit the total Distributions by it during anyfiscal year to exceed ninety percent (90%) of Funds from Operations except thatsuch limitation on Distributions may be exceeded to the extent necessary forthe Borrower to maintain its REIT status provided that the Borrower providesthe Agent with a letter from its accountants or attorneys setting forth thebasis for computation of the amount of such necessary excessDistributions.  During any period whenany Default or Event of Default has occurred and is continuing the totalDistributions by the Borrower will not exceed the minimum amount necessary forthe Borrower to maintain its REIT status.

 

§8.8                          [Intentionally Omitted.]

 

§8.9                          Related Companies.  The Borrower will not amend the articles of incorporation orbylaws or other organizational documents of any of the Related Companies otherthan as may be required by any lender in connection with the incurrence ofIndebtedness permitted under §8.1. Borrower will not, directly or indirectly, make or permit to be made, byvoluntary or involuntary means, any sale, assignment, transfer, disposition,mortgage, pledge, hypothecation or encumbrance of its interest in any RelatedCompany or Unconsolidated Entity or any dilution of its interest in any RelatedCompany or Unconsolidated Entity.

 

**§9.****                               FINANCIAL COVENANTS OF THE BORROWER**.  The Borrower covenants and agrees asfollows, so long as any Loan or Note is outstanding or any Lender has anyobligation to make any Loan:

 

§9.1                          Reserved.  

 

§9.2                          Reserved.  

 

§9.3                          Total Liabilities to Gross Asset Value.  The Borrower will not permit TotalLiabilities to exceed seventy percent (70%) of Gross Asset Value, calculated asof the end of each fiscal quarter through and including the fiscal quarterending March 31, 2004. Beginning with the fiscal quarter endingJune 30, 2004, the Borrower will not permit Total Liabilities to exceedsixty-five percent (65%) of Gross Asset Value, calculated as of the end of eachfiscal quarter.

 

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§9.4                          Adjusted EBITDA to Interest Expense.  The Borrower will not permit the ratio ofits Adjusted EBITDA to Interest Expense to be less than 1.75 to 1.0 for anyperiod of four consecutive fiscal quarters, calculated as of the end of eachfiscal quarter through and including the fiscal quarter ending March 31,2004.  Beginning with the period of fourconsecutive fiscal quarters ending June 30, 2004, the Borrower will notpermit the ratio of its Adjusted EBITDA to Interest Expense to be less than 2.0to 1.0 for any period of four consecutive fiscal quarters, calculated as of theend of each fiscal quarter.

 

§9.5                          EBITDA to Fixed Charges.  The Borrower will not permit the ratio ofits EBITDA to Fixed Charges to be less than 1.5 to 1.0 for any period of fourconsecutive fiscal quarters, calculated as of the end of each fiscal quarterthrough and including the fiscal quarter ending March 31, 2004.  Beginning with the period of fourconsecutive fiscal quarters ending June 30, 2004, the Borrower will notpermit the ratio of its EBITDA to Fixed Charges to be less than 1.75 to 1.0 forany period of four consecutive fiscal quarters, calculated as of the end ofeach fiscal quarter.

 

§9.6                          Minimum Tangible Net Worth.  The Borrower will not at any time permit itsTangible Net Worth to be less than the sum of $25,000,000, plus 75% of NetOffering Proceeds after March 31, 2003, plus 100% of Net OP Proceeds afterMarch 31, 2003.

 

**§10.****                        CONDITIONS TO EFFECTIVENESS**.  This Agreement shall become effective wheneach of the following conditions precedent have been satisfied:

 

§10.1                    Loan Documents.  Each of the Loan Documents shall have beenduly executed and delivered by the respective parties thereto, shall be in fullforce and effect and shall be in form and substance satisfactory to each of theLenders. Each Lender shall have received a fully executed original of its Noteprior to or on the Closing Date.

 

§10.2                    GoodStanding Certificates and Certified Copies.  The Agent shall have received (i) a Certificate of Good Standingfor the Borrower from the State of Maryland and a certificate of qualificationfor the Borrower to do business from the State of Colorado, and (ii) a copy ofthe Borrower’s Articles of Incorporation certified by the Maryland Secretary ofState.

 

§10.3                    By-laws;Resolutions.  All action on thepart of the Borrower necessary for the valid execution, delivery andperformance by the Borrower of this Agreement and the other Loan Documents towhich it is or is to become a party shall have been duly and effectively taken,and evidence thereof satisfactory to the Agent shall have been provided to theAgent. The Agent shall have received from the Borrower true copies of itsby-laws and the resolutions adopted by its Board of Directors authorizing thetransactions described herein, each certified by its secretary to be true andcomplete and in effect on the Closing Date.

 

§10.4                    IncumbencyCertificate; Authorized Signers. The Agent shall have received from the Borrower an incumbencycertificate, dated as of the Closing Date, signed by a duly authorized officerof the Borrower and giving the name and bearing a specimen signature of eachResponsible Officer.

 

§10.5                    Opinionsof Counsel Concerning Organization and Loan Documents.  Each of the Lenders and the Agent shall havereceived favorable opinions addressed to the Lenders and the

 

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Agent and dated as of the Closing Date, in form andsubstance reasonably satisfactory to the Lenders and the Agent from Borrower’scounsel, which opinion may rely on opinions from other law firms approved bythe Lenders as to matters of law applicable in the various states where the Borroweris organized.

 

§10.6                    Payment ofFees.  The Borrower shall havepaid to the Agent the fees pursuant to §4.1 and shall have paid all otherexpenses as provided in §15 hereof then outstanding.

 

§10.7                    ComplianceCertificate.  The Agent shallhave received a Compliance Certificate showing compliance with §8.3(d), and§9.3 through §9.6 as of September 30, 2003 and for the fiscal periodsending thereon.

 

**§11.****                        CONDITIONS TO ALL BORROWINGS**.  The obligations of the Lenders to make anyLoan, whether on or after the Closing Date shall also be subject to thesatisfaction of the following conditions precedent:

 

§11.1                    RepresentationsTrue; No Event of Default; Compliance Certificate.  Each of the representations and warrantiesof the Borrower contained in this Agreement, the other Loan Documents or in anydocument or instrument delivered pursuant to or in connection with thisAgreement shall be true and correct in all material respects as of the date asof which they were made and shall also be true and correct in all materialrespects at and as of the time of the making of such Loan, with the same effectas if made at and as of that time (except to the extent of changes resultingfrom transactions contemplated or permitted by this Agreement and the otherLoan Documents and changes occurring in the ordinary course of business thatsingly or in the aggregate are not materially adverse, and except to the extentthat such representations and warranties relate expressly to an earlier date);the Borrower shall have performed and complied with all terms and conditionsherein required to be performed by it or prior to the Borrowing Date of suchLoan; and no Default or Event of Default shall have occurred and be continuingon the date of any Loan Request or on the Borrowing Date of such Loan; andAgent shall have received a Compliance Certificate with computations evidencingcompliance with the covenants contained in §9.1 through §9.6 hereof aftergiving effect to such requested Loan.

