Document:

Exhibit 4.1

 

YAHOO! INC.

 

 

and

 

 

EQUISERVE TRUST COMPANY, N.A.,

Rights Agent

 

 

Amended and Restated

Rights Agreement

 

Dated as of April 1, 2005

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Certain
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment of Rights Agent

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Issuance of Rights Certificates

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Form of Rights Certificates

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Countersignature and Registration

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Transfer, Split-Up, Combination and
  Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
  Certificates

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Exercise of Rights; Purchase Price;
  Expiration Date of Rights

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Cancellation and Destruction of Rights
  Certificates

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Reservation and Availability of Capital
  Stock

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Preferred Stock Record Date

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Adjustment of Purchase Price, Number and
  Kind of Shares or Number of Rights

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Certificate of Adjusted Purchase Price or
  Number of Shares

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Consolidation, Merger or Sale or Transfer
  of Assets Cash Flow or Earning Power

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Fractional Rights and Fractional Shares

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Rights of Action

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Agreement of Rights Holders

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Rights Certificate Holder Not Deemed a
  Stockholder

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Concerning the Rights Agent

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Merger or Consolidation or Change of Name
  of Rights Agent

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Duties of Rights Agent

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Change of Rights Agent

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Issuance of New Rights Certificates

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 23.

  	
  Redemption and Termination

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Exchange

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Notice of Certain Events

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Notices

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Supplements and Amendments

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Successors

  	
  34

  

 

 

	
  Section 29.

  	
  Determinations and Actions by the Board of
  Directors, etc.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 30.

  	
  Benefits of this Agreement

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 31.

  	
  Severability

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 32.

  	
  Governing Law

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 33.

  	
  Counterparts

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 34.

  	
  Descriptive Headings

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 35.

  	
  Force Majeure

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A —

  	
  Form of Certificate of Designation,
  Preferences and Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B —

  	
  Form of Rights Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit C —

  	
  Form of Summary of Rights

  	
   

  

 

ii

 

AMENDED AND
RESTATED RIGHTS AGREEMENT

 

AMENDED AND
RESTATED RIGHTS AGREEMENT, dated as of April 1, 2005 (the “Agreement”),
between Yahoo! Inc., a Delaware corporation (the “Company”), and EquiServe
Trust Company, N.A., a federally chartered trust company (the “Rights Agent”).

 

W I T N E S S
E T H

 

WHEREAS, on March 1,
2001 (the “Rights Dividend Declaration Date”), the Board of Directors of the
Company authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of common stock, par value $.001 per share,
of the Company (the “Common Stock”) outstanding at the close of business on March 20,
2001 (the “Record Date”), and has authorized the issuance of one Right (as such
number has heretofore been, and may hereinafter be, adjusted pursuant to the
provisions of Section 11(p) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or delivered
from the Company’s treasury) and the Distribution Date (as hereinafter defined)
each Right initially representing the right to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock of the Company (the
“Preferred Stock”) having the rights, powers and preferences set forth in the
form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the “Rights”);

 

WHEREAS, the
Company and the Rights Agent, have previously entered into a Rights Agreement,
dated as of March 15, 2001 (the “Agreement”);

 

WHEREAS, on April
7, 2004, the Board of Directors of the Company declared a two-for-one stock
split of the Company’s Common Stock and in connection therewith and in
accordance with Section 11(p) of the Rights Agreement the Rights as set forth
and described in this Amended and Restated Rights Agreement were automatically
adjusted so that (i) each outstanding share of Common Stock is now accompanied
by one-half of one Right (subject to future adjustment); (ii) the formula used
to determine the Current Market Price per share of Preferred Stock pursuant to
Section 11(d)(ii) (if the Current Market Price per share of Preferred Stock
cannot be otherwise determined in accordance with the Agreement) was adjusted
from an amount equal to 1,000 multiplied by the Current Market Price per share
of the Common Stock to an amount equal to 2,000 (subject to future adjustment)
multiplied by the Current Market Price per share of the Common Stock; and (iii)
the exchange ratio at which the Board of Directors of the Company may exchange
the Rights pursuant to Section 24(a) of the Rights Agreement, was adjusted from
one share of Common Stock to two shares of Common Stock (subject to future
adjustment), per Right;

 

WHEREAS, Section 27
of the Agreement provides that, prior to the occurrence of a Distribution Date
(as defined therein), the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of the Agreement without the
approval of any holders of certificates representing shares of Common Stock and
the Rights Agent shall execute such supplement or amendment;

 

WHEREAS, the
Company intends to modify the terms of the Agreement in certain respects as set
forth herein, and in connection therewith, is entering into this Amended and
Restated Rights Plan and directing the Rights Agent to enter into this Amended
and Restated Rights Plan.

 

NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set forth, the parties hereby agree as follows:

 

Section 1.               Certain
Definitions.  For purposes of this
Agreement, the following terms have the meanings indicated:

 

(a)           “Acquiring Person” shall mean (x) any Person who or
which, together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the 

 

 

Company for or
pursuant to the terms of any such plan, (iv) any Person who becomes the
Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock
then outstanding as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of shares of Common Stock by the
Company other than at a time when the rights are not redeemable, unless and
until such Person, after becoming aware that such Person has become the
Beneficial Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock, acquires beneficial ownership of additional shares of
Common Stock representing one percent (1%) or more of the shares of Common
Stock then outstanding, (v) any such Person who has reported or is
required to report such ownership (but less than 20%) on Schedule 13G
under the Securities Exchange Act of 1934, as amended and in effect on the date
of the Agreement (the “Exchange Act”) (or any comparable or successor report)
or on Schedule 13D under the Exchange Act (or any comparable or successor
report) which Schedule 13D does not state any intention to or reserve the
right to control or influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such schedule (other
than the disposition of the Common Stock) and, within 10 Business Days of being
requested by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights and who or which,
together with all Affiliates and Associates, thereafter does not acquire
additional shares of Common Stock while the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding; provided, however, that if the
Person requested to so certify fails to do so within 10 Business Days, then
such Person shall become an Acquiring Person immediately after such 10-Business-Day
period, (vi) any Person who is, as of March 1, 2001, the Beneficial
Owner of fifteen percent (15%) or more of the shares of Common Stock then
outstanding, so long as such Person thereafter does not, while the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, acquire
additional shares of Common Stock representing one percent (1%) or more of the
shares of Common Stock then outstanding, unless any such acquisition of
additional shares is pursuant to (A) a stock dividend or distribution by
the Company or (B) a Qualified Offer (as defined in Section 11(a) (ii));
provided, however, that such Person shall cease to be excluded from the
definition of Acquiring Person pursuant to this clause (vi) at such time,
if any, as such Person ceases to be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, or (y) any Person who or which has
entered into any agreement or arrangement with the Company or any Subsidiary of
the Company providing for an Acquisition Transaction (as defined in Section 1(b) hereof).

 

(b)           “Acquisition Transaction” shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company will no longer
own a majority of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or otherwise combined
(based solely on the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company, pursuant to
such transaction), (y) a purchase or other acquisition of all or a substantial
portion of the assets of the Company and its Subsidiaries, or (z) a purchase or
other acquisition of securities representing 15% or more of the shares of
Common Stock then outstanding.

 

(c)           “Act” shall mean the Securities Act of 1933, as
amended.

 

2

 

(d)           “Adjustment Shares” shall have the meaning set forth
in Section 11(a)(ii) hereof.

 

(e)           “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.

 

(f)            A Person shall be deemed the “Beneficial Owner” of,
and shall be deemed to “beneficially own,” any securities:

 

(i)    which such Person or any of such Person’s Affiliates
or Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, other rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the “Beneficial Owner” of, or to “beneficially own,” (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event (as
hereinafter defined), or (C) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person’s Affiliates or Associates prior to the
Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or
Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i) hereof
in connection with an adjustment made with respect to any Original Rights;

 

(ii)   which such Person or any of such Person’s Affiliates
or Associates, directly or indirectly, has the right to vote or dispose of or
has “beneficial ownership” of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding:  (A) arises solely
from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act,
and (B) is not reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or

 

(iii)  which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person’s Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in 

 

3

 

the
proviso to subparagraph (ii) of this paragraph (g)) or disposing of any
voting securities of the Company; provided, however, that nothing
in this paragraph (g) shall cause a Person engaged in business as an
underwriter of securities to be the “Beneficial Owner” of, or to “beneficially
own,” any securities acquired through such Person’s participation in good faith
in a firm commitment underwriting until the expiration of forty days after the
date of such acquisition, and then only if such securities continue to be owned
by such Person at such expiration of forty days and provided further, however,
that any stockholder of the Company, with affiliate(s), associate(s) or other
person(s) who may be deemed representatives of it serving as director(s) of the
Company, shall not be deemed to beneficially own securities held by other
Persons as a result of (i) persons affiliated or otherwise associated with
such stockholder serving as directors or taking any action in connection
therewith, (ii) discussing the status of its shares with the Company or
other stockholders of the Company similarly situated or (iii) voting or
acting in a manner similar to other stockholders similarly situated, absent a
specific finding by the Board of Directors of an express agreement among such
stockholders to act in concert with one another as stockholders so as to cause,
in the good faith judgment of the Board of Directors, each such stockholder to
be the Beneficial Owner of the shares held by the other stockholder(s).

 

(g)           “Business Day” shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Massachusetts are authorized or obligated by law or executive order to close.

 

(h)           “Close of business” on any given date shall mean 5:00 P.M.,
Massachusetts time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Massachusetts time,
on the next succeeding Business Day.

 

(i)            “Common Stock” shall mean the common stock, par value
$.001 per share, of the Company, except that “Common Stock” when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.

 

(j)            “Common Stock Equivalents” shall have the meaning set
forth in Section 11(a)(iii) hereof.

 

(k)           “Current Market Price” shall have the meaning set
forth in Section 11(d)(i) hereof.

 

(l)            “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(m)          “Distribution Date” shall have the meaning set forth
in Section 3(a) hereof.

 

(n)           “Equivalent Preferred Stock” shall have the meaning
set forth in Section 11(b) hereof.

 

4

 

(o)           “Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended and in effect on the date of the Agreement.

 

(p)           “Exchange Ratio” shall have the meaning set forth in Section 24
hereof.

 

(q)           “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

 

(r)            “Final Expiration Date” shall have the meaning set
forth in Section 7(a) hereof.

 

(s)           “Person” shall mean any individual, firm, corporation,
partnership or other entity.

 

(t)            “Preferred Stock” shall mean shares of Series A
Junior Participating Preferred Stock, par value $.001 per share, of the
Company, and, to the extent that there are not a sufficient number of shares of
Series A Junior Participating Preferred Stock authorized to permit the
full exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series A Junior Participating Preferred Stock.

 

(u)           “Principal Party” shall have the meaning set forth in Section 13(b) hereof.

 

(v)           “Purchase Price” shall have the meaning set forth in Section 4(a) hereof.

 

(w)          “Qualified Offer” shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(x)            “Record Date” shall have the meaning set forth in the
preamble of this Agreement.

 

(y)           “Rights” shall have the meaning set forth in the
preamble of this Agreement.

 

(z)            “Rights Agent” shall have the meaning set forth in the
preamble of this Agreement.

 

(aa)         “Rights Certificate” shall have the meaning set forth
in Section 3(a) hereof.

 

(bb)         “Rights Dividend Declaration Date” shall have the
meaning set forth in the preamble of this Agreement.

 

(cc)         “Section 11(a)(ii) Event” shall mean any
event described in Section 11(a)(ii) hereof.

 

5

 

(dd)         “Section 13 Event” shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof. 

 

(ee)         “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(ff)           “Stock Acquisition Date” shall mean the earlier of (i) the
first date of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed or amended pursuant to Section 13(d) under
the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such pursuant to clause (x) of the definition of Acquiring
Person other than pursuant to a Qualified Offer, and (ii) the date that an
Acquiring Person has become such pursuant to clause (y) of the definition of
Acquiring Person.

 

(gg)         “Subsidiary” shall mean, with reference to any Person,
any corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such Person.

 

(hh)         “Substitution Period” shall have the meaning set forth
in Section 11(a)(iii) hereof.

 

(ii)           “Summary of Rights” shall have the meaning set forth
in Section 3(b) hereof.

 

(jj)           “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof.

 

(kk)         “Triggering Event” shall mean any Section 11(a)(ii) Event
or any Section 13 Event.

 

Section 2.               Appointment
of Rights Agent.  The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment.  The Company may from time
to time appoint such co-rights agents as it may deem necessary or desirable,
upon ten (10) days’ prior written notice to the Rights Agent.  The Rights Agent shall have not duty to
supervise, and in no event be liable for, the acts or omissions of any such
co-Rights Agent.

 

Section 3.               Issuance
of Rights Certificates.

 

(a)           Until the earlier of (i) the close of business on
the tenth Business Day after the Stock Acquisition Date (or, if the tenth
Business Day after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of business
on the tenth Business Day (or such later date as the Board of Directors shall
determine) after the date of the commencement of a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, or any successor
provision thereto, if upon consummation thereof, such Person would become an
Acquiring 

 

6

 

Person, in either
instance other than pursuant to a Qualified Offer, (the earlier of (i) and
(ii) being herein referred to as the “Distribution Date”), (x) the Rights
will be evidenced (subject to the provisions of paragraphs (b) and (c) of
this Section 3) by the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock (including a
transfer to the Company).  As soon as
practicable after the Distribution Date, the Rights Agent will send by first-class,
insured, postage-prepaid mail, to each record holder of the Common Stock as of
the close of business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit B hereto (the “Rights Certificates”),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein.  In the
event that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.  As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.

 

(b)           The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the “Summary of
Rights”) to any holder of Rights who may so request from time to time prior to
the Expiration Date. With respect to certificates for the Common Stock
outstanding as of the Record Date, or issued subsequent to the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date, the
Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights.  Until the earlier
of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock.

 

(c)           Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the Company’s
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. 
Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the following legend:

 

This
certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between Yahoo! Inc. (the “Company”) and the
Rights Agent thereunder (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company.  Under
certain circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by this
certificate.  The Company will mail to
the holder of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge, promptly after receipt of a written
request therefor.  Under certain
circumstances set forth in the Rights Agreement, Rights issued to, 

 

7

 

or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void.

 

With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.

 

Section 4.               Form of
Rights Certificates.

 

(a)           The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(such exercise price per one one-thousandth of a share, the “Purchase Price”),
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.

 

(b)           Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i), Section 11(p) or Section 22 hereof that
represents Rights beneficially owned by: 
(i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:

 

The Rights represented by this Rights
Certificate are or were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate 

 

8

 

of an Acquiring Person (as such terms are
defined in the Rights Agreement). 
Accordingly, this Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 7(e) of
the Rights Agreement.

 

Section 5.               Countersignature
and Registration.

 

(a)           The Rights Certificates shall be executed on behalf of
the Company by its Chairman or Vice-Chairman of its Board of Directors, its
Chief Executive Officer, its President or any Vice President, its Chief
Financial Officer or any Assistant Treasurer, or its Secretary or any Assistant
Secretary, either manually or by facsimile signature, and shall have affixed
thereto the Company’s seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature.  The Rights
Certificates shall be countersigned by the Rights Agent, either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned.  In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.

 

(b)           Following the Distribution Date, the Rights Agent will
keep, or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder.  Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.

 

Section 6.               Transfer,
Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.

 

(a)           Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of one one-thousandths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then
entitles such holder (or former holder in the case of a transfer) to
purchase.  Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of 

 

9

 

the Rights Agent
designated for such purpose.  Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. 
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 and Section 24 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested.  The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.

 

(b)           Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate, if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.

 

Section 7.               Exercise
of Rights; Purchase Price; Expiration Date of Rights.

 

(a)           Subject to Section 7(e) hereof, at any time
after the Distribution Date the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or in
part upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-thousandths of a share (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) 5:00 P.M.,
California time, on March 1, 2011, or such later date as may be
established by the Board of Directors prior to the expiration of the Rights
(such date, as it may be extended by the Board of Directors, the “Final
Expiration Date”), or (ii) the time at which the Rights are redeemed or
exchanged as provided in Section 23 and Section 24 hereof (the
earlier of (i) and (ii) being herein referred to as the “Expiration
Date”).

 

(b)           The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right initially shall be
$250, shall be subject to adjustment from time to time as provided in Section 11
and Section 13(a) hereof and shall be payable in accordance with
paragraph (c) below.

 

(c)           Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-thousandth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may be) to be 

 

10

 

purchased as set
forth below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-thousandths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or, upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. 
The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the order of the Company.  In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.  The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.

 

(d)           In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

 

(e)           Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise.  The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof 

 

11

 

are complied with,
but shall have no liability to any holder of Rights Certificates or any other
Person as a result of its failure to make any determinations with respect to an
Acquiring Person or any of its Affiliates, Associates or transferees hereunder.

 

(f)            Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.

 

Section 8.               Cancellation
and Destruction of Rights Certificates.

 

All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. 
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof.  The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.

 

Section 9.               Reservation
and Availability of Capital Stock.

 

(a)           The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event,
out of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its treasury),
the number of shares of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event,
Common Stock and/or other securities) that, as provided in this Agreement
including Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.

 

(b)           So long as the shares of Preferred Stock (and,
following the occurrence of a Section 11(a)(ii) Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.

 

(c)           The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence
of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement
under the Act, 

 

12

 

with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the expiration of the
Rights.  The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights.  The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days after the date set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. 
Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension has been
rescinded.  In addition, if the Company
shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective.  Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable
law, or a registration statement shall not have been declared effective.

 

(d)           The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Section 11(a)(ii) Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.

 

(e)           The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. 
The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of
one one-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in respect of a name other than that of the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) in a name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been paid (any such tax being
payable by the holder of such Rights Certificates at the time of surrender) or
until it has been established to the Company’s satisfaction that no such tax is
due.

 

Section 10.             Preferred Stock
Record Date.  Each person in whose
name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred 

 

13

 

Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.  Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.

 

Section 11.             Adjustment of
Purchase Price, Number and Kind of Shares or Number of Rights.  The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.

 

(a)(i)                       In the event the Company shall
at any time after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock
into a smaller number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification.  If an event occurs which would require an
adjustment under both this Section 11(a)(i) and

Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.

 

(ii)                                  In the event any Person shall, at
any time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a) hereof, or is an acquisition
of shares of Common Stock pursuant to a tender offer or an exchange offer for
all outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not officers
of the Company and who are not 

 

14

 

representatives,
nominees, Affiliates or Associates of an Acquiring Person, after receiving
advice from one or more investment banking firms, to be (a) at a price
which is fair to stockholders and not inadequate (taking into account all
factors which such members of the Board of Directors deem relevant, including,
without limitation, prices which could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its stockholders (a
“Qualified Offer”), then, promptly following the occurrence of such event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one one-thousandths
of a share of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred
to as the “Purchase Price” for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first occurrence (such number of
shares, the “Adjustment Shares”).

 

(iii)                               In the event that the number of
shares of Common Stock which is authorized by the Company’s Amended and
Restated Certificate of Incorporation, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights, is not sufficient
to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A) determine
the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current
Value”), and (B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock, such as the Preferred Stock, which the
Board of Directors has deemed to have essentially the same value or economic
rights as shares of Common Stock (such shares of preferred stock being referred
to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any reduction in the Purchase
Price), where such aggregate value has been determined by the Board of Directors
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors; provided, however, that if
the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company’s right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger
Date”), then the 

 

15

 

Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. 
For purposes of the preceding sentence, the term “Spread” shall mean the
excess of (i) the Current Value over (ii) the Purchase Price.  If the Board of Directors determines in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization
of such additional shares (such thirty (30) day period, as it may be extended,
is herein called the “Substitution Period”). 
To the extent that the Company determines that action should be taken
pursuant to the first and/or third sentences of this Section 11(a)(iii),
the Company (1) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof.  In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.  For purposes of this Section 11(a)(iii),
the value of each Adjustment Share shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any Common Stock Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on such date.

 

(b)           In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock (or shares having
the same rights, privileges and preferences as the shares of Preferred Stock (“Equivalent
Preferred Stock”)) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock
and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible 

 

16

 

securities so to be
offered are initially convertible).  In
case such subscription price may be paid by delivery of consideration, part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.  Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation.  Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

 

(c)           In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation), cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or evidences of indebtedness, or of
subscription rights or warrants (excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the Current Market Price
(as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock, and the
denominator of which shall be such Current Market Price (as determined pursuant
to Section 11(d) hereof) per share of Preferred Stock.  Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution
is not so made, the Purchase Price shall be adjusted to be the Purchase Price
which would have been in effect if such record date had not been fixed.

 

(d)(i)       For the purpose of any
computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the thirty (30) consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the ten (10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market
Price per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights), or (B) any subdivision, combination or reclassification of such
Common Stock, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification shall not
have occurred prior to the commencement of the requisite thirty (30) Trading
Day or ten (10) Trading Day period, as set forth above, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading.  The closing
price for each 

 

17

 

day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System (“NASDAQ”) or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors.  If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors shall be used.  The term “Trading Day” shall mean a day on
which the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. 
If the Common Stock is not publicly held or not so listed or traded,
Current Market Price per share shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.

 

(ii)   For
the purpose of any computation hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner as set forth above for
the Common Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof).  If the Current Market
Price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the Current Market Price
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current Market
Price per share of the Common Stock.  If
neither the Common Stock nor the Preferred Stock is publicly held or so listed
or traded, Current Market Price per share of the Preferred Stock shall mean the
fair value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

 

(e)           Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a share of 

 

18

 

Common Stock or other share or ten-millionth
of a share of Preferred Stock, as the case may be.  Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.

 

(f)            If as a result of an adjustment made
pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j),
(k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms to any such other
shares.

 

(g)           All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.

 

(h)           Unless the Company shall have
exercised its election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number
of one one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.

 

(i)            The Company may elect on or after
the date of any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one one-thousandths of a
share of Preferred Stock purchasable upon the exercise of a Right.  Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. 
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.  The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. 
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the 

 

19

 

additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment.  Rights
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in the
public announcement.

 

(j)            Irrespective of any adjustment or
change in the Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-thousandth of a share and the number of one
one-thousandth of a share which were expressed in the initial Rights
Certificates issued hereunder.

 

(k)           Before taking any action that would
cause an adjustment reducing the Purchase Price below the then stated value, if
any, of the number of one one-thousandths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable such number
of one one-thousandths of a share of Preferred Stock at such adjusted Purchase
Price.

 

(l)            In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of one one-thousandths of a share of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of one one-thousandths of
a share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder’s right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.

 

(m)          Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment the
Board of Directors shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.

 

20

 

(n)           The Company covenants and agrees that
it shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the stockholders of the Person who constitutes, or would constitute, the
“Principal Party” for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.

 

(o)           The Company covenants and agrees
that, after the Distribution Date, it will not, except as permitted by Section
23 or Section 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.

 

(p)           Anything in this Agreement to the
contrary notwithstanding, in the event that the Company shall at any time after
the Rights Dividend Declaration Date and prior to the earlier of the
Distribution Date or the Expiration Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator which
shall be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately following the
occurrence of such event.

 

Section 12.             Certificate of Adjusted Purchase
Price or Number of Shares.  Whenever
an adjustment is made as provided in Section 11 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to each holder of
a certificate representing shares of Common Stock) in accordance with Section
25 hereof.  The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained.

 

21

 

Section 13.             Consolidation, Merger or Sale or
Transfer of Assets Cash Flow or Earning Power.

 

(a)           In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets, cash flow or earning power aggregating more than 50% of
the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such one one-thousandths of a share for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence of a Section 11(a)(ii) Event), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
referred to as the “Purchase Price” for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined pursuant to

Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.

 

22

 

(b)           “Principal Party” shall mean:

 

(i)    in
the case of any transaction described in clause (x) or (y) of the first
sentence of Section 13(a), the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation; and

 

(ii)   in
the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of
the assets, cash flow or earning power transferred pursuant to such transaction
or transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, “Principal Party” shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of two or more of which are and have been so registered,
“Principal Party” shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.

 

(c)           The Company shall not consummate any
such consolidation, merger, sale or transfer unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock which have
not been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will

 

(i)    prepare
and file a registration statement under the Act, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date; and

 

(ii)   take
all such other action as may be necessary to enable the Principal Party to
issue the securities purchasable upon exercise of the Rights, including but not
limited to the registration or qualification of such securities under all
requisite securities laws of jurisdictions of the various states and the
listing of such securities on such exchanges and trading markets as may be
necessary or appropriate; and

 

(iii)  will
deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which 

 

23

 

comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.

 

The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.  In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).

 

(d)           Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction
is consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which is a Qualified Offer as such term is defined in Section 11(a)(ii)
hereof (or a wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is not less than
the price per share of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender offer or exchange
offer and (iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the same as
the form of consideration paid pursuant to such tender offer or exchange
offer.  Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.

 

Section 14.             Fractional Rights and Fractional
Shares.

 

(a)           The Company shall not be required to
issue fractions of Rights, except prior to the Distribution Date as provided in
Section 11(i) or Section 11(p) hereof, or to distribute Rights Certificates
which evidence fractional Rights.  In
lieu of such fractional Rights, the Company shall pay to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. 
For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable.  The closing price of the
Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights, selected by the Board of Directors.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors shall be used.

 

24

 

(b)           The Company shall not be required to
issue fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock).  In lieu of fractional shares of Preferred
Stock that are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. 
For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of the
closing price of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.

 

(c)           Following the occurrence of a
Triggering Event, the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.  In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one (1) share of Common
Stock.  For purposes of this Section
14(c), the current market value of one share of Common Stock shall be the
closing price per share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) on the Trading Day immediately prior to the date of such
exercise.

 

(d)           The holder of a Right by the
acceptance of the Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except as permitted
by this Section 14.

 

Section 15.             Rights of Action.  All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement.  Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened violations
of the obligations hereunder of any Person subject to this Agreement.

 

Section 16.             Agreement of Rights Holders.  Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with every other
holder of a Right that:

 

25

 

(a)           prior to the Distribution Date, the
Rights will be transferable only in connection with the transfer of Common
Stock;

 

(b)           after the Distribution Date, the
Rights Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates fully
executed;

 

(c)           subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary; and

 

(d)           notwithstanding anything in this
Agreement to the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligation; provided, however, the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.

 

Section 17.             Rights Certificate Holder Not
Deemed a Stockholder.  No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.

 

Section 18.             Concerning the Rights Agent.

 

(a)           The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder.  The Company
also agrees to indemnify the Rights 

 

26

 

Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.

 

(b)           The Rights Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.

 

Section 19.             Merger or Consolidation or
Change of Name of Rights Agent.

 

(a)           Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust, stock transfer or other
stockholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; but only if such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof.  In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.

 

(b)           In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

 

Section 20.             Duties of Rights Agent.  The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:

 

(a)           The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete 

 

27

 

authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.

 

(b)           Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation, the identity
of any Acquiring Person and the determination of Current Market Price) be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

 

(c)           The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful misconduct.

 

(d)           The Rights Agent shall not be liable
for or by reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the
Company only.

 

(e)           The Rights Agent shall not be under
any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11, Section 13 or Section 24
hereof or responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.

 

(f)            The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.

 

(g)           The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Secretary, any Assistant Secretary, the
Chief Financial Officer, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, 

 

28

 

and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.

 

(h)           The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.

 

(i)            The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.

 

(j)            No provision of this Agreement shall
require the Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.

 

(k)           If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first consulting with the Company.

 

Section 21.             Change of Rights Agent.  The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty (30) days’ notice in writing mailed to the Company, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified mail,
and, if such resignation occurs after the Distribution Date, to the registered
holders of the Rights Certificates by first-class mail.  In the event the transfer agency relationship
in effect between the Company and the Rights Agent terminates, the Rights Agent
will be deemed to resign automatically on the effective date of such
termination; and any required notice will be sent by the Company.  The Company may remove the Rights Agent or
any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and, if such removal occurs after the Distribution Date, to the
holders of the Rights Certificates by first-class mail.  If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. 
If the Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights 

 

29

 

Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights
Agent.  Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a) a legal
business entity organized and doing business under the laws of the United
States or of the State of California or of any other state of the United
States, in good standing, having an office in the State of California, which is
authorized under such laws to exercise corporate trust, stock transfer or
stockholder services powers and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a legal business entity described in clause (a) of this sentence.  After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and, if such appointment occurs after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Rights
Certificates.  Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

 

Section 22.             Issuance of New Rights
Certificates.  Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by the Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.  In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

 

Section 23.             Redemption and Termination.

 

(a)           The Board of Directors may, at its
option, at any time prior to the earlier of (i) the close of business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.001 per 

 

30

 

Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). 
Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company’s right of redemption hereunder
has expired.  The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price, as defined in Section 11(d)(i) hereof, of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.

 

(b)           Immediately upon the action of the
Board of Directors ordering the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. 
Promptly after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder’s last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock.  Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.  Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made.

 

(c)           Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth in this
Section 23 and other than in connection with the purchase or repurchase by any
of them of Common Stock prior to the Distribution Date.

 

Section 24.             Exchange.

 

(a)           The Board of Directors may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock then outstanding.

 

(b)           Immediately upon the action of the
Board of Directors ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of Common
Stock 

 

31

 

equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. 
The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. 
The Company promptly shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent.  Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. 
Each such notice of exchange will state the method by which the exchange
of the Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged.  Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.

 

(c)           In any exchange pursuant to this Section
24, the Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11 hereof)
for Common Stock exchangeable for Rights, at the initial rate of one
one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock)
for each share of Common Stock, as appropriately adjusted to reflect stock
splits, stock dividends and other similar transactions after the date hereof.

 

(d)           In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the
Rights.

 

(e)           The Company shall not be required to
issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. 
In lieu of such fractional shares of Common Stock, there shall be paid
to the registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock.  For the purposes of this
subsection (e), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.

 

Section 25.             Notice of Certain Events.

 

(a)           In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(iv) to effect any consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit 

 

32

 

one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock, whichever shall be the
earlier.

 

(b)           In case a Section 11(a)(ii) Event
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.

 

Section 26.             Notices.  Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing by the Rights Agent with the Company) as follows:

 

Yahoo! Inc.

701 First
Avenue

Sunnyvale,
California 94089

Attention:  Corporate Secretary

 

Subject to the provisions of
Section 21, any notice or demand authorized by this Agreement to be given or
made by the Company or by the holder of any Rights Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing by the
Rights Agent with the Company) as follows:

 

EquiServe
Trust Company, N.A.

c/o EquiServe
Limited Partnership

250 Royall
Street

Canton,
Massachusetts 02021

Attention:
Client Administration

 

33

 

Notices or
demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of certificates representing shares of Common
Stock) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.

 

Section 27.             Supplements and Amendments.

 

(a)           Prior to the Distribution Date, and
subject to the provisions of Section 27(b) hereof, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
shares of Common Stock.  From and after
the Distribution Date, and subject to the provisions of Section 27(b) hereof,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person).  Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.  Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.

 

(b)           Notwithstanding anything herein to
the contrary, no supplement or amendment shall be made to this Agreement at a
time when the Rights are not redeemable, except as contemplated by clause (i) or
(ii) of Section 27(a) hereof.

 

Section 28.             Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

 

Section 29.             Determinations and Actions by
the Board of Directors, etc.  For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock or any other class of capital stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act.  The Board of Directors shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement).  All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board of 

 

34

 

Directors in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of Directors,
or any of the directors on the Board of Directors, to any liability to the
holders of the Rights.

 

Section 30.             Benefits of this Agreement.  Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).

 

Section 31.             Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth
Business Day following the date of such determination by the Board of
Directors.  Without limiting the
foregoing, if any provision requiring a specific group of directors to act is
held to by any court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by the
Board of Directors in accordance with applicable law and the Company’s Amended
and Restated Certificate of Incorporation and Bylaws.

 

Section 32.             Governing Law.  This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.

 

Section 33.             Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

Section 34.             Descriptive Headings.  Descriptive headings of the several sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.

 

Section 35.             Force Majeure.  Notwithstanding anything to the contrary
contained herein, Rights Agent shall not be liable for any delays or failures
in performance resulting from acts beyond its reasonable control including,
without limitation, acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information
storage or retrieval systems, labor difficulties, war, or civil unrest.

 

35

 

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

 

 

	
   

  	
  YAHOO! INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  J. Callahan

  	
   

  
	
   

  	
  Name:

  	
  Michael J.
  Callahan

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President, General Counsel and
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
  EquiServe
  Trust Company, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua
  P. McGinn

  	
   

  
	
   

  	
  Name:

  	
  Joshua P.
  McGinn

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Account Manager

  	
   

  
						

 

36

 

Exhibit A

 

FORM OF

CERTIFICATE OF DESIGNATION, PREFERENCES AND

RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

 

of

 

YAHOO! INC.