 

§11.2                    No LegalImpediment.  No change shall haveoccurred in any law or regulations thereunder or interpretations thereof thatin the reasonable opinion of any Lender would make it illegal for such Lenderto make such Loan.

 

§11.3                    GovernmentalRegulation.  Each Lender shall havereceived such statements in substance and form reasonably satisfactory to suchLender as such Lender shall require for the purpose of compliance with anyapplicable regulations of the Comptroller of the Currency or the Board ofGovernors of the Federal Reserve System.

 

§11.4                    Proceedingsand Documents.  All proceedings inconnection with the transactions contemplated by this Agreement, the other LoanDocuments and all other documents incident thereto shall be reasonablysatisfactory in substance and in form to the Agent, and the Lenders shall havereceived all information and such counterpart originals or certified or othercopies of such documents as the Agent may reasonably request.

 

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**§12.****                        EVENTS OF DEFAULT; ACCELERATION; ETC**.

 

§12.1                    Events of Defaultand Acceleration.  If any of thefollowing events (“Events of Default” or, if the giving of notice or the lapseof time or both is required, then, prior to such notice or lapse of time,“Defaults”) shall occur:

 

(a)                                  theBorrower shall fail to pay any principal of the Loans when the same shallbecome due and payable;

 

(b)                                 theBorrower shall fail to pay any interest on the Loans or any other sums duehereunder or under any of the other Loan Documents within five (5) days afterthe same shall become due and payable;

 

(c)                                  theBorrower shall fail to comply with any of its covenants contained in §3.2,§7.5, §7.6, §7.7, §7.8, §8 or §9 hereof;

 

(d)                                 theBorrower shall fail to perform any other term, covenant or agreement containedherein or in any of the other Loan Documents (other than those specifiedelsewhere in this §12) for thirty (30) days after written notice of suchfailure from Agent to the Borrower;

 

(e)                                  anyrepresentation or warranty of the Borrower in this Agreement or any of theother Loan Documents or in any other document or instrument delivered pursuantto or in connection with this Agreement, shall prove to have been false in anymaterial respect upon the date when made or deemed to have been made orrepeated, provided, however, that with respect to the representations andwarranties of the Borrower contained in §6.18 and §6.22, if the condition orevent making the representation and warranty false is capable of being cured bythe Borrower, no enforcement action has been commenced against the Borrower orthe applicable Real Estate on account of such condition or event nor is theapplicable Real Estate subject to risk of forfeiture due to such condition orevent, and the Borrower promptly commences the cure thereof after the Borrower’sfirst obtaining knowledge of such condition or event, the Borrower shall have aperiod of thirty (30) days after the date that the Borrower first obtainedknowledge of such condition or event during which the Borrower may cure suchcondition or event (or, if such condition or event is not reasonably capable ofbeing cured within such thirty (30) day period, such additional period of timeas may be reasonably required in order to cure such condition or event but inany event such period shall not exceed six (6) months from the date that theBorrower first obtained knowledge of such condition or event), and no Event ofDefault shall exist hereunder during such thirty (30) day or additional periodso long as the Borrower continuously and diligently pursues the cure of suchcondition or event and the other conditions to such cure period have notchanged;

 

(f)                                    theBorrower, any of the Related Companies or any Controlled Unconsolidated Entityshall fail to pay at maturity, or within any applicable period of grace, anyIndebtedness, or shall fail to observe or perform any material term, covenantor agreement contained in any agreement by which it is bound, evidencing orsecuring Indebtedness for such period of time as would permit (assuming thegiving of appropriate notice if required) the holder or holders thereof or ofany obligations issued thereunder to accelerate the maturity thereof, and inany event, such failure shall continue for thirty (30) days, unless theaggregate amount of all such defaulted Indebtedness plus the amount of anyunsatisfied judgments described in paragraph (i) of this §12.1 is less than$5,000,000.00;

 

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(g)                                 anyof the Borrower, any of the Related Companies or any Controlled UnconsolidatedEntity shall make an assignment for the benefit of creditors, or admit inwriting its inability to pay or generally fail to pay its debts as they matureor become due, or shall petition or apply for the appointment of a trustee orother custodian, liquidator or receiver of any substantial part of itsproperties or shall commence any case or other proceeding under any bankruptcy,reorganization, arrangement, insolvency, readjustment of debt, dissolution orliquidation or similar law of any jurisdiction, now or hereafter in effect, orshall take any action to authorize or in furtherance of any of the foregoing,or if any such petition or application shall be filed or any such case or otherproceeding shall be commenced against any such Person and such Person shallindicate its approval thereof, consent thereto or acquiescence therein;

 

(h)                                 adecree or order is entered appointing any such trustee, custodian, liquidatoror receiver or adjudicating the Borrower, any of the Related Companies or anyControlled Unconsolidated Entity bankrupt or insolvent, or approving a petitionin any such case or other proceeding, or a decree or order for relief isentered in respect of the Borrower, any of the Related Companies or anyControlled Unconsolidated Entity in an involuntary case under federalbankruptcy laws as now or hereafter constituted;

 

(i)                                     thereshall remain in force, undischarged, unsatisfied and unstayed, for more thanthirty days, whether or not consecutive, any uninsured final judgment againstthe Borrower, any of the Related Companies or any Controlled UnconsolidatedEntity that, with other outstanding uninsured final judgments, undischarged,against the Borrower, any of the Related Companies or any ControlledUnconsolidated Entity plus the amount of any defaulted Indebtedness underparagraph (f) of this §12.1, exceeds in the aggregate $5,000,000.00;

 

(j)                                     ifany of the Loan Documents or any material provision of any Loan Documents shallbe unenforceable, cancelled, terminated, revoked or rescinded otherwise than inaccordance with the terms thereof or with the express prior written agreement,consent or approval of the Agent, or any action at law, suit or in equity orother legal proceeding to make unenforceable, cancel, revoke or rescind any ofthe Loan Documents shall be commenced by or on behalf of the Borrower, or anycourt or any other governmental or regulatory authority or agency of competentjurisdiction shall make a determination that, or issue a judgment, order,decree or ruling to the effect that, any one or more of the Loan Documents isillegal, invalid or unenforceable in accordance with the terms thereof;

 

(k)                                  theBorrower, any of the Related Companies or any Controlled Unconsolidated Entityshall be indicted for a federal crime, a punishment for which could include theforfeiture of any assets of the Borrower;

 

(l)                                     theBorrower shall fail to pay, observe or perform any term, covenant, condition oragreement contained in any agreement, document or instrument evidencing,securing or otherwise relating to any Indebtedness of the Borrower to anyLender (other than the Obligations) and/or relating to any Permitted Lien(other than the Obligations) within any applicable period of grace provided forin such agreement, document or instrument;

 

(m)                               [IntentionallyOmitted];

 

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(n)                                 any“Event of Default”, as defined in any of the other Loan Documents, shall occur;or