 

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

 

We, the
undersigned officers of Yahoo! Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DO HEREBY CERTIFY:

 

That pursuant
to the authority conferred upon the Board of Directors by the Amended and
Restated Certificate of Incorporation of the said Corporation, the said Board
of Directors on March 1, 2001, adopted the following resolution creating a
series of two million (2,000,000) shares of Preferred Stock designated as
Series A Junior Participating Preferred Stock:

 

RESOLVED, that
pursuant to the authority vested in the Board of Directors of this Corporation
in accordance with the provisions of its Amended and Restated Certificate of
Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:

 

Section
1.  Designation and Amount.  The shares of such series shall be designated
as “Series A Junior Participating Preferred Stock” and the number of shares
constituting such series shall be two million (2,000,000).

 

Section
2.  Dividends and Distributions.

 

(A)  Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on March 31, June 30, September 30 and December 31 of each year
(each such date being referred to herein as a “Quarterly Dividend Payment
Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $.01 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate 

 

37

 

per share
amount of all cash dividends, and 1000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.001 per share, of the Corporation (the “Common Stock”)
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating Preferred
Stock.  In the event the Corporation
shall at any time after March 1, 2001 (the “Rights Declaration Date”) (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

 

(B)  The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock as provided
in Paragraph (A) above immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of Common Stock).

 

(C)  Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the date of issue
of such shares of Series A Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date.  Accrued but unpaid dividends shall
not bear interest.  Dividends paid on the
shares of Series A Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding.  The
Board of Directors may fix a record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment thereof.

 

Section
3.  Voting Rights.  The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:

 

(A)  Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to one thousand (1000) votes on all
matters submitted to a vote of the stockholders of the Corporation.  In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend 

 

38

 

on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which holders
of shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

 

(B)  Except as otherwise provided herein or by
law, the holders of shares of Series A Junior Participating Preferred Stock and
the holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.

 

(C) (i)  If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an amount equal to
six (6) quarterly dividends thereon, the occurrence of such contingency shall
mark the beginning of a period (herein called a “default period”) which shall
extend until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all
shares of Series A Junior Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment.  During each default period, all holders of
Preferred Stock (including holders of the Series A Junior Participating
Preferred Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two (2) directors.

 

(ii)  During any default period, such voting right
of the holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to subparagraph (iii)
of this Section 3(C) or at any annual meeting of stockholders, and thereafter
at annual meetings of stockholders, provided that neither such voting right nor
the right of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of directors shall be
exercised unless the holders of ten percent (10%) in number of shares of
Preferred Stock outstanding shall be present in person or by proxy.  The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of Preferred Stock of
such voting right.  At any meeting at
which the holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a
class, to elect directors to fill such vacancies, if any, in the Board of Directors
as may then exist up to two (2) directors or, if such right is exercised at an
annual meeting, to elect two (2) directors. 
If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of directors as shall be
necessary to permit the election by them of the required number.  After the holders of the Preferred Stock
shall have exercised their right to elect directors in any default period and
during the continuance of such period, the number of directors shall not be
increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking senior
to or pari  passu with the Series A Junior Participating Preferred
Stock.

 

(iii)  Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the 

 

39

 

total number
of shares of Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the President, a Vice-President or the
Secretary of the Corporation.  Notice of
such meeting and of any annual meeting at which holders of Preferred Stock are entitled
to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of
record of Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation.  Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding.  Notwithstanding the provisions of this
Paragraph (C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of the stockholders.

 

(iv)  In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors until the
holders of Preferred Stock shall have exercised their right to elect two (2)
directors voting as a class, after the exercise of which right (x) the
directors so elected by the holders of Preferred Stock shall continue in office
until their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of Directors
may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by
vote of a majority of the remaining directors theretofore elected by the
holders of the class of stock which elected the director whose office shall
have become vacant.  References in this
Paragraph (C) to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill vacancies as
provided in clause (y) of the foregoing sentence.

 

(v)  Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to elect
directors shall cease, (y) the term of any directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of directors
shall be such number as may be provided for in the Amended and Restated
Certificate of Incorporation or Bylaws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by law or
in the certificate of incorporation or by-laws).  Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding sentence may
be filled by a majority of the remaining directors.

 

(D)  Except as set forth herein, holders of Series
A Junior Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.

 

Section
4.  Certain Restrictions.

 

(A)  Whenever quarterly dividends or other
dividends or distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, 

 

40

 

on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not

 

(i)  declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Stock;

 

(ii)  declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;

 

(iii)  redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the Series A
Junior Participating Preferred Stock; or

 

(iv)  purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

 

(B)  The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation
could, under Paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.

 

Section
5.  Reacquired Shares.  Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof.  All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.

 

Section
6.  Liquidation, Dissolution or
Winding Up.  (A)  Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Corporation, no distribution shall
be made to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, 

 

41

 

dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount equal to $250,000 per share of Series A Participating
Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the “Series A Liquidation Preference”). 
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the “Common
Adjustment”) equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the “Adjustment Number”). 
Following the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series A Junior Participating Preferred Stock and Common Stock, respectively,
holders of Series A Junior Participating Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.

 

(B)  In the event, however, that there are not
sufficient assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to their respective
liquidation preferences.  In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.

 

(C)  In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

 

Section
7.  Consolidation, Merger, etc.  In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series A Junior
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or
exchanged.  In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the 

 

42

 

outstanding
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

 

Section
8.  No Redemption.  The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.

 

Section
9.  Ranking.  The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation’s Preferred
Stock as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.

 

Section
10.  Amendment.  At any time when any shares of Series A
Junior Participating Preferred Stock are outstanding, neither the Amended and
Restated Certificate of Incorporation of the Corporation nor this Certificate
of Designation shall be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Junior Participating Preferred Stock, voting separately as a class.

 

Section
11.  Fractional Shares.  Series A Junior Participating Preferred Stock
may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.

 

IN WITNESS
WHEREOF, we have executed and subscribed this Certificate and do affirm the
foregoing as true under the penalties of perjury this                  day
of March, 2001. 

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

	
  Attest:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Secretary

  	
   

  

 

43

 

Exhibit B

 

[Form of Rights Certificate]

 

	
  Certificate
  No. R-

  	
   

  	
   Rights

  

 

NOT EXERCISABLE AFTER MARCH 1,
2011 OR EARLIER IF REDEEMED BY THE COMPANY. 
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.  [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME
AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*

 

*                                         The
portion of the legend in brackets shall be inserted only if applicable and if
so inserted shall replace the preceding sentence.

 

 

Rights Certificate

 

YAHOO! INC.

 

This certifies
that                                   ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of March 15, 2001
(the “Rights Agreement”), as amended and restated April 1, 2005 between Yahoo!
Inc., a Delaware corporation (the “Company”), and EquiServe Trust Company,
N.A., a federally chartered trust company (the “Rights Agent”), to purchase
from the Company at any time prior to 5:00 P.M. (California time) on March 1,
2011 (unless such date is extended prior thereto by the Board of Directors) at
the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
share of Series A Junior Participating Preferred Stock (the “Preferred Stock”)
of the Company, at a purchase price of $250 per one one-thousandth of a share
(the “Purchase Price”), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed.  The number of Rights evidenced
by this Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of March 20, 2001, based on
the Preferred Stock as constituted at such date.  The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.

 

Upon the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.

 

As provided in
the Rights Agreement, the Purchase Price and the number and kind of shares of
Preferred Stock or other securities, which may be purchased upon the exercise
of the Rights evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including Triggering
Events.

 

This Rights
Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement.  Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.

 

 

This Rights
Certificate, with or without other Rights Certificates, upon surrender at the
principal office or offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. 
If this Rights Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.

 

Subject to the
provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $.001 per
Right at any time prior to the earlier of the close of business on (i) the
tenth Business Day following the Stock Acquisition Date (as such time period
may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date.  Under certain
circumstances following the Stock Acquisition Date, the Rights may be
exchanged, in whole or in part, for shares of the Common Stock, or shares of
preferred stock of the Company having essentially the same value or economic
rights as such shares.  Immediately upon
the action of the Board of Directors authorizing any such exchange, and without
any further action or any notice, the Rights (other than Rights which are not
subject to such exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such exchange.

 

No fractional
shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

 

No holder of
this Rights Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
consent to or withhold consent from any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement.

 

 

 

This Rights
Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Rights Agent.

 

WITNESS the
facsimile signatures of the proper officers of the Company and its corporate
seal.

 

 

	
  Dated as of 

  	
   

  	
  .

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ATTEST: 

  	
  YAHOO! INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
								

 

 

	
   

  	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EquiServe
  Trust Company, N.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  	
   

  

 

 

[Form of Reverse Side of Rights Certificate]

 

 

FORM OF ASSIGNMENT

 

 

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

 

	
   

  	
  FOR VALUE
  RECEIVED

  	
   

  
	
   

  
	
  hereby
  sells, assigns and transfers unto

  	
   

  
	
   

  
	
  (Please print name and address of transferee)

  
	
   

  
	
   

  
	
   

  
	
  this Rights
  Certificate, together with all right, title and interest therein, and does
  hereby irrevocably constitute and appoint 

  
	
   

  
	
   

  	
   Attorney, to transfer the within Rights
  Certificate on the books of the within named Company, with full power 

  
	
   

  
	
  of
  substitution.

  
	
   

  
	
  Dated: 

  	
   

  	
  ,

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guaranteed:

  	
   

  
											

 

 

Certificate

 

The undersigned hereby certifies by checking
the appropriate boxes that:

 

(1) 
this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);

 

(2) 
after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.

 

 

	
  Dated:  

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  
	
   

  
	
  Signature
  Guaranteed:

  

 

 

NOTICE

 

The signature
to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.

 

 

FORM OF ELECTION TO PURCHASE

 

(To be
executed if holder desires to exercise Rights represented by the Rights
Certificate.)

 

To: Yahoo! Inc.:

 

The
undersigned hereby irrevocably elects to exercise                     
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:

 

Please insert social security

or other identifying number

 

	
   

  
	
   

  
	
  (Please print name and address)

  
	
   

  

 

If such number
of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in
the name of and delivered to:

 

Please insert social security

or other identifying number

 

	
   

  
	
   

  
	
  (Please print name and address)

  
	
   

  
	
   

  
	
  Dated:  

  	
   

  	
  ,

  	
   

  	
   

  

 

 

Signature

 

Signature Guaranteed:

 

 

Certificate

 

The
undersigned hereby certifies by checking the appropriate boxes that:

 

(1)  the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

 

(2)  after due inquiry and to the best knowledge
of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.

 

	
  Dated: 

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  
	
   

  
	
  Signature
  Guaranteed:

  
								

 

 

NOTICE

 

The signature
to the foregoing Election to Purchase and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.

 

Exhibit C

 

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED STOCK

 

On March 1,
2001, the Board of Directors of Yahoo! Inc. (the “Company”) declared a dividend
distribution of one Right for each outstanding share of Company Common Stock to
stockholders of record at the close of business on March 20, 2001 (the “Record
Date”).  Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-thousandth of a share (a “Unit”) of Series A Junior Participating Preferred
Stock, par value $.001 per share (the “Series A Preferred Stock”) at a Purchase
Price of $250 per Unit, subject to adjustment. 
The description and terms of the Rights are set forth in a Rights
Agreement dated March 15, 2001, as amended and restated April 1, 2005, between
the Company and EquiServe Trust Company, N.A., as Rights Agent (the “Rights
Agreement”).

 

Initially, the
Rights will be attached to all Common Stock certificates representing shares
then outstanding, and no separate Rights Certificates will be distributed.  Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated
persons (an “Acquiring Person”) has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock other than as a result of
repurchases of stock by the Company, certain inadvertent actions by
institutional or certain other stockholders or the beneficial ownership by a
person of 15% or more of the outstanding Common Stock as of March 1, 2001, or
the date a Person has entered into an agreement or arrangement with the Company
or any Subsidiary of the Company providing for an Acquisition Transaction  (the “Stock Acquisition Date”) or (ii) 10
business days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group becoming an Acquiring Person. 
An Acquisition Transaction is defined in the Rights Agreement as (x) a
merger, consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company will no longer
own a majority of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or otherwise combined
(based solely on the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company, pursuant to
such transaction), (y) a purchase or other acquisition of all or a substantial
portion of the assets of the Company and its Subsidiaries, or (z) a purchase or
other acquisition of securities representing 15% or more of the shares of
Common Stock then outstanding.  Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates
and will be transferred with and only with such 

 

 

Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. 
Pursuant to the Rights Agreement, the Company reserves the right to
require prior to the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.

 

The Rights are
not exercisable until the Distribution Date and will expire at 5:00 P.M.
(California time) on March 1, 2011, unless such date is extended or the Rights
are earlier redeemed or exchanged by the Company as described below.

 

As soon as
practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
represent the Rights.  Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.

 

In the event
that a Person becomes an Acquiring Person, except pursuant to an offer for all
outstanding shares of Common Stock which the independent directors determine to
be fair and not inadequate and to otherwise be in the best interests of the
Company and its stockholders, after receiving advice from one or more
investment banking firms (a “Qualified Offer”), each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.  However,
Rights are not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.

 

For example,
at an exercise price of $200 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the
preceding paragraph would entitle its holder to purchase $400 worth of Common
Stock (or other consideration, as noted above) for $200.  Assuming that the Common Stock had a per
share value of $40 at such time, the holder of each valid Right would be
entitled to purchase 10 shares of Common Stock for $200.

 

In the event
that, at any time following the Stock Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than with an entity which
acquired the shares pursuant to a Qualified Offer), (ii) the Company engages in
a merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) 50% or more of the Company’s assets, cash flow or earning
power is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a value equal to
two times the exercise price of the Right. 

 

 

The events set
forth in this paragraph and in the second preceding paragraph are referred to
as the “Triggering Events.”

 

At any time
after a person becomes an Acquiring Person and prior to the acquisition by such
person or group of fifty percent (50%) or more of the outstanding Common Stock,
the Board may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one one-thousandth of a share of Preferred Stock (or
of a share of a class or series of the Company’s preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).

 

At any time
until ten business days following the Stock Acquisition Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.001 per Right
(payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors).  Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.001 redemption price.

 

Until a Right
is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive
dividends.  While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.

 

Any of the
provisions of the Rights Agreement may be amended by the Board of Directors
prior to the Distribution Date.  After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement. 
The foregoing notwithstanding, no amendment may be made to the Rights
Agreement at a time when the Rights are not redeemable, except to cure any
ambiguity or correct or supplement any provision contained in the Rights
Agreement which may be defective or inconsistent with any other provision therein.

 

A copy of the
Amended and Restated Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form
8-A/Current Report on Form 8-K.  A copy
of the Rights Agreement is available free of charge from the Rights Agent.  This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Amended and Restated Rights Agreement, which is incorporated herein by
reference.Exhibit 10.1

 

 

REVOLVING CREDIT AGREEMENT

dated as of April 1, 2005

among

ERP OPERATING LIMITED PARTNERSHIP,

THE BANKS LISTED HEREIN,

BANK OF AMERICA, N.A.,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

J.P. MORGAN SECURITIES INC.

as Joint Lead Arranger

and Joint Book Runner,

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arranger

and Joint Book Runner,

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,

as Documentation Agent,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Documentation Agent,

WELLS FARGO BANK, N.A.

as Documentation Agent,

SUNTRUST BANK,

as Documentation Agent,

and

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent

 

 

 

REVOLVING CREDIT AGREEMENT

 

THIS REVOLVING CREDIT AGREEMENT, dated as of April 1, 2005, is
among ERP OPERATING LIMITED PARTNERSHIP (the “Borrower”), the BANKS
party hereto, BANK OF AMERICA, N.A., as Administrative Agent, JPMORGAN CHASE
BANK, N.A., as Syndication Agent, COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES, as Documentation Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Documentation Agent, WELLS FARGO BANK, N.A., as Documentation Agent, SUNTRUST
BANK, as Documentation Agent and U.S. BANK NATIONAL ASSOCIATION, as
Documentation Agent.

 

W  I  T  N
E  S  S  E  T  H

 

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

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1                          Definitions.  The following terms, as used herein, have the
following meanings:

 

“Absolute Rate Auction” means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.

 

“Administrative Agent” shall mean Bank of America, N.A., in its
capacity as Administrative Agent hereunder, and its permitted successors in
such capacity in accordance with the terms of this Agreement.

 

“Administrative Questionnaire” means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the Borrower)
duly completed by such Bank.

 

“Agreement” shall mean this Revolving Credit Agreement as the
same may from time to time hereafter be modified, supplemented or amended.

 

 

“Applicable Interest Rate” means (I) with respect to any Fixed
Rate Indebtedness, the fixed interest rate applicable to such Fixed Rate
Indebtedness at the time in question, and (ii) with respect to any
Floating Rate Indebtedness, either (x) the rate at which the interest rate
applicable to such Floating Rate Indebtedness is actually capped (or fixed
pursuant to an interest rate hedging device), at the time of calculation, if
Borrower has entered into an interest rate cap agreement or other interest rate
hedging device with respect thereto or (y) if Borrower has not entered into an
interest rate cap agreement or other interest rate hedging device with respect
to such Floating Rate Indebtedness, the greater of (A) the rate at which
the interest rate applicable to such Floating Rate Indebtedness could be fixed
for the remaining term of such Floating Rate Indebtedness, at the time of
calculation, by Borrower’s entering into any unsecured interest rate hedging
device either not requiring an upfront payment or if requiring an upfront
payment, such upfront payment shall be amortized over the term of such device
and included in the calculation of the interest rate (or, if such rate is
incapable of being fixed by entering into an unsecured interest rate hedging
device at the time of calculation, a fixed rate equivalent reasonably determined
by Administrative Agent) or (B) the floating rate applicable to such
Floating Rate Indebtedness at the time in question.

 

“Applicable Lending Office” means, with respect to any Bank, (I)
in the case of its Base Rate Loans or Swingline Loans, its Domestic Lending
Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending
Office, and (iii) in the case of its Money Market Loans, its Money Market
Lending Office.

 

“Applicable Margin” means, with respect to each Loan, the
respective percentages per annum determined, at any time, based on the range
into which Borrower’s Credit Rating then falls, in accordance with the table
set forth below.  Any change in Borrower’s
Credit Rating causing it to move to a different range on the table shall effect
an immediate change in the Applicable Margin. 
In the event that Borrower receives two (2) Credit Ratings that are
not equivalent, the Applicable Margin shall be determined by the lower of such
two (2) Credit Ratings.  In the
event that Borrower receives more than two (2) Credit Ratings, and such
Credit Ratings are not equivalent, the 

 

2

 

Applicable Margin shall be determined by the lower of the two (2) highest
Credit Ratings, provided that each of said two (2) highest Credit Ratings
shall be Investment Grade Ratings and at least one of which shall be an
Investment Grade Rating from S&P or Moody’s.  In the event that each of said two (2) highest
Credit Ratings shall not be Investment Grade Ratings or at least one shall not
be an Investment Grade Rating from S&P or Moody’s, then the Applicable
Margin shall be determined by the lowest of the Credit Ratings.  In the event that only one of the Rating
Agencies shall have set Borrower’s Credit Rating, then the Applicable Margin
shall be based on such Credit Rating only.

 

	
  Range
  of

  Borrower’s

  Credit Rating

  (S&P/Moody’s 

  Ratings)

  	
   

  	
  Applicable

  Margin for

  Base Rate

  Loans

  	
   

  	
  Applicable

  Margin for Euro

  Dollar Loans

  	
   

  
	
   

  	
   

  	
  (% per annum)

  	
   

  	
  (% per annum)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Investment Grade

  	
   

  	
  0.250

  	
   

  	
  1.050

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.0

  	
   

  	
  0.800

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.0

  	
   

  	
  0.600

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.0

  	
   

  	
  0.500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-/A3 or better

  	
   

  	
  0.0

  	
   

  	
  0.450

  	
   

  

 

“Approved Bank” shall mean banks which have (i)(a) a
minimum net worth of $500,000,000 and/or (b) total assets of
$10,000,000,000, and (ii) a minimum long term debt rating of (a) BBB+
or higher by S&P, and (b) Baa1 or higher by Moody’s.

 

“Assignee” has the meaning set forth in Section 9.6(c).

 

“Bank” means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors and each Designated Lender; provided, however, that the
term “Bank” shall exclude each Designated Lender when used in reference
to a Committed Loan, the Commitments or terms relating to the Committed Loans
and the Commitments and shall further exclude each Designated Lender for all
other purposes 

 

3

 

hereunder except that any Designated Lender which funds a Money Market
Loan shall, subject to Section 9.6(d), have the rights (including the
rights given to a Bank contained in Section 9.3 and otherwise in Article IX)
and obligations of a Bank associated with holding such Money Market Loan.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code,
entitled “Bankruptcy”, as amended from time to time, and any successor statute
or statutes.

 

“Base Rate” means, for any day, a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1⁄2 of 1% and (b) the
rate of interest in effect for such day as publicly announced from time to time
by the Bank serving as the Administrative Agent as its “prime rate.”  The “prime rate” is a rate set by Bank of
America, N.A. based upon various factors including Bank of America, N.A.’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate.  Any
change in such rate announced by the Bank serving as the Administrative Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base Rate Loan” means a Committed Loan made or to be made by a
Bank as a Base Rate Loan in accordance with the applicable Notice of Borrowing
or Notice of Interest Rate Election or pursuant to Article VIII.

 

“Benefit Arrangement” means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

 

“Borrower” means ERP Operating Limited Partnership, an Illinois
limited partnership.

 

“Borrower’s Share” means Borrower’s or EQR’s share of the
liabilities or assets, as the case may be, of an Investment Affiliate or
Consolidated Subsidiary as reasonably determined by Borrower based upon
Borrower’s or EQR’s economic interest in such Investment Affiliate or
Consolidated Subsidiary, as the case may be, as of the date of such
determination.

 

4

 

“Borrowing” has the meaning set forth in Section 1.3.

 

“Capital Leases” as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person

 

“Capital Reserve” shall mean $200 per year.

 

“Capitalized Property Value” means, as of any date, (I) with
respect to Stabilized Properties, the aggregate amount of EBITDA (or Borrower’s
Share thereof with respect to any Stabilized Property owned by a Consolidated
Subsidiary or an Investment Affiliate) with respect to such Stabilized
Properties, divided by the FMV Cap Rate, and (ii) with respect to any
Non-Stabilized Property, the greater of (x) the aggregate amount of EBITDA with
respect to such Non-Stabilized Property (or Borrower’s Share thereof with
respect to any Non-Stabilized Property owned by a Consolidated Subsidiary or an
Investment Affiliate), divided by the FMV Cap Rate, and (y) the undepreciated
book value, determined in accordance with GAAP of such Non-Stabilized Property
(or Borrower’s Share thereof with respect to any Non-Stabilized Property owned
by a Consolidated Subsidiary or an Investment Affiliate).

 

“Cash and Cash Equivalents” shall mean unrestricted
(notwithstanding the foregoing, however, cash held in escrow in connection with
the completion of Code Section 1031 “like-kind” exchanges shall be deemed
to be “unrestricted” for purposes hereof) (I) cash, (ii) direct
obligations of the United States Government, including without limitation,
treasury bills, notes and bonds, (iii) interest bearing or discounted
obligations of Federal agencies and government sponsored entities or pools of
such instruments offered by Approved Banks and dealers, including without
limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass through
certificates, Federal National Mortgage Association bonds and notes, and
Federal Farm Credit System securities, (iv) time deposits, domestic and
eurodollar certificates of deposit, bankers acceptances, commercial paper rated
at least A-1 by S&P and P-1 by Moody’s and/or guaranteed by a Person with
an Aa rating by Moody’s, an AA rating by S&P or better rated credit,
floating rate notes, other money market instruments 

 

5

 

and letters of credit each issued by Approved Banks (provided that the
same shall cease to be a “Cash or Cash Equivalent” if at any time any such bank
shall cease to be an Approved Bank), (v) obligations of domestic
corporations, including, without limitation, commercial paper, bonds,
debentures and loan participations, each of which is rated at least AA by
S&P and/or Aa2 by Moody’s and/or guaranteed by a Person with an Aa rating
by Moody’s, an AA rating by S&P or better rated credit, (vi) obligations
issued by states and local governments or their agencies, rated at least MIG-1
by Moody’s and/or SP-1 by S&P and/or guaranteed by an irrevocable letter of
credit of an Approved Bank (provided that the same shall cease to be a “Cash or
Cash Equivalent” if at any time any such bank shall cease to be an Approved
Bank), (vii) repurchase agreements with major banks and primary government
security dealers fully secured by the U.S. Government or agency collateral
equal to or exceeding the principal amount on a daily basis and held in
safekeeping, and (viii) real estate loan pool participations, guaranteed
by a Person with an AA rating given by S&P or Aa2 rating given by Moody’s
or better rated credit.

 

“Closing Date” means the date on or after the Effective Date on
which the conditions set forth in Section 3.1 shall have been satisfied to
the satisfaction of the Administrative Agent.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended,
and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant
thereto in temporary or final form.

 

“Committed Borrowing” has the meaning set forth in Section 1.3.

 

“Committed Loan” means a loan made or to be made by a Bank
pursuant to Section 2.1, as well as Loans required to be made by a Bank
pursuant to Section 2.16 to reimburse a Fronting Bank for a Letter of
Credit that has been drawn upon; provided that, if any such loan or
loans (or portions thereof) are combined or subdivided pursuant to a Notice of
Interest Rate Election, the term “Committed Loan” shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.

 

6

 

“Commitment” means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof (and,
for each Bank which is an Assignee, the amount set forth in the Transfer
Supplement entered into pursuant to Section 9.6(c) as the Assignee’s
Commitment), as such amount may be reduced from time to time pursuant to Section 2.11(e) or
reduced or increased in connection with an assignment to an Assignee or from
another Bank.

 

“Consolidated EBITDA” means, for any twelve (12) month period,
net earnings (loss), inclusive of the net incremental gains (losses) on sales
of condominium units, Raw Land and other non-depreciated Properties, and
exclusive of net derivative gains (losses) and gains (losses) on the
dispositions of depreciable Properties, as reflected in reports filed by
Borrower pursuant to the Securities Exchange Act of 1934, as amended, before
deduction (including amounts reported in discontinued operations), for (I)
depreciation and amortization expense and other non-cash items as determined in
good faith by Borrower for such period, (ii) Interest Expense for such
period, (iii) Taxes for such period, (iv) the gains (and plus
the losses) from extraordinary items, and (v) the gains (and plus the
losses) from non-recurring items, as determined in good faith by Borrower, for
such period, all of the foregoing without duplication. In each case, amounts
shall be reasonably determined by Borrower in accordance with GAAP, except to
the extent that GAAP by its terms shall not apply with respect to the
determination of non-cash and non-recurring items and except that such net
earnings (loss) shall only include Borrower’s Share of such net earnings (loss)
attributable to Consolidated Subsidiaries and shall include, without
duplication, Borrower’s Share of the net earnings (loss), inclusive of the net
incremental gains (losses) on sales of condominium units, Raw Land and other
non-depreciated Properties, and exclusive of net derivative gains (losses) and
gains (losses) on the dispositions of depreciable Properties, of any Investment
Affiliate before deduction (including amounts reported in discontinued
operations) for (I) depreciation and amortization expense and other non-cash
items of such Investment Affiliate as determined in good faith by Borrower for
such period, (ii) Interest Expense of such Investment Affiliate for such
period, (iii) Taxes of such Investment Affiliate for such period, (iv) the
gains (and plus the losses) from extraordinary items of such Investment
Affiliate, and (v) the gains (and plus the losses) from non-recurring
items of 

 

7

 

such Investment Affiliate as determined in good faith by Borrower for
such period.

 

“Consolidated Subsidiary” means at any date any Person which is
consolidated with Borrower or EQR in accordance with GAAP.

 

“Contingent Obligation” as to any Person means, without
duplication, (I) any contingent obligation of such Person required to be shown
on such Person’s balance sheet in accordance with GAAP, and (ii) any
obligation required to be disclosed in the footnotes to such Person’s financial
statements, guaranteeing partially or in whole any Non-Recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion) which have
not yet been called on or quantified, of such Person or of any other
Person.  The amount of any Contingent
Obligation described in clause (ii) shall be deemed to be (a) with
respect to a guaranty of interest or interest and principal, or operating
income guaranty, the Net Present Value of the sum of all payments required to
be made thereunder (which in the case of an operating income guaranty shall be
deemed to be equal to the debt service for the note secured thereby),
calculated at the Applicable Interest Rate, through (I) in the case of an interest
or interest and principal guaranty, the stated date of maturity of the
obligation (and commencing on the date interest could first be payable
thereunder), or (II) in the case of an operating income guaranty, the date
through which such guaranty will remain in effect, and (b) with respect to
all guarantees not covered by the preceding clause (a), an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to
the most recent financial statements of Borrower required to be delivered
pursuant to Section 4.4 hereof. 
Notwithstanding anything contained herein to the contrary, guarantees of
completion shall not be deemed to be Contingent Obligations unless and until a
claim for payment or performance has been made thereunder, at which time any such
guaranty of completion shall be deemed to be a Contingent Obligation in an
amount equal to any such claim.  

 

8

 

Subject to the preceding sentence, (I) in the case of a joint and
several guaranty given by such Person and another Person (but only to the
extent such guaranty is recourse, directly or indirectly to Borrower), the
amount of the guaranty shall be deemed to be 100% thereof unless and only to
the extent that such other Person has delivered Cash or Cash Equivalents to
secure all or any part of such Person’s guaranteed obligations and (ii) in
the case of a guaranty (whether or not joint and several) of an obligation
otherwise constituting Indebtedness of such Person, the amount of such guaranty
shall be deemed to be only that amount in excess of the amount of the
obligation constituting Indebtedness of such Person.  Notwithstanding anything contained herein to
the contrary, (xx) “Contingent Obligations” shall be deemed not to include
guarantees of Unused Commitments or of construction loans to the extent the
same have not been drawn, and (yy) the aggregate amount of all Contingent
Obligations of any Consolidated Subsidiary or Investment Affiliate (except to
the extent that any such Contingent Obligation is recourse to the Borrower or
EQR) which would otherwise exceed the total capital contributions of the
Borrower and EQR to such entity, together with the amount of any unfunded
obligations of the Borrower or EQR to make such additional equity contributions
to such entity that could be legally enforced by a creditor of such entity
shall be deemed to be equal to the amount of such capital contributions and
equity or loan commitments.  All matters
constituting “Contingent Obligations” shall be calculated without duplication.

 

“Credit Rating” means the rating assigned by the Rating Agencies
to Borrower’s senior unsecured long term indebtedness.

 

“Customary Non-Recourse Carve-Outs” means fraud,
misrepresentation, misapplication of cash, waste, environmental claims and
liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements.

 

“Debt Restructuring” means a restatement of, or material change
in, the amortization or other financial terms of any Indebtedness of EQR, the
Borrower or any Consolidated Subsidiary or Investment Affiliate.

 

“Debt Service” means, for any period, Interest Expense for such
period plus scheduled principal 

 

9

 

amortization (excluding any individual scheduled principal payment
which exceeds 25% of the original principal amount of an issuance of
Indebtedness) for such period on all Indebtedness of Borrower or EQR (excluding
Indebtedness of any Consolidated Subsidiary or Investment Affiliate), on a
consolidated basis, plus Borrower’s Share of scheduled principal
amortization for such period on all Indebtedness of all Consolidated
Subsidiaries and Investment Affiliates for which there is no recourse to EQR or
Borrower (or any Property thereof), plus, without duplication, EQR’s and
Borrower’s actual or potential liability for principal amortization (excluding
any individual scheduled principal payment which exceeds 25% of the original
principal amount of an issuance of Indebtedness) for such period on all
Indebtedness of all Consolidated Subsidiaries and Investment Affiliates that is
recourse to EQR or Borrower (or any Property thereof).

 

“Default” means any condition or event which with the giving of
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.

 

“Default Rate” has the meaning set forth in Section 2.6(d).

 

“Designated Lender” means a special purpose corporation that (I)
shall have become a party to this Agreement pursuant to Section 9.6(d),
and (ii) is not otherwise a Bank.

 

“Designated Lender Notes” means promissory notes of the
Borrower, substantially in the form of Exhibit A-1 hereto, evidencing the
obligation of the Borrower to repay Money Market Loans made by Designated
Lenders, and “Designated Lender Note” means any one of such promissory notes
issued under Section 9.6(d) hereof.

 

“Designating Lender” shall have the meaning set forth in Section 9.6(d) hereof.

 

“Designation Agreement” means a designation agreement in
substantially the form of Exhibit G attached hereto, entered into by a
Bank and a Designated Lender and accepted by the Administrative Agent.

 

“Development Activity” means (a) the development and
construction of one or more apartment buildings by the Borrower or any of its
Subsidiaries, (b) the financing by 

 

10

 

the Borrower, EQR or any Subsidiaries or Investment Affiliates of
either or both of any such development or construction or (c) the incurrence by
the Borrower, EQR or any Subsidiaries or Investment Affiliates of either or
both of any Contingent Obligations in connection with such development or
construction (other than purchase contracts for Real Property Assets which are
not payable until completion of development or construction), valued at the
cost of such projects under development and construction in the case of assets
owned by the Borrower, EQR or any Subsidiaries, or the Borrower’s Share of the
cost of such projects under development and construction in the case of assets
owned by Investment Affiliates.

 

“Documentation Agents” means Commerzbank AG, New York Branch,
Wachovia Bank, National Association, Wells Fargo Bank, N.A., SunTrust Bank, and
US Bank National Association, in their capacities as Documentation Agents
hereunder, and their permitted successors in such capacity in accordance with
the terms of this Agreement.

 

“Domestic Business Day” means any day except a Saturday, Sunday
or other day on which commercial banks in Chicago, Illinois are authorized or
required by law to close.

 

“Domestic Lending Office” means, as to each Bank, its office
located at its address in the United States set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Domestic Lending Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the Borrower and the
Administrative Agent.

 

“Down REIT” means a limited liability company, corporation or
limited partnership in which the only interest in such limited liability
company, corporation or partnership not owned (directly or indirectly) by
Borrower shall be preference interests or preference units, respectively, and
which limited liability company, corporation or limited partnership, as the
case may be (collectively, a “Down REIT Guarantor”), has executed and
delivered to the Administrative Agent, on behalf of the Banks, (I) a Guaranty
of Payment in the form attached hereto as Exhibit H (a “Down
REIT Guaranty”), (ii) all documents reasonably requested by the
Administrative Agent relating to the existence of such Down REIT Guarantor, and
the authority for and validity of such Down REIT Guaranty, including, 

 

11

 

without limitation, the organizational documents of such Down REIT
Guarantor, modified or supplemented prior to the date of such Down REIT
Guaranty, each certified to be true, correct and complete by such Down REIT
Guarantor, not more than ten (10) days prior to the date of such Down REIT
Guaranty, together with a good standing certificate from the Secretary of State
(or the equivalent thereof) of the State of formation of such Down REIT
Guarantor, to be dated not more than ten (10) days prior to the date of such
Down REIT Guaranty, as well as authorizing resolutions in respect of such Down
REIT Guaranty, and (iii) an opinion of counsel with respect to such Down
REIT Guarantor and Down REIT Guaranty, in form and substance reasonably
acceptable to the Administrative Agent, with respect to due organization,
existence, good standing and authority, and validity and enforceability of such
Down REIT Guaranty.  In addition, for
purposes of this definition, a Down REIT Guaranty shall not be deemed to
constitute Unsecured Debt of the applicable Down REIT Guarantor.

 

“Down REIT Guarantor” shall have the meaning set forth in the
definition of Down REIT.

 

“Down REIT Guaranty” shall have the meaning set forth in the
definition of Down REIT.

 

“Down REIT Guaranty Proceeds” shall have the meaning set forth
in Section 9.18(a) hereof.

 

“EBITDA” means, for any twelve (12) month period, net earnings
(loss), exclusive of net derivative gains (losses) and gains (losses) on the
dispositions of Properties, before deduction (including amounts reported in
discontinued operations) for (I) depreciation and amortization expense and
other non-cash items as determined in good faith by Borrower for such period, (ii) Interest
Expense for such period, (iii) Taxes for such period, (iv) the gains
(and plus the losses) from extraordinary items, and (v) the gains
(and plus the losses) from non-recurring items, as determined in good faith by
Borrower, all of the foregoing without duplication. In each case, amounts shall
be reasonably determined by Borrower in accordance with GAAP, except to the
extent that GAAP by its terms shall not apply with respect to the determination
of non-cash and non-recurring items. EBITDA shall not be deemed to include
corporate level general and administrative expenses and other corporate
expenses, such as land holding costs, employee and trustee stock and stock
option expenses and 

 

12

 

pursuit costs write-offs, all as determined in good faith by Borrower.

 

“Effective Date” means the date this Agreement becomes effective
in accordance with Section 9.9.

 

“Environmental Affiliate” means any partnership, joint venture,
trust or corporation in which an equity interest is owned by the Borrower
and/or EQR, either directly or indirectly, and, as a result of the ownership of
such equity interest, the Borrower and/or EQR may have recourse liability for
Environmental Claims against such partnership, joint venture or corporation (or
the property thereof).

 

“Environmental Approvals” means any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.

 

“Environmental Claim” means, with respect to any Person, any
notice, claim, demand or similar communication (written or oral) by any other
Person alleging potential liability of such Person for investigatory costs,
cleanup costs, governmental response costs, natural resources damage, property
damages, personal injuries, fines or penalties arising out of, based on or
resulting from (I) the presence, or release into the environment, of any
Materials of Environmental Concern at any location, whether or not owned by
such Person or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law, in each case (with respect to both
(I) and (ii) above) as to which there is a reasonable possibility of an
adverse determination with respect thereto and which, if adversely determined,
would have a Material Adverse Effect.

 

“Environmental Laws” means any and all federal, state, and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, licenses,
agreements and other governmental restrictions relating to the environment, the
effect of the environment on human health or emissions, discharges or releases
of Materials of Environmental Concern into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern or the
clean up or other remediation thereof.

 

13

 

“EQR” means Equity Residential, a Maryland real estate
investment trust, the sole general partner of the Borrower.

 

“EQR Guaranty” means the Guaranty of Payment, dated as of the
date hereof, executed by EQR in favor of Administrative Agent and the Banks.

 

“EQR 2004 Form 10-K” means EQR’s annual report on Form 10-K
for 2004, as filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.

 

“ERISA Group” means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the
Code.

 

“Euro-Dollar Borrowing” has the meaning set forth in Section 1.3.

 

“Euro-Dollar Business Day” means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.

 

“Euro-Dollar Lending Office” means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar
Lending Office) or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Administrative Agent.

 

“Euro-Dollar Loan” means a Committed Loan made or to be made by
a Bank as a Euro-Dollar Loan in accordance with the applicable Notice of
Borrowing or Notice of Interest Rate Election.

 

“Euro-Dollar Rate” means, for any applicable Interest Period for
any Euro-Dollar Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate (“BBA 

 

14

 

LIBOR”), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by the Administrative
Agent from time to time) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term
equivalent such Interest Period.  If such
rate is not available at such time for any reason, the “Euro-Dollar Rate” for
such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery
on the first day of such Interest Period in same day funds in the approximate
amount of the Euro-Dollar Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered by
Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

 

“Euro-Dollar Reserve Percentage” means, with respect to any
applicable Interest Period, for any day that percentage (expressed as a
decimal) which is in effect on such day as prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including basic, supplemental, emergency, special and
marginal reserves) generally applicable to financial institutions regulated by
the Federal Reserve Board comparable in size and type to the Person serving as
the Administrative Agent under Regulation D of the Federal Reserve Board, in
respect of “Eurocurrency liabilities”, or under any similar or successor
regulation with respect to Eurocurrency liabilities or Eurocurrency funding (or
in respect of any other category of liabilities which include deposits by
reference to which the interest rate on Euro-Dollar Loans is determined),
whether or not the Person serving as the Administrative Agent has any
Euro-Currency liabilities or such requirement otherwise in fact applies to the
Person serving as the Administrative Agent. The Euro-Dollar Rate shall be adjusted
automatically as of the effective date of each change in the Euro-Dollar
Reserve Percentage.

 

“Event of Default” has the meaning set forth in Section 6.1.

 

15

 

“Existing Revolving Credit Agreement” has the meaning set forth
in Section 3.1(e).

 

“Extension Date” has the meaning set forth in Section 2.9(b) hereof.

 

“Extension Fee” shall mean a fee in an amount equal to fifteen
basis points (0.15%) due and payable on the aggregate amount of the continuing
Commitments on the Extension Date pursuant to the terms of Subsection 2.9(b) hereof.

 

“Extension Notice” has the meaning set forth in Section 2.9(b) hereof.

 

“Extension Option” has the meaning set forth in Section 2.9(b) hereof.

 

“Facility Fee” has the meaning set forth in Section 2.8(a).

 

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

 

“Federal Reserve Board” means the Board of Governors of the
Federal Reserve System as constituted from time to time.

 

“Financing Partnership” means any Subsidiary which is
wholly-owned, directly or indirectly, by Borrower or by Borrower and EQR.

 

16

 

“FIN46(r)” has the meaning set forth in the definition of “GAAP”.

 

“Fiscal Quarter” means a fiscal quarter of a Fiscal Year.

 

“Fiscal Year” means the fiscal year of Borrower and EQR which
shall be the twelve (12) month period ending on the last day of December in
each year.

 

“Fixed Charges” for any twelve (12) month period means (without
duplication) the sum of (I) Debt Service for such period, (ii) the product
of the average number of apartment units owned (directly or beneficially) by
Borrower, EQR, or any wholly-owned Subsidiary of either or both during such
period and the Capital Reserve for such period, (iii) Borrower’s Share of
the aggregate sum of the product of the average number of apartment units owned
(directly or beneficially) by each Consolidated Subsidiary (other than
wholly-owned Subsidiaries of Borrower and/or EQR) and Investment Affiliate
during such period and the Capital Reserve for such period, (iv) dividends
on preferred units payable by Borrower during such period, and (v) distributions
made by the Borrower during such period to EQR for the purpose of paying
dividends on preferred shares in EQR.

 

“Fixed Rate Borrowing” has the meaning set forth in Section 1.3.

 

“Fixed Rate Indebtedness” means all Indebtedness which accrues
interest at a fixed rate.

 

“Floating Rate Indebtedness” means all Indebtedness which is not
Fixed Rate Indebtedness and which is not a Contingent Obligation or an Unused
Commitment.

 

“FMV Cap Rate” means 7.50%.

 

“Fronting Bank” shall mean Bank of America, N.A., JPMorgan Chase
Bank, N.A., or such other Bank which has notified the Administrative Agent that
it is willing to be a Fronting Bank and which is designated by Borrower in its
Notice of Borrowing as the Bank which shall issue a Letter of Credit with
respect to such Notice of Borrowing.

 

“GAAP” means generally accepted accounting principles recognized
as such in the opinions and 

 

17

 

pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination; provided,
however, that with respect to the financial covenants, including the related
definitions, (I) GAAP shall be deemed modified to eliminate the effect of FASB
Interpretations No. 46(r), Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB) No. 51 (“FIN 46(r)”),
issued by the Financial Accounting Standards Board, on the operation of such
covenants, and (ii) only Borrower’s Share of any income, expense, assets
and liabilities of any Investment Affiliate shall be taken into account.

 

“Gross Asset Value” means, (I) with respect to all Stabilized
Properties and Non-Stabilized Properties, each such Property’s Capitalized
Property Value, plus (ii) the value of any Cash or Cash Equivalents
(including Cash or Cash Equivalents held in restricted Section 1031
accounts under the control of the Borrower or EQR) owned by Borrower, EQR or
any wholly-owned Subsidiary of either, plus (iii) the book value,
determined in accordance with GAAP, of readily marketable Securities and
Investment Mortgages owned by the Borrower, EQR or their wholly-owned
Consolidated Subsidiaries, plus (iv) Borrower’s Share of the value of any
Cash or Cash Equivalents (including Cash or Cash Equivalents held in restricted
Section 1031 accounts under the control of a non-wholly owned Consolidated
Subsidiary or by an Investment Affiliate) owned by any such Consolidated
Subsidiary or Investment Affiliate, plus (v) Borrower’s Share of the book
value, determined in accordance with GAAP, of readily marketable Securities and
Investment Mortgages owned by any non-wholly owned Consolidated Subsidiary or
Investment Affiliate.

 

“Group of Loans” means, at any time, a group of Loans consisting
of (I) all Committed Loans which are Base Rate Loans at such time, or (ii) all
Euro-Dollar Loans having the same Interest Period at such time; provided
that, if a Committed Loan of any particular Bank is converted to or made as a
Base Rate Loan pursuant to Section 8.2 or 8.5, such Loan shall be included
in the same Group or Groups of Loans from time to time as it would have been in
if it had not been so converted or made.

 

18

 

“Increase Option” has the meaning set forth in Section 2.1(b).

 

“Indebtedness”, as applied to any Person (and without
duplication), means (a) all indebtedness, obligations or other liabilities
of such Person for borrowed money, (b) all indebtedness, obligations or
other liabilities of such Person evidenced by Securities or other similar
instruments, (c) all reimbursement obligations, contingent or otherwise, of
such Person with respect to letters of credit actually issued for such Person’s
account or upon such Person’s application, (d) all obligations of such
Person to pay the deferred and unpaid purchase price of Property except any
such deferred and unpaid purchase price that constitutes an accrued expense or
trade payable, (e) all obligations in respect of Capital Leases (including
ground leases) of such Person, (f) all indebtedness, obligations or other
liabilities of such Person or others secured by a Lien on any asset of such
Person, whether or not such indebtedness, obligations or liabilities are
assumed by, or are a personal liability of such Person, in the case of items of
Indebtedness incurred under clauses (a), (b), (c) and (d) to the extent
that any such items (other than letters of credit), in accordance with GAAP,
would be included as liabilities on the liability side of the balance sheet of
such Person, exclusive, however, of all accounts payable, accrued interest and
expenses, prepaid rents, security deposits and dividends and distributions
declared but not yet paid. Indebtedness also includes, to the extent not
otherwise included, any obligation of Borrower or EQR, as well as Borrower’s
Share of any obligation of any Consolidated Subsidiary or Investment Affiliate,
to be liable for, or to pay as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Indebtedness of
another Person (other than Borrower, EQR, a Consolidated Subsidiary or an
Investment Affiliate). Indebtedness shall not include any Intracompany
Indebtedness. “Intracompany Indebtedness” means indebtedness whose obligor is
Borrower, EQR, any Consolidated Subsidiary or any Investment Affiliate and
whose obligee is Borrower, EQR or any wholly-owned Consolidated Subsidiary.

 

“Indemnitee” has the meaning set forth in Section 9.3(b).

 

“Interest Expense” means, for any period and without
duplication, total interest expense, whether paid, 

 

19

 

accrued or capitalized (including the interest component of Capital
Leases but excluding interest expense covered by an interest reserve
established under a loan facility, as well as any interest expense under any
construction loan or construction activity that under GAAP is required to be
capitalized) of Borrower or EQR (excluding any such interest expense accrued or
capitalized on Indebtedness of any Consolidated Subsidiary or Investment
Affiliate), including without limitation all commissions, discounts and other
fees and charges owed with respect to drawn letters of credit, amortized costs
of Interest Rate Contracts incurred on or after the Closing Date and the
Facility Fees payable to the Banks in accordance with Section 2.8, plus
Borrower’s Share of accrued or paid interest with respect to any Indebtedness
of Consolidated Subsidiaries or Investment Affiliates for which there is no
recourse to EQR or Borrower, plus, without duplication, EQR’s and
Borrower’s actual or potential liability for accrued, paid or capitalized
interest (including the interest component of Capital Leases but excluding
interest expense covered by an interest reserve established under a loan
facility, as well as any interest expense under any construction loan or construction
activity that under GAAP is required to be capitalized) with respect to
Indebtedness of Consolidated Subsidiaries or Investment Affiliates that is
recourse to EQR or Borrower, calculated for all Fixed Rate Indebtedness at the
actual interest rate in effect with respect to all Indebtedness outstanding as
of the last day of such period and, in the case of all Floating Rate
Indebtedness, the actual rate of interest in effect with respect to such
Floating Rate Indebtedness outstanding for the period during which no Interest
Rate Contract is in effect, and, during the period that an Interest Rate
Contract is in effect with respect to such Floating Rate Indebtedness, the
strike rate payable under such Interest Rate Contract if lower than the actual
rate of interest.

 

“Interest Period” means:

 

(1) with respect to each Euro-Dollar Borrowing, the period
commencing on the date of such Borrowing specified in the Notice of Borrowing
or on the date specified in the applicable Notice of Interest Rate Election and
ending 1, 2, 3 or 6 months thereafter (or such shorter period, but in no event
less than 7 days, as Borrower may request, subject to the approval of the
Administrative Agent), as the Borrower may elect in the applicable Notice of
Borrowing or Notice of Interest Rate Election; provided that:

 

20

 

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

 

(b)  any such Interest Period which
begins on the last Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and

 

(c) 
any such Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.

 

(2)  Intentionally Omitted.

 

(3)  with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Money Market
Quote Request and ending such number of months thereafter (or for a period of
less than one month but in no event less than seven (7) days) as the
Borrower may elect in accordance with Section 2.3; provided that:

 

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

 

(b)  any such Interest Period which
begins on the last Euro-Dollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and

 

21

 

(c) 
any such Interest Period which would otherwise end after the Maturity
Date shall end on the Maturity Date.

 

(4)  with respect to each Money Market Absolute Rate Loan, the
period commencing on the date of borrowing specified in the applicable Money
Market Quote Request and ending such number of days thereafter (but not less
than seven (7) days, or more than 180 days) as the Borrower may elect in
accordance with Section 2.3; provided that:

 

(a)  any such Interest Period which
would otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day; and

 

(b)  any such Interest Period which
would otherwise end after the Maturity Date shall end on the Maturity Date.

 

“Interest Rate Contracts” means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.

 

“Investment Affiliate” means any Person in whom EQR or Borrower
holds an equity interest, directly or indirectly, other than Consolidated
Subsidiaries, excluding the effects of consolidation required by FIN46(r),
Military Housing Affiliates and Securities and other passive interests.

 

“Investment Grade Rating” means a rating for a Person’s senior
long-term unsecured debt, or if no such rating has been issued, a “shadow”
rating, of BBB- or better from S&P or Fitch, or a rating or “shadow” rating
of Baa3 or better from Moody’s.  Any such
“shadow” rating shall be evidenced by a letter from the applicable Rating
Agency or by such other evidence as may be reasonably acceptable to the
Administrative Agent (as to any such other evidence, the Administrative Agent
shall present the same to, and discuss the same with, the Banks).

 

“Investment Mortgages” means mortgages securing indebtedness
directly or indirectly owed to Borrower, EQR or Subsidiaries of either or both,
including certificates of interest in real estate mortgage investment conduits.

 

22

 

“Invitation for Money Market Quotes” has the meaning set forth
in Section 2.3(c).

 

“Joint Lead Arrangers” means Banc of America Securities LLC and
J.P. Morgan Securities Inc.

 

“Joint Venture Parent” means Borrower, EQR or one or more
Financing Partnerships of Borrower which directly owns any interest in a Joint
Venture Subsidiary.

 

“Joint Venture Subsidiary” means any entity (other than a
Financing Partnership) in which (I) a Joint Venture Parent owns at least 20% of
the economic interests and (ii) the sale or financing of any Property
owned by such Joint Venture Subsidiary is substantially controlled by a Joint
Venture Parent, subject to customary provisions set forth in the organizational
documents of such Joint Venture Subsidiary with respect to refinancings or
rights of first refusal granted to other members of such Joint Venture
Subsidiary.  For purposes of the preceding
sentence, the sale or financing of a Property owned by a Joint Venture
Subsidiary shall be deemed to be substantially controlled by a Joint Venture
Parent if such Joint Venture Parent has the ability to exercise a buy-sell
right in the event of a disagreement regarding the sale or financing of such
Property. In addition, the relationship of a Joint Venture Parent as a tenant
in common in any asset with other tenants in common in the same asset shall be
treated as if such relationship were a general partnership for purposes of this
definition. For purposes of the definition of Unencumbered Asset Value, a Joint
Venture Subsidiary shall be deemed to include any entity (other than a
Financing Partnership) in which a Qualified Joint Venture Partner owns the
balance of the interests.

 

“Letter(s) of Credit” has the meaning provided in Section 2.2(b).

 

“Letter of Credit Collateral” has the meaning provided in Section 6.4.

 

“Letter of Credit Collateral Account” has the meaning provided
in Section 6.4.

 

“Letter of Credit Documents” has the meaning provided in Section 2.16.

 

23

 

“Letter of Credit Usage” means at any time the sum of (I) the
aggregate maximum amount available to be drawn under the Letters of Credit then
outstanding, assuming compliance with all requirements for drawing referred to
therein, and (ii) the aggregate amount of the Borrower’s unpaid
obligations under this Agreement in respect of the Letters of Credit.

 

“LIBOR Auction” means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the Euro-Dollar Rate pursuant to Section 2.3.

 

“Lien” means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement, in each case that has the effect of creating a
security interest in respect of such asset. 
For the purposes of this Agreement, the Borrower, EQR or any Subsidiary
of either or both shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.

 

“Loan” means a Base Rate Loan, a Euro-Dollar Loan, a Money
Market Loan or a Swingline Loan and “Loans” means Base Rate Loans,
Euro-Dollar Loans, Money Market Loans or Swingline Loans or any combination of
the foregoing.

 

“Loan Documents” means this Agreement, the Notes, the EQR
Guaranty, the Letter(s) of Credit, the Letter of Credit Documents and any Down
REIT Guaranty.

 

“Margin Stock” shall have the meaning provided such term in
Regulation U.

 

“Material Adverse Effect” means an effect resulting from any
circumstance or event or series of circumstances or events, of whatever nature
(but excluding general economic conditions), which does or could reasonably be
expected to, materially and adversely, (I) impair the ability of the Borrower
and/or EQR and their Consolidated Subsidiaries, taken as a whole, to perform
their respective obligations under the Loan Documents or (ii) impair the
ability of Administrative Agent or the Banks to enforce the Loan Documents.

 

24

 

“Material Plan” means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.

 

“Materials of Environmental Concern” means and includes
pollutants, contaminants, hazardous wastes, toxic and hazardous substances,
asbestos, lead, petroleum and petroleum by-products.

 

“Maturity Date” shall mean the date when all of the Obligations
hereunder shall be due and payable which shall be May 29, 2008, unless
accelerated pursuant to the terms hereof or extended pursuant to Section 2.9(b) hereof.

 

“Military Housing” shall mean projects, the primary purpose of
which is the acquisition, development, construction, maintenance and operation
of military family housing and military unaccompanied housing on or near
military installations of the United States of America in collaboration with
the United States of America.

 

“Military Housing Affiliates” shall mean any Consolidated
Subsidiary or Investment Affiliate of the Borrower or EQR which only has an
investment in Military Housing.

 

“Money Market Absolute Rate” has the meaning set forth in Section 2.3(d).

 

“Money Market Absolute Rate Loan” means a loan made or to be
made by a Bank pursuant to an Absolute Rate Auction.

 

“Money Market Borrowing” has the meaning set forth in Section 1.3.

 

“Money Market Lending Office” means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Administrative Agent; provided that any Bank may
from time to time by notice to the Borrower and the Administrative Agent
designate separate Money Market Lending Offices for its Money Market LIBOR
Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other
hand, in which case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such offices, as the
context may require.

 

25

 

“Money Market LIBOR Loan” means a loan made or to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Article VIII).

 

“Money Market Loan” means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.

 

“Money Market Margin” has the meaning set forth in Section 2.3(d)(2).

 

“Money Market Quote” means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.3.

 

“Money Market Quote Request” shall have the meaning set forth in
Section 2.3(b).

 

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

 

“Multiemployer Plan” means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to
which any member of the ERISA Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.

 

“Multifamily Residential Property Mortgages” means Investment
Mortgages issued by any Person engaged primarily in the business of developing,
owning, and managing multifamily residential property.

 

“Multifamily Residential Property Partnership Interests” means
partnership or joint venture interests, or common or preferred stock, or
membership, trust or other equity interests issued by any Person engaged
primarily in the business of developing, owning, and managing multifamily
residential property, but excluding Securities.

 

“Negative Pledge” means, with respect to any Property, any
covenant, condition, or other restriction entered into by the owner of such
Property or directly binding on such Property which prohibits or limits the
creation or assumption of any Lien upon such Property to secure any or all of
the Obligations; provided, however, that such term shall not include (a) any
covenant, condition 

 

26

 

or restriction contained in any ground lease from a Governmental
Authority, or (b) any financial covenant (such as a limitation on secured
indebtedness) given for the benefit of any Person that may be violated by the
granting of any Lien on any Property to secure any or all of the Obligations.

 

“Net Income” means, for any period, the net earnings (or loss)
after Taxes of the Borrower, on a consolidated basis, for such period
calculated in conformity with GAAP.

 

“Net Present Value” shall mean, as to a specified or
ascertainable dollar amount, the present value, as of the date of calculation
of any such amount, using a discount rate equal to the Base Rate in effect as
of the date of such calculation.

 

“Non-Multifamily Residential Property” means Property which is
not (I) used for lease, operation or use as a multifamily residential property,
(ii) Unimproved Assets or Raw Land, (iii) Securities, (iv) Multifamily
Residential Property Mortgages, or (v) Multifamily Residential Property
Partnership Interests.

 

“Non-Recourse Indebtedness” means Indebtedness with respect to
which recourse for payment is limited to (I) specific assets related to a
particular Property or group of Properties encumbered by a Lien securing such
Indebtedness or (ii) any Subsidiary or Investment Affiliate (provided that
if a Subsidiary or Investment Affiliate is a partnership, there is no recourse
to Borrower or EQR as a general partner of such partnership); provided,
however, that personal recourse of Borrower or EQR for any such Indebtedness
for Customary Non-Recourse Carve-Outs in non-recourse financing of real estate
shall not, by itself, prevent such Indebtedness from being characterized as
Non-Recourse Indebtedness.

 

“Non-Stabilized Property” means any Property owned or leased by
Borrower, EQR, a Consolidated Subsidiary or an Investment Affiliate that is not
a Stabilized Property.

 

“Notes” means promissory notes of the Borrower, substantially in
the form of Exhibits A-1 and A-2 hereto, evidencing the
obligation of the Borrower to repay the Loans, and “Note” means any one
of such promissory notes issued hereunder.

 

27

 

“Notice of Borrowing” means a notice substantially in the form
of Exhibit C attached hereto and made a part hereof.

 

“Notice of Interest Rate Election” has the meaning set forth in Section 2.6.

 

“Obligations” means all obligations, liabilities, indemnity
obligations and Indebtedness of every nature of the Borrower, from time to time
owing to Administrative Agent or any Bank under or in connection with this
Agreement or any other Loan Document.

 

“Parent” means, with respect to any Bank, any Person controlling
such Bank.

 

“Participant” has the meaning set forth in Section 9.6(b).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

 

“Period Fraction” means, with respect to any period of time, a
fraction, the numerator of which is the actual number of days in such period,
and the denominator of which is three hundred and sixty (360).

 

“Permitted Holdings” means Development Activity, Raw Land,
Securities, Non-Multifamily Residential Property, Investment Mortgages, and
Investment Affiliates.

 

“Permitted Liens” means:

 

a.                                       Liens for Taxes,
assessments or other governmental charges not yet due and payable or which are
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted in accordance with the terms hereof;

 

b.                                      statutory liens
of carriers, warehousemen, mechanics, materialmen and other similar liens
imposed by law, which are incurred in the ordinary course of business for sums
not more than sixty (60) days delinquent or which are being contested in good
faith in accordance with the terms hereof;

 

28

 

c.                                       deposits made in
the ordinary course of business in connection with worker’s compensation,
unemployment insurance and other social security legislation or to secure
liabilities to insurance carriers;

 

d.                                      utility deposits
and other deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, purchase contracts, construction contracts,
governmental contracts, statutory obligations, surety bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;

 

e.                                       Liens for
purchase money obligations for equipment (or Liens to secure Indebtedness
incurred within 90 days after the purchase of any equipment to pay all or a
portion of the purchase price thereof or to secure Indebtedness incurred solely
for the purpose of financing the acquisition of any such equipment, or
extensions, renewals, or replacements of any of the foregoing for the same or
lesser amount); provided that (I) the Indebtedness secured by any such
Lien does not exceed the purchase price of such equipment, (ii) any such
Lien encumbers only the asset so purchased and the proceeds upon sale,
disposition, loss or destruction thereof, and (iii) such Lien, after
giving effect to the Indebtedness secured thereby, does not give rise to an
Event of Default;

 

f.                                         easements,
rights-of-way, zoning restrictions, other similar charges or encumbrances and
all other items listed on Schedule B to the owner’s title insurance
policies, except in connection with any Indebtedness, for any of the Real
Property Assets, so long as the foregoing do not interfere in any material
respect with the use or ordinary conduct of the business of the owner and do
not diminish in any material respect the value of the Property to which it is
attached or for which it is listed;

 

g.                                      Liens and
judgments (I) which have been or will be bonded (and the Lien thereby removed
other than on any cash or securities serving as security for such bond) or
released of record 

 

29

 

within thirty (30) days after the date such Lien or judgment is entered
or filed against EQR, Borrower, or any Subsidiary, or (ii) which are being
contested in good faith by appropriate proceedings for review and in respect of
which there shall have been secured a subsisting stay of execution pending such
appeal or proceedings;

 

h.                                      Liens on Property
of the Borrower, EQR or the Subsidiaries of either or both (other than Qualifying
Unencumbered Property) securing Indebtedness which may be incurred or remain
outstanding without resulting in an Event of Default hereunder; and

 

I.                                         Liens in favor
of the Borrower, EQR or a Consolidated Subsidiary against any asset of
Borrower, any Consolidated Subsidiary or any Investment Affiliate.

 

“Person” means an individual, a corporation, a partnership, an
association, a trust, a limited liability company or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

 

“Plan” means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (I)
is maintained, or contributed to, by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.

 

“Pro Rata Share” means, with respect to any Bank, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Bank’s Commitment and the denominator of which shall be the aggregate amount of
all of the Banks’ Commitments, as adjusted from time to time in accordance with
the provisions of this Agreement; provided, however, that if the Commitments
shall have been terminated, then “Pro Rata Share” shall mean, with
respect to any Bank, a fraction (expressed as a percentage), the numerator of
which shall be the amount of such Bank’s outstanding 

 

30

 

Committed Loans and the denominator of which shall be the aggregate
amount of all of the Banks’ outstanding Committed Loans.

 

“Property” means, with respect to any Person, any real or
personal property, building, facility, structure, equipment or unit, or other
asset owned or leased by such Person.

 

“Public Debt” shall have the meaning set forth in Section 9.18(a) hereof.

 

“Qualified Joint Venture Partner” means (a) pension funds,
insurance companies, banks, investment banks or similar institutional entities,
each with significant experience in making investments in commercial real
estate, and (b) commercial real estate companies of similar quality and
experience.

 

“Qualifying Unencumbered Property” means any Property (including
Raw Land and Property with Development Activity) from time to time which is
owned directly or indirectly in fee (or ground leasehold) by Borrower, EQR, a
Financing Partnership or a Joint Venture Subsidiary, which (I) is Raw Land,
Property with Development Activity or an operating multifamily residential
property, (ii) is not subject (nor are any equity interests in such
Property that are owned directly or indirectly by Borrower or EQR subject) to a
Lien which secures Indebtedness of any Person other than Permitted Liens, (iii) is
not subject (nor are any equity interests in such Property that are owned
directly or indirectly by Borrower or EQR subject) to any Negative Pledge, and (iv) in
the case of any Property that is owned by a Subsidiary of the Borrower or EQR,
is owned by a Subsidiary that does not have any outstanding Unsecured Debt
(other than those items of Indebtedness set forth in clauses (d) or (e) of
the definition of Indebtedness, or any Contingent Obligation except for
guarantees for borrowed money). In addition, in the case of any Property that
is owned by a Subsidiary of Borrower and/or EQR, if such Subsidiary shall
commence any proceeding under any bankruptcy, insolvency or similar law, or any
such involuntary case shall be commenced against it and shall remain
undismissed and unstayed for a period of 90 days, then, simultaneously with the
occurrence of such conditions, such Property shall no longer constitute a
Qualifying Unencumbered Property. 
Notwithstanding the foregoing, for 

 

31

 

the purposes of this definition, a Property shall be deemed to be
wholly-owned by Borrower if such Property shall be owned by a Down REIT or a
wholly-owned Subsidiary of such Down REIT.

 

“Rating Agencies” means, collectively, S&P, Moody’s and
Fitch Ratings Inc.

 

“Raw Land” means Real Property Assets upon which no material
improvements have been commenced.

 

“Real Property Assets” means, as of any time, the real property
assets (including interests in participating mortgages in which the Borrower’s
interest therein is characterized as equity according to GAAP) owned directly
or indirectly by the Borrower, EQR and the Consolidated Subsidiaries of either
or both at such time.

 

“Recourse Debt” shall mean Indebtedness that is not Non-Recourse
Indebtedness.

 

“Regulation U” means Regulation U of the Federal Reserve Board,
as in effect from time to time.

 

“Required Banks” means at any time Banks having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans (provided, that in the case of Swingline Loans,
the amount of each Bank’s funded participation interest in such Swingline Loans
shall be considered for purposes hereof as if it were a direct loan and not a participation
interest, and the aggregate amount of Swingline Loans owing to the Swingline
Lender shall be considered for purposes hereof as reduced by the amount of such
funded participation interests).

 

“S&P” means Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., or any successor thereto.