 

(o)                                 Anytwo or more of William Atkins, Charles Knight and John Greenman shall cease tobe a senior executive officer of the Borrower and the Board of Directors of theBorrower shall not, within six months thereafter, hire a substitute officer whohas been approved by the Majority Lenders, with each Lender having the right toapprove or disapprove any proposed successor in its sole reasonable discretion;

 

(p)                                 aChange of Control shall occur without the prior written consent of all Lenders;

 

(q)                                 any“Event of Default” as defined in the Secured Revolving Credit Agreement shalloccur;

 

then, and in any such event, so long as thesame may be continuing, the Agent may, and upon the request of the MajorityLenders shall, by notice in writing to the Borrower declare all amounts owingwith respect to this Agreement, the Notes and the other Loan Documents to be,and they shall thereupon forthwith become, immediately due and payable withoutpresentment, demand, protest or other notice of any kind, all of which arehereby expressly waived by the Borrower; provided that in the event of anyEvent of Default specified in §§12.1(g) or 12.1(h), all such amounts shallbecome immediately due and payable automatically and without any requirement ofnotice from the Agent or action by the Majority Lenders.

 

§12.2                    Terminationof Commitments.  If any one or moreEvents of Default specified in §12.1(g) or §12.1(h) shall occur, any unusedportion of the Commitments hereunder, shall forthwith terminate and the Lendersshall be relieved of all obligations to make Loans to the Borrower.  If any other Event of Default shall haveoccurred and be continuing, any Lender may by notice to the Borrower terminatethe unused portion of its Commitment hereunder, and upon such notice beinggiven such unused portion of its Commitment hereunder shall terminateimmediately and such Lender shall be relieved of all further obligations tomake Loans. No termination of such Lender’s Commitment hereunder shall relievethe Borrower of any of the Obligations or any of its existing obligations tosuch Lender arising under other agreements or instruments.

 

§12.3                    Remedies.  In case any one or more of the Events ofDefault shall have occurred, and whether or not the Lenders shall haveaccelerated the maturity of the Loans pursuant to §12.1, each Lender, if owedany amount with respect to the Loans, may, with the consent of the MajorityLenders, direct the Agent to proceed to protect and enforce the rights andremedies of the Agent and the Lenders under this Agreement, the Notes or any ofthe other Loan Documents by suit in equity, action at law or other appropriateproceeding, whether for the specific performance of any covenant or agreementcontained in this Agreement and the other Loan Documents or any instrumentpursuant to which the obligations are evidenced, including to the full extentpermitted by applicable law the obtaining of the ex parte appointment of areceiver and, if any amount shall have become due, by declaration or otherwise,to proceed to enforce the payment thereof or any other legal or equitable rightof such Lender. No remedy herein conferred upon any Lender or the Agent or theholder of any Note is intended to be exclusive of any other

 

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remedy and each and every remedy shall be cumulativeand shall be in addition to every other remedy given hereunder or now orhereafter existing at law or in equity or by statute or any other provision oflaw.

 

§12.4                    Distributionof Proceeds.  In the event that,during the continuance of any Default or Event of Default, the Agent or anyLender as the case may be, receives any monies in connection with theenforcement of any of the Loan Documents, or otherwise with respect to therealization upon any of the assets of the Borrower, such monies shall bedistributed for application as follows:

 

(a)                                  First,to the payment of, or (as the case may be) the reimbursement of the Agent foror in respect of all reasonable costs, expenses, disbursements and losses whichshall have been incurred or sustained by the Agent in connection with thecollection of such monies by the Agent, for the exercise, protection orenforcement by the Agent of all or any of the rights, remedies, powers andprivileges of the Agent or the Lenders under this Agreement or any of the otherLoan Documents or in support of any provision of adequate indemnity to theAgent against any taxes or liens which by law shall have, or may have, priorityover the rights of the Agent to such monies;

 

(b)                                 Second,to all other Obligations in such order or preference as the Majority Lendersmay determine; provided, however, that in the event that any Lender shall havewrongfully failed or refused to make an advance under §2.6 and such failure orrefusal shall be continuing, advances made by other Lenders during the pendencyof such failure or refusal shall be entitled to be repaid as to principal andaccrued interest in priority to the other Obligations described in thissubsection (b), and distributions in respect of such Obligations shall bemade among the Lenders pro rata in accordance with each Lender’s respectiveFacility Percentage; and provided, further, that the Agent may in itsdiscretion make proper allowance to take into account any Obligations not thendue and payable;

 

(c)                                  Third,upon payment and satisfaction in full or other provisions for payment in fullsatisfactory to the Lenders and the Agent of all of the obligations, and to thepayment of any obligations required to be paid pursuant to applicable lawsapplicable to such enforcement; and

 

(d)                                 Fourth,the excess, if any, shall be returned to the Borrower or to such other Personsas are legally entitled thereto.

 

**§13.****                        SETOFF**.  Borrower hereby grants to each Lender, acontinuing lien, security interest and right of setoff as security for allliabilities and obligations to such Lender hereunder, whether now existing orhereafter arising, upon and against all deposits, credits, collateral andproperty, now or hereafter in the possession, custody, safekeeping or controlof such Lender or in transit to it.  Atany time, without demand or notice (any such notice being expressly waived byBorrower), any Lender may, WITH THE PRIOR APPROVAL OF THE AGENT, setoff thesame or any part thereof and apply the same to any liability or obligation ofBorrower hereunder even though unmatured and regardless of the adequacy of anyother collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS ORREMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH

 

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SECURES THEOBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCHDEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each otherLender that (a) if an amount to be set off is to be applied to Indebtedness ofthe Borrower to such Lender, other than Indebtedness evidenced by the Notesheld by such Lender, such amount shall be applied ratably to such otherIndebtedness and to the Indebtedness evidenced by all such Notes held by suchLender, and (b) if such Lender shall receive from the Borrower, whether byvoluntary payment, exercise of the right of setoff, counterclaim, cross action,enforcement of the claim evidenced by the Notes held by such Lender byproceedings against the Borrower at law or in equity or by proof thereof inbankruptcy, reorganization, liquidation, receivership or similar proceedings,or otherwise, and shall retain and apply to the payment of the Note or Notesheld by such Lender any amount in excess of its ratable portion of the paymentsreceived by all of the Lenders with respect to the Notes held by all of theLenders, such Lender will make such disposition and arrangements with the otherLenders with respect to such excess, either by way of distribution, pro tantoassignment of claims, subrogation or otherwise as shall result in each Lenderreceiving in respect of the Notes held by it its proportionate payment ascontemplated by this Agreement; provided that if all or any part of such excesspayment is thereafter recovered from such Lender, such disposition andarrangements shall be rescinded and the amount restored to the extent of suchrecovery, but without interest. Notwithstanding the foregoing, no Lender shall exercise a right ofsetoff if such exercise would limit or prevent the exercise of any other remedyor other recourse against the Borrower.