 

“Secured Debt” means Indebtedness of EQR, on a consolidated
basis, and without duplication, Borrower’s Share of any Indebtedness of any
Investment Affiliate, (I) the payment of which is secured by a Lien on any
Property owned or leased by EQR, Borrower, or any Subsidiary or Investment Affiliate
of either or both, or (ii) which is unsecured Indebtedness of any
Subsidiary or Investment

 

32

 

Affiliate of Borrower or EQR, which Subsidiary or Investment Affiliate
is not a guarantor of the Obligations and which Indebtedness is not recourse to
the Borrower or EQR (other than for Customary Non-Recourse Carve-Outs), or (iii) which
is Unsecured Tax Exempt Indebtedness.

 

“Securities” means any stock, partnership interests, shares,
shares of beneficial interest, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as “securities,”
or any certificates of interest, shares, or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire any of the foregoing, all of which shall be
passive investments.

 

“Solvent” means, with respect to any Person, that the fair
saleable value of such Person’s assets exceeds the Indebtedness of such Person.

 

“Stabilized Property” means (I) with respect to any income-producing
Property acquired by Borrower, EQR, any Consolidated Subsidiary or any
Investment Affiliate, such Property shall have been owned by Borrower, EQR, any
Consolidated Subsidiary or any Investment Affiliate for at least four (4) complete
Fiscal Quarters, and (ii) with respect to any Property under construction
or redevelopment, such Property shall have been owned by Borrower, EQR, any
Consolidated Subsidiary or any Investment Affiliate for at least four (4) complete
Fiscal Quarters after the earlier to occur of (x) eighteen (18) months after
substantial completion (i.e., the issuance of a certificate of occupancy for
the applicable Property), and (b) the last day of the Fiscal Quarter in
which the applicable Property achieves an occupancy rate of not less than 93%.

 

“Subsidiary” means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower and/or
EQR.

 

“Swingline Borrowing” has the meaning set forth in Section 1.3.

 

33

 

“Swingline Commitment” has the meaning set forth in Section 2.18(a).

 

“Swingline Lender” means Bank of America, N.A., in its capacity
as Swingline Lender hereunder, and its permitted successors in such capacity in
accordance with the terms of this Agreement.

 

“Swingline Loan” means a loan made or to be made by the
Swingline Lender pursuant to Section 2.18.

 

“Syndication Agent” shall mean JPMorgan Chase Bank, N.A., in its
capacity as Syndication Agent hereunder, and its permitted successors in such
capacity in accordance with the terms of this Agreement.

 

“Taxes” means all federal, state, local and foreign income and
gross receipts taxes.

 

“Term” has the meaning set forth in Section 2.9.

 

“Termination Event” shall mean (I) a “reportable event”, as such
term is described in Section 4043 of ERISA (other than a “reportable event”
not subject to the provision for 30-day notice to the PBGC), or an event
described in Section 4062(e) of ERISA, (ii) the withdrawal by
any member of the ERISA Group from a Multiemployer Plan during a plan year in
which it is a “substantial employer” (as defined in Section 4001(a)(2) of
ERISA), or the incurrence of liability by any member of the ERISA Group under Section 4064
of ERISA upon the termination of a Multiemployer Plan, (iii) the filing of
a notice of intent to terminate any Plan under Section 4041 of ERISA, other
than in a standard termination within the meaning of Section 4041 of
ERISA, or the treatment of a Plan amendment as a distress termination under Section 4041
of ERISA, (iv) the institution by the PBGC of proceedings to terminate,
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or cause a trustee to be appointed to administer, any Plan or (v) any
other event or condition that might reasonably constitute grounds for the
termination of, or the appointment of a trustee to administer, any Plan or the
imposition of any liability or encumbrance or Lien on the Real Property Assets
or any member of the ERISA Group under ERISA.

 

“Unencumbered Asset Value” means the sum of (I) the Capitalized
Property Value of all Qualifying 

 

34

 

Unencumbered Property, (ii) the value of any Cash or Cash
Equivalent (including Cash or Cash Equivalents held in restricted Section 1031
accounts under the control of the Borrower) owned by Borrower, EQR or any
wholly-owned Subsidiary of either, and (iii) the book value, determined in
accordance with GAAP, of readily marketable Securities and Investment Mortgages
owned by the Borrower, EQR or their wholly-owned Subsidiaries not subject to
any Lien, plus (iv) Borrower’s Share of the value of any Cash or Cash
Equivalents (including Cash or Cash Equivalents held in restricted Section 1031
accounts under the control of a non-wholly owned Consolidated Subsidiary or by
an Investment Affiliate) owned by any such Consolidated Subsidiary or
Investment Affiliate, plus (v) Borrower’s Share of the book value,
determined in accordance with GAAP, of readily marketable Securities and
Investment Mortgages owned by any non-wholly owned Consolidated Subsidiary or
Investment Affiliate, provided, however, that the aggregate value of those
items set forth in clauses (iii) and (v) shall not exceed thirty
percent (30%) of Unencumbered Asset Value.

 

“Unimproved Assets” means Real Property Assets, other than Raw
Land, upon which no material improvements have been completed which completion
is evidenced by a certificate of occupancy or its equivalent and is less than
90% leased in the aggregate (based upon number of units).

 

“United States” means the United States of America, including
the fifty states and the District of Columbia.

 

“Unsecured Debt” means Indebtedness of EQR, on a consolidated
basis, which is not Secured Debt.

 

“Unused Commitments” shall mean an amount equal to all
unadvanced funds (other than unadvanced funds in connection with any
construction loan) which any third party is obligated to advance to Borrower or
another Person or otherwise pursuant to any loan document, written instrument
or otherwise.

 

SECTION 1.2                          Accounting Terms and
Determinations.  Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared, in accordance with GAAP applied on
a basis consistent (except for changes concurred in by the Borrower’s
independent 

 

35

 

public accountants and, with respect to
financial covenants including the related definitions, except for eliminating
the effects of FIN 46(r)) with the most recent audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Administrative Agent; provided that for purposes of references to the
financial results and information of “EQR, on a consolidated basis,” EQR shall
be deemed to own one hundred percent (100%) of the partnership interests in
Borrower; and provided further that, if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the Borrower’s compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner reasonably
satisfactory to the Borrower and the Required Banks.

 

SECTION 1.3                          Types of Borrowings.  The term “Borrowing” denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant
to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base Rate Loans and
Swingline Loans, have the same initial Interest Period.  Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a “Fixed Rate Borrowing” is a Euro-Dollar
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to Article VIII),
and a “Euro-Dollar Borrowing” is a Borrowing comprised of Euro-Dollar
Loans) or by reference to the provisions of Article II under which
participation therein is determined (i.e., a “Committed Borrowing”
is a Borrowing under Section 2.1 in which all Banks participate in
proportion to their Commitments, while a “Money Market Borrowing” is a
Borrowing under Section 2.3 in which a Bank’s share is determined on the
basis of its bid in accordance therewith, and a “Swingline Borrowing” is
a Borrowing under Section 2.18 in which only the Swingline Lender
participates (subject to the provisions of said Section 2.18)).

 

36

 

ARTICLE II

THE CREDITS

 

SECTION 2.1                          Commitments to Lend.

 

(a)                                  Each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to make Committed Loans to the Borrower and participate in Letters of Credit
issued by the Fronting Bank on behalf of the Borrower pursuant to this Article from
time to time during the term hereof in amounts such that the aggregate
principal amount of Committed Loans plus such Bank’s Pro Rata Share of
Swingline Loans by such Bank at any one time outstanding together with such
Bank’s Pro Rata Share of the Letter of Credit Usage shall not exceed the amount
of its Commitment. Each Borrowing outstanding under this Section 2.1 shall
be in an aggregate principal amount of $3,000,000, or an integral multiple of
$100,000 in excess thereof (except that any such Borrowing may be in the
aggregate amount available in accordance with Section 3.2(b), or in any
amount required to reimburse the Fronting Bank for any drawing under any Letter
of Credit or to repay the Swingline Lender the amount of any Swingline Loan)
and, other than with respect to Money Market Loans and Swingline Loans, shall
be made from the several Banks ratably in proportion to their respective
Commitments.  In no event shall the
aggregate Loans outstanding at any time, plus outstanding Letter of Credit
Usage, exceed $1,000,000,000, as the same may be reduced from time to time as a
result of cancellation of Commitments by Borrower, or increased pursuant to Section 2.1(b) hereof.
Subject to the limitations set forth herein, any amounts repaid may be
reborrowed.

 

(b)                                 Optional
Increase in Commitments. At
any time prior to the date that is twenty-four (24) months after the date of
this Agreement, on not more than one (1) occassion, provided no Event of
Default shall have occurred and then be continuing, the Borrower may, if it so
elects, increase the aggregate amount of the Commitments (subject to proviso (ii) in
the next sentence), either by designating an Approved Bank not theretofore a
Bank to become a Bank (such designation to be effective only with the prior
written consent of the Administrative Agent, which consent will not be
unreasonably withheld) and/or by agreeing with an existing Bank or Banks that
such Bank’s Commitment (or such 

 

37

 

Banks’ Commitments) shall be increased.  Upon execution and delivery by the Borrower
and any such Bank or other financial institution of an instrument in form
reasonably satisfactory to the Administrative Agent, such existing Bank shall
have a Commitment as therein set forth or such Approved Bank shall become a
Bank with a Commitment as therein set forth and all the rights and obligations
of a Bank with such a Commitment hereunder; provided
that:

 

(i)                                     the
Borrower shall provide prompt notice of such increase to the Administrative
Agent, who shall promptly notify the Banks; and

 

(ii)                                  the
amount of such increase does not cause the aggregate Commitments to exceed
$1,500,000,000.

 

Upon any increase in the aggregate amount of the Commitments pursuant
to this Section 2.1(b), within five Business Days (in the case of any Base
Rate Loans then outstanding) or at the end of the then current Interest Period
with respect thereto (in the case of any Euro-Dollar Loans then outstanding),
as applicable, each Bank’s Pro Rata Share shall be recalculated to reflect such
increase in the Commitments and the outstanding principal balance of the
Committed Loans shall be reallocated among the Banks such that the outstanding
principal amount of Committed Loans owed to each Bank shall be equal to such
Bank’s Pro Rata Share (as recalculated). 
All payments, repayments and other disbursements of funds by the
Administrative Agent to Banks shall thereupon and, at all times thereafter, be
made in accordance with each Bank’s recalculated Pro Rata Share.

 

SECTION 2.2                          Notice of Borrowing.

 

(a)                                  The
Borrower shall give Administrative Agent notice not later than 10:00 a.m.
(Chicago time) (x) one Domestic Business Day before each Base Rate Borrowing,
or (y) three Euro-Dollar Business Days before each Euro-Dollar Borrowing,
specifying:

 

(i)                                     the
date of such Borrowing, which shall be a Domestic Business Day in the case of a
Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,

 

(ii)                                  the
aggregate amount of such Borrowing,

 

38

 

(iii)                               whether
the Loans comprising such Borrowing are to be Base Rate Loans or Euro-Dollar
Loans, and

 

(iv)                              in
the case of a Euro-Dollar Borrowing, the duration of the Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period.

 

(b)                                 Borrower
shall give the Administrative Agent, and the designated Fronting Bank, written
notice in the event that it desires to have letters of credit (each, a “Letter
of Credit”) issued, or to have Letters of Credit issued on behalf of a
Subsidiary, hereunder no later than 10:00 a.m., Chicago time, at least
four (4) Domestic Business Days prior to the date of such issuance.  Each such notice shall specify (I) the
designated Fronting Bank, (ii) the aggregate amount of the requested
Letters of Credit, (iii) the individual amount of each requested Letter of
Credit and the number of Letters of Credit to be issued, (iv) the date of
such issuance (which shall be a Domestic Business Day), (v) the name and
address of the beneficiary, (vi) the expiration date of the Letter of
Credit (which in no event shall be later than twelve (12) months after the
Maturity Date), (vii) the purpose and circumstances for which such Letter
of Credit is being issued and (viii) the terms upon which each such Letter
of Credit may be drawn upon.  Each such
notice may be revoked telephonically by the Borrower to the applicable Fronting
Bank and the Administrative Agent any time prior to the date of issuance of the
Letter of Credit by the applicable Fronting Bank, provided such revocation is
confirmed in writing by the Borrower to the Fronting Bank and the Administrative
Agent within one (1) Domestic Business Day by facsimile.  Notwithstanding anything contained herein to
the contrary, the Borrower shall complete and deliver to the Fronting Bank any
required documentation in connection with any requested Letter of Credit no
later than two (2) Domestic Business Days prior to the issuance thereof.
No later than 10:00 a.m., Chicago time, on the date that is four (4) Domestic
Business Days prior to the date of issuance, the Borrower shall specify a
precise description of the documents and the verbatim text of any certificate
to be presented by the beneficiary of such Letter of Credit, which if presented
by such beneficiary prior to the expiration date of the Letter of Credit would
require the Fronting Bank to make a payment under the Letter of Credit; provided,
that Fronting Bank may, in its reasonable judgment, require changes in any such

 

39

 

 

documents and certificates only
in conformity with changes in customary and commercially reasonable practice or
law and, provided  further, that no Letter of Credit shall require
payment against a conforming draft to be made thereunder prior to the third Domestic
Business Day following the date that such draft is presented if such
presentation is made later than 10:00 A.M. Chicago time (except that if
the beneficiary of any Letter of Credit requests at the time of the issuance of
its Letter of Credit that payment be made on the same Domestic Business Day
against a conforming draft, such beneficiary shall be entitled to such a same
day draw, provided such draft is presented to the applicable Fronting Bank no
later than 10:00 A.M. Chicago time and provided further the Borrower shall
have requested to the Fronting Bank and the Administrative Agent that such
beneficiary shall be entitled to a same day draw). In determining whether to
pay on any Letter of Credit, the Fronting Bank shall be responsible only to determine
that the documents and certificates required to be delivered under the Letter
of Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit. The Administrative Agent shall provide
each of the Banks, quarterly, a summary of all outstanding Letters of Credit.

 

SECTION 2.3                          Money Market Borrowings.

 

(a)                                  The
Money Market Option.  From time to
time during the Term, and provided that at such time the Borrower maintains an
Investment Grade Rating from both S&P and Moody’s, the Borrower may, as set
forth in this Section 2.3, request the Banks during the Term to make
offers to make Money Market Loans to the Borrower, not to exceed, at such time,
the lesser of (I) fifty percent (50%) of the aggregate Commitments, and (ii) the
aggregate Commitments less all Loans and Letter of Credit Usage then
outstanding.  Subject to the provisions
of this Agreement, the Borrower may repay any outstanding Money Market Loan on
any day which is a Euro-Dollar Business Day and any amounts so repaid may be
reborrowed, up to the amount available under this Section 2.3 at the time
of such Borrowing, until the Domestic Business Day next preceding the Maturity
Date.  The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section 2.3.  It is hereby acknowledged and agreed by the
Borrower, the Administrative Agent and all the Banks party hereto that on the
Closing Date, the Money Market Loans previously made by 

 

40

 

JPMorgan Chase Bank, N.A. (formerly known as
JPMorgan Chase Bank) and US Bank, National Association under the Existing
Revolving Credit Agreement, and more particularly set forth on Schedule 2.3
hereto, shall be transferred to this Agreement and shall be deemed to be Money
Market Loans hereunder.

 

(b)                                 Money
Market Quote Request.  When the
Borrower wishes to request offers to make Money Market Loans under this Section,
it shall transmit to the Administrative Agent by facsimile transmission a
request substantially in the form of Exhibit B hereto (a “Money
Market Quote Request”) so as to be received not later than 10:30 A.M.
(Chicago time) on (x) the fifth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic
Business Day next preceding the date of Borrowing proposed therein, in the case
of an Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Administrative Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:

 

1.                                       the
proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the
case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute
Rate Auction,

 

2.                                       the
aggregate amount of such Borrowing, which shall be $3,000,000 or a larger
multiple of $100,000,

 

3.                                       the
duration of the Interest Period applicable thereto (which shall not be less
than 7 days or more than 180 days), subject to the provisions of the definition
of Interest Period, and

 

4.                                       whether
the Money Market Quotes requested are to set forth a Money Market Margin or a
Money Market Absolute Rate.

 

The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request.  No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number of days as the
Borrower and the Administrative Agent may agree) of any other Money Market
Quote Request. Together with the delivery of each Money Market Quote Request, 

 

41

 

Borrower shall pay to the Administrative Agent, a fee equal to $2,500.

 

(c)                                  Invitation
for Money Market Quotes.  Promptly
upon receipt of a Money Market Quote Request, the Administrative Agent shall
send to the Banks by facsimile or electronic transmission a copy thereof, which
shall constitute an invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to which such Money
Market Quote Request relates in accordance with this Section (an “Invitation
for Money Market Quotes”).

 

(d)                                 Submission
and Contents of Money Market Quotes.

 

1.                                       Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes.  Each Money Market Quote must comply with the
requirements of this subsection (d) and must be submitted to the
Administrative Agent by facsimile transmission at its offices specified in or
pursuant to Section 9.1 not later than (x) 2:00 P.M. (Chicago time)
on the fourth Euro-Dollar Business Day prior to the proposed date of Borrowing,
in the case of a LIBOR Auction or (y) 9:30 A.M. (Chicago time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided
that Money Market Quotes submitted by the Bank serving as the Administrative
Agent (or any affiliate of the Bank serving as the Administrative Agent) in the
capacity of a Bank may be submitted, and may only be submitted, if the Bank
serving as the Administrative Agent or such affiliate notifies the Borrower of
the terms of the offer or offers contained therein not later than (x) one hour
prior to the deadline for the other Banks, in the case of a LIBOR Auction or
(y) 15 minutes prior to the deadline for the other Banks, in the case of an
Absolute Rate Auction.  Subject to
Articles III and VI, any Money Market Quote so made shall be irrevocable except
with the written consent of the Administrative Agent given on the instructions
of the Borrower.  Such Money Market Loans
may be funded by such Bank’s Designated Lender (if any) as provided in Section 9.6(d),
however, such Bank shall not be 

 

42

 

required to specify in its Money Market Quote
whether such Money Market Loans will be funded by such Designated Lender.

 

2.                                       Each
Money Market Quote shall be in substantially the form of Exhibit D
hereto and shall in any case specify:

 

(a)                                  the
proposed date of Borrowing,

 

(b)                                 the
principal amount of the Money Market Loan for which each such offer is being
made, which principal amount (w) may be greater than or less than the
Commitment of the quoting Bank, (x) must be $3,000,000 or a larger multiple of
$100,000, (y) may not exceed the principal amount of Money Market Loans for
which offers were requested and (z) may be subject to an aggregate limitation
as to the principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,

 

(c)                                  in
the case of a LIBOR Auction, the margin above or below the applicable
Euro-Dollar Rate (the “Money Market Margin”) offered for each such Money
Market Loan, expressed as a percentage (specified to the nearest 1/10,000th of
1%) to be added to or subtracted from such base rate,

 

(d)                                 in
the case of an Absolute Rate Auction, the rate of interest per annum (specified
to the nearest 1/10,000th of 1%) (the “Money Market Absolute Rate”)
offered for each such Money Market Loan, and

 

(e)                                  the
identity of the quoting Bank.

 

A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the related
Invitation for Money Market Quotes.

 

3.                                       Any
Money Market Quote shall be disregarded if it:

 

(a)                                  is
not substantially in conformity with Exhibit D hereto or does not
specify all of the information required by subsection (d)(2) above;

 

43

 

(b)                                 contains
qualifying, conditional or similar language (except for an aggregate limitation
as provided in subsection (d)(2)(b) above);

 

(c)                                  proposes
terms other than or in addition to those set forth in the applicable Invitation
for Money Market Quotes(except for an aggregate limitation as provided in subsection (d)(2) above);
or

 

(d)                                 arrives
after the time set forth in subsection (d)(1).

 

(e)                                  Notice
to Borrower.  The Administrative
Agent shall promptly (and in any event within one (1) Domestic Business
Day after receipt thereof) notify the Borrower in writing of the terms (x) of
any Money Market Quote submitted by a Bank that is in accordance with subsection (d) and
(y) of any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. 
Any such subsequent Money Market Quote shall be disregarded by the
Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote or
modifies the terms of such previous Money Market Quote to provide terms more
favorable to Borrower.  The
Administrative Agent’s notice to the Borrower shall specify (A) the
aggregate principal amount of Money Market Loans for which offers have been
received for each Interest Period specified in the related Money Market Quote
Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (c) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.

 

(f)                                    Acceptance
and Notice by Borrower.  Not later
than 10:30 A.M. (Chicago time) on (x) the third Euro-Dollar Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction or (y)
the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Administrative Agent of its acceptance or non-acceptance of
the offers so 

 

44

 

notified to it pursuant to subsection (e).  In the case of acceptance, such notice (a “Notice
of Money Market Borrowing”) shall specify the aggregate principal amount of
offers for each Interest Period that are accepted.  The Borrower may accept any Money Market
Quote in whole or in part; provided that:

 

1.                                       the
aggregate principal amount of each Money Market Borrowing may not exceed the
applicable amount set forth in the related Money Market Quote Request;

 

2.                                       the
principal amount of each Money Market Borrowing must be $3,000,000 or a larger
multiple of $100,000;

 

3.                                       acceptance
of offers may only be made on the basis of ascending Money Market Margins or
Money Market Absolute Rates, as the case may be; and

 

4.                                       the
Borrower may not accept any offer that is described in subsection (d)(3) or
that otherwise fails to comply with the requirements of this Agreement.

 

(g)                                 Allocation
by Administrative Agent.  If offers
are made by two or more Banks with the same Money Market Margins or Money
Market Absolute Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which such offers are permitted to be
accepted for the related Interest Period, the principal amount of Money Market
Loans in respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Banks as nearly as possible (in multiples of
$100,000, as the Administrative Agent may deem appropriate) in proportion to
the aggregate principal amounts of such offers.   The Administrative Agent shall promptly (and
in any event within one (1) Domestic Business Day after such offers are
accepted) notify the Borrower and each such Bank in writing of any such
allocation of Money Market Loans. 
Determinations by the Administrative Agent of the allocation of Money
Market Loans shall be conclusive in the absence of manifest error.

 

(h)                                 Notification
by Administrative Agent.  Upon
receipt of the Borrower’s Notice of Money Market Borrowing in accordance with Section 2.3(f) hereof,
the Administrative Agent shall, on the date such Notice of Money Market
Borrowing is received by the Administrative Agent, promptly notify each Bank
(and such Notice of Money Market Borrowing 

 

45

 

shall not thereafter be revocable by the
Borrower) (I) of the principal amount of the Money Market Borrowing accepted by
the Borrower, and (ii) of such Bank’s share (if any) of such Money Market
Borrowing. A Bank who is notified that it has been selected to make a Money
Market Loan may designate its Designated Lender (if any) to fund such Money
Market Loan on its behalf, as described in Section 9.6(d).  Any Designated Lender which funds a Money
Market Loan shall on and after the time of such funding become the obligee
under such Money Market Loan and be entitled to receive payment thereof when
due.  No Bank shall be relieved of its
obligation to fund a Money Market Loan, and no Designated Lender shall assume
such obligation, prior to the time the applicable Money Market Loan is funded.

 

(i)                                     Funding
of Committed Loans Not Affected. Notwithstanding anything to the contrary
contained herein, each Bank shall be required to fund its Pro Rata Share of
Committed Loans in accordance with Section 2.1 hereof despite the fact
that any Bank’s Commitment may have been or may be exceeded as a result of such
Bank’s making of Money Market Loans.

 

SECTION 2.4                          Notice to Banks; Funding
of Loans.

 

(a)                                  Upon
receipt of a Notice of Borrowing from Borrower in accordance with Section 2.2
hereof, the Administrative Agent shall, on the date such Notice of Borrowing is
received by the Administrative Agent, promptly notify each Bank of the contents
thereof and of such Bank’s share of such Borrowing, of the interest rate
determined pursuant thereto and the Interest Period(s) (if different from those
requested by the Borrower) and such Notice of Borrowing shall not thereafter be
revocable by the Borrower, unless Borrower shall pay any applicable expenses
pursuant to Section 2.13.

 

(b)                                 Not
later than 1:00 p.m. (Chicago time) on the date of each Borrowing as
indicated in the Notice of Borrowing, each Bank shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing
in Federal funds immediately available in Chicago, to the Administrative Agent
at its address referred to in Section 9.1. 
If the Borrower has requested the issuance of a Letter of Credit, no
later than 12:00 Noon (Chicago time) on the date of such issuance as indicated
in the notice delivered pursuant to Section 2.2(b), the Fronting Bank
shall issue such Letter of Credit in the amount so requested 

 

46

 

and deliver the same to the Borrower with a
copy thereof to the Administrative Agent. 
Immediately upon the issuance of each Letter of Credit by the Fronting
Bank, such Fronting Bank shall be deemed to have sold and transferred to each
other Bank, and each such other Bank shall be deemed, and hereby agrees, to
have irrevocably and unconditionally purchased and received from the Fronting
Bank, without recourse or warranty, an undivided interest and a participation
in such Letter of Credit, any drawing thereunder, and the obligations of the
Borrower hereunder with respect thereto, and any security therefor or guaranty
pertaining thereto, in an amount equal to such Bank’s ratable share thereof
(based upon the ratio its Commitment bears to the aggregate of all
Commitments).  Upon any change in any of
the Commitments in accordance herewith, there shall be an automatic adjustment
to such participations to reflect such changed shares.  The Fronting Bank shall have the primary
obligation to fund any and all draws made with respect to such Letter of Credit
notwithstanding any failure of a participating Bank to fund its ratable share
of any such draw.  The Administrative
Agent will instruct the Fronting Bank to make such Letter of Credit available
to the Borrower and the Fronting Bank shall make such Letter of Credit
available to the Borrower at the Borrower’s aforesaid address or at such
address in the United States as Borrower shall request on the date of the
issuance thereof.

 

(c)                                  Not
later than 3:00 p.m. (Chicago time) on the date of each Swingline
Borrowing as indicated in the applicable Notice of Borrowing, the Swingline
Lender shall make available such Swingline Borrowing in Federal funds
immediately available in Chicago, Illinois, to the Administrative Agent at its
address referred to herein.

 

(d)                                 Unless
the Administrative Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank’s share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection (b) of
this Section 2.4 and the Administrative Agent may, in reliance upon such
assumption, but shall not be obligated to, make available to the Borrower on
such date a corresponding amount on behalf of such Bank.  If and to the extent that such Bank shall not
have so made such share available to the Administrative Agent, such Bank and
the Borrower severally agree to repay to the Administrative Agent forthwith on 

 

47

 

demand, and in the case of the Borrower one (1) Domestic
Business Day after demand, such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, at (I) in the
case of the Borrower, a rate per annum equal to the interest rate applicable
thereto pursuant to Section 2.7 and (ii) in the case of such Bank,
the Federal Funds Rate.  If such Bank
shall repay to the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Bank’s Loan included in such Borrowing as of
the date of such Borrowing for purposes of this Agreement.

 

SECTION 2.5                          Notes.

 

(a)                                  The
Loans of each Bank shall be evidenced by a single Note payable to the order of
such Bank for the account of its Applicable Lending Office.

 

(b)                                 Each
Bank may, by notice to the Borrower and the Administrative Agent, request that
its Loans of a particular type (including Swingline Loans and Money Market
Loans) be evidenced by a separate Note in an amount equal to the aggregate
unpaid principal amount of such Loans. Any additional costs incurred by the
Administrative Agent, the Borrower or the Banks in connection with preparing
such a Note shall be at the sole cost and expense of the Bank requesting such
Note. In the event any Loans evidenced by such a Note are paid in full prior to
the Maturity Date, any such Bank shall return such Note to Borrower.  Each such Note shall be in substantially the
form of Exhibit A-2 hereto with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant type.  Upon the execution and delivery of any such
Note, any existing Note payable to such Bank shall be replaced or modified
accordingly.  Each reference in this
Agreement to the “Note” of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.

 

(c)                                  Upon
receipt of each Bank’s Note pursuant to Section 3.1(a), the Administrative
Agent shall forward such Note to such Bank. 
Each Bank shall record the date, amount, type and maturity of each Loan
made by it and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Bank so elects in connection
with any transfer or enforcement of its Note, endorse on the appropriate schedule appropriate
notations to evidence the foregoing information with respect to each such 

 

48

 

Loan then outstanding; provided that
the failure of any Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Notes.  Each Bank is hereby irrevocably authorized by
the Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.

 

(d)                                 The
Committed Loans shall mature, and the principal amount thereof shall be due and
payable, on the Maturity Date. The Swingline Loans shall mature, and the
principal amount thereof shall be due and payable, in accordance with Section 2.18(b) (iii).

 

(e)                                  Each
Money Market Loan included in any Money Market Borrowing shall mature, and the
principal amount thereof shall be due and payable, together with accrued
interest thereon, on the earlier to occur of (I) last day of the Interest
Period applicable to such Borrowing or (ii) the Maturity Date.

 

(f)                                    There
shall be no more than ten (10) Euro-Dollar Groups of Loans outstanding at
any one time.

 

SECTION 2.6                          Method of Electing
Interest Rates.

 

(a)                                  The
Loans included in each Committed Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of
Borrowing.  Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne
by each Group of Loans (subject in each case to the provisions of Article VIII),
as follows:

 

(i)                                     if
such Loans are Base Rate Loans, the Borrower may elect to convert all or any
portion of such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day;

 

(ii)                                  if
such Loans are Euro-Dollar Loans, the Borrower may elect to convert all or any
portion of such Loans to Base Rate Loans and/or elect to continue all or any
portion of such Loans as Euro-Dollar Loans for an additional Interest Period or
additional Interest Periods, in each case effective on the last day of the then
current Interest Period applicable to such Loans, or on such other date
designated by Borrower in the Notice of Interest Rate 

 

49

 

Election provided Borrower shall pay any
losses pursuant to Section 2.13.

 

Each such election shall be made by delivering a notice (a “Notice
of Interest Rate Election”) to the Administrative Agent at least three (3) Euro-Dollar
Business Days before the conversion or continuation selected in such notice is
to be effective.  A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (I) such
portion is allocated ratably among the Loans comprising such Group of Loans, (ii) the
portion to which such Notice of Interest Rate Election applies, and the
remaining portion to which it does not apply, are each $500,000 or any larger
multiple of $100,000, (iii) there shall be no more than ten (10) Euro-Dollar
Groups of Loans outstanding at any time, (iv) no Committed Loan may be
continued as, or converted into, a Euro-Dollar Loan when any Event of Default
has occurred and is continuing, and (v) no Interest Period shall extend
beyond the Maturity Date.

 

(b)                                 Each
Notice of Interest Rate Election shall specify:

 

(i)                                     the
Group of Loans (or portion thereof) to which such notice applies;

 

(ii)                                  the
date on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of subsection (a) above;

 

(iii)                               if
the Loans comprising such Group of Loans are to be converted, the new type of
Loans and, if such new Loans are Euro-Dollar Loans, the duration of the initial
Interest Period applicable thereto; and

 

(iv)                              if
such Loans are to be continued as Euro-Dollar Loans for an additional Interest
Period, the duration of such additional Interest Period.

 

Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.

 

(c)                                  Upon
receipt of a Notice of Interest Rate Election from the Borrower pursuant to subsection (a) above,
the Administrative Agent shall notify each Bank the same day 

 

50

 

as it receives such Notice of Interest Rate
Election of the contents thereof, the interest rates determined pursuant
thereto and the Interest Periods (if different from those requested by the
Borrower) and such notice shall not thereafter be revocable by the
Borrower.  If the Borrower fails to
deliver a timely Notice of Interest Rate Election to the Administrative Agent
for any Group of Loans which are Euro-Dollar Loans, such Loans shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.

 

(d)                                 If
the Borrower shall fail to pay any principal of or interest on any Money Market
Loan when due, such Money Market Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the Base Rate until (in
the case of a failure to pay interest) such failure shall become an Event of
Default and thereafter (or immediately in the case of a failure to pay
principal) at a rate per annum equal to the sum of 4% plus the Base Rate for
such day.

 

SECTION 2.7                          Interest Rates.

 

(a)                                  Each
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until the date it is repaid or
converted into a Euro-Dollar Loan pursuant to Section 2.6 or at the
Maturity Date, at a rate per annum equal to the Base Rate plus the Applicable
Margin for Base Rate Loans for such day. 
Such interest shall be payable on the first Domestic Business Day of
each month.

 

(b)                                 Subject
to Section 8.1, each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin for Euro-Dollar Loans for such day plus the Euro-Dollar Rate applicable
to such Interest Period.  Such interest
shall be payable on the last day of each Interest Period or on the first
Domestic Business Day of each month, if sooner, as well as on the date of any
prepayment of any such Euro-Dollar Loan.

 

(c)                                  Subject
to Section 8.1, each Money Market LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Rate for such
Interest Period (determined in accordance with 

 

51

 

Section 2.7(b) as if the related
Money Market LIBOR Borrowing were a Euro-Dollar Borrowing) plus (or minus) the
Money Market Margin quoted by the Bank making such Loan in accordance with Section 2.3.  Each Money Market Absolute Rate Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Money Market
Absolute Rate quoted by the Bank making such Loan in accordance with Section 2.3.  Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than one month, at intervals of one month after the first day thereof.  Any overdue principal of or interest on any
Money Market Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Base Rate until (in the case of a failure
to pay interest) such failure shall become an Event of Default and thereafter
(or immediately in the case of the failure to pay principal) at a rate per
annum equal to the sum of 4% plus the Base Rate for such day.