 

**§14.****                        THE AGENT**.

 

§14.1                    Authorization.  The Agent is authorized to take such actionon behalf of each of the Lenders and to exercise all such powers as are hereunderand under any of the other Loan Documents and any related documents delegatedto the Agent, together with such powers as are reasonably incident thereto,provided that no duties or responsibilities not expressly assumed herein ortherein shall be implied to have been assumed by the Agent.  The obligations of Agent hereunder areprimarily administrative in nature, and nothing contained in this Agreement orany of the other Loan Documents shall be construed to constitute the Agent as atrustee for any Lender or to create any agency or fiduciary relationship.  Agent shall act as the contractualrepresentative of the Lenders hereunder, and notwithstanding the use of theterm “Agent”, it is understood and agreed that the Agent shall not have anyfiduciary duties or responsibilities to any Lender by reason of this Agreementor any other Loan Document and is acting as an independent contractor, therights and duties of which are limited to those expressly set forth in thisAgreement and the other Loan Documents.

 

§14.2                    Employeesand Agents.  The Agent mayexercise its powers and execute its duties by or through employees or agentsand shall be entitled to take, and to rely on, advice of counsel concerning allmatters pertaining to its rights and duties under this Agreement and the otherLoan Documents. The Agent may utilize the services of such Persons as the Agentin its sole discretion may reasonably determine, and all reasonable fees andexpenses of any such Persons shall be paid by the Borrower.

 

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§14.3                    No Liability.  Neither the Agent nor any of itsshareholders, directors, officers or employees nor any other Person assistingthem in their duties nor any agent or employee thereof, shall be liable for anywaiver, consent or approval given or any action taken, or omitted to be taken,in good faith by it or them hereunder or under any of the other Loan Documents,or in connection herewith or therewith, or be responsible for the consequencesof any oversight or error of judgment whatsoever, except that the Agent or suchother Person, as the case may be, may be liable for losses due to its willfulmisconduct or gross negligence as determined by a court of competentjurisdiction after the exhaustion of all applicable appeal periods.

 

§14.4                    NoRepresentations.  The Agentshall not be responsible for the execution or validity or enforceability by oragainst Borrower of this Agreement, the Notes, any of the other Loan Documentsor any instrument at any time constituting, or intended to constitute,collateral security for the Notes, or for the value of any such collateralsecurity or for the validity, enforceability or collectability of any suchamounts owing with respect to the Notes, or for any recitals or statements, warrantiesor representations made herein or in any of the other Loan Documents or in anycertificate or instrument hereafter furnished to it by or on behalf of theBorrower, or be bound to ascertain or inquire as to the performance orobservance of any of the terms, conditions, covenants or agreements herein orin any instrument at any time constituting, or intended to constitute,collateral security for the Notes. The Agent shall not be bound to ascertainwhether any notice, consent, waiver or request delivered to it by the Borroweror any holder of any of the Notes shall have been duly authorized or is true,accurate and complete. The Agent has not made nor does it now make anyrepresentations or warranties, express or implied, nor does it assume any liabilityto the Lenders, with respect to the credit worthiness or financial condition ofthe Borrower or its Subsidiaries or any other Person.  Each Lender acknowledges that it has, independently and withoutreliance upon the Agent or any other Lender, and based upon such informationand documents as it has deemed appropriate, made its own credit analysis anddecision to enter into this Agreement. Each Lender also acknowledges that it will, independently and withoutreliance upon the Agent or any other Lender, based upon such information anddocuments as it deems appropriate at the time, continue to make its own creditanalysis and decisions in taking or not taking action under this Agreement andthe other Loan Documents.  Agent’scounsel has only represented Agent and FNB in connection with the LoanDocuments and the only attorney-client relationship or duty of care is betweenAgent’s counsel and Agent or FNB. Each Lender has been independentlyrepresented by separate counsel on all matters regarding the Loan Documents andthe granting and perfecting of liens in the Collateral.

 

§14.5                    Payments.

 

(a)                                  Apayment by the Borrower to the Agent hereunder or any of the other LoanDocuments for the account of any Lender shall constitute a payment to suchLender subject to the pro rata rights to repayment based upon the FacilityPercentage of each Lender. The Agent agrees, promptly after the Agent’s receiptof good funds as determined in accordance with Agent’s customary practices, todistribute to each Lender such Lender’s pro rata share of payments received bythe Agent for the account of the Lenders except as otherwise expressly providedherein or in any of the other Loan Documents.

 

(b)                                 Ifin the opinion of the Agent the distribution of any amount received by it insuch capacity hereunder, under the Notes or under any of the other LoanDocuments might

 

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involve it in liability, it mayrefrain from making distribution until its right to make distribution shallhave been adjudicated by a court of competent jurisdiction. If a court ofcompetent jurisdiction shall adjudge that any amount received and distributedby the Agent is to be repaid, each Person to whom any such distribution shallhave been made shall either repay to the Agent its proportionate share of theamount so adjudged to be repaid or shall pay over the same in such manner andto such Persons as shall be determined by such court.

 

(c)                                  Notwithstandinganything to the contrary contained in this Agreement or any of the other LoanDocuments, any Lender that fails (i) to make available to the Agent its prorata share of any Loan or (ii) to comply with the provisions of §12 and §13with respect to making dispositions and arrangements with the other Lenders,where such Lender’s share of any payment received, whether by setoff orotherwise, is in excess of its pro rata share of such payments due and payableto all of the Lenders, in each case as, when and to the full extent required bythe provisions of this Agreement, or to adjust promptly such Lender’soutstanding principal and its pro rata Facility Percentage as provided in §2.1hereof, shall be deemed delinquent (a “Delinquent Lender”) and shall be deemeda Delinquent Lender until such time as such delinquency is satisfied.  A Delinquent Lender shall be deemed to haveassigned any and all payments due to it from the Borrower, whether on accountof outstanding Loans, interest, fees or otherwise, to the remainingnondelinquent Lenders for application to, and reduction of, their respectivepro rata shares of all outstanding Loans. The Delinquent Lender hereby authorizes the Agent to distribute suchpayments to the nondelinquent Lenders in proportion to their respective prorata shares of all outstanding Loans. In addition to the rights and remedies that may be available to theAgent at law and in equity, a Defaulting Lender’s right to participate in theadministration of the Loan Documents, including, without limitation, any rightsto consent to or direct any action or inaction of the Agent pursuant to thisAgreement or otherwise, or to be taken into account in the calculation ofMajority Lenders or any matter requiring approval of all of the Lenders, shallbe suspended while such Lender is a Defaulting Lender.  A Delinquent Lender shall be deemed to havesatisfied in full a delinquency when and if, as a result of application of theassigned payments to all outstanding Loans of the nondelinquent Lenders, theLenders’ respective pro rata shares of all outstanding Loans have returned tothose in effect immediately prior to such delinquency and without giving effectto the nonpayment causing such delinquency.

 

§14.6                    Holdersof Notes.  The Agent may deemand treat the payee of any Note as the absolute owner or purchaser thereof forall purposes hereof until it shall have been furnished in writing with adifferent name by such payee or by a subsequent holder, assignee or transferee.