 

(d)                                 In
the event that, and for so long as, any Event of Default shall have occurred
and be continuing, the outstanding principal amount of the Loans, and, to the
extent permitted by applicable law, overdue interest in respect of all Loans,
shall bear interest at the annual rate equal to the sum of the Base Rate and
four percent (4%) (the “Default Rate”).

 

(e)                                  The
Administrative Agent shall determine each interest rate applicable to the Loans
hereunder.  The Administrative Agent
shall give prompt notice to the Borrower and the Banks of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of demonstrable error.

 

SECTION 2.8                          Fees.

 

(a)                                  Facility
Fee.  The Borrower shall pay to the
Administrative Agent for the account of the Banks ratably in proportion to
their respective Commitments a facility fee (the “Facility Fee”) on the
aggregate Commitments at the respective percentages per annum based upon the
range into which the Borrower’s Credit Rating then falls, in accordance with
the following table.  The facility fee
shall be payable in arrears on each January 1, April 1, July 1
and October 1 during the Term, and on the Maturity Date.

 

52

 

	
  Less than BBB-/ Baa3

  	
   

  	
  0.200

  	
  %

  
	
  BBB-/Baa3

  	
   

  	
  0.200

  	
  %

  
	
  BBB/Baa2

  	
   

  	
  0.150

  	
  %

  
	
  BBB+/Baa1

  	
   

  	
  0.150

  	
  %

  
	
  A-/A3 or better

  	
   

  	
  0.150

  	
  %

  

 

Any change in the Borrower’s Credit Rating causing it to move into a
different range on the table shall effect an immediate change in the applicable
percentage per annum.  In the event that
the Borrower receives two (2) Credit Ratings and such ratings are split
between a higher and a lower range on the table, the applicable percentage per
annum shall be based upon the lower of such two (2) Credit Ratings.  In the event that Borrower receives more than
two (2) Credit Ratings, and such Credit Ratings are not equivalent, the
applicable percentage per annum shall be determined by the lower of the two (2) highest
Credit Ratings, provided that each of said two (2) highest Credit Ratings
shall be Investment Grade Ratings and at least one of which shall be an
Investment Grade Rating from S&P or Moody’s.  In the event that each of said two (2) highest
Credit Ratings shall not be Investment Grade Ratings or at least one shall not
be an Investment Grade Rating from S&P or Moody’s, then the applicable
percentage per annum shall be determined by the lowest of the Credit
Ratings.  In the event that only one (1) Rating
Agency has set the Borrower’s Credit Rating, then the applicable percentage per
annum shall be based on such single Credit Rating.

 

(b)                                 Letter
of Credit Fee.  During the Term, the
Borrower shall pay to the Administrative Agent, for the account of the Banks in
proportion to their interests in respect of issued and undrawn Letters of
Credit, a fee (a “Letter of Credit Fee”) in an amount, provided that no
Event of Default shall have occurred and be continuing, equal to a rate per
annum equal to the then percentage per annum of the Applicable Margin with
respect to Euro-Dollar Loans less 0.10%, on the daily average of such issued
and undrawn Letters of Credit, which fee shall be payable, in arrears, on each January 1,
April 1, July 1 and October 1 during the Term, and on the
Maturity Date, and, if and to the extent that the term of any Letter of Credit
shall extend beyond the Maturity Date, on each January 1, April 1, July 1
and October 1 until all Letters of Credit shall have expired and/or been
returned and on the date such final Letter of Credit expires or is
returned.  From the occurrence, and
during the continuance, of an Event of Default, such fee 

 

53

 

shall be increased to be equal to four
percent (4%) per annum on the daily average of such issued and undrawn Letters
of Credit.

 

(c)                                  Fronting
Bank Fee.  The Borrower shall pay any
Fronting Bank, for its own account, a fee (a “Fronting Bank Fee”) at a
rate per annum equal to the greater of (x).10% of the issued and undrawn amount
of the Letters of Credit issued by such Fronting Bank and (y) $500 per Letter
of Credit, which fee shall be in addition to and not in lieu of, the Letter of
Credit Fee.  The Fronting Bank Fee shall
be payable in arrears on each January 1, April 1, July 1 and October 1
during the Term, and on the Maturity Date, on each January 1, April 1,
July 1 and October 1 until all Letters of Credit shall have expired
and/or been returned and on the date such final Letter of Credit expires or is
returned. In addition, Borrower shall pay directly to the Fronting Bank for its
own account, the customary processing fees, charges and expenses of the
Fronting Bank in connection with the issuance, administration or extension of
letters of credit as from time to time in effect.

 

(d)                                 Fees
Non-Refundable.  All fees set forth
in this Section 2.8 shall be deemed to have been earned on the date
payment is due in accordance with the provisions hereof and shall be
non-refundable.  The obligation of the
Borrower to pay such fees in accordance with the provisions hereof shall be
binding upon the Borrower and shall inure to the benefit of the Administrative
Agent and the Banks regardless of whether any Loans are actually made.

 

SECTION 2.9                          Maturity Date; Extension.

 

(a)                                  The
term (the “Term”) of the Commitments (and each Bank’s obligations to
make Loans) shall terminate and expire on the Maturity Date.  Upon the date of the termination of the Term,
any Loans then outstanding (together with accrued interest thereon and all
other Obligations other than with respect to Letters of Credit) shall be due
and payable on such date.

 

(b)                                 Borrower
shall have one option (the “Extension Option”) to extend the Maturity
Date, for an additional twelve (12) month period, upon the following terms and
conditions:  (I) delivery by Borrower of
written notice thereof to the Administrative Agent (the “Extension Notice”)
on or before the date which is thirty (30) days prior to the current Maturity
Date but in no event more than 

 

54

 

one hundred eighty (180) days prior to the current Maturity Date (which
Extension Notice, the Administrative Agent shall promptly deliver to the
Banks); (ii) no Event of Default shall have occurred and be continuing
both on the date Borrower delivers the Extension Notice to the Administrative
Agent and on the first day of the extension period (the “Extension Date”);
(iii) each of the representations and warranties contained in this
Agreement and the other Loan Documents (other than representations and
warranties which expressly speak of a different date and other than the representation
and warranty set forth in Section 4.4(c)(I)) shall be true and correct in
all material respects on and as of the Extension Date; and (iv) Borrower
shall pay to the Administrative Agent, for the account of the Banks, ratably in
proportion to their respective Commitments, on the Extension Date, the
Extension Fee.  Borrower’s delivery of
the Extension Notice shall be irrevocable.

 

SECTION 2.10                    Intentionally Omitted.

 

SECTION 2.11                    Optional Prepayments and
Optional Decreases and Termination.

 

(a)                                  The
Borrower may, upon at least one (1) Domestic Business Day’s notice to the
Administrative Agent (which shall promptly notify each of the Banks), prepay
any Group of Loans which are Base Rate Loans(or any Money Market Borrowing
bearing interest at the Base Rate pursuant to Section 8.1), in whole at
any time, or from time to time in part in amounts aggregating One Million
Dollars ($1,000,000) or any larger multiple of One Hundred Thousand Dollars
($100,000), by paying the principal amount to be prepaid.  The Borrower may, from time to time on any
Domestic Business Day so long as prior notice is given to the Administrative
Agent and Swingline Lender no later than 1:00 p.m. (Chicago time) on the
day on which Borrower intends to make such prepayment, prepay any Swingline
Loans in whole or in part in amounts aggregating $100,000 or a higher integral
multiple of $100,000 (or, if less, the aggregate outstanding principal amount
of all Swingline Loans then outstanding) by paying the principal amount to be
prepaid no later than 2:00 p.m. (Chicago time) on such day.  Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such Group
of Loans or Borrowing(or the Swingline Lender in the case of Swingline Loans)
included in such Group of Loans or Borrowing.

 

55

 

(b)                                 The
Borrower may, upon at least one (1) Euro-Dollar Business Day’s notice to
the Administrative Agent (which shall promptly notify each of the Banks),
prepay any Euro-Dollar Loan as of the last day of the Interest Period
applicable thereto.  Except as provided
in Article VIII and except with respect to any Euro-Dollar Loan which has
been converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4
hereof, the Borrower may not prepay all or any portion of the principal amount
of any Euro-Dollar Loan prior to the end of the Interest Period applicable
thereto unless the Borrower shall also pay any applicable expenses pursuant to Section 2.13.  Any such prepayment shall be upon at least
three (3) Euro-Dollar Business Days’ notice to the Administrative
Agent.  Each such optional prepayment
shall be in the amounts set forth in Section 2.11(a) above and shall
be applied to prepay ratably the Loans of the Banks included in any Group of
Loans which are Euro-Dollar Loans, except that any Euro-Dollar Loan which has
been converted to a Base Rate Loan pursuant to Section 8.2, 8.3 or 8.4
hereof may be prepaid without ratable payment of the other Loans in such Group
of Loans which have not been so converted.

 

(c)                                  The
Borrower may, upon at least one (1) Domestic Business Day’s notice to the
Administrative Agent (by 11:00 a.m Chicago time on such Domestic Business Day),
reimburse the Administrative Agent for the benefit of the Fronting Bank for the
amount of any drawing under a Letter of Credit in whole or in part in any
amount.

 

(d)                                 The
Borrower may at any time return, or cause to be returned, any undrawn Letter of
Credit to the Fronting Bank in whole, but not in part, and the Fronting Bank
within a reasonable period of time shall give the Administrative Agent and each
of the Banks notice of such return.

 

(e)                                  The
Borrower may at any time and from time to time cancel all or any part of the
Commitments. If there are Loans then outstanding or, if there are no Loans
outstanding at such time as to which the Commitments with respect thereto are
being cancelled, upon at least one (1) Domestic Business Day’s notice to
the Administrative Agent (which shall promptly notify each of the Banks), whereupon,
in either event, all or such portion of the Commitments, as applicable, shall
terminate as to the Banks, pro rata on the date set forth in such notice of
cancellation, and, if there are any Loans then outstanding, Borrower shall
prepay, as applicable, all or such portion of Loans outstanding on such date in
accordance with the requirements of Section 2.11(a) 

 

56

 

and (b). In no event shall the Borrower be
permitted to cancel Commitments for which a Letter of Credit has been issued
and is outstanding unless the Borrower returns (or causes to be returned) such
Letter of Credit to the Fronting Bank. Borrower shall be permitted to designate
in its notice of cancellation which Loans, if any, are to be prepaid.  A reduction of the Commitments pursuant to
this Section 2.11(e) shall not effect a reduction in the Swingline
Commitment (unless so elected by the Borrower) until the aggregate Commitments
have been reduced to an amount equal to or less than the Swingline Commitment.

 

(f)                                    Any
amounts so prepaid pursuant to Section 2.11 (a), (b), (c) or (d) may
be reborrowed. In the event Borrower elects to cancel all or any portion of the
Commitments and the Swingline Commitment pursuant to Section 2.11(e) hereof,
such amounts may not be reborrowed.

 

(g)                                 The
Borrower may not prepay any portion of a Money Market Loan except with the
prior consent of the Bank or Designated Lender holding such Money Market Loan.

 

SECTION 2.12                    General Provisions as to
Payments.

 

(a)                                  The
Borrower shall make each payment of interest on the Loans and of fees
hereunder, not later than 12:00 Noon (Chicago time) on the date when due, in
Federal or other funds immediately available in Chicago, to the Administrative
Agent at its address referred to in Section 9.1.  The Administrative Agent will promptly (and
if received prior to 12:00 noon, on the same Domestic Business Day, if received
after 12:00 noon on the immediately following Domestic Business Day) distribute
to each Bank its ratable share (or applicable share with respect to Money
Market Loans) of each such payment received by the Administrative Agent for the
account of the Banks.  If and to the
extent that the Administrative Agent shall receive any such payment for the
account of the Banks on or before 12:00 Noon (Chicago time) on any Domestic
Business Day, and Administrative Agent shall not have distributed to any Bank
its applicable share of such payment on such Domestic Business Day,
Administrative Agent shall distribute such amount to such Bank together with
interest thereon, for each day from the date such amount should have been
distributed to such Bank until the date Administrative Agent distributes such
amount to such Bank, at the Federal Funds Rate. 
Whenever any payment of principal of, or interest on the Base Rate Loans
or Swingline Loans or of fees shall be due 

 

57

 

on a day which is not a Domestic Business
Day, the date for payment thereof shall be extended to the next succeeding Domestic
Business Day.  Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business
Day.  Whenever any payment of principal
of, or interest on, the Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. 
If the date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended time.

 

(b)                                 Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Administrative Agent may assume that
the Borrower has made such payment in full to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Bank on such due date an amount equal to the amount
then due such Bank.  If and to the extent
that the Borrower shall not have so made such payment, each Bank shall repay to
the Administrative Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Rate.

 

SECTION 2.13                    Funding Losses.  If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or Money Market LIBOR Loan or
Money Market Absolute Rate Loan (pursuant to Article II, VI or VIII or
otherwise) on any day other than the last day of the Interest Period applicable
thereto, or if the Borrower fails to borrow, continue or convert to any
Euro-Dollar Loans or Money Market LIBOR Loans or Money Market Absolute Rate
Loans after notice has been given to any Bank in accordance with Section 2.4(a) or
2.6, or if Borrower shall deliver a Notice of Interest Rate Election specifying
that a Euro-Dollar Loan or Money Market LIBOR Loan or Money Market Absolute
Rate Loan shall be converted on a date other than the first (lst) day of the
then current Interest Period applicable thereto, 

 

58

 

the Borrower shall reimburse each Bank within
15 days after certification of such Bank of such loss or expense (which shall
be delivered by each such Bank to Administrative Agent for delivery to
Borrower) for any resulting loss or expense incurred by it (or by an existing
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such payment or failure
to borrow, continue or convert, provided that such Bank shall have
delivered to Administrative Agent and Administrative Agent shall have delivered
to the Borrower a certification as to the amount of such loss or expense, which
certification shall set forth in reasonable detail the basis for and
calculation of such loss or expense and shall be conclusive in the absence of
demonstrable error.

 

SECTION 2.14                    Computation of Interest and Fees.
All interest and fees shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).

 

SECTION 2.15                    Use of Proceeds.  The Borrower shall use the proceeds of the
Loans for general corporate purposes, including, without limitation, the
acquisition of real property to be used in the Borrower’s existing business and
for general working capital needs of the Borrower; provided, however, that no
Swingline Loan shall be used more than once for the purpose of refinancing
another Swingline Loan, in whole or part.

 

SECTION 2.16                    Letters of Credit.

 

(a)                                  Subject
to the terms contained in this Agreement and the other Loan Documents, upon the
receipt of a notice in accordance with Section 2.2(b) requesting the
issuance of a Letter of Credit, the Fronting Bank shall issue a Letter of
Credit or Letters of Credit in such form as is reasonably acceptable to the
Borrower and the Fronting Bank (subject to the provisions of Section 2.2(b))
in an amount or amounts equal to the amount or amounts requested by the
Borrower.

 

(b)                                 It
is hereby acknowledged and agreed by the Borrower, the Administrative Agent and
all the Banks party hereto that on the Closing Date, the letters of credit
previously issued by Bank of America, N.A., PNC Bank, NA 

 

59

 

and/or JPMorgan Chase Bank, N.A. (formerly
known as JPMorgan Chase Bank) as “Fronting Bank” under the Existing Revolving
Credit Agreement, as well as by Bank of America, N.A. under a separate letter
of credit facility, and more particularly set forth on Schedule 2.16
hereto, shall be transferred to this Agreement and shall be deemed to be
Letters of Credit hereunder.

 

(c)                                  The
Letter of Credit Usage shall be no more than Five Hundred Million Dollars
($500,000,000) at any one time.

 

(d)                                 Intentionally
Omitted.

 

(e)                                  In
the event of any request for a drawing under any Letter of Credit by the
beneficiary thereunder, the Fronting Bank shall notify the Borrower and the
Administrative Agent (and the Administrative Agent shall notify each Bank
thereof) on or before the date on which the Fronting Bank intends to honor such
drawing, and, except as provided in this subsection (e), the Borrower
shall reimburse the Fronting Bank, in immediately available funds, on the same
day on which such drawing is honored in an amount equal to the amount of such
drawing.  Notwithstanding anything
contained herein to the contrary, however, unless the Borrower shall have
notified the Administrative Agent, and the Fronting Bank prior to 11:00 a.m.
(Chicago time) on the Domestic Business Day immediately prior to the date of
such drawing that the Borrower intends to reimburse the Fronting Bank for the
amount of such drawing with funds other than the proceeds of the Loans, the
Borrower shall be deemed to have timely given a Notice of Borrowing pursuant to
Section 2.2 to the Administrative Agent, requesting a Borrowing of Base
Rate Loans on the date on which such drawing is honored and in an amount equal
to the amount of such drawing.  Each Bank
(other than the Fronting Bank) shall, in accordance with Section 2.4(b),
make available its Pro Rata Share of such Borrowing to the Administrative
Agent, the proceeds of which shall be applied directly by the Administrative
Agent to reimburse the Fronting Bank for the amount of such draw.  In the event that any such Bank fails to make
available to the Fronting Bank the amount of such Bank’s participation on the
date of a drawing, the Fronting Bank shall be entitled to recover such amount
on demand from such Bank together with interest at the Federal Funds Rate
commencing on the date such drawing is honored, and the provisions of Section 9.16
shall otherwise apply to such failure.

 

60

 

(f)                                    If,
after the date hereof, any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (I) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit issued by, or assets held by, or deposits in or for the account of,
or participations in any letter of credit, upon any Bank (including the
Fronting Bank) or (ii) impose on any Bank any other condition regarding
this Agreement or such Bank (including the Fronting Bank) as it pertains to the
Letters of Credit or any participation therein and the result of any event
referred to in the preceding clause (I) or (ii) shall be to increase, by
an amount deemed by the Fronting Bank or such Bank to be material, the cost to
the Fronting Bank or any Bank of issuing or maintaining any Letter of Credit or
participating therein, then the Borrower shall pay to the Fronting Bank or such
Bank, within 15 days after written demand by such Bank (with a copy to the
Administrative Agent), which demand shall be accompanied by a certificate
showing, in reasonable detail, the calculation of such amount or amounts, such
additional amounts as shall be required to compensate the Fronting Bank or such
Bank for such increased costs or reduction in amounts received or receivable
hereunder.  Each Bank will promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section 2.16 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank.  If such Bank shall fail to notify Borrower of
any such event within 90 days following the end of the month during which such
event occurred, then Borrower’s liability for any amounts described in this Section incurred
by such Bank as a result of such event shall be limited to those attributable
to the period occurring subsequent to the ninetieth (90th) day prior to the
date upon which such Bank actually notified Borrower of the occurrence of such
event.  A certificate of any Bank
claiming compensation under this Section 2.16 and setting forth a
reasonably detailed calculation of the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of demonstrable error.  In determining such amount, such Bank may use
any reasonable averaging and attribution methods.

 

61

 

(g)                                 The
Borrower hereby agrees to protect, indemnify, pay and save harmless the
Fronting Bank and the Banks from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys’ fees and disbursements) which the Fronting Bank or any Bank may
incur or be subject to as a result of (I) the issuance of the Letters of
Credit, other than to the extent of the bad faith, gross negligence or wilful
misconduct of the Fronting Bank or (ii) the failure of the Fronting Bank
to honor a drawing under any Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de  jure
or de  facto government or governmental authority, including by
reason of court order (collectively, “Governmental Acts”), other than to
the extent of the bad faith, gross negligence or wilful misconduct of the
Fronting Bank.  As between the Borrower
and the Fronting Bank and each Bank, the Borrower assumes all risks of the acts
and omissions of any beneficiary with respect to its use, or misuses of, the
Letters of Credit issued by the Fronting Bank. In furtherance and not in
limitation of the foregoing, the Fronting Bank and the Banks shall not be
responsible (I) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or insufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit, other than as
a result of the bad faith, gross negligence or wilful misconduct of the
Fronting Bank; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any message, by mail, cable, telegraph, facsimile
transmission, or otherwise; (v) for errors in interpretation of any
technical terms; (vi) for any loss or delay in the transmission or
otherwise of any documents required in order to make a drawing under any Letter
of Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of any Letter of Credit of the proceeds of such Letter of Credit;
or (viii) for any consequence arising from causes beyond the control of
the Fronting Bank or any Bank, 

 

62

 

including any Government Acts, in each case
other than to the extent of the bad faith, gross negligence or willful
misconduct of the Fronting Bank.  None of
the above shall affect, impair or prevent the vesting of the Fronting Bank’s or
any Bank’s rights and powers hereunder. 
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Fronting
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not put the
Fronting Bank or any Bank under any resulting liability to the Borrower;
provided that, notwithstanding anything in the foregoing to the contrary, the
Fronting Bank will be liable to the Borrower for any damages suffered by the
Borrower or its Subsidiaries as a result of the Fronting Bank’s grossly
negligent or wilful failure to pay under any Letter of Credit after the
presentation to it of a sight draft and certificates strictly in compliance
with the terms and conditions of the Letter of Credit, except as a result of
any court order.

 

(h)                                 If
the Fronting Bank or the Administrative Agent is required at any time, pursuant
to any bankruptcy, insolvency, liquidation or reorganization law or otherwise,
to return to the Borrower any reimbursement by the Borrower of any drawing
under any Letter of Credit, each Bank shall pay to the Fronting Bank or the
Administrative Agent, as the case may be, its Pro Rata Share of such payment,
but without interest thereon unless the Fronting Bank or the Administrative
Agent is required to pay interest on such amounts to the person recovering such
payment, in which case with interest thereon, computed at the same rate, and on
the same basis, as the interest that the Fronting Bank or the Administrative
Agent is required to pay.

 

SECTION 2.17                    Letter of Credit Usage Absolute.  The obligations of the Borrower under this
Agreement in respect of any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement (as the same may be amended from time to time) under all
circumstances, including, without limitation, to the extent permitted by law,
the following circumstances:

 

(a)                                  any
lack of validity or enforceability of any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the “Letter of
Credit Documents”) or any Loan Document;

 

63

 

(b)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations of the Borrower in respect of the Letters of Credit
or any other amendment or waiver of or any consent by the Borrower to departure
from all or any of the Letter of Credit Documents or any Loan Document;

 

(c)                                  any
exchange, release or non-perfection of any collateral, or any release or
amendment or waiver of or consent to departure from any guaranty, for all or
any of the obligations of the Borrower in respect of the Letters of Credit;

 

(d)                                 the
existence of any claim, set-off, defense or other right that the Borrower may
have at any time against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any such transferee may
be acting), the Administrative Agent, the Fronting Bank or any Bank (other than
a defense based on the bad faith, gross negligence or wilful misconduct of the
Administrative Agent, the Fronting Bank or such Bank) or any other Person,
whether in connection with the Loan Documents, the transactions contemplated
hereby or by the Letter of Credit Documents or any unrelated transaction;

 

(e)                                  any
draft or any other document presented under or in connection with any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; provided,
that payment by the Fronting Bank under such Letter of Credit against
presentation of such draft or document shall not have been the result of the
bad faith, gross negligence or wilful misconduct of the Fronting Bank;

 

(f)                                    payment
by the Fronting Bank against presentation of a draft or certificate that does
not strictly comply with the terms of the Letter of Credit; provided,
that such payment shall not have been the result of the bad faith, gross
negligence or wilful misconduct of the Fronting Bank; and

 

(g)                                 any
other circumstance or happening whatsoever other than the payment in full of
all obligations hereunder in respect of any Letter of Credit or any agreement
or instrument relating to any Letter of Credit, whether or not similar to any
of the foregoing, that might 

 

64

 

otherwise constitute a defense available to,
or a discharge of, the Borrower; provided, that such other circumstance
or happening shall not have been the result of bad faith, gross negligence or
wilful misconduct of the Fronting Bank.

 

SECTION 2.18                    Swingline Loan Subfacility.

 

(a)                                  Swingline
Commitment.  Subject to the terms and
conditions of this Section 2.18, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower (each a
“Swingline Loan” and, collectively, the “Swingline Loans”) from
time to time during the term hereof; provided, however, that the
aggregate amount of Swingline Loans outstanding at any time shall not exceed
the lesser of (I) ONE HUNDRED MILLION DOLLARS ($100,000,000), and (ii) the
aggregate Commitments less all Loans then outstanding and Letter of Credit Usage
(the “Swingline Commitment”). 
Subject to the limitations set forth herein, any amounts repaid in
respect of Swingline Loans may be reborrowed.

 

(b)                                 Swingline
Borrowings.

 

(i)                                     Notice
of Borrowing.  With respect to any
Swingline Borrowing, the Borrower shall give the Swingline Lender and the
Administrative Agent notice in writing in the form attached hereto as Exhibit C,
which is received by the Swingline Lender and Administrative Agent not later
than 1:00 p.m. (Chicago time) on the proposed date of such Swingline
Borrowing (and confirmed by telephone by such time), specifying (A) that a
Swingline Borrowing is being requested, (B) the amount of such Swingline
Borrowing, (c) the proposed date of such Swingline Borrowing, which shall be a
Domestic Business Day, and (D) stating that no Default or Event of Default
has occurred and is continuing both before and after giving effect to such
Swingline Borrowing.  Such notice shall
be irrevocable.

 

(ii)                                  Minimum
Amounts.  Each Swingline Borrowing
shall be in a minimum principal amount of $1,000,000, or an integral multiple
of $100,000 in excess thereof.

 

(iii)                               Repayment
of Swingline Loans.  Each Swingline
Loan shall be due and payable on the earliest of (A) 5 Domestic Business
Days from the date of the applicable Swingline Borrowing, (B) the date of
the next Committed Borrowing or (c) the Maturity Date.  In addition, in no event shall Swingline
Loans be outstanding for more than ten (10) 

 

65

 

Domestic Business Days in any calendar month.
If, and to the extent, any Swingline Loans shall be outstanding on the date of
any Committed Borrowing, such Swingline Loans shall first be repaid from the
proceeds of such Committed Borrowing prior to the disbursement of the same to
the Borrower.  If, and to the extent, a
Committed Borrowing is not requested prior to the Maturity Date or the end of
the 5-Domestic Business Day period after a Swingline Borrowing, the Borrower
shall be deemed to have requested a Committed Borrowing comprised entirely of
Base Rate Loans in the amount of the applicable Swingline Loan then
outstanding, the proceeds of which shall be used to repay such Swingline Loan
to the Swingline Lender.  In addition,
the Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Administrative Agent, demand repayment of its
Swingline Loans by way of a Committed Borrowing, in which case the Borrower
shall be deemed to have requested a Committed Borrowing comprised entirely of
Base Rate Loans in the amount of such Swingline Loans then outstanding, the
proceeds of which shall be used to repay such Swingline Loans to the Swingline
Lender.  Any Committed Borrowing which is
deemed requested by the Borrower in accordance with this Section 2.18(b)(iii) is
hereinafter referred to as a “Mandatory Borrowing”.  Each Bank hereby irrevocably agrees to make
Committed Loans promptly upon receipt of notice from the Swingline Lender of
any such deemed request for a Mandatory Borrowing in the amount and in the
manner specified in the preceding sentences and on the date such notice is
received by such Bank (or the next Domestic Business Day if such notice is
received after 12:00 P.M. (Chicago time)) notwithstanding (I) the amount
of the Mandatory Borrowing may not comply with the minimum amount of Committed
Borrowings otherwise required hereunder, (II) whether any conditions specified
in Section 3.2 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such deemed request for a Committed
Borrowing to be made by the time otherwise required in Section 2.2, (V)
the date of such Mandatory Borrowing (provided that such date must be a
Domestic Business Day), or (VI) any termination of the Commitments immediately
prior to such Mandatory Borrowing or contemporaneously therewith; provided,
however, that no Bank shall be obligated to make Committed Loans in
respect of a Mandatory Borrowing if a Default or an Event of Default then
exists and the applicable Swingline Loan was made by the Swingline Lender
without receipt of a written Notice of Borrowing in the form specified in
subclause (I) above or 

 

66

 

after Administrative Agent has delivered a
notice of Default or Event of Default which has not been rescinded.

 

(iv)                              Purchase
of Participations.  In the event that
any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation , as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Borrower), then
each Bank hereby agrees that it shall forthwith, upon demand, purchase (as of
the date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payment received from the Borrower on or after such date and prior to
such purchase) from the Swingline Lender such participations in the outstanding
Swingline Loans as shall be necessary to cause each such Bank to share in such
Swingline Loans ratably based upon its Pro Rata Share (determined before giving
effect to any termination of the Commitments pursuant hereto), provided that (A) all
interest payable on the Swingline Loans with respect to any participation shall
be for the account of the Swingline Lender until but excluding the day upon
which the Mandatory Borrowing would otherwise have occurred, and (B) in
the event of a delay caused by any purchasing Bank between the day upon which
the Mandatory Borrowing would otherwise have occurred and the time any purchase
of a participation pursuant to this sentence is actually made, such purchasing
Bank shall be required to pay to the Swingline Lender interest on the principal
amount of such participation for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the date
of payment for such participation, at the rate equal to the Federal Funds Rate,
for the two (2) Domestic Business Days after the date the Mandatory
Borrowing would otherwise have occurred, and thereafter at a rate equal to the
Base Rate. Notwithstanding the foregoing, no Bank shall be obligated to
purchase a participation in any Swingline Loan if a Default or an Event of
Default then exists and such Swingline Loan was made by the Swingline Lender
without receipt of a written Notice of Borrowing in the form specified in
subclause (I) above or after Administrative Agent has delivered a notice of
Default or Event of Default which has not been rescinded.

 

(c)                                  Interest
Rate.  Each Swingline Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Swingline Loan is made until the date it is repaid, at a rate per
annum equal to the 

 

67

 

Federal Funds Rate for such day, plus the
Applicable Margin for Euro-Dollar Loans.

 

SECTION 2.19                    Letters of Credit Maturing after
the Maturity Date.

 

(a)                                  Notwithstanding
anything contained herein to the contrary, if any Letters of Credit, by their
terms, shall mature after the Maturity Date (as the same may be extended),
then, on and after the Maturity Date, the provisions of this Agreement shall
remain in full force and effect with respect to such Letters of Credit, and the
Borrower shall comply with the provisions of Section 2.19(b). No Letter of
Credit shall mature on a date that is more than twelve (12) months after the
Maturity Date then in effect.

 

(b)                                 If,
at any time and from time to time, any Letter of Credit shall have been issued
hereunder and the same shall expire on a date after the Maturity Date, then, on
the date that is five (5) Business Days prior to the Maturity Date, the
Borrower shall pay to the Administrative Agent, on behalf of the Banks, in same
day funds at the Administrative Agent’s office designated in such demand, for
deposit in the Letter of Credit Collateral Account, Letter of Credit Collateral
in an amount equal to the amount of the Letter of Credit Usage, in United
States Dollars, under the Letters of Credit. 
Interest shall accrue on the Letter of Credit Collateral Account in
accordance with the provisions of Section 6.4.

 

ARTICLE III

 

CONDITIONS

 

SECTION 3.1                          Closing.  The closing hereunder shall occur on the date
when each of the following conditions is satisfied (or waived by the
Administrative Agent and the Banks), each document to be dated the Closing Date
unless otherwise indicated:

 

(a)                                  the
Borrower shall have executed and delivered to the Administrative Agent a Note
for the account of each Bank dated on or before the Closing Date complying with
the provisions of Section 2.5;

 

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(b)                                 the
Borrower, the Administrative Agent and each of the Banks shall have executed
and delivered to the Borrower and the Administrative Agent a duly executed
original of this Agreement;

 

(c)                                  EQR
shall have executed and delivered to the Administrative Agent a duly executed
original of the EQR Guaranty and each Down REIT Guarantor shall have executed
and delivered to the Administrative Agent a duly executed original of a Down
REIT Guaranty;

 

(d)                                 the
Administrative Agent shall have received an opinion of DLA Piper Rudnick Gray
Cary US LLP, counsel for the Borrower, acceptable to the Administrative Agent,
the Banks and their counsel;

 

(e)                                  the
Borrower shall have repaid in full, and terminated, the Revolving Credit
Agreement, dated as of May 29, 2002, among the Borrower, EQR, Bank of
America N.A., as administrative agent, JPMorgan Chase Bank, as syndication
agent, and the financial institutions party thereto (the “Existing Revolving
Credit Agreement”).

 

(f)                                   the
Administrative Agent shall have received all documents the Administrative Agent
may reasonably request relating to the existence of the Borrower and EQR, the
authority for and the validity of this Agreement and the other Loan Documents,
and any other matters relevant hereto, all in form and substance satisfactory
to the Administrative Agent.  Such
documentation shall include, without limitation, the agreement of limited
partnership of the Borrower, as well as the certificate of limited partnership
of the Borrower, both as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by a senior officer of the Borrower
as of a date not more than ten (10) days prior to the Closing Date,
together with a certificate of existence as to the Borrower from the Secretary
of State (or the equivalent thereof) of Illinois, to be dated not more than
thirty (30) days prior to the Closing Date, as well as the declaration of trust
of EQR, as amended, modified or supplemented to the Closing Date, certified to
be true, correct and complete by a senior officer of EQR as of a date not more
than ten (10) days prior to the Closing Date, together with a good
standing certificate as to EQR from the Secretary of State (or the equivalent
thereof) of Maryland, to be dated not more than thirty (30) days prior to the
Closing Date;

 

69

 

(g)                                 the
Administrative Agent shall have received all certificates, agreements and other
documents and papers referred to in this Section 3.1 and the Notice of
Borrowing referred to in Section 3.2, if applicable, unless otherwise
specified, in sufficient counterparts, satisfactory in form and substance to
the Administrative Agent in its sole discretion;

 

(h)                                 the
Borrower, EQR and each Down REIT Guarantor shall have taken all actions
required to authorize the execution and delivery of this Agreement and the
other Loan Documents to be executed by Borrower, EQR and each Down REIT
Guarantor, as the case may be, and the performance thereof by the Borrower EQR
and each Down REIT Guarantor;

 

(i)                                     the
Administrative Agent shall be satisfied that neither the Borrower, EQR nor any
Consolidated Subsidiary is subject to any present or contingent environmental
liability which could have a Material Adverse Effect;

 

(j)                                     the
Administrative Agent shall have received, for its and any other Bank’s account,
all fees due and payable pursuant to Section 2.8 hereof on or before the
Closing Date, and the fees and expenses accrued through the Closing Date of
Skadden, Arps, Slate, Meagher & Flom LLP shall have been paid directly
to such firm, if required by such firm and if such firm has delivered an
invoice in reasonable detail of such fees and expenses in sufficient time for
the Borrower to approve and process the same;

 

(k)                                  the
Administrative Agent shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Borrower, EQR and the applicable Consolidated Subsidiaries,
and the validity and enforceability, of the Loan Documents, or in connection
with any of the transactions contemplated thereby, and such consents, licenses
and approvals shall be in full force and effect;

 

(l)                                     the
Administrative Agent shall have received 
(or Borrower shall have made publicly available) the audited financial
statements of the Borrower and its Consolidated Subsidiaries and of EQR for the
fiscal year ended December 31, 2004; and

 

70

 

(m)                              no
Event of Default shall have occurred.

 

SECTION 3.2                          Borrowings.  The obligation of any Bank to make a Loan or
to participate in any Letter of Credit issued by the Fronting Bank and the
obligation of the Fronting Bank to issue a Letter of Credit or the obligation
of the Swingline Lender to make a Swingline Loan on the occasion of any
Borrowing or Letter of Credit issuance is subject to the satisfaction of the
following conditions:

 

(a)                                  receipt
by the Administrative Agent of a Notice of Borrowing as required by Section 2.2
or a Notice of Money Market Borrowing as required by Section 2.3 or a
request to cause a Fronting Bank to issue a Letter of Credit pursuant to Section 2.16;

 

(b)                                 immediately
after such Borrowing or issuance, the aggregate outstanding principal amount of
the Loans plus the Letter of Credit Usage will not exceed the aggregate amount
of the Commitments;

 

(c)                                  immediately
before and after such Borrowing or issuance of any Letter of Credit, no Event
of Default shall have occurred and be continuing both before and after giving
effect to the making of such Loans or the issuance of such Letter of Credit;

 

(d)                                 the
representations and warranties contained in this Agreement and the other Loan
Documents (other than representations and warranties which expressly speak as
of a different date and other than the representation and warranty set forth in
Section 4.4(c)(I)) shall be true and correct in all material respects on
and as of the date of such Borrowing both before and after giving effect to the
making of such Loans or the issuance of such Letter of Credit;

 

(e)                                  no
law or regulation shall have been adopted, no order, judgment or decree of any
governmental authority shall have been issued, and no litigation shall be
pending, which does or seeks to enjoin, prohibit or restrain, the making or
repayment of the Loans, the issuance of any Letter of Credit or the
consummation of the transactions contemplated by this Agreement and the other
Loan Documents; and

 

(f)                                    with
respect to the initial Borrowing hereunder only, no event, act or condition
shall have 

 

71

 

occurred after the date of the most recent
financial statements of Borrower which, in the reasonable judgment of the
Administrative Agent, or the Required Banks, as the case may be, has had or is
likely to have a Material Adverse Effect.

 

Each Borrowing hereunder or acceptance of a Letter of Credit issued
hereunder shall be deemed to be a representation and warranty by the Borrower
on the date of such Borrowing as to the facts specified in clauses (b), (c),
(d), (e), and (f) (with respect to the initial Borrowing hereunder only,
and only to the extent that Borrower is or should have been aware of any
Material Adverse Effect) of this Section, except as otherwise disclosed in
writing by Borrower to the Banks. 
Notwithstanding anything to the contrary, no Borrowing or issuance of a
Letter of Credit shall be permitted if such Borrowing or issuance would cause
Borrower to fail to be in compliance with any of the covenants contained in
this Agreement or in any of the other Loan Documents.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Administrative Agent and each of the Banks which
is or may become a party to this Agreement to make the Loans and issue or
participate in Letters of Credit, the Borrower makes the following
representations and warranties as of the Closing Date.  Such representations and warranties shall
survive the effectiveness of this Agreement, the execution and delivery of the
other Loan Documents and the making of the Loans and the issuance of the
Letters of Credit.

 

SECTION 4.1                          Existence and Power.  The Borrower is a limited partnership, duly
formed and validly existing as a limited partnership under the laws of the
State of Illinois and has all powers and all material governmental licenses,
authorizations, consents and approvals required to own its property and assets
and carry on its business as now conducted or as it presently proposes to
conduct and has been duly qualified and is in good standing in every
jurisdiction in which the failure to be so qualified and/or in good standing is
likely to have a Material Adverse Effect. 
EQR is a real estate investment trust, duly formed, validly existing and
in good standing as a real estate investment trust under the laws of the State 

 

72

 

of Maryland and has all powers and all
material governmental licenses, authorizations, consents and approvals required
to own its property and assets and carry on its business as now conducted or as
it presently proposes to conduct and has been duly qualified and is in good
standing in every jurisdiction in which the failure to be so qualified and/or
in good standing is likely to have a Material Adverse Effect.

 

SECTION 4.2                          Power and Authority.  The Borrower has the partnership power and
authority to execute, deliver and carry out the terms and provisions of, and to
consummate the transactions contemplated by, each of the Loan Documents to
which it is a party and has taken all necessary partnership action, if any, to
authorize the execution and delivery on behalf of the Borrower and the
performance by the Borrower of, and the consummation of the transactions
contemplated by, such Loan Documents. 
The Borrower has duly executed and delivered each Loan Document to which
it is a party in accordance with the terms of this Agreement, and each such
Loan Document constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, except as enforceability
may be limited by applicable insolvency, bankruptcy or other laws affecting
creditors’ rights generally, or general principles of equity, whether such
enforceability is considered in a proceeding in equity or at law.  EQR has the power and authority to execute,
deliver and carry out the terms and provisions, and the consummation of the
transactions contemplated by, each of the Loan Documents on behalf of the
Borrower to which the Borrower is a party and has taken all necessary action to
authorize the execution and delivery on behalf of the Borrower and the
performance by the Borrower of such Loan Documents.

 

SECTION 4.3                          No Violation.  Neither the execution, delivery or
performance by or on behalf of the Borrower of the Loan Documents to which it
is a party, nor compliance by the Borrower with the terms and provisions
thereof nor the consummation of the transactions contemplated by the Loan
Documents, (I) will materially contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will materially conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the 

 

73

 

property or assets of the Borrower or any of
its Consolidated Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust, or other agreement or other instrument to which the
Borrower (or of any partnership of which the Borrower is a partner) or any of
its Consolidated Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it is subject, or (iii) will cause a material
default by the Borrower under any organizational document of any Person in
which the Borrower has an interest, or cause a material default under the
Borrower’s agreement or certificate of limited partnership, the consequences of
which conflict, breach or default would have a Material Adverse Effect, or
result in or require the creation or imposition of any Lien whatsoever upon any
Property (except as contemplated herein).

 

SECTION 4.4                          Financial Information.

 

(a)                                  The
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries,
dated as of December 31, 2004, and the related consolidated statements of
Borrower’s financial position for the fiscal year then ended, reported on by
Ernst & Young LLP, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date and
their consolidated results of operations and cash flows for such fiscal year.

 

(b)                                 The
consolidated balance sheet of EQR, dated as of December 31, 2004, and the
related consolidated statements of EQR’s financial position for the fiscal year
then ended, reported on by Ernst & Young LLP and set forth in the EQR
2004 Form 10-K, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with GAAP, the consolidated financial position of
EQR and its Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.

 

(c)                                  Since
December 31, 2004, (I) except as may have been disclosed in writing to the
Banks, nothing has occurred prior to the Closing Date having a Material Adverse
Effect, and (ii) except as previously disclosed to the Banks, neither the
Borrower nor EQR has incurred any material indebtedness or guaranty on or
before the Closing Date.

 

74

 

SECTION 4.5                          Litigation.  Except as previously disclosed by the
Borrower in writing to the Banks prior to the date hereof, there is no action,
suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, nor, to the knowledge of the Borrower, any
investigation of, (I) the Borrower, EQR or any of their Consolidated
Subsidiaries, (ii) the Loan Documents or any of the transactions
contemplated by the Loan Documents or (iii) any of their assets, before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which could,
individually or in the aggregate, have a Material Adverse Effect or which in
any manner draws into question the validity or enforceability of this Agreement
or the other Loan Documents.

 

SECTION 4.6                          Compliance with ERISA.  The transactions contemplated by the Loan
Documents will not constitute a nonexempt prohibited transaction (as such term
is defined in Section 4975 of the Code or Section 406 of ERISA) that
could subject the Administrative Agent or the Banks to any tax or penalty for
prohibited transactions imposed under Section 4975 of the Code or Section 502(I)
of ERISA.

 

SECTION 4.7                          Environmental Matters.  The Borrower and EQR each conducts reviews of
the effect of Environmental Laws on the business, operations and properties of
the Borrower, EQR and Consolidated Subsidiaries of either or both when
necessary in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently owned,
any capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses).  On the basis of this review, the Borrower and
EQR each has reasonably concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, are unlikely to have
a Material Adverse Effect.

 

SECTION 4.8                          Taxes.  United States Federal income tax returns of
the Borrower, EQR and their Consolidated 

 

75

 

Subsidiaries have been prepared and filed
through the fiscal year ended December 31, 2003.  The Borrower, EQR and their Consolidated
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received
by the Borrower, EQR or any Consolidated Subsidiary, except such taxes, if any,
as are reserved against in accordance with GAAP, such taxes as are being
contested in good faith by appropriate proceedings or such taxes, the failure
to make payment of which when due and payable will not have, in the aggregate,
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Borrower, EQR and their Consolidated Subsidiaries in respect of taxes or
other governmental charges are, in the opinion of the Borrower, adequate.

 

SECTION 4.9                          Full Disclosure.  All information heretofore furnished by the
Borrower to the Administrative Agent or any Bank for purposes of or in
connection with or pursuant to this Agreement or any transaction contemplated
hereby or thereby is true and accurate in all material respects on the date as
of which such information is stated or certified.  The Borrower has disclosed to the
Administrative Agent, in writing any and all facts existing on the Closing Date
which have or may have (to the extent the Borrower can now reasonably foresee)
a Material Adverse Effect.

 

SECTION 4.10                    Solvency.  On the Closing Date and after giving effect
to the transactions contemplated by the Loan Documents occurring on the Closing
Date, the Borrower will be Solvent.

 

SECTION 4.11                    Use of Proceeds; Margin
Regulations.  All proceeds of the
Loans will be used by the Borrower only in accordance with the provisions
hereof.  No part of the proceeds of any
Loan, and no Letter of Credit, will be used by the Borrower to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock in any manner that might violate the
provisions of Regulations T, U or X of the Federal Reserve Board.  Neither the making of any Loan nor the use of
the proceeds thereof nor the issuance of any Letter of Credit will violate or
be inconsistent with the provisions of Regulations T, U or X of the Federal
Reserve Board.

 

76

 

SECTION 4.12                    Governmental Approvals.  No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution,
delivery and performance of any Loan Document or the consummation of any of the
transactions contemplated thereby other than those that have already been duly
made or obtained and remain in full force and effect or those which, if not
made or obtained, would not have a Material Adverse Effect.

 

SECTION 4.13                    Investment Company Act; Public
Utility Holding Company Act.  Neither
the Borrower, EQR nor any Consolidated Subsidiary is (x) an “investment
company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended, (y) a “holding
company” or a “subsidiary company” of a “holding company” or
an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of
1935, as amended, or (z) subject to any other federal or state law or
regulation which purports to restrict or regulate its ability to borrow money
or otherwise obtain extensions of credit.

 

SECTION 4.14                    Principal Offices.  As of the Closing Date, the principal office,
chief executive office and principal place of business of the Borrower is Two
North Riverside Plaza, Suite 400, Chicago, Illinois 60606.

 

SECTION 4.15                    REIT Status.  For the fiscal year ended December 31,
2004, EQR qualified and EQR intends to continue to qualify as a real estate
investment trust under the Code.

 

SECTION 4.16                    No Default.  No Event of Default or, to the best of the
Borrower’s knowledge, Default exists and the Borrower is not in default in any
material respect beyond any applicable grace period under or with respect to
any other material agreement, instrument or undertaking to which it is a party
or by which it or any of its property is bound in any respect, the existence of
which default is likely to result in a Material Adverse Effect.

 

SECTION 4.17                    Compliance With Law.  To the Borrower’s knowledge, the Borrower and
each of the Real Property Assets are in compliance with all laws, rules, 

 

77

 

regulations, orders, judgments, writs and
decrees, including, without limitation, all building and zoning ordinances and
codes, the failure to comply with which is likely to have a Material Adverse
Effect.

 

SECTION 4.18                    Organizational Documents.  The documents delivered pursuant to Section 3.1(f) constitute,
as of the Closing Date, all of the organizational documents (together with all
amendments and modifications thereof) of the Borrower and EQR.   The Borrower represents that it has
delivered to the Administrative Agent true, correct and complete copies, as of
the Closing Date, of each of the documents set forth in this Section 4.18,
except for exhibits to the Borrower’s partnership agreement identifying the
current list of partners which, with the permission of the Banks, have been omitted
therefrom.

 

SECTION 4.19                    Qualifying Unencumbered
Properties.  As of December 31,
2004, each Property listed on Exhibit F as a Qualifying
Unencumbered Property (I) is Raw Land, a Property with Development Activity or
an operating multifamily residential property owned or ground leased (directly
or beneficially) by Borrower, EQR, or a Consolidated Subsidiary or Investment
Affiliate of either or both, (ii) is not subject (nor are any equity
interests in such Property that are owned directly or indirectly by Borrower or
EQR subject) to a Lien which secures Indebtedness of any Person, other than
Permitted Liens, (iii) is not subject (nor are any equity interests in
such Property that are owned directly or indirectly by Borrower or EQR subject)
to any Negative Pledges, and (iv) is not owned by a Subsidiary of the
Borrower or EQR (other than the Borrower) that has any outstanding Unsecured
Debt (other than those items of Indebtedness set forth in clauses (d) or (e) of
the definition of Indebtedness, or any Contingent Obligation other than
guarantees for borrowed money).  All of
the information set forth on Exhibit F is true and correct in all
material respects.

 

ARTICLE V

 

AFFIRMATIVE AND NEGATIVE
COVENANTS

 

The Borrower covenants and agrees that, so long as any Bank has any
Commitment hereunder or any Obligations remain unpaid:

 

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SECTION 5.1                          Information.  The Borrower will deliver to each of the
Banks:

 

(a)                                  as
soon as available and in any event within five (5) Domestic Business Days
after the same is filed with the Securities and Exchange Commission (but in no
event later than 125 days after the end of each fiscal year of the Borrower) a
consolidated balance sheet of the Borrower, EQR and their Consolidated Subsidiaries
as of the end of such fiscal year and the related consolidated statements of
Borrower’s and EQR’s operations and consolidated statements of Borrower’s and
EQR’s cash flow for such fiscal year, setting forth in each case in comparative
form the figures as of the end of and for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange Commission on
Borrower’s and EQR’s Form 10K and reported on by Ernst & Young
LLP or other independent public accountants of nationally recognized standing;

 

(b)                                 as
soon as available and in any event within five (5) Domestic Business Days
after the same is filed with the Securities and Exchange Commission (but in no
event later than 80 days after the end of each of the first three quarters of
each fiscal year of the Borrower and EQR), (I) a consolidated balance sheet of
the Borrower, EQR and their Consolidated Subsidiaries as of the end of such
quarter and the related consolidated statements of Borrower’s and EQR’s
operations and consolidated statements of Borrower’s and EQR’s cash flow for
such quarter and for the portion of the Borrower’s or EQR’s fiscal year ended
at the end of such quarter, all reported on in the form provided to the
Securities and Exchange Commission on Borrower’s and EQR’s Form 10Q, and (ii) and
such other information reasonably requested by the Administrative Agent or any
Bank;

 

(c)                                  simultaneously
with the delivery of each set of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer, the chief
accounting officer or treasurer of the Borrower (I) setting forth in reasonable
detail the calculations required to establish whether the Borrower was in
compliance with the requirements of Section 5.8 on the date of such
financial statements; (ii) certifying (x) that such financial statements
fairly present in all material respects the financial condition and the results
of operations of the Borrower on the dates and for the periods indicated, on
the basis of GAAP, with respect to the Borrower subject, in the case of interim
financial statements, to normally recurring 

 

79

 

year-end adjustments, and (y) that such
officer has reviewed the terms of the Loan Documents and has made, or caused to
be made under his or her supervision, a review in reasonable detail of the
business and condition of the Borrower during the period beginning on the date
through which the last such review was made pursuant to this Section 5.1(c)
(or, in the case of the first certification pursuant to this Section 5.1(c),
the Closing Date) and ending on a date not more than ten (10) Domestic
Business Days prior to the date of such delivery and that (1) on the basis
of such financial statements and such review of the Loan Documents, no Event of
Default existed under Section 6.1(b) with respect to Sections 5.8 and
5.9 at or as of the date of said financial statements, and (2) on the
basis of such review of the Loan Documents and the business and condition of the
Borrower, to the best knowledge of such officer, as of the last day of the
period covered by such certificate no Default or Event of Default under any
other provision of Section 6.1 occurred and is continuing or, if any such
Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof and the action the Borrower proposes to take in
respect thereof.  Such certificate shall
set forth the calculations required to establish the matters described in
clauses (1) and (2) above;

 

(d)                                 (I)
within five (5) Domestic Business Days after any officer of the Borrower
obtains knowledge of any Default or Event of Default, if such Default or Event
of Default is then continuing, a certificate of the chief financial officer,
the chief accounting officer, treasurer, controller, or other executive officer
of the Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto; and (ii) promptly
and in any event within five (5) Domestic Business Days after the Borrower
obtains knowledge thereof, notice of (x) any litigation or governmental
proceeding pending or threatened against the Borrower or the Real Property
Assets as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, is likely to individually or
in the aggregate, result in a Material Adverse Effect, and (y) any other event,
act or condition which is likely to result in a Material Adverse Effect;

 

(e)                                  promptly
upon the mailing thereof to the shareholders of EQR generally, copies of all
financial statements, reports and proxy statements so mailed;

 

80

 

 

(f)                                    promptly
upon the filing thereof and to the extent that the same are not publicly
available, copies of all registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents) (other than the
exhibits thereto, which exhibits will be provided upon request therefor by any
Bank) which EQR shall have filed with the Securities and Exchange Commission;

 

(g)                                 Promptly
and in any event within thirty (30) days, if and when any member of the ERISA
Group (I) gives or is required to give notice to the PBGC of any “reportable
event” (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, and in the case of clauses (I)
through (vii) above, which event could result in a Material Adverse
Effect, a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth details as to such occurrence and action,
if any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take;

 

(h)                                 promptly
and in any event within ten (10) days after the Borrower obtains actual
knowledge of any of

 

81

 

the following events, a certificate of the
Borrower, executed by an officer of the Borrower, specifying the nature of such
condition, and the Borrower’s or, if the Borrower has actual knowledge thereof,
the Environmental Affiliate’s proposed initial response thereto:  (I) the receipt by the Borrower, or, if the
Borrower has actual knowledge thereof, any of the Environmental Affiliates of
any communication (written or oral), whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Borrower, or, if
the Borrower has actual knowledge thereof, any of the Environmental Affiliates,
is not in compliance with applicable Environmental Laws, and such noncompliance
is likely to have a Material Adverse Effect, (ii) the Borrower shall
obtain actual knowledge that there exists any Environmental Claim pending
against the Borrower or any Environmental Affiliate and such Environmental
Claim is likely to have a Material Adverse Effect or (iii) the Borrower
obtains actual knowledge of any release, emission, discharge or disposal of any
Material of Environmental Concern that is likely to form the basis of any
Environmental Claim against the Borrower or any Environmental Affiliate which
in any such event is likely to have a Material Adverse Effect;

 

(i)                                     promptly
and in any event within five (5) Domestic Business Days after receipt of
any material notices or correspondence from any company or agent for any
company providing insurance coverage to the Borrower relating to any loss which
is likely to result in a Material Adverse Effect, copies of such notices and
correspondence; and

 

(j)                                     from
time to time such additional information regarding the financial position or
business of the Borrower, EQR and their Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request in writing.

 

SECTION 5.2                          Payment
of Obligations.  Each of the
Borrower, EQR and their Consolidated Subsidiaries will pay and discharge, at or
before maturity, all its respective material obligations and liabilities
including, without limitation, any obligation pursuant to any agreement by
which it or any of its properties is bound, in each case where the failure to
so pay or discharge such obligations or liabilities is likely to result in a
Material Adverse Effect, and will maintain in accordance with GAAP, appropriate
reserves for the accrual of any of the same.

 

82

 

SECTION 5.3                          Maintenance
of Property; Insurance; Leases.

 

(a)                                  The
Borrower and/or EQR will keep, and will cause each Consolidated Subsidiary to
keep, all property useful and necessary in its business, including without
limitation the Real Property Assets (for so long as it constitutes Real
Property Assets), in good repair, working order and condition, ordinary wear
and tear excepted, in each case where the failure to so maintain and repair
will have a Material Adverse Effect.

 

(b)                                 The
Borrower and/or EQR shall maintain, or cause to be maintained, insurance with
such insurers, on such properties, in such amounts and against such risks
(excluding terrorist insurance and mold insurance) as is consistent with
insurance maintained by businesses of comparable type and size in the industry,
and furnish the Administrative Agent satisfactory evidence thereof promptly
upon Administrative Agent’s reasonable request.

 

SECTION 5.4                          Conduct
of Business and Maintenance of Existence.  The Borrower and EQR will continue to engage
in business of the same general type as now conducted by the Borrower and EQR,
and each will preserve, renew and keep in full force and effect, its
partnership and trust existence and its respective rights, privileges and
franchises necessary for the normal conduct of business unless the failure to
maintain such rights and franchises does not have a Material Adverse Effect.

 

SECTION 5.5                          Compliance
with Laws.  The Borrower and
EQR will and will cause their Subsidiaries to comply in all material respects
with all applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws,
and all zoning and building codes with respect to the Real Property Assets and
ERISA and the rules and regulations thereunder and all federal securities
laws) except where the necessity of compliance therewith is contested in good
faith by appropriate proceedings or where the failure to do so will not have a
Material Adverse Effect or expose Administrative Agent or the Banks to any
material liability therefor.

 

SECTION 5.6                          Inspection
of Property, Books and Records. 
Each of the Borrower and EQR will keep proper

 

83

 

books of record and account in which full,
true and correct entries shall be made of all dealings and transactions in
relation to its business and activities in conformity with GAAP, modified as
required by this Agreement and applicable law; and will permit representatives
of any Bank at such Bank’s expense to visit and inspect any of its properties,
including without limitation the Real Property Assets, to examine and make
abstracts from any of its books and records and to discuss its affairs,
finances and accounts with its officers and independent public accountants, all
at such reasonable times during normal business hours, upon reasonable prior
notice and as often as may reasonably be desired.  Administrative Agent shall coordinate any
such visit or inspection to arrange for review by any Bank requesting any such
visit or inspection.

 

SECTION 5.7                          Intentionally
Omitted.

 

SECTION 5.8                          Financial
Covenants.

 

(a)                                  Indebtedness
to Gross Asset Value.  Borrower shall
not permit the ratio of Indebtedness of Borrower and EQR (excluding
Indebtedness of Consolidated Subsidiaries or Investment Affiliates), and
Borrower’s Share of Indebtedness of all Consolidated Subsidiaries and
Investment Affiliates to Gross Asset Value of Borrower and EQR to exceed 0.60:1
at any time.

 

(b)                                 Secured
Debt to Gross Asset Value.  Borrower
shall not permit the ratio of Secured Debt of Borrower and EQR (excluding
Indebtedness of Consolidated Subsidiaries or Investment Affiliates), and
Borrower’s Share of Secured Debt of all Consolidated Subsidiaries and
Investment Affiliates to Gross Asset Value of Borrower and EQR to exceed 0.40:1
at any time.

 

(c)                                  Consolidated
EBITDA to Fixed Charges Ratio. 
Borrower shall not permit the ratio of Consolidated EBITDA for the then
most recently completed twelve (12) month period to Fixed Charges for the then
most recently completed twelve (12) month period to be less than 1.50:1.

 

(d)                                 Unencumbered
Pool.  Borrower shall not permit the
ratio of the Unencumbered Asset Value to outstanding Unsecured Debt to be less
than 1.50:1 at any time.

 

(e)                                  Permitted
Holdings.  Borrower’s and EQR’s
primary business will be the ownership, operation and

 

84

 

development of multifamily residential
property (including conversions to condominiums) and any other business
activities of Borrower, EQR and Subsidiaries of either or both will remain
incidental thereto.  Notwithstanding the
foregoing, Borrower, EQR and Subsidiaries of either or both may acquire or
maintain Permitted Holdings if and so long as the aggregate value of Permitted
Holdings, whether held directly or indirectly (but without duplication) by
Borrower, EQR and/or their Subsidiaries, does not exceed, at any time, thirty
percent (30%) of Gross Asset Value of Borrower and EQR as a whole.

 

(f)                                    Calculation.  Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter.

 

SECTION 5.9                          Restriction
on Fundamental Changes.

 

(a)                                  Neither
the Borrower nor EQR shall enter into any merger or consolidation, unless (I)
either (x) the Borrower or EQR is the surviving entity, or (y) the individuals
constituting EQR’s Board of Trustees immediately prior to such merger or
consolidation represent a majority of the surviving entity’s Board of Directors
or Board of Trustees after such merger or consolidation, and (ii) the
entity which is merged with Borrower or EQR is predominantly in the commercial
real estate business.

 

(b)                                 The
Borrower shall not amend its agreement of limited partnership or other
organizational documents in any manner that would have a Material Adverse
Effect without the Administrative Agent’s consent, which shall not be
unreasonably withheld.  EQR shall not
amend its declaration of trust, by-laws, or other organizational documents in
any manner that would have a Material Adverse Effect without the Administrative
Agent’s consent, which shall not be unreasonably withheld.

 

(c)                                  The
Borrower shall deliver to Administrative Agent copies of all amendments to its
agreement of limited partnership or to EQR’s declaration of trust, by-laws, or
other organizational documents simultaneously with the first delivery of
financial statements referred to in Sections 5.1(a) or (b) above
following the effective date of any such amendment.

 

SECTION 5.10                    Changes
in Business.  Except for
Permitted Holdings, neither the Borrower nor EQR shall enter

 

85

 

into any business which is substantially
different from that conducted by the Borrower or EQR on the Closing Date after
giving effect to the transactions contemplated by the Loan Documents.  The Borrower shall carry on its business
operations through the Borrower and its Subsidiaries and Investment Affiliates.

 

SECTION 5.11                    Margin
Stock.  None of the proceeds
of any Loan, and no Letter of Credit, will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
any Margin Stock in any manner that might violate the provisions of Regulations
T, U or X of the Federal Reserve Board.

 

SECTION 5.12                    Intentionally
Omitted.

 

SECTION 5.13                    EQR Status.

 

(a)                                  Status.
 EQR shall at all times (I) remain a
publicly traded company listed on the New York Stock Exchange or another
national stock exchange located in the United States and (ii) maintain its
status as a self-directed and self-administered real estate investment trust
under the Code.

 

(b)                                 Indebtedness.  EQR shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any
Indebtedness, except:

 

(1)                                  the Obligations; and

 

(2)                                  Indebtedness which,
after giving effect thereto, may be incurred or may remain outstanding without
giving rise to an Event of Default or Default.

 

(c)                                  Disposal
of Partnership Interests.  EQR will
not directly or indirectly convey, sell, transfer, assign, pledge or otherwise
encumber or dispose of any of its partnership interests in Borrower, except for
the reduction of EQR’s interest in the Borrower arising from Borrower’s
issuance of partnership interests in the Borrower or the retirement of
preference units by Borrower.

 

86

 

ARTICLE VI

DEFAULTS

 

SECTION 6.1                          Events
of Default.  If one or more of
the following events (“Events of Default”) shall have occurred and be
continuing:

 

(a)                                  the
Borrower shall fail to pay when due any principal of any Loan, or the Borrower
shall fail to pay when due interest on any Loan or any fees or any other amount
payable hereunder and the same shall continue for a period of five (5) days
after the same becomes due;

 

(b)                                 the
Borrower shall fail to observe or perform any covenant contained in Section 5.8,
Section 5.9, Section 5.11 or Section 5.13;

 

(c)                                  the
Borrower shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those covered by clause (a), (b), (e), (f), (g),
(h), (j), (n) or (o) of this Section 6.1) for 30 days after written notice
thereof has been given to the Borrower by the Administrative Agent, or if such
default is of such a nature that it cannot with reasonable effort be completely
remedied within said period of thirty (30) days such additional period of time
as may be reasonably necessary to cure same, provided Borrower commences such
cure within said thirty (30) day period and diligently prosecutes same, until
completion, but in no event shall such extended period exceed ninety (90) days;

 

(d)                                 any
representation, warranty, certification or statement made or deemed made by the
Borrower in this Agreement or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made) and the defect
causing such representation or warranty to be incorrect when made (or deemed
made) is not removed within thirty (30) days after written notice thereof from
Administrative Agent to Borrower;

 

(e)                                  the
Borrower, EQR, any Subsidiary or any Investment Affiliate shall default in the
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) of any amount owing in respect of any
Recourse Debt (other than the Obligations) for which the aggregate outstanding
principal amount exceeds $50,000,000 and such default shall continue beyond the

 

87

 

giving of any required notice and the
expiration of any applicable grace period and such default has not been waived,
in writing, by the holder of any such Debt; or the Borrower, EQR, any
Subsidiary or any Investment Affiliate shall default in the performance or
observance of any obligation or condition with respect to any such Recourse
Debt or any other event shall occur or condition exist beyond the giving of any
required notice and the expiration of any applicable grace period, if the
effect of such default, event or condition is to accelerate the maturity of any
such indebtedness or to permit (without any further requirement of notice or
lapse of time) the holder or holders thereof, or any trustee or agent for such
holders, to accelerate the maturity of any such indebtedness;

 

(f)                                    the
Borrower or EQR shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or admit in writing
its inability to pay its debts as such debts become due, or shall take any
action to authorize any of the foregoing;

 

(g)                                 an
involuntary case or other proceeding shall be commenced against the Borrower or
EQR seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 days; or an order for relief shall
be entered against the Borrower or EQR under the federal bankruptcy laws as now
or hereafter in effect;

 

(h)                                 one
or more final, non-appealable judgments or decrees (or one or more judgments
which is/are not stayed pending appeal) in an aggregate amount of Fifty Million
Dollars ($50,000,000) or more shall be entered by a court or

 

88

 

courts of competent jurisdiction against the
Borrower, EQR or any of their respective Consolidated Subsidiaries (other than
any judgment as to which, and only to the extent, a reputable insurance company
has acknowledged coverage of such claim in writing) and (I) any such judgments
or decrees shall not be stayed, discharged, paid, bonded or vacated within
thirty (30) days or (ii) enforcement proceedings shall be commenced by any
creditor on any such judgments or decrees;

 

(i)                                     there
shall be a change in the majority of the Board of Directors or Board of
Trustees of EQR during any twelve (12) month period, excluding any change in
directors or trustees resulting from (w) the retirement of any director or
trustee as a result of compliance with any written policy of EQR requiring
retirement from the Board upon reaching the age specified in such policy,
(x) the death or disability of any director or trustee, or (y)
satisfaction of any requirement for the majority of the members of the board of
directors or trustees of EQR to qualify under applicable law as independent
directors or trustees or (z) the replacement of any director or trustee who is
an officer or employee of EQR or an affiliate of EQR with any other officer or
employee of EQR or an affiliate of EQR;

 

(j)                                     any
Person (including affiliates of such Person) or “group” (as such term is
defined in applicable federal securities laws and regulations) shall acquire
more than thirty percent (30%) of the common shares of EQR;

 

(k)                                  intentionally
omitted;

 

(l)                                     any
Termination Event with respect to a Plan shall occur as a result of which
Termination Event or Events any member of the ERISA Group has incurred or may
incur any liability to the PBGC or any other Person and the sum (determined as
of the date of occurrence of such Termination Event) of the insufficiency of
such Plan and the insufficiency of any and all other Plans with respect to
which such a Termination Event shall have occurred and be continuing (or, in
the case of a Multiemployer Plan with respect to which a Termination Event
described in clause (ii) of the definition of Termination Event shall have
occurred and be continuing, the liability of the Borrower) is equal to or
greater than $20,000,000 and which the Administrative Agent reasonably
determines will have a Material Adverse Effect;

 

89

 

(m)                               any
member of the ERISA Group shall commit a failure described in Section 302(f)(1) of
ERISA or Section 412(n)(1) of the Code and the amount of the lien
determined under Section 302(f)(3) of ERISA or Section 412(n)(3) of
the Code that could reasonably be expected to be imposed on any member of the
ERISA Group or their assets in respect of such failure shall be equal to or
greater than $20,000,000 and which the Administrative Agent reasonably
determines will have a Material Adverse Effect;

 

(n)                                 at
any time, for any reason the Borrower or EQR seeks to repudiate its obligations
under any Loan Document; or

 

(o)                                 a
default beyond any applicable notice or grace period under any of the other
Loan Documents.