 

§14.7                    Indemnity.  The Lenders ratably agree hereby toindemnify and hold harmless the Agent from and against any and all claims,actions and suits (whether groundless or otherwise), losses, damages, costs,expenses (including any expenses for which the Agent has not been reimbursed bythe Borrower as required by §15), and liabilities of every nature and characterarising out of or related to this Agreement, the Notes, or any of the otherLoan Documents or the transactions contemplated or evidenced hereby or thereby,or the Agent’s actions taken hereunder or thereunder, except to the extent thatany of the same shall be directly caused by the Agent’s willful misconduct orgross negligence as determined by a court of competent jurisdiction after theexhaustion of all applicable appeal periods.

 

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§14.8                    Agentas Lender.  In its individualcapacity, FNB shall have the same obligations and the same rights, powers andprivileges in respect to its Commitment and the Loans made by it, and as theholder of any of the Notes as it would have were it not also the Agent.

 

§14.9                    Resignation.  The Agent may resign at any time by givingsixty (60) days, prior written notice thereof to the Lenders and theBorrower.  Upon any such resignation,the Majority Lenders shall have the right to appoint a successor Agent.  Unless a Default or Event of Default shallhave occurred and be continuing, appointment of such successor Agent shall besubject to the reasonable approval of the Borrower.  If no successor Agent shall have been so appointed by theMajority Lenders and shall have accepted such appointment within thirty (30)days after the giving of notice of resignation or removal of the Borrower hasdisapproved or failed to approve a successor agent within such period, then theretiring Agent may, on behalf of the Lenders, appoint a successor Agent, whichshall be a financial institution having a rating of not less than A2/P2 or itsequivalent by Standard & Poor’s Corporation. Upon the acceptance of anyappointment as Agent hereunder by a successor Agent, such successor Agent shallthereupon succeed to and become vested with all the rights, powers, privilegesand duties of the retiring Agent, and the retiring Agent shall be dischargedfrom its duties and obligations hereunder. After any retiring Agent’sresignation, the provisions of this Agreement and the other Loan Documentsshall continue in effect for its benefit in respect of any actions taken oromitted to be taken by it while it was acting as Agent.

 

§14.10              Notificationof Defaults and Events of Default. Each Lender hereby agrees that, upon learning of the existence of aDefault or an Event of Default, it shall promptly notify the Agent thereof. TheAgent hereby agrees that upon receipt of any notice under this §14.10 it shallpromptly notify the other Lenders of the existence of such Default or Event ofDefault.

 

§14.11              Duties inthe Case of Enforcement.  In caseone of more Events of Default have occurred and shall be continuing, andwhether or not acceleration of the obligations shall have occurred, the Agentshall, if (a) so requested by the Majority Lenders and (b) the Lenders haveprovided to the Agent such additional indemnities and assurances againstexpenses and liabilities as the Agent may reasonably request, proceed toenforce the provisions of the Loan Documents and exercise all or any legal andequitable and other rights or remedies as it may have. The Majority Lenders maydirect the Agent in writing as to the method and the extent of any suchexercise, the Lenders hereby agreeing to indemnify and hold the Agent harmlessfrom all liabilities incurred in respect of all actions taken or omitted inaccordance with such directions, provided that the Agent need not comply withany such direction to the extent that the Agent reasonably believes the Agent’scompliance with such direction to be unlawful or commercially unreasonable inany applicable jurisdiction or would subject to the Agent to civil liability.

 

**§15.****                        EXPENSES**.  The Borrower agrees to pay (a) any taxes(including any interest and penalties in respect thereto) payable by the Agentor any of the Lenders (other than taxes based upon the Agent’s or any Lender’snet income), including any intangibles taxes in connection with the LoanDocuments, or other taxes payable on or with respect to the transactionscontemplated by this Agreement, including any taxes payable by the Agent or anyof the Lenders after the Closing Date (the Borrower hereby agreeing toindemnify the Lenders with respect thereto), (b) the reasonable fees, expensesand disbursements of the Agent’s counsel or any local counsel to the Agentincurred in connection with the preparation, administration or interpretationof the Loan Documents and other instruments mentioned herein, each closinghereunder, and amendments, modifications, approvals, consents or waivers heretoor hereunder, (c) the reasonable fees, costs, expenses and disbursements of theAgent incurred in connection with the preparation, administration orinterpretation

 

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of the LoanDocuments and other instruments mentioned herein, (d) the fees, costs, expensesand disbursements of the Agent incurred in connection with the syndicationand/or participation of the Loans, (e) all reasonable out-of-pocket expenses(including reasonable attorneys’ fees and costs, which attorneys may beemployees of any Lender or the Agent and the fees and costs of appraisers,engineers, investment bankers, surveyors or other experts retained by the Agentor any Lender in connection with any such enforcement proceedings) incurred byany Lender or the Agent in connection with (i) the enforcement of orpreservation of rights under any of the Loan Documents against the Borrower orthe administration thereof after the occurrence of a Default or Event ofDefault (including, without limitation, expenses incurred in any restructuringand/or “workout” of the Loans), and (ii) any litigation, proceeding or disputewhether arising hereunder or otherwise, in any way related to the Agent’s orthe Lender’s relationship with the Borrower, any Controlled UnconsolidatedEntity or any of the Related Companies, (f) all reasonable fees, expenses anddisbursements of the Agent incurred in connection with UCC searches, UCCfilings or mortgage recordings, (g) all reasonable costs incurred by the Agentin the future in connection with its inspection of the Real Estate, and (h) thereasonable fees, costs, expenses and disbursements of the Agent incurred inconnection with the granting of any collateral by the Borrower, including,without limitation, the costs incurred by the Agent in connection with itsinspection of such collateral, and the fees and disbursements of the Agent’scounsel. The covenants of this §15 shall survive payment or satisfaction ofpayment of amounts owing with respect to the Notes.