 

SECTION 6.2                          Rights
and Remedies.

 

(a)                                  Upon
the occurrence of any Event of Default described in Sections 6.1(f) or
(g), the Commitments and the Swingline Commitment shall immediately terminate and
the unpaid principal amount of, and any and all accrued interest on, the Loans
and any and all accrued fees and other Obligations hereunder shall
automatically become immediately due and payable, with all additional interest
from time to time accrued thereon and without presentation, demand, or protest
or other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower; and upon the occurrence and during the continuance of any other Event
of Default, subject to the provisions of Section 6.2(b), the
Administrative Agent may (and upon the demand of the Required Banks shall), by
written notice to the Borrower, in addition to the exercise of all of the
rights and remedies permitted the Administrative Agent and the Banks at law or
equity or under any of the other Loan Documents, declare the Commitments
terminated and the unpaid principal amount of and any and all accrued and
unpaid interest on the Loans and any and all accrued fees and other Obligations
hereunder to be, and the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued thereon and (except as
otherwise as provided in the Loan Documents) without presentation, demand, or
protest or other requirements of any kind (including, without limitation,

 

90

 

valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower.

 

(b)                                 Notwithstanding
anything to the contrary contained in this Agreement or in any other Loan
Document, the Administrative Agent and the Banks each agree that any exercise
or enforcement of the rights and remedies granted to the Administrative Agent
or the Banks under this Agreement or at law or in equity with respect to this
Agreement or any other Loan Documents shall be commenced and maintained by the
Administrative Agent on behalf of the Administrative Agent and/or the Banks.  The
Administrative Agent shall act at the direction of the Required Banks in
connection with the exercise of any and all remedies at law, in equity or under
any of the Loan Documents (including, without limitation, those set forth in Section 6.4
hereof) or, if the Required Banks are unable to reach agreement within thirty
(30) days of commencement of discussions, then, from and after an Event of
Default and the the end of such thirty (30) day period, the Administrative
Agent may pursue such rights and remedies as it may determine if it shall
reasonably determine that the same shall be in the best interests of the Banks,
taken as a whole.

 

SECTION 6.3                          Notice
of Default.  The
Administrative Agent shall give notice to the Borrower under Section 6.1(c)
promptly upon being requested to do so by the Required Banks and shall
thereupon notify all the Banks thereof. 
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default (other than nonpayment of
principal of or interest on the Loans) unless Administrative Agent has received
notice in writing from a Bank or Borrower or any court or governmental agency
referring to this Agreement or the other Loan Documents, describing such event
or condition.  Should Administrative
Agent receive notice of the occurrence of a Default or Event of Default expressly
stating that such notice is a notice of a Default or Event of Default, or
should Administrative Agent send Borrower a notice of Default or Event of
Default, Administrative Agent shall promptly give notice thereof to each Bank.

 

91

 

SECTION 6.4                          Actions
in Respect of Letters of Credit.

 

(a)                                  If,
at any time and from time to time, any Letter of Credit shall have been issued
hereunder and an Event of Default shall have occurred and be continuing, then,
upon the occurrence and during the continuation thereof, the Administrative
Agent may, and upon the demand of the Required Banks shall, whether in addition
to the taking by the Administrative Agent of any of the actions described in
this Article or otherwise, make a demand upon the Borrower to, and forthwith
upon such demand (but in any event within ten (10) days after such demand)
the Borrower shall (provided that upon the occurrence of any Event of Default
it described in Section 6.1(f) or 6.1(g) the Borrower shall
automatically be required to), pay to the Administrative Agent, on behalf of
the Banks, in same day funds at the Administrative Agent’s office designated in
such demand, for deposit in a special cash collateral account (the “Letter
of Credit Collateral Account”) to be maintained in the name of the
Administrative Agent (on behalf of the Banks) and under its sole dominion and
control at such place as shall be designated by the Administrative Agent, an
amount equal to the amount of the Letter of Credit Usage under the Letters of
Credit.  Interest shall accrue on the
Letter of Credit Collateral Account at a rate equal to the rate on overnight
funds.

 

(b)                                 The
Borrower hereby grants to the Administrative Agent, as administrative agent,
for its benefit and the ratable benefit of the Banks a lien on and a security
interest in, the following collateral (the “Letter of Credit Collateral”):

 

(i)                                     the
Letter of Credit Collateral Account, all cash deposited therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Letter of Credit Collateral Account;

 

(ii)                                  all
notes, certificates of deposit and other instruments from time to time
hereafter delivered to or otherwise possessed by the Administrative Agent for
or on behalf of the Borrower in substitution for or in respect of any or all of
the then existing Letter of Credit Collateral;

 

(iii)                               all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Letter of Credit Collateral; provided that if
no Event of Default

 

92

 

shall have occurred and be continuing, any
interest, dividends or other earnings received with respect to the Letter of
Credit Collateral shall be distributed to Borrower on a monthly basis; and

 

(iv)                              to
the extent not covered by the above clauses, all proceeds of any or all of the
foregoing Letter of Credit Collateral.

 

The lien and security interest granted hereby secures the payment of
all Obligations of the Borrower now or hereafter existing hereunder and under
any other Loan Document.

 

(c)                                  The
Borrower hereby authorizes the Administrative Agent for the ratable benefit of
the Banks to apply, from time to time after funds are deposited in the Letter
of Credit Collateral Account, funds then held in the Letter of Credit
Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become due and payable by the
Borrower to the Banks in respect of the Letters of Credit.

 

(d)                                 Neither
the Borrower nor any Person claiming or acting on behalf of or through the
Borrower shall have any right to withdraw any of the funds held in the Letter
of Credit Collateral Account, except as provided in Sections 6.4(b) and (h) hereof.

 

(e)                                  The
Borrower agrees that it will not (I) sell or otherwise dispose of any interest
in the Letter of Credit Collateral or (ii) create or permit to exist any
lien, security interest or other charge or encumbrance upon or with respect to
any of the Letter of Credit Collateral, except for the security interest
created by this Section 6.4.

 

(f)                                    If
any Event of Default shall have occurred and be continuing:

 

(i)                                     The
Administrative Agent may, in its sole discretion, without notice to the
Borrower except as required by law and at any time and from time to time,
charge, set off or otherwise apply all or any part of the Letter of Credit
Collateral, first, (x) amounts previously drawn on any Letter of Credit
that have not been reimbursed by the Borrower and (y) any Letter of Credit
Usage described in clause (ii) of the definition thereof that are then due
and payable and second, any other unpaid Obligations then

 

93

 

due and payable against the Letter of Credit
Collateral Account or any part thereof, in such order as the Administrative
Agent shall elect.  The rights of the
Administrative Agent under this Section 6.4 are in addition to any rights
and remedies which any Bank may have.

 

(ii)                                  The
Administrative Agent may also exercise, in its sole discretion, in respect of
the Letter of Credit Collateral Account, in addition to the other rights and
remedies provided herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform Commercial Code in
effect in the State of Illinois at that time.

 

(g)                                 The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Letter of Credit Collateral if the Letter of
Credit Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, it being understood that,
assuming such treatment, the Administrative Agent and the Banks shall not have
any responsibility or liability with respect thereto.

 

(h)                                 At
such time as all Events of Default have been cured or waived in writing, all
amounts remaining in the Letter of Credit Collateral Account shall be promptly
returned to the Borrower, and in the case of Letters of Credit maturing after
the Maturity Date, upon the return of any such Letters of Credit, any amount
attributable to such Letter of Credit shall be promptly returned to the
Borrower.  Absent such cure or written
waiver or return, any surplus of the funds held in the Letter of Credit
Collateral Account and remaining after payment in full of all of the
Obligations of the Borrower hereunder and under any other Loan Document after
the Maturity Date shall be paid to the Borrower or to whomsoever may be lawfully
entitled to receive such surplus.

 

SECTION 6.5                          Distribution
of Proceeds after Default. 
Notwithstanding anything contained herein to the contrary, from and
after an Event of Default, to the extent proceeds are received by
Administrative Agent, such proceeds will be distributed to the Banks pro rata
in accordance with the unpaid principal amount of the Loans.

 

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ARTICLE VII

THE AGENTS

 

SECTION 7.1                          Appointment
and Authorization.  Each Bank
irrevocably appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by
the terms hereof or thereof, together with all such powers and discretion as
are reasonably incidental thereto. Except as set forth in Sections 7.8 and 7.9
hereof, the provisions of this Article VII are solely for the benefit of
Administrative Agent and the Banks, and Borrower shall not have any right to
rely on or enforce any of the provisions of this Article VII.  In performing its functions and duties under
this Agreement, Administrative Agent shall act solely as an agent of the Banks
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for the Borrower.

 

SECTION 7.2                          Agency
and Affiliates. Bank of America, N.A. shall have the same rights and
powers under this Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not the Administrative Agent, and Bank of
America, N.A. and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower, EQR or any
Subsidiary or affiliate of the Borrower as if it were not the Administrative
Agent hereunder, and the term “Bank” and “Banks” shall include Bank of America,
N.A. in its individual capacity.

 

SECTION 7.3                          Action
by Administrative Agent.  The
obligations of the Administrative Agent hereunder are only those expressly set
forth herein.  Without limiting the
generality of the foregoing, the Administrative Agent shall not be required to
take any action with respect to any Default or Event of Default, except as
expressly provided in Article VI. 
The duties of Administrative Agent shall be administrative in
nature.  Subject to the provisions of
Sections 7.1, 7.5 and 7.6, Administrative Agent shall administer the Loans in
the same manner as it administers its own loans.

 

SECTION 7.4                          Consultation
with Experts.  As between
Administrative Agent and the Banks, the

 

95

 

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

 

SECTION 7.5                          Liability
of Administrative Agent, Syndication Agent, Documentation Agents.  As between Administrative Agent and the
Banks, none of the Administrative Agent, the Syndication Agent, or the
Documentation Agents, nor any of their affiliates nor any of their respective
directors, officers, agents or employees, shall be liable for any action taken
or not taken by any of them in connection herewith (I) with the consent or at
the request of the Required Banks or (ii) in the absence of its own gross
negligence or wilful misconduct.  As
between Administrative Agent and the Banks, none of the Administrative Agent,
the Syndication Agent, or the Documentation Agents, nor any of their respective
directors, officers, agents or employees, shall be responsible for or have any
duty to ascertain, inquire into or verify (I) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower, except with respect to payment of principal and
interest; (iii) the satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the Administrative Agent;
or (iv) the validity, effectiveness or genuineness of this Agreement, the
other Loan Documents or any other instrument or writing furnished in connection
herewith.  As between Administrative
Agent and the Banks, the Administrative Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.

 

SECTION 7.6                          Indemnification.  Each Bank shall, ratably in accordance with
its Commitment, indemnify the Administrative Agent, the Syndication Agent, and
the Documentation Agents, and their respective affiliates and directors,
officers, agents and employees (to the extent not reimbursed by the Borrower),
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from such indemnitee’s
gross negligence or wilful misconduct) that

 

96

 

such indemnitee may suffer or incur in
connection with its duties as Administrative Agent and/or Syndication Agent
and/or Documentation Agents under this Agreement, the other Loan Documents or
any action taken or omitted by such indemnitee hereunder as Administrative
Agent or as Syndication Agent.  In the
event that the Syndication Agent, the Documentation Agents or the
Administrative Agent shall, subsequent to its receipt of indemnification
payment(s) from Banks in accordance with this Section, recoup any amount from
the Borrower, or any other party liable therefor in connection with such
indemnification, Syndication Agent, such Documentation Agents or the
Administrative Agent shall reimburse the Banks which previously made the
payment(s) pro rata, based upon the actual amounts which were
theretofore paid by each Bank.  The
Syndication Agent, the Documentation Agents, or the Administrative Agent, as
the case may be, shall reimburse such Banks so entitled to reimbursement within
two (2) Domestic Business Days after its receipt of such funds from the
Borrower or such other party liable therefor.

 

SECTION 7.7                          Credit
Decision.  Each Bank
acknowledges that it has, independently and without reliance upon the
Administrative Agent, the Syndication Agent, or the Documentation Agents, or
any other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Bank also acknowledges
that it will, independently and without reliance upon the Administrative Agent,
Syndication Agent, the Documentation Agents or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under this
Agreement.

 

SECTION 7.8                          Successor
Administrative Agent or Syndication Agent.  The Administrative Agent, the Syndication
Agent, or the Documentation Agents may resign at any time by giving notice
thereof to the Banks, the Borrower and each other and the Administrative Agent
or the Syndication Agent, as applicable, shall resign in the event the Commitment
of the Bank serving as the Administrative Agent or the Syndication Agent is
reduced to less than $10,000,000.  Upon
any such resignation, the Required Banks shall have the right to appoint a
successor Administrative Agent or Syndication Agent, as applicable, which
successor Administrative Agent or successor Syndication Agent (as applicable)
shall, provided no Event of Default has occurred

 

97

 

and is then continuing, be subject to
Borrower’s approval, which approval shall not be unreasonably withheld or
delayed (except that Borrower shall, in all events, be deemed to have approved
Bank of America, N.A. as a successor Syndication Agent and JPMorgan Chase Bank,
N.A. as a successor Administrative Agent). 
If no successor Administrative Agent or Syndication Agent (as
applicable) shall have been so appointed by the Required Banks and (if
required) approved by the Borrower, or, if so appointed, shall not have
accepted such appointment within 30 days after the retiring Administrative
Agent or Syndication Agent (as applicable) gives notice of resignation, then
the retiring Administrative Agent or retiring Syndication Agent (as applicable)
may, on behalf of the Banks, appoint a successor Administrative Agent or Syndication
Agent (as applicable), which shall be the Syndication Agent or the
Administrative Agent, as the case may be, who shall act until the Required
Banks shall appoint a successor Administrative Agent or Syndication Agent.  In any event, the retiring Administrative
Agent shall continue to act as Administrative Agent until such time as a
successor Administrative Agent shall have been so appointed by the Required
Banks, approved by Borrower (if required), and assumed its duties hereunder.
Upon the acceptance of its appointment as the Administrative Agent or
Syndication Agent hereunder by a successor Administrative Agent or successor
Syndication Agent, as applicable, such successor Administrative Agent or
successor Syndication Agent, as applicable, shall thereupon succeed to and
become vested with all the rights and duties of the retiring Administrative
Agent or retiring Syndication Agent, as applicable, and the retiring
Administrative Agent or the retiring Syndication Agent, as applicable, shall be
discharged from its duties and obligations hereunder.  The rights and duties of the Administrative
Agent to be vested in any successor Administrative Agent shall include, without
limitation, the rights and duties as Swingline Lender.  After any retiring Administrative Agent’s or
retiring Syndication Agent’s resignation hereunder, the provisions of this Article shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Administrative Agent or the Syndication Agent, as applicable.  For gross negligence or willful misconduct,
as determined by the Required Banks (excluding for such determination the Bank
serving as Administrative Agent or Syndication Agent in its capacity as a Bank,
as applicable), the Administrative Agent or Syndication Agent may be removed at
any time by giving at least thirty (30) Domestic Business

 

98

 

Days prior written notice to the
Administrative Agent, Syndication Agent and Borrower.  Such resignation or removal shall take effect
upon the acceptance of appointment by a successor Administrative Agent or
Syndication Agent, as applicable, in accordance with the provisions of this Section 7.8.

 

SECTION 7.9                          Consents
and Approvals.  All
communications from Administrative Agent to the Banks requesting the Banks’
determination, consent, approval or disapproval (I) shall be given in the form
of a written notice to each Bank, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Bank where such
matter or item may be inspected, or shall otherwise describe the matter or
issue to be resolved, (iii) shall include, if reasonably requested by a
Bank and to the extent not previously provided to such Bank, written materials
and a summary of all oral information provided to Administrative Agent by
Borrower in respect of the matter or issue to be resolved, (iv) shall
include Administrative Agent’s recommended course of action or determination in
respect thereof and (v) shall include, in boldface type, a statement that
if any Bank does not respond to such request within ten (10) Domestic
Business Days and provide a written explanation of the reasons behind any
objection, such Lender shall be deemed to have approved of or consented to, as
applicable, the recommendation or determination of the Administrative Agent
described in such request.  Each Bank
shall reply promptly, but in any event within ten (10) Domestic Business
Days after receipt of the request therefor from Administrative Agent (the “Bank
Reply Period”).  Unless a Bank shall
give written notice to Administrative Agent that it objects to the
recommendation or determination of Administrative Agent within the Bank Reply
Period, such Bank shall be deemed to have approved of or consented to such
recommendation or determination.  With
respect to decisions requiring the approval of the Required Banks or all the
Banks, Administrative Agent shall submit its recommendation or determination
for approval of or consent to such recommendation or determination to all Banks
and upon receiving the required approval or consent shall follow the course of
action or determination of the Required Banks (and each non-responding Bank
shall be deemed to have concurred with such recommended course of action) or
all the Banks, as the case may be.

 

99

 

ARTICLE VIII

CHANGE IN CIRCUMSTANCES

 

SECTION 8.1                          Basis
for Determining Interest Rate Inadequate or Unfair.  If on or prior to the first day of any
Interest Period for any Euro-Dollar Borrowing or Money Market LIBOR Loan:

 

(a)                                  the
Administrative Agent determines in good faith that deposits in dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or

 

(b)                                 Banks
having 50% or more of the aggregate amount of the Commitments advise the
Administrative Agent that the Euro-Dollar Rate, as determined by the
Administrative Agent will not adequately and fairly reflect the cost to each
such Bank of funding its Euro-Dollar Loans for such Interest Period,

 

the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until
the Administrative Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. 
Unless the Borrower notifies the Administrative Agent at least two
Domestic Business Days before the date of (I) any Euro-Dollar Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing, or (ii) any Money Market LIBOR Borrowing for which a Notice of
Money Market Borrowing has previously been given, the Money Market LIBOR Loans
comprising such Borrowing shall bear interest for each day from and including
the first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day. 
For purposes of Section 8.1(b), in determining whether the
Euro-Dollar Rate, as determined by Administrative Agent, will not adequately
and fairly reflect the cost to any Bank of funding its Euro-Dollar Loans for
such Interest Period, such determination will be based solely on the ability of
such Bank to obtain matching funds in the London interbank market at a
reasonably equivalent rate.

 

SECTION 8.2                          Illegality.  If, on or after the date of this Agreement,
the adoption of any applicable law, rule

 

100

 

or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) made after the Closing Date
of any such authority, central bank or comparable agency shall make it unlawful
for any Bank (or its Euro-Dollar Lending Office) (x) to make, maintain or fund
its Euro-Dollar Loans, or (y) to participate in any Letter of Credit issued by
the Fronting Bank, or, with respect to the Fronting Bank, to issue any Letter
of Credit, the Administrative Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank in case of the event
described in clause (x) above to make Euro-Dollar Loans, or in the case of the
event described in clause (y) above, to participate in any Letter of Credit
issued by the Fronting Bank or, with respect to the Fronting Bank, to issue any
Letter of Credit, shall be suspended. 
With respect to Euro-Dollar Loans, before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need
for giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.  If such
Bank shall determine that it may not lawfully continue to maintain and fund any
of its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall be deemed to have delivered a Notice of Interest
Rate Election and such Euro-Dollar Loan shall be converted as of such date to a
Base Rate Loan (without payment of any amounts that Borrower would otherwise be
obligated to pay pursuant to Section 2.13 hereof with respect to Loans
converted pursuant to this Section 8.2) in an equal principal amount from
such Bank (on which interest and principal shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and such Bank shall
make such a Base Rate Loan.

 

If, at any time, it shall be unlawful for any Bank to make, maintain or
fund its Euro-Dollar Loans, the Borrower shall have the right, upon five (5) Domestic
Business Day’s notice to the Administrative Agent, to either (x) cause a bank,
reasonably acceptable to the

 

101

 

Administrative Agent, to offer to purchase the Commitments of such Bank
for an amount equal to such Bank’s outstanding Loans and all amounts due such
Bank hereunder (including, without limitation, interest, Facility Fees, Letter
of Credit Fees and all amounts payable pursuant to Section 2.13), and to
become a Bank hereunder, or obtain the agreement of one or more existing Banks
to offer to purchase the Commitments of such Bank for such amount, which offer
such Bank is hereby required to accept, or (y) to repay in full all Loans then
outstanding of such Bank, together with interest thereon, Facility Fees, Letter
of Credit Fees and all other amounts due such Bank hereunder (including,
without limitation, amounts payable pursuant to Section 2.13), upon which
event, such Bank’s Commitments shall be deemed to be cancelled pursuant to Section 2.11(e).  Any Bank subject to this paragraph shall
retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.

 

SECTION 8.3                          Increased
Cost and Reduced Return.

 

(a)                                  If,
on or after (x) the date hereof in the case of Committed Loans made pursuant to
Section 2.1, or (y) the date of the related Money Market Quote, in the
case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
made after the Closing Date of any such authority, central bank or comparable
agency, shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Federal Reserve Board (but
excluding with respect to any Euro-Dollar Loan any such requirement to the
extent reflected in an applicable Euro-Dollar Reserve Percentage)), special
deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition materially
more burdensome in nature, extent or consequence than those in existence as of
the Closing Date affecting such Bank’s Euro-Dollar Loans, its Note, or its
obligation to make Euro-Dollar Loans, and the result of any of the foregoing is
to

 

102

 

increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
to such Euro-Dollar Loans, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts (based upon a reasonable allocation thereof by such Bank to
the Euro-Dollar Loans made by such Bank hereunder) as will compensate such Bank
for such increased cost or reduction to the extent such Bank generally imposes such
additional amounts on other borrowers of such Bank in similar circumstances.

 

(b)                                 If
any Bank shall have reasonably determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any law, rule or regulation regarding capital
adequacy, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank any request
or directive regarding capital adequacy (whether or not having the force of
law) made after the Closing Date of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return on
capital of such Bank (or its Parent) as a consequence of such Bank’s
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
reasonably deemed by such Bank to be material, then from time to time, within
15 days after demand by such Bank (with a copy to the Administrative Agent),
the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction to the extent such Bank
generally imposes such additional amounts on other borrowers of such Bank in
similar circumstances.

 

(c)                                  Each
Bank will promptly notify the Borrower and the Administrative Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable

 

103

 

judgment of such Bank, be otherwise
disadvantageous to such Bank.  If such
Bank shall fail to notify Borrower of any such event within 90 days following
the end of the month during which such event occurred, then Borrower’s
liability for any amounts described in this Section incurred by such Bank
as a result of such event shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
such Bank actually notified Borrower of the occurrence of such event.  A certificate of any Bank claiming
compensation under this Section and setting forth a reasonably detailed
calculation of the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of demonstrable error.  In determining such amount, such Bank may use
any reasonable averaging and attribution methods.

 

(d)                                 If
at any time, any Bank shall be owed amounts pursuant to this Section 8.3,
the Borrower shall have the right, upon five (5) Domestic Business Day’s
notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank’s outstanding Loans and all amounts
due such Bank hereunder (including, without limitation, interest, Facility
Fees, Letter of Credit Fees and all amounts payable pursuant to Section 2.13
and this Section 8.3), and to become a Bank hereunder, or to obtain the
agreement of one or more existing Banks to offer to purchase the Commitments of
such Bank for such amount, which offer such Bank is hereby required to accept,
or (y) to repay in full all Loans then outstanding of such Bank, together with
interest thereon, Facility Fees, Letter of Credit Fees and all other amounts
due such Bank hereunder (including, without limitation, amounts payable
pursuant to Section 2.13 and this Section 8.3), upon which event,
such Bank’s Commitment shall be deemed to be cancelled pursuant to Section 2.11(e).  Any Bank subject to this Section 8.3(d) shall
retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.

 

SECTION 8.4                          Taxes.

 

(a)                                  Any
and all payments by the Borrower to or for the account of any Bank or the
Administrative Agent hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities

 

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with respect thereto, excluding, in
the case of each Bank and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank’s Applicable Lending Office or any political
subdivision thereof or by any other jurisdiction (or any political subdivision
thereof) as a result of a present or former connection between such Bank or
Administrative Agent and such other jurisdiction or by the United States (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Non-Excluded
Taxes”).  If the Borrower shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any sum
payable hereunder or under any Note or in respect of any Letter of Credit, (I)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 8.4) such Bank or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section 9.1,
the original or a certified copy of a receipt evidencing payment thereof.

 

(b)                                 In
addition, the Borrower agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, or charges or similar levies
which arise from any payment made hereunder or under any Note or in respect of
any Letter of Credit or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Letter of Credit (hereinafter
referred to as “Other Taxes”).

 

(c)                                  The
Borrower agrees to indemnify each Bank, the Fronting Bank and the
Administrative Agent for the full amount of Non-Excluded Taxes or Other Taxes
(including, without limitation, any Non-Excluded Taxes or Other Taxes imposed
or asserted by any jurisdiction on amounts payable under this Section 8.4)
paid by such Bank, the Fronting Bank or the Administrative Agent (as the case
may be) and, so

 

105

 

long as such Bank or Administrative Agent has
promptly paid any such Non-Excluded Taxes or Other Taxes, any liability for
penalties and interest arising therefrom or with respect thereto.  This indemnification shall be made within 15
days from the date such Bank, the Fronting Bank or the Administrative Agent (as
the case may be) makes demand therefor.

 

(d)                                 Each
Bank organized under the laws of a jurisdiction outside the United States, on
or prior to the date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other Bank, shall
provide the Borrower with an Internal Revenue Service Form W-8BEN or
W-8ECI, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and shall provide Borrower with two further copies of any such
form or certification on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to Borrower,
certifying (I) in the case of a Form 1001, that such Bank is entitled to
benefits under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States, and (ii) in the
case of being under Sections 1442(c)(1) and 1442(a) of the Code,
that it is entitled to an exemption from United States backup withholding
tax.  If the form provided by a Bank at
the time such Bank first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from “Non-Excluded Taxes” as defined in Section 8.4(a).

 

(e)                                  For
any period with respect to which a Bank has failed to provide the Borrower with
the appropriate form pursuant to Section 8.4(d) (unless such failure
is due to a change in treaty, law or regulation occurring subsequent to the
date on which a form originally was required to be provided), such Bank shall
not be entitled to indemnification under Section 8.4(c) with respect to
Non-Excluded Taxes imposed by the United States; provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Non-Excluded Taxes because of its failure
to

 

106

 

deliver a form required hereunder, the
Borrower shall take such steps as such Bank shall reasonably request to assist
such Bank to recover such Taxes so long as Borrower shall incur no cost or
liability as a result thereof.

 

(f)                                    If
the Borrower is required to pay additional amounts to or for the account of any
Bank pursuant to this Section 8.4, then such Bank will change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.

 

(g)                                 If,
at any time, any Bank shall be owed amounts pursuant to this Section 8.4,
the Borrower shall have the right, upon five (5) Domestic Business Day’s
notice to the Administrative Agent to either (x) cause a bank, reasonably
acceptable to the Administrative Agent, to offer to purchase the Commitments of
such Bank for an amount equal to such Bank’s outstanding Loans and all amounts
due such Bank hereunder (including, without limitation, interest, Facility
Fees, Letter of Credit Fees and all amounts payable pursuant to Section 2.13
and this Section 8.4), and to become a Bank hereunder, or to obtain the
agreement of one or more existing Banks to offer to purchase the Commitments of
such Bank for such amount, which offer such Bank is hereby required to accept,
or (y) to repay in full all Loans then outstanding of such Bank, together with
interest thereon, Facility Fees, Letter of Credit Fees and all other amounts
due such Bank hereunder (including, without limitation, amounts payable
pursuant to Section 2.13 and this Section 8.4), upon which event,
such Bank’s Commitment shall be deemed to be cancelled pursuant to Section 2.11(c).  Any Bank subject to this Section 8.4(d) shall
retain the benefits of Sections 2.16(f), 2.16(g), 8.3, 8.4 and 9.3 for the
period prior to such purchase or cancellation.

 

SECTION 8.5                          Base
Rate Loans Substituted for Affected Euro-Dollar Loans.  If (I) the obligation of any Bank to make
Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3 or 8.4 with respect to
its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days’ prior notice to such Bank through the Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank,
then, unless and until such Bank notifies the Borrower that the circumstances

 

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giving rise to such suspension or demand for
compensation no longer exist:

 

(a)                                  Borrower
shall be deemed to have delivered a Notice of Interest Rate Election with
respect to such affected Euro-Dollar Loans and thereafter all Loans which would
otherwise be made by such Bank as Euro-Dollar Loans shall be made instead as
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and

 

(b)                                 after
each of its Euro-Dollar Loans has been repaid, all payments of principal which
would otherwise be applied to repay such Euro-Dollar Loans shall be applied to
repay its Base Rate Loans instead, and

 

(c)                                  Borrower
will not be required to make any payment which would otherwise be required by Section 2.13
with respect to such Euro-Dollar Loans converted to Base Rate Loans pursuant to
clause (a) above.

 

ARTICLE IX

MISCELLANEOUS

 

SECTION 9.1                          Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
facsimile transmission followed by telephonic confirmation or similar writing)
and shall be given to such party:  (x) in
the case of the Borrower or the Administrative Agent, at its address, or
facsimile number set forth on the signature pages hereof with a duplicate
copy thereof, in the case of the Borrower, to the Borrower, at Equity
Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois
60606, Attn: General Counsel, and to DLA Piper Rudnick Gray Cary US LLP, 203
North LaSalle Street, Suite 1900, Chicago, Illinois 60601, Attn: James M.
Phipps, Esq., (y) in the case of any Bank, at its address, or facsimile
number set forth in its Administrative Questionnaire or (z) in the case of any
party, such other address, or facsimile number as such party may hereafter
specify for the purpose by notice to the Administrative Agent and the Borrower
and, if such party is the Borrower or the Administrative Agent, the Banks.  Each such notice, request or other
communication shall be effective (I) if given by facsimile transmission, when
such

 

108

 

facsimile is transmitted to the facsimile
number specified in this Section and the appropriate answerback or
facsimile confirmation is received, (ii) if given by certified registered
mail, return receipt requested, with first class postage prepaid, addressed as
aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a
nationally recognized overnight carrier, 24 hours after such communication is
deposited with such carrier with postage prepaid for next day delivery, or (iv) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article II
or Article VIII shall not be effective until received. The Administrative
Agent shall promptly notify the Banks of any change in the address of the
Borrower or the Administrative Agent.

 

SECTION 9.2                          No Waivers.  No failure or delay by the Administrative
Agent or any Bank in exercising any right, power or privilege hereunder or
under any Note shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

 

SECTION 9.3                          Expenses;
Indemnification.