 

**§16.****                        INDEMNIFICATION**.  The Borrower agrees to indemnify and hold harmless the Agent andthe Lenders and the shareholders, directors, agents, officers, subsidiaries,and affiliates of the Agent and the Lenders and any Person that controls theAgent or any Lender from and against any and all claims, actions or causes ofaction and suits whether groundless or otherwise, and from and against any andall liabilities, losses, settlement payments, obligations, damages and expensesof every nature and character arising out of this Agreement or any of the otherLoan Documents or the transactions contemplated hereby or which otherwise arisein connection with the financing including, without limitation except to theextent caused by the gross negligence or willful misconduct of a Lender or theAgent as determined by a court of competent jurisdiction after the exhaustionof all applicable appeal periods (but such limitation on indemnification shallonly apply to the Agent or Lender that is being grossly negligent or committingwillful misconduct), (a) any actual or proposed use by the Borrower of theproceeds of any of the Loans, (b) any actual or alleged infringement of anypatent, copyright, trademark, service mark or similar right of the Borrower,(c) the Borrower entering into or performing this Agreement or any of the otherLoan Documents or (d) with respect to the Borrower and its respectiveproperties, the violation of any Environmental Law, the Release or threatenedRelease of any Hazardous Substances or any action, suit, proceeding orinvestigation brought or threatened with respect to any Hazardous Substances(including, but not limited to claims with respect to wrongful death, personalinjury or damage to property), (e) any cost, claim liability, damage or expensein connection with any harm the Borrower may be found to have caused in therole of a broker, in each case including, without limitation, the reasonablefees and disbursements of counsel and allocated costs of internal counselincurred in connection with any such investigation, litigation or otherproceeding. In litigation, or the preparation therefor, the Lenders

 

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and the Agentshall each be entitled to select their own separate counsel and, in addition tothe foregoing indemnity, the Borrower agrees to pay promptly the reasonablefees and expenses of such counsel. If, and to the extent that the obligationsof the Borrower under this §16 are unenforceable for any reason, the Borrowerhereby agrees to make the maximum contribution to the payment in satisfactionof such obligations which is permissible under applicable law. The provisionsof this §16 shall survive the repayment of the Loans and the termination of theobligations of the Lenders hereunder and shall continue in full force andeffect as to the Lenders so long as the possibility of any such claim, action,cause of action or suit exists under applicable law, rule or regulation.

 

**§17.****                        SURVIVAL OF COVENANTS, ETC**.  All covenants, agreements, representationsand warranties made herein, in the Notes, in any of the other Loan Documents orin any documents or other papers delivered by or on behalf of the Borrowerpursuant hereto shall be deemed to have been relied upon by the Lenders and theAgent, notwithstanding any investigation heretofore or hereafter made by it,and shall survive the making by the Lenders of the Loans, as hereincontemplated, and shall continue in full force and effect so long as any amountdue under this Agreement or the Notes or any of the other Loan Documentsremains outstanding or the Lenders have any obligation to make any Loans. Theindemnification obligations of the Borrower provided herein and the other LoanDocuments shall survive the full repayment of amounts due and the terminationof the obligations of the Lenders hereunder and thereunder to the extentprovided herein and therein. All statements contained in any certificatedelivered to the Agent or any Lender at any time executed on behalf of theBorrower pursuant hereto or in connection with the transactions contemplatedhereby shall constitute representations and warranties by the Borrowerhereunder.

 

**§18.****                        ASSIGNMENT; PARTICIPATIONS; ETC**.

 

§18.1                    Conditionsto Assignment by Lenders.  Except asprovided herein, each Lender may assign to one or more Eligible Assignees allor a portion of its interests, rights and obligations under this Agreement(including all or a portion of its Facility Percentage and the same portion ofthe Loans at the time owing to it, and the Notes held by it); provided that (a)the Agent shall have given its prior written consent to such assignment exceptthat such consent shall not be needed with respect to an assignment from aLender to one of its Affiliated Lenders, (b) each such assignment shall be of aconstant, and not a varying, percentage of all the assigning Lender’s rightsand obligations under this Agreement, (c) each assignment shall be in an amountof not less than $3,000,000 that is a whole multiple of $1,000,000, (d) eachLender shall either assign its entire Commitment or shall retain, free of anysuch assignment, an amount of its Commitment of not less $3,000,000 and (e) theparties to such assignment shall execute and deliver to the Agent, forrecording in the Register (as hereinafter defined), an Assignment andAcceptance, substantially in the form of Exhibit D hereto (an “Assignment andAcceptance”) , together with any Notes subject to such assignment. Upon suchexecution, delivery, acceptance and recording, from and after the effectivedate specified in each Assignment and Acceptance, (i) the assignee thereundershall be a party hereto and, to the extent provided in such Assignment andAcceptance, have the rights and obligations of a Lender hereunder, and (ii) theassigning Lender shall, to the extent provided in such assignment and uponpayment to the Agent of the registration fee referred to in §18.3, be releasedfrom its obligations under this Agreement.

 

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§18.2                    CertainRepresentations and Warranties; Limitations; Covenants.  By executing and delivering an Assignmentand Acceptance, the parties to the assignment thereunder confirm to and agreewith each other and the other parties hereto as follows: (a) other than therepresentation and warranty that it is the legal and beneficial owner of theinterest being assigned thereby free and clear of any adverse claim, theassigning Lender makes no representation or warranty and assumes noresponsibility with respect to any statements, warranties or representationsmade in or in connection with this Agreement or the execution, legality,validity, enforceability, genuineness, sufficiency or value of this Agreement,the other Loan Documents or any other instrument or document furnished pursuanthereto; (b) the assigning Lender makes no representation or warranty andassumes no responsibility with respect to the financial condition of theBorrower or any other Person primarily or secondarily liable in respect of anyof the Obligations, or the performance or observance by the Borrower or anyother Person primarily or secondarily liable in respect of any of theobligations of any of their obligations under this Agreement or any of theother Loan Documents or any other instrument or document furnished pursuanthereto or thereto or the validity or enforceability or priority of any lien orany Collateral; (c) such assignee confirms that it has received a copy of thisAgreement, together with copies of the most recent financial statementsreferred to in §6.4 and §7.4 and such other documents and information as it hasdeemed appropriate to make its own credit analysis and decision to enter intosuch Assignment and Acceptance; (d) such assignee will, independently andwithout reliance upon the assigning Lender, the Agent or any other Lender andbased on such documents and information as it shall deem appropriate at thetime, continue to make its own credit and Collateral decisions in taking or nottaking action under this Agreement, (e) such assignee represents and warrantsthat it is an Eligible Assignee; (f) such assignee appoints and authorizes theAgent to take such action as “Agent” on its behalf and to exercise such powersunder this Agreement and the other Loan Documents as are delegated to the Agentby the terms hereof or thereof, together with such powers as are reasonablyincidental thereto; (g) such assignee agrees that it will perform in accordancewith their terms all of the obligations that by the terms of this Agreement arerequired to be performed by it as a Lender; and (h) such assignee representsand warrants that it is legally authorized to enter into such Assignment andAcceptance.

 

§18.3                    Register.  The Agent shall maintain a copy of eachAssignment and Acceptance delivered to it and a register or similar list (the“Register”) for the recordation of the names and addresses of the Lenders andthe Facility Percentages of, and principal amount of the Loans owing to theLenders from time to time. The entries in the Register shall be conclusive, inthe absence of manifest error, and the Borrower, the Agent and the Lenders maytreat each Person whose name is recorded in the Register as a Lender hereunderfor all purposes of this Agreement. The Register shall be available forinspection by the Borrower and the Lenders at any reasonable time and from timeto time upon reasonable prior notice. Upon each such recordation, the assigning Lender agrees to pay to theAgent a registration fee in the sum of $5,000.00.  The Agent may amend Schedules 1 and 1.1 hereof to reflectthe recording of any such assignments.

 

§18.4                    New Notes.  Upon its receipt of an Assignment andAcceptance executed by the parties to such assignment, together with each Notesubject to such assignment, the Agent shall (a) record the informationcontained therein in the Register, and (b) give prompt notice thereof to theBorrower and the Lenders (other than the assigning Lender). Within five (5)Business Days

 

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after receipt of such notice, the Borrower, at its ownexpense, shall execute and deliver to the Agent, in exchange for eachsurrendered Note, a new Note to the order of such Eligible Assignee in anamount equal to the amount assumed by such Eligible Assignee pursuant to such Assignmentand Acceptance and, if the assigning Lender has retained some portion of itsLoans hereunder, a new Note to the order of the assigning Lender in an amountequal to the amount retained by it hereunder. Such new Notes shall provide thatthey are replacements for the surrendered Notes and that they do not constitutea novation, shall be in an aggregate principal amount equal to the aggregateprincipal amount of the surrendered Notes, shall be dated the effective date ofsuch Assignment and Acceptance and shall otherwise be in substantially the formof the assigned Notes. The surrendered Notes shall be cancelled and returned tothe Borrower.

 

§18.5                    Participations.  Each Lender may sell participations to oneor more banks or other entities in a portion of such Lender’s rights andobligations under this Agreement and the other Loan Documents not to exceedforty-nine percent (49%) of its Facility Percentage; provided that (a) theAgent shall have given its prior written consent to such participation, exceptthat any Lender may sell participations to its Affiliated Lenders without suchconsent, (b) each such participation shall be in an amount of not less than$3,000,000 that is a whole multiple of $1,000,000, (c) any such sale orparticipation shall not affect the rights and duties of the selling Lenderhereunder to the Borrower and the Lender shall continue to exercise allapprovals, disapprovals and other functions of a Lender, (d) such participationshall not entitle such participant to any rights or privileges under thisAgreement or the Loan Documents, including, without limitation, the right toapprove waivers, amendments or modifications, (e) such participant shall haveno direct rights against the Borrower except the rights granted to the Lenderspursuant to §13, (f) such sale is effected in accordance with all applicablelaws, (g) such participant shall not be a Person controlling, controlled by orunder common control with, or which is not otherwise free from influence orcontrol by, the Borrower, any Related Company or any Unconsolidated Entity orany affiliate thereof, and (h) no participant shall have the right to grantfurther participations or assign its rights, obligations or interests undersuch participation to other Persons without the prior written consent of theAgent.

 

§18.6                    Pledge byLender.  Any Lender may at anytime pledge or assign all or any portion of its interest and rights under thisAgreement (including all or any portion of its Note) to any of the twelveFederal Reserve Banks organized under Section 4 of the Federal ReserveAct, 12 U.S.C. §341. No such pledge or the enforcement thereof shall releasethe pledgor Lender from its obligations hereunder or under any of the otherLoan Documents.

 

§18.7                    NoAssignment by Borrower. The Borrower shall not assign or transfer any of its rights orobligations under any of the Loan Documents without the prior written consentof each of the Lenders.

 

§18.8                    Disclosure.  The Borrower agrees that in addition todisclosures made in accordance with standard banking practices any Lender maydisclose information obtained by such Lender pursuant to this Agreement toassignees or participants and potential assignees or participants hereunder.

 

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**§19.****                        NOTICES, ETC**. Except as otherwise expressly provided in this Agreement, all noticesand other communications made or required to be given pursuant to thisAgreement or the Notes shall be in writing and shall be delivered in hand,mailed by United States registered or certified first class mail, postageprepaid, sent by overnight courier, or sent by telegraph, telecopy, telefax ortelex and confirmed by delivery via courier or postal service, addressed asfollows:

 

(a)                                  ifto the Borrower, at 1780 S. Bellaire Street, Suite 515, Denver, CO 80222Attention: Chief Financial Officer, Telefax No. 303-296-7353 or at such otheraddress for notice as the Borrower shall last have furnished in writing to theAgent; and

 

(b)                                 ifto the Agent, at 100 Federal Street, Boston, Massachusetts 02110, Attention:Structured Real Estate, and to 115 Perimeter Center Place, N.E., Suite 500,Atlanta, Georgia 30346, Attn: George Ojanuga, Director, Telefax No.770-390-8434 or such other address for notice as the Agent shall last have furnishedin writing to the Borrower.

 

(c)                                  ifto any Lender, at such Lender’s address set forth on such Lender’s signaturepage, or such other address for notice as such Lender shall have last furnishedin writing to the Person giving the notice.

 

Any such notice or demand shall be deemed tohave been duly given or made and to have become effective (i) if delivered byhand, overnight courier or facsimile to a responsible officer of the party towhich it is directed, at the time of the receipt thereof by such officer or thesending of such facsimile (as evidenced by confirmation of successfultransmission) and (ii) if sent by registered or certified first-class mail,postage prepaid, on the third Business Day following the mailing thereof.

 

**§20.****                        GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE**.  This agreement and each of the other LoanDocuments, except as otherwise specifically provided therein, and the rightsand obligations of the parties hereunder shall be construed and interpreted inaccordance with the laws of the Commonwealth Of Massachusetts (excluding thelaws applicable to conflicts or choice of law). BORROWER AGREES THAT ANY SUITBY IT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTSMAY BE BROUGHT ONLY IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANYFEDERAL COURT SITTING THEREIN AND BORROWER CONSENTS TO THE NONEXCLUSIVEJURISDICTION OF SUCH COURT FOR ANY SUIT BY AGENT OR ANY LENDER AND THE SERVICEOF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESSSPECIFIED IN §19. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW ORHEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCHSUIT IS BROUGHT IN AN INCONVENIENT FORUM. IN ADDITION TO THE COURTS OF THECOMMONWEALTH OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT OR ANY LENDER MAYBRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE ANY COLLATERALEXISTS AND THE BORROWER CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCHCOURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERBY MAIL AT THE ADDRESS SPECIFIED IN §19.

 

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**§21.****                        HEADINGS**.  The captions in this Agreement are forconvenience of reference only and shall not define or limit the provisions hereof.

 

**§22.****                        COUNTERPARTS**.  This Agreement and any amendment hereof maybe executed in several counterparts and by each party on a separatecounterpart, each of which when so executed and delivered shall be an original,and all of which together shall constitute one instrument. In proving thisAgreement it shall not be necessary to produce or account for more than onesuch counterpart signed by the party against whom enforcement is sought.

 

**§23.****                        ENTIRE AGREEMENT**.  This Agreement and the Loan Documents is intended by the partiesas the final, complete and exclusive statement of the transactions evidenced bythis Agreement and the Loan Documents. All prior or contemporaneous promises, agreements and understandings, whetheroral or written, are deemed to be superceded by this Agreement and the LoanDocuments, and no party is relying on any promise, agreement or understandingnot set forth in this Agreement and the Loan Documents. Neither this Agreementnor any term hereof may be changed, waived, discharged or terminated, except asprovided in §25.

 

**§24.****                        WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS**.  THE BORROWER, THE AGENT AND EACH LENDERHEREBY MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHTTO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDEROR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATEDTO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OFDEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,STATEMENTS OR ACTIONS OF AGENT OR THE LENDERS RELATING TO THE ADMINISTRATION OFTHE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILLSEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIALCANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAYHAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE ORCONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUALDAMAGES.  BORROWER CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED,EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS TOPROVIDE THE COMMITMENTS AND MAKE THE LOANS.

 

**§25.****                        CONSENTS, AMENDMENTS, WAIVERS, ETC.** Except as otherwise expressly provided in this Agreement, any consent orapproval required or permitted by this Agreement may be given, and any term ofthis Agreement or of any other instrument related hereto or mentioned hereinmay be amended, and the performance or observance by the Borrower of any termsof this Agreement or such other instrument or the continuance of any Default orEvent of Default may be waived (either generally or in a particular instanceand either retroactively or prospectively) with, but only with, the writtenconsent of the Majority Lenders.  Notwithstanding

 

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the foregoing, none of thefollowing may occur without the written consent of each Lender:  a decrease in the rate of interest on andthe term of the Notes; an increase in the amount of the Commitments of theLenders; a forgiveness, reduction or waiver of the principal of any unpaid Loanor any interest thereon or fee payable to the Lenders under the Loan Documents;the postponement of any date fixed for any payment of principal of or intereston the Loan; an extension of the Maturity Date; a change in the manner ofdistribution of any payments to the Lenders or the Agent; the release of theBorrower; an amendment of the definition of Majority Lenders or of anyrequirement for consent by all of the Lenders; any modification to require aLender to fund a pro rata share of a request for an advance of theLoan made by the Borrower other than based on its Facility Percentage; anamendment to this §25; or an amendment of any provision of this Agreement orthe Loan Documents which requires the approval of all of the Lenders or theMajority Lenders to require a lesser number of Lenders to approve suchaction.  No waiver shall extend to oraffect any obligation not expressly waived or impair any right consequentthereon. No course of dealing or delay or omission on the part of the Agent orany Lender in exercising any right shall operate as a waiver thereof orotherwise be prejudicial thereto.  Nonotice to or demand upon the Borrower shall entitle the Borrower to other orfurther notice or demand in similar or other circumstances.

 

**§26.****                        SEVERABILITY.** The provisions of this Agreement are severable, and if any one clause orprovision hereof shall be held invalid or unenforceable in whole or in part inany jurisdiction, then such invalidity or unenforceability shall affect onlysuch clause or provision, or part thereof, in such jurisdiction, and shall notin any manner affect such clause or provision in any other jurisdiction, or anyother clause or provision of this Agreement in any jurisdiction.

 

**§27.****                        RELATIONSHIP.** Neither the Agent nor any Lender has any fiduciary relationship with orfiduciary duty to the Borrower arising out of or in connection with theAgreement or the other Loan Documents or the transactions contemplatedhereunder and thereunder, and the relationship between each Lender and theBorrower is solely that of a lender and borrower, and nothing contained hereinor in any of the other Loan Documents shall in any manner be construed as makingthe parties hereto partners, joint venturers or any other relationship otherthan lender and borrower.

 

**§28.****                        DEALINGS WITH THE BORROWER.** The Agent, the Lenders and their affiliates may accept deposits from,extend credit to and generally engage in any kind of banking, trust or otherbusiness with the Borrower or any of its affiliates or Subsidiaries regardlessof the capacity of the Agent or the Lenders hereunder.

 

**§29.****                        NO UNWRITTEN AGREEMENTS.  THE WRITTEN LOAN DOCUMENTS REPRESENT THEFINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OFPRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN THE PARTIES.**

 

**§30.****                        TIME OF THE ESSENCE.** Time is of the essence with respect to each and every covenant,agreement and obligation of the Borrower under this Agreement and the otherLoan Documents.

 

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**§31.****                        RIGHTS OF THIRD PARTIES.**

 

(a)                                  ThisAgreement and the other Loan Documents are made and entered into for the soleprotection and legal benefit of the Borrower, the Lenders, and the Agent, andtheir permitted successors and assigns, and no other Person shall be a director indirect legal beneficiary of, or have any direct or indirect cause ofaction or claim in connection with, this Agreement or any of the other LoanDocuments.

 

(b)                                 Allconditions to the performance of the obligations of the Agent and the Lendersunder this Agreement, including the obligation to make Loans, are imposedsolely and exclusively for the benefit of the Agent and the Lenders and noother Person shall have standing to require satisfaction of such conditions inaccordance with their terms or be entitled to assume that the Agent and theLenders will refuse to make advances of proceeds of the Loan in the absence ofstrict compliance with any or all thereof and no other Person shall, under anycircumstances, be deemed to be a beneficiary of such conditions, any and all ofwhich may be freely waived in whole or in part by the Agent and the Lenders atany time if in their sole discretion they deem it desirable to do so.

 

**[SIGNATURESBEGIN ON FOLLOWING PAGE]**

 

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IN WITNESS WHEREOF, the undersigned have dulyexecuted this Agreement as a sealed instrument as of the date first set forthabove.

 
|   | **BORROWER:**                                          |
|--------|--------------------------------------------------------|
|   |                                                   |
|   | **AMERIVEST PROPERTIES INC.**, a Maryland  corporation |
|   |                                                   |
|   | By:                                                    | John B. Greenman |   |
|   |                                                   |
|   | Name:                                                  | John B. Greenman |   |
|   |                                                   |
|   | Title:                                                 | Vice President |   |
|   |                                                   |
|   |                                                   |
|   | **AGENT:**                                             |
|   |                                                   |
|   | **FLEET NATIONAL BANK**, as Agent                      |
|   |                                                   |
|   |                                                   |
|   | By:                                                    | George Ojanuga |   |
|   | Name:   George Ojanuga                            |
|   | Title:   Director                                 |
|        |                                                        |  |  |  |  |  |

 

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**Lender Signature Page**

 
|   | FLEET NATIONAL BANK         |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         | George Ojanuga |   |
|   | Name:   George Ojanuga |
|   | Title:   Director      |

 
| Commitment:          |   | $      | 30,000,000 |   |
|----------------------|--------|--------|------------|--------|
|                 |   |   |       |
| Facility Percentage: |   | 100    | %          |

 

 
|   | Notice Address:                       |
|--------|---------------------------------------|
|   |                                  |
|   | Fleet National Bank                   |
|   | 100 Federal Street                    |
|   | Boston, MA   02110               |
|   | Attn: Structured Real Estate          |
|   |                                  |
|   |                                  |
|   | With a copy to:                       |
|   |                                  |
|   | Fleet National Bank.                  |
|   | 115 Perimeter Center Place, N.E.      |
|   | Suite 500                             |
|   | Atlanta, GA 30346                     |
|   | Attn: George Ojanuga, Vice President  |
|   | Fax:   (770)390-8434 or 391-9811 |

 

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