 

(a)                                  The
Borrower shall pay within thirty (30) days after written notice from the
Administrative Agent, (I) all reasonable out-of-pocket costs and expenses of
the Administrative Agent and the Syndication Agent (including reasonable fees
and disbursements of special counsel Skadden, Arps, Slate, Meagher &
Flom LLP), in connection with the preparation of this Agreement, the Loan
Documents and the documents and instruments referred to therein, and any waiver
or consent hereunder or any amendment hereof or any Default or Event of Default
or alleged Default or Event of Default, (ii) all reasonable fees and
disbursements of special counsel Skadden, Arps, Slate, Meagher & Flom
LLP in connection with the syndication of the Loans and (iii) if an Event
of Default occurs, all reasonable out-of-pocket expenses incurred by the
Administrative Agent and each Bank (the Administrative Agent shall promptly
submit any expenses of any of the Banks to Borrower for reimbursement),
including fees and disbursements of counsel for the Administrative Agent and
each of the Banks, in connection with the enforcement of the Loan Documents and
the

 

109

 

instruments referred to therein and such
Event of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom; provided, however, that the
attorneys’ fees and disbursements for which Borrower is obligated under this
subsection (a)(iii) shall be limited to the reasonable
non-duplicative fees and disbursements of (A) counsel for Administrative
Agent, and (B) counsel for all of the Banks as a group; and provided,
further, that all other costs and expenses for which Borrower is
obligated under this subsection (a)(iii) shall be limited to the
reasonable non-duplicative costs and expenses of Administrative Agent.  For purposes of this Section 9.3(a)(iii),
(1) counsel for Administrative Agent shall mean a single outside law firm
representing Administrative Agent, and (2) counsel for all of the Banks as
a group shall mean a single outside law firm representing such Banks as a group
(which law firm may or may not be the same law firm representing either or both
of Administrative Agent and/or Syndication Agent).

 

(b)                                 The
Borrower agrees to indemnify the Syndication Agent, the Administrative Agent
and each Bank, their respective affiliates and the respective directors,
officers, agents and employees of the foregoing (each an “Indemnitee”)
and hold each Indemnitee harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind, including, without limitation,
the reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any investigative, administrative or judicial
proceeding that may at any time (including, without limitation, at any time
following the payment of the Obligations) be asserted against any Indemnitee,
as a result of, or arising out of, or in any way related to or by reason of,
(I) any of the transactions contemplated by the Loan Documents or the
execution, delivery or performance of any Loan Document, (ii) any
violation by the Borrower, EQR or the Environmental Affiliates of any
applicable Environmental Law, (iii) any Environmental Claim arising out of
the management, use, control, ownership or operation of property or assets by
the Borrower, EQR or any of the Environmental Affiliates, including, without
limitation, all on-site and off-site activities of Borrower or any
Environmental Affiliate involving Materials of Environmental Concern, (iv) the
breach of any environmental representation or warranty set forth herein, but
excluding those liabilities, losses, damages, costs and expenses (a) for
which such Indemnitee has been compensated pursuant to the terms of this
Agreement, (b) incurred solely by reason of the gross

 

110

 

negligence, wilful misconduct, bad faith or
fraud of any Indemnitee as finally determined by a court of competent
jurisdiction, (c) violations of Environmental Laws relating to a Property which
are caused by the act or omission of such Indemnitee after such Indemnitee
takes possession of such Property or (d) any liability of such Indemnitee
to any third party based upon contractual obligations of such Indemnitee owing
to such third party which are not expressly set forth in the Loan
Documents.  In addition, the
indemnification set forth in this Section 9.3(b) in favor of any
director, officer, agent or employee of Administrative Agent, Syndication Agent
or any Bank shall be solely in his or her respective capacity as such director,
officer, agent or employee.  The Borrower’s
obligations under this Section shall survive the termination of this
Agreement and the payment of the Obligations.

 

SECTION 9.4                          Sharing
of Set-Offs.  In addition to
any rights now or hereafter granted under applicable law or otherwise, and not
by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to the Borrower or to any other Person, any such notice being hereby
expressly waived, but subject to the prior consent of the Administrative Agent,
to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at
any time held or owing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations of the Borrower then
due and payable to such Bank under this Agreement or under any of the other
Loan Documents, including, without limitation, all interests in Obligations
purchased by such Bank.  Each Bank agrees
that if it shall by exercising any right of set-off or counterclaim or
otherwise (except pursuant to Sections 8.2, 8.3, 8.4 or 9.6), receive payment
of a proportion of the aggregate amount of principal and interest due with
respect to any Note held by it or Letter of Credit participated in by it, or,
in the case of the Fronting Bank, Letter of Credit issued by it, which is
greater than the proportion received by any other Bank or Letter of Credit
issued or participated in by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so

 

111

 

that all such payments of principal and
interest with respect to the Notes held by the Banks or Letter of Credit issued
or participated in by such other Banks shall be shared by the Banks pro rata; provided
that nothing in this Section shall impair the right of any Bank to
exercise any right of set-off or counterclaim it may have to any deposits not
received in connection with the Loans and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes or in respect of the Letters of Credit.  The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a participation
in a Note or a Letter of Credit, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation. Notwithstanding anything to the contrary contained herein, any
Bank may, by separate agreement with the Borrower, waive its right to set off
contained herein or granted by law and any such written waiver shall be
effective against such Bank under this Section 9.4.

 

SECTION 9.5                          Amendments
and Waivers.  Any provision of
this Agreement or the Notes, the Letter of Credit Documents or other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of the Administrative Agent or the Swingline Lender in its
capacity as Administrative Agent or Swingline Lender, as applicable, are
affected thereby, by the Administrative Agent or Swingline Lender, as
applicable); provided that no such amendment or waiver with respect to
this Agreement, the Notes, the Letter of Credit Documents or any other Loan
Documents shall, unless signed by all the Banks, (I) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, (iii) postpone
the date fixed for any payment of principal of or interest on any Loan or any
fees hereunder or for any reduction or termination of any Commitment or extend
the term of any Letter of Credit beyond twelve (12) months after the Maturity
Date, (iv) change the percentage of the Commitments (except pursuant to
the Increase Option) or of the aggregate unpaid principal amount of the Notes,
or the number of

 

112

 

Banks, which shall be required for the Banks
or any of them to take any action under this Section or any other
provision of this Agreement, (v) release the EQR Guaranty or any Down REIT
Guaranty, (vi) modify the definition of “Required Banks”, or (vii) modify
the provisions of this Section 9.5.

 

SECTION 9.6                          Successors
and Assigns.

 

(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement or the other Loan Documents without the prior written consent of all
Banks and the Administrative Agent and any Bank may not assign or otherwise
transfer any of its interest under this Agreement except as permitted in subsection (b) and
(c) of this Section 9.6.

 

(b)                                 Any
Bank may at any time grant (I) prior to the occurrence of an Event of Default,
to an existing Bank or one or more banks, finance companies, insurance
companies or other financial institutions in minimum amounts of not less than
$5,000,000 (or any lesser amount in the case of participations to an existing
Bank or in the case of participations with respect to Money Market Loans only)
(it being understood that no Bank may hold Commitments of which less than
$10,000,000 in the aggregate is for its own account, unless its Commitments
shall have been reduced to zero) and (ii) after the occurrence and during
the continuance of an Event of Default, to any Person in any amount (in each
case, a “Participant”), participating interests in its Commitment or any
or all of its Loans, with (and subject to) the consent of, provided that no
Event of Default shall have occurred and be continuing, the Borrower (other
than with respect to Money Market Loans), which consent shall not be
unreasonably withheld or delayed.  The
Administrative Agent shall be notified by any such Bank of any such
participation prior to the same becoming effective. Any participation made
during the continuation of an Event of Default shall not be affected by the
subsequent cure of such Event of Default. 
In the event of any such grant by a Bank of a participating interest to
a Participant, whether or not upon notice to the Borrower and the
Administrative Agent, such Bank shall remain responsible for the performance of
its obligations hereunder, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank’s

 

113

 

rights and obligations under this
Agreement.  Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause
(I), (ii), (iii), (iv) or (v) of Section 9.5 without the consent
of the Participant.  The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article VIII with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of
this Agreement only to the extent of, and subject to the restrictions with
respect to, a participating interest granted in accordance with this subsection (b).

 

(c)                                  Any
Bank may at any time assign to (I) prior to the occurrence of an Event of Default,
(A) an existing Bank, (B) one or more banks, finance companies,
insurance or other financial institutions which (1) has (or, in the case
of a bank which is a subsidiary, such bank’s parent has) a rating of its senior
debt obligations of not less than Baa-1 by Moody’s or a comparable rating by a
rating agency acceptable to Administrative Agent and (2) has total assets
in excess of Ten Billion Dollars ($10,000,000,000), or (c) with the prior
consent and approval of the Administrative Agent, each Fronting Bank and
Borrower, a wholly-owned affiliate of such transferor Bank if such transferor
Bank then meets the requirements of clause (i)(B) or, if such transferor
Bank’s parent then meets the requirements of clause (i)(B), a wholly-owned
affiliate of such parent, in each case in minimum amounts of not less than Ten
Million Dollars ($10,000,000) and integral multiples of One Million Dollars
($1,000,000) thereafter (or any lesser amount in the case of assignments to an
existing Bank) (it being understood that no Bank may hold Commitments of less
than $10,000,000 in the aggregate, unless its Commitments shall have been
reduced to zero) and (ii) after the occurrence and during the continuance
of an Event of Default, to any Person in any amount (in each case, an “Assignee”),
all or a proportionate part of all, of its rights and obligations under this
Agreement, the Notes and the other Loan Documents, and, in either case, such
Assignee shall assume

 

114

 

such rights and obligations, pursuant to a
Transfer Supplement in substantially the form of Exhibit ”E” hereto
executed by such Assignee and such transferor Bank, with (and subject to) the
consent of the Administrative Agent and each Fronting Bank and, provided that
no Event of Default shall have occurred and be continuing, the Borrower, which
consent shall not be unreasonably withheld or delayed; provided that if
an Assignee is an affiliate of such transferor Bank which meets the
requirements of clause (i)(B) above or was a Bank immediately prior to
such assignment, no such consent shall be required; and provided further
that such assignment may, but need not, include rights of the transferor Bank
in respect of outstanding Money Market Loans. 
Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights and obligations of a
Bank with a Commitment as set forth in such instrument of assumption, and no
further consent or action by any party shall be required and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent.  Upon the consummation of any
assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to the Assignee.  In connection with any such assignment, the
transferor Bank shall pay to the Administrative Agent an administrative fee for
processing such assignment in the amount of $2,500 provided that such fee shall
be paid by the Assignee if such assignment is required by Section 8.2, 8.3
or 8.4.  If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Administrative Agent certification as
to exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.4. 
Any assignment made during the continuation of an Event of Default shall
not be affected by any subsequent cure of such Event of Default.

 

(d)                                 Any
Bank (each, a “Designating Lender”) may at any time designate one
Designated Lender to fund Money Market Loans on behalf of such Designating
Lender subject to the terms of this Section 9.6(d) and the provisions
in Sections 9.6(b) and (c) shall not apply to such designation.  No Bank may designate more than one (1) Designated
Lender at any one time.  The parties to
each such designation shall execute and deliver to the Administrative Agent for
its

 

115

 

acceptance a Designation Agreement.  Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Administrative Agent will
accept such Designation Agreement and will give prompt notice thereof to the
Borrower, whereupon, (I) the Borrower shall execute and deliver to the
Designating Lender a Designated Lender Note payable to the order of the
Designated Lender, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Lender shall become a party to this
Agreement with a right (subject to the provisions of Section 2.3(b)) to
make Money Market Loans on behalf of its Designating Lender pursuant to Section 2.3
after the Borrower has accepted a Money Market Loan (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required
to make payments with respect to any obligations in this Agreement except to
the extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation
and assumption by the Designated Lender, the Designating Lender shall be and
remain obligated to the Borrower, the Administrative Agent and the Banks for
each and every obligation of the Designating Lender and its related Designated
Lender with respect to this Agreement, including, without limitation, any
indemnification obligations under Section 7.6 hereof and any sums
otherwise payable to the Borrower by the Designated Lender.  Each Designating Lender shall serve as the
administrative agent of the Designated Lender and shall on behalf of, and to
the exclusion of, the Designated Lender: (I) receive any and all payments made
for the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or
relating to this Agreement and the other Loan Documents.  Any such notice, communication, vote,
approval, waiver, consent or amendment shall be signed by the Designating
Lender as administrative agent for the Designated Lender and shall not be
signed by the Designated Lender on its own behalf and shall be binding upon the
Designated Lender to the same extent as if signed by the Designated Lender on
its own behalf.  The Borrower, the
Administrative Agent and the Banks may rely thereon without any requirement
that the Designated Lender sign or acknowledge the same.  No Designated Lender may assign or transfer
all or any portion of its interest hereunder or under any other Loan Document,
other than assignments to the

 

116

 

Designating Lender which
originally designated such Designated Lender or otherwise in accordance with
the provisions of Sections 9.6 (b) and (c).

 

(e)                                  Any
Bank may at any time assign all or any portion of its rights under this
Agreement and its Note and the Letter(s) of Credit participated in by such Bank
or, in the case of the Fronting Bank, issued by it, to a Federal Reserve
Bank.  No such assignment shall release
the transferor Bank from its obligations hereunder.

 

(f)                                    No
Assignee, Participant or other transferee of any Bank’s rights shall be entitled
to receive any greater payment under Section 8.3 or 8.4 than such Bank
would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower’s prior written consent or by
reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.

 

SECTION 9.7                          Collateral.  Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any “margin stock” (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.

 

SECTION 9.8                          Governing
Law; Submission to Jurisdiction.

 

(a)                                  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).

 

(b)                                 Any
legal action or proceeding with respect to this Agreement or any other Loan
Document and any action for enforcement of any judgment in respect thereof may
be brought in the courts of the State of Illinois or of the United States of
America for the Northern District of Illinois, and, by execution and delivery
of this Agreement, the Borrower hereby accepts for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and appellate courts

 

117

 

from any thereof.  The Borrower irrevocably consents to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the hand delivery, or mailing of copies thereof by registered
or certified mail, postage prepaid, to the Borrower at its address set forth
below.  The Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts referred
to above and hereby further irrevocably waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum. 
Nothing herein shall affect the right of the Administrative Agent to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other
jurisdiction.

 

SECTION 9.9                          Counterparts;
Integration; Effectiveness. 
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. 
This Agreement constitutes the entire agreement and understanding among
the parties hereto and supersedes any and all prior agreements and understandings,
oral or written, relating to the subject matter hereof.  This Agreement shall become effective upon
receipt by the Administrative Agent and the Borrower of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to which
an executed counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of telegraphic or other written
confirmation from such party of execution of a counterpart hereof by such
party).

 

SECTION 9.10                    WAIVER
OF JURY TRIAL.  EACH OF THE
BORROWER, THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE BANKS HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

SECTION 9.11                    Survival.  All indemnities set forth herein (including,
without limitation, Sections 2.16(g), 8.4 and 9.3) shall survive the execution
and delivery of this Agreement and the other Loan Documents and the making and
repayment of the Obligations.

 

118

 

SECTION 9.12                    Domicile
of Loans.  Each Bank may
transfer and carry its Loans at, to or for the account of any domestic or
foreign branch office, subsidiary or affiliate of such Bank.

 

SECTION 9.13                    Limitation
of Liability.  No claim may be
made by the Borrower or any other Person acting by or through Borrower against
the Administrative Agent or any Bank or the affiliates, directors, officers,
employees, attorneys or agent of any of them for any consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or by the other Loan Documents, or any act, omission or event
occurring in connection therewith; and the Borrower hereby waives, releases and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.

 

SECTION 9.14                    Recourse
Obligation. This Agreement and the Obligations hereunder are fully
recourse to the Borrower and to EQR pursuant to the EQR Guaranty and to any
Down REIT Guarantor pursuant to any Down REIT Guaranty. Notwithstanding the
foregoing, no recourse under or upon any obligation, covenant, or agreement
contained in this Agreement shall be had against any officer, director,
shareholder or employee of the Borrower or any officer, director, shareholder
or employee of EQR except in the event of fraud or misappropriation of funds on
the part of such officer, director, shareholder or employee.

 

SECTION 9.15                    Confidentiality.  The Administrative Agent and each Bank shall
use reasonable efforts to assure that information about Borrower, EQR and its
Subsidiaries and Investment Affiliates, and the Properties thereof and their
operations, affairs and financial condition, not generally disclosed to the
public, which is furnished to Administrative Agent or any Bank pursuant to the
provisions hereof or any other Loan Document is used only for the purposes of
this Agreement and shall not be divulged to any Person other than the
Administrative Agent, the Banks, and their affiliates and respective officers,
directors, employees and agents who are actively and directly participating in
the evaluation, administration or enforcement of the Loan, this Agreement, the
Loan Documents and the extension of credit hereunder, except:  (a) to their attorneys and accountants, (b) in
connection with the enforcement of the rights and exercise of any remedies of

 

119

 

the Administrative Agent and the Banks
hereunder and under the other Loan Documents, (c) in connection with
assignments and participations and the solicitation of prospective assignees
and participants referred to in Section 9.6 hereof, who have agreed in
writing to be bound by a confidentiality agreement substantially equivalent to
the terms of this Section 9.15, and (d) as may otherwise be required
or requested by any regulatory authority having jurisdiction over the
Administrative Agent or any Bank or by any applicable law, rule, regulation or
judicial process.

 

SECTION 9.16                    Bank’s
Failure to Fund.

 

(a)                                  Unless
the Administrative Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank’s share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection (b) of
Section 2.4 or Section 2.16(e), and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount.  If and to the
extent that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, in accordance with the provisions of Section 2.4(c)
or Section 2.16(e).  If such Bank
shall repay to the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Bank’s Loan included in such Borrowing for
purposes of this Agreement as of the date of such Borrowing.  Nothing contained in this Section or
Sections 2.4(c) or 2.16(e) shall be deemed to reduce the Commitment of any
Bank or in any way affect the rights of Borrower with respect to any defaulting
Bank or Administrative Agent.  The
failure of any Bank to make available to the Administrative Agent such Bank’s
share of any Borrowing in accordance with Sections 2.4(b) or 2.16(e) shall
not relieve any other Bank of its obligations to fund its Commitment, in
accordance with the provisions hereof.

 

(b)                                 If
a Bank does not remit to Administrative Agent such Bank’s Pro Rata Share of a
Loan in accordance herewith, then neither Administrative Agent nor the other
Banks shall be required or obligated to fund such Bank’s Pro Rata Share of such
Loan.

 

120

 

(c)                                  As
used herein, the following terms shall have the meanings set forth below:

 

(i)                                     “Defaulting
Bank” shall mean any Bank which (x) does not remit to the Administrative
Agent such Bank’s Pro Rata Share of a Loan in accordance herewith for a period
of five (5) Domestic Business Days after notice of such failure from
Administrative Agent, (y) shall otherwise fail to perform such Bank’s
obligations under the Loan Documents for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, or (z)
shall fail to pay the Administrative Agent or any other Bank, as the case may
be, upon demand, such Bank’s Pro Rata Share of any costs, expenses or
disbursements incurred or made by the Administrative Agent and payable by such
Bank pursuant to the terms of the Loan Documents for a period of five (5) Domestic
Business Days after notice of such failure from Administrative Agent, and in
all cases, such failure is not as a result of a good faith dispute as to
whether such advance is properly required to be made pursuant to the provisions
of this Agreement, or as to whether such other performance or payment is
properly required pursuant to the provisions of this Agreement.

 

(ii)                                  “Junior
Creditor”  means any Defaulting Bank
which has not (x) fully cured each and every default on its part under the Loan
Documents and (y) unconditionally tendered to the Administrative Agent such
Defaulting Bank’s Pro Rata Share of all costs, expenses and disbursements
required to be paid or reimbursed pursuant to the terms of the Loan Documents.

 

(iii)                               “Payment
in Full” means, as of any date, the receipt by the Banks who are not Junior
Creditors of an amount of cash, in lawful currency of the United States,
sufficient to indefeasibly pay in full all Senior Debt.

 

(iv)                              “Senior
Debt” means (x) collectively, any and all indebtedness, obligations and
liabilities of the Borrower to the Banks who are not Junior Creditors, or any
of them, from time to time, whether fixed or contingent, direct or indirect,
joint or several, due or not due, liquidated or unliquidated, determined or
undetermined, arising by contract, operation of law or otherwise, whether on
open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing
after the filing of a petition initiating any proceeding referred to in Section 6.1(f) or

 

121

 

 

(g)), reimbursement for fees,
indemnities, costs, expenses or otherwise, which arise under, in connection
with or in respect of the Loans or the Loan Documents, and (y) any and all
deferrals, renewals, extensions and refundings of, or amendments, restatements,
rearrangements, modifications or supplements to, any such indebtedness,
obligation or liability.

 

(v)                                 “Subordinated
Debt”  means (x) any and all
indebtedness, obligations and liabilities of Borrower to one or more Junior
Creditors from time to time, whether fixed or contingent, direct or indirect,
joint or several, due or not due, liquidated or unliquidated, determined or
undetermined, arising by contract, operation of law or otherwise, whether on
open account or evidenced by one or more instruments, and whether for
principal, premium, interest (including, without limitation, interest accruing
after the filing of a petition initiating any proceeding referred to in Section 6.1(f) or
(g)), reimbursement for fees, indemnities, costs, expenses or otherwise, which
arise under, in connection with or in respect of the Loans or the Loan
Documents, and (y) any and all deferrals, renewals, extensions and refundings
of, or amendments, restatements, rearrangements, modifications or supplements
to, any such indebtedness, obligation or liability.

 

(d)                                 Immediately
upon a Bank’s becoming a Junior Creditor, no Junior Creditor shall, prior to
Payment in Full of all Senior Debt:

 

(i)                                     accelerate,
demand payment of, sue upon, collect, or receive any payment upon, in any manner,
or satisfy or otherwise discharge, any Subordinated Debt, whether for
principal, interest or otherwise;

 

(ii)                                  take or enforce any Liens to secure Subordinated Debt or
attach or levy upon any assets of Borrower to enforce any Subordinated Debt;

 

(iii)                               enforce or apply any security for any Subordinated Debt; or

 

(iv)                              incur any debt or liability, or the like, to, or receive any
loan, return of capital, advance, gift or any other property from, the
Borrower.

 

(e)                                  In
the event of:

 

122

 

(i)                                     any insolvency, bankruptcy, receivership, liquidation,
dissolution, reorganization, readjustment, composition or other similar
proceeding relating to Borrower;

 

(ii)                                  any liquidation, dissolution or other winding-up of the
Borrower, voluntary or involuntary, whether or not involving insolvency,
reorganization or bankruptcy proceedings;

 

(iii)                               any assignment by the Borrower for the benefit of creditors;

 

(iv)                              any sale or other transfer of all or substantially all
assets of the Borrower; or

 

(v)                                 any other marshaling of the assets of the Borrower;

 

each of the Banks
shall first have received Payment in Full of all Senior Debt before any payment
or distribution, whether in cash, securities or other property, shall be made
in respect of or upon any Subordinated Debt. 
Any payment or distribution, whether in cash, securities or other
property that would otherwise be payable or deliverable in respect of
Subordinated Debt to any Junior Creditor but for this Agreement shall be paid or
delivered directly to the Administrative Agent for distribution to the Banks in
accordance with this Agreement until Payment in Full of all Senior Debt.  If any Junior Creditor receives any such
payment or distribution, it shall promptly pay over or deliver the same to the
Administrative Agent for application in accordance with the preceding sentence.

 

(f)                                    Each
Junior Creditor shall file in any bankruptcy or other proceeding of Borrower in
which the filing of claims is required by law, all claims relating to
Subordinated Debt that such Junior Creditor may have against Borrower and
assign to the Banks who are not Junior Creditors all rights of such Junior
Creditor thereunder.  If such Junior
Creditor does not file any such claim prior to forty-five (45) days before the
expiration of the time to file such claim, Administrative Agent, as
attorney-in-fact for such Junior Creditor, is hereby irrevocably authorized to
do so in the name of such Junior Creditor or, in Administrative Agent’s sole
discretion, to assign the claim to a nominee and to cause proof of claim to be
filed in the name of such nominee.  The
foregoing power of attorney is

 

123

 

coupled with an
interest and cannot be revoked.  The
Administrative Agent shall, to the exclusion of each Junior Creditor, have the
sole right, subject to Section 9.5 hereof, to accept or reject any plan
proposed in any such proceeding and to take any other action that a party
filing a claim is entitled to take.  In
all such cases, whether in administration, bankruptcy or otherwise, the Person
or Persons authorized to pay such claim shall pay to Administrative Agent the
amount payable on such claim and, to the full extent necessary for that
purpose, each Junior Creditor hereby transfers and assigns to the
Administrative Agent all of the Junior Creditor’s rights to any such payments
or distributions to which Junior Creditor would otherwise be entitled.

 

(g)                                 (I)  If any payment or
distribution of any character or any security, whether in cash, securities or
other property, shall be received by any Junior Creditor in contravention of
any of the terms hereof, such payment or distribution or security shall be
received for the benefit of, and shall promptly be paid over or delivered and
transferred to, Administrative Agent for application to the payment of all
Senior Debt, to the extent necessary to achieve Payment in Full.  In the event of the failure of any Junior
Creditor to endorse or assign any such payment, distribution or security,
Administrative Agent is hereby irrevocably authorized to endorse or assign the
same as attorney-in-fact for such Junior Creditor.

 

(ii)  Each Junior Creditor shall take
such action (including, without limitation, the execution and filing of a
financing statement with respect to this Agreement and the execution,
verification, delivery and filing of proofs of claim, consents, assignments or
other instructions that Administrative Agent may require from time to time in
order to prove or realize upon any rights or claims pertaining to Subordinated
Debt or to effectuate the full benefit of the subordination contained herein)
as may, in Administrative Agent’s sole and absolute discretion, be necessary or
desirable to assure the effectiveness of the subordination effected by this
Agreement.

 

(h)                                 (I)  Each Bank that becomes a Junior Creditor
understands and acknowledges by its execution hereof that each other Bank is
entering into this Agreement and the other Loan Documents in reliance upon the
absolute subordination in right of payment and in time of payment of
Subordinated Debt to Senior Debt as set forth herein.

 

124

 

(ii)  Only upon the Payment in Full of
all Senior Debt shall any Junior Creditor be subrogated to any remaining rights
of the Banks which are not Defaulting Banks to receive payments or
distributions of assets of the Borrower made on or applicable to any Senior
Debt.

 

(iii)  Each Junior Creditor agrees that
it will deliver all instruments or other writings evidencing any Subordinated
Debt held by it to Administrative Agent, promptly after request therefor by the
Administrative Agent.

 

(iv)  No Junior Creditor may at any time
sell, assign or otherwise transfer any Subordinated Debt, or any portion thereof,
including, without limitation, the granting of any Lien thereon, unless and
until satisfaction of the requirements of Section 9.6 above and the
proposed transferee shall have assumed in writing the obligation of the Junior
Creditor to the Banks under this Agreement, in a form acceptable to the
Administrative Agent.

 

(v)  If any of the Senior Debt should be
invalidated, avoided or set aside, the subordination provided for herein
nevertheless shall continue in full force and effect and, as between the Banks
which are not Defaulting Banks and all Junior Creditors, shall be and be deemed
to remain in full force and effect.

 

(vi)  Each Junior Creditor hereby
irrevocably waives, in respect of Subordinated Debt, all rights (x) under
Sections 361 through 365, 502(e) and 509 of the Bankruptcy Code (or any
similar sections hereafter in effect under any other Federal or state laws or
legal or equitable principles relating to bankruptcy, insolvency,
reorganizations, liquidations or otherwise for the relief of debtors or
protection of creditors), and (y) to seek or obtain conversion to a different
type of proceeding or to seek or obtain dismissal of a proceeding, in each case
in relation to a bankruptcy, reorganization, insolvency or other proceeding
under similar laws with respect to the Borrower.  Without limiting the generality of the
foregoing, each Junior Creditor hereby specifically waives (A) the right
to seek to give credit (secured or otherwise) to the Borrower in any way under Section 364
of the Bankruptcy Code unless the same is subordinated in all respects to
Senior Debt in a manner acceptable to Administrative Agent in its sole and
absolute discretion and (B) the right to receive any collateral security
(including any “super priority” or

 

125

 

equal or “priming” or replacement Lien) for any Subordinated Debt
unless the Banks which are not Defaulting Banks have received a senior position
acceptable to the Banks in their sole and absolute discretion to secure all Senior
Debt (in the same collateral to the extent collateral is involved).

 

(i)                                     (I)  In addition to and not in limitation of the
subordination effected by this Section 9.16, the Administrative Agent and
each of the Banks which are not Defaulting Banks may in their respective sole
and absolute discretion also exercise any and all other rights and remedies
available at law or in equity in respect of a Defaulting Bank; and

 

(ii)   The Administrative
Agent shall give each of the Banks notice of the occurrence of a default under
this Section 9.16 by a Defaulting Bank and if the Administrative Agent
and/or one or more of the other Banks shall, at their option, fund any amounts
required to be paid or advanced by a Defaulting Bank, the other Banks who have
elected not to fund any portion of such amounts shall not be liable for any
reimbursements to the Administrative Agent and/or to such other funding Banks.

 

(j)                                     Notwithstanding
anything to the contrary contained or implied herein, a Defaulting Bank shall
not be entitled to vote on any matter as to which a vote by the Banks is
required hereunder, including, without limitation, any actions or consents on
the part of the Administrative Agent as to which the approval or consent of all
the Banks or the Required Banks is required under Article VIII, Section 9.5
or elsewhere, so long as such Bank is a Defaulting Bank; provided, however,
that in the case of any vote requiring the unanimous consent of the Banks, if
all the Banks other than the Defaulting Bank shall have voted in accordance
with each other, then the Defaulting Bank shall be deemed to have voted in
accordance with such Banks.

 

(k)                                  Each
of the Administrative Agent and any one or more of the Banks which are not
Defaulting Banks may, at their respective option, (I) advance to the Borrower
such Bank’s Pro Rata Share of the Loans not advanced by a Defaulting Bank in
accordance with the Loan Documents, or (ii) pay to the Administrative
Agent such Bank’s Pro Rata Share of any costs, expenses or disbursements
incurred or made by the Administrative Agent pursuant to the terms of this
Agreement not theretofore paid by a Defaulting Bank.  Immediately upon the making of any such
advance by the

 

126

 

Administrative Agent or any one of the Banks,
such Bank’s Pro Rata Share and the Pro Rata Share of the Defaulting Bank shall
be recalculated to reflect such advance. 
All payments, repayments and other disbursements of funds by the
Administrative Agent to Banks shall thereupon and, at all times thereafter be
made in accordance with such Bank’s recalculated Pro Rata Share unless and
until a Defaulting Bank shall fully cure all defaults on the part of such
Defaulting Bank under the Loan Documents or otherwise existing in respect of
the Loans or this Agreement, at which time the Pro Rata Share of the Bank(s)
which advanced sums on behalf of the Defaulting Bank and of the Defaulting Bank
shall be restored to their original percentages.

 

SECTION 9.17                    No
Bankruptcy Proceedings.  Each
of the Borrower, the Banks and the Administrative Agent hereby agrees that it
will not institute against any Designated Lender or join any other Person in
instituting against any Designated Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any federal or state
bankruptcy or similar law, until the later to occur of (I) one year and one day
after the payment in full of the latest maturing commercial paper note issued
by such Designated Lender and (ii) the Maturity Date.

 

SECTION 9.18                    Down REIT Guaranties.

 

(a)                                  Notwithstanding any
other provision hereof or of any other Loan Document to the contrary, the
Administrative Agent, the Banks and Designated Lenders agree with Borrower that
any funds, claims, or distributions actually received by the Administrative
Agent for the account of any Bank or Designated Lender as a result of the
enforcement of, or pursuant to, any Down REIT Guaranty, net of the
Administrative Agent’s and the Banks’ expenses of collection thereof (such net
amount, “Down REIT Guaranty Proceeds”), shall be made available for
distribution equally and ratably (in proportion to the aggregate amount of
principal, interest and other amounts then owed in respect of the Obligations
or of an issuance of Public Debt, as the case may be) among the Administrative
Agent, the Banks and the Designated Lenders and the trustee or trustees of any
Unsecured Debt, not subordinated to the Obligations (or to the holders
thereof), issued by Borrower, before or after the Effective Date, in offerings
registered under the Securities Act of 1933, as amended, or in transactions
exempt from registration pursuant to rule 144A or Regulation 8 thereunder
or listed on non-U.S. securities exchanges

 

127

 

(“Public Debt”), and the Administrative Agent is hereby
authorized by Borrower, by each Bank (on its own behalf and on behalf of its
Designated Lender, if any) and by each Down REIT Guarantor by its execution and
delivery of a Down REIT Guaranty, to make such Down REIT Guaranty Proceeds so
available.  No Bank or Designated Lender
shall have any interest in any amount paid over by the Administrative Agent to
the trustee or trustees in respect of any Public Debt (or to the holders
thereof) pursuant to the foregoing authorization.  This Section 9.18 shall apply
solely to Down REIT Guaranty Proceeds, and not to any payments, funds, claims
or distributions received by the Administrative Agent, any Bank or Designated
Lender directly or indirectly from Borrower or any other Person other than from
a Down REIT Guarantor pursuant to a Down REIT Guaranty.  Borrower is aware of the terms of the Down
REIT Guaranties, and specifically understands and agrees with the
Administrative Agent, the Banks and the Designated Lenders that, to the extent
Down REIT Guaranty Proceeds are distributed to holders of Public Debt or their
respective trustees, such Down REIT Guarantor has agreed that the Obligations
will not be deemed reduced by any such distributions and such Down REIT Guarantor
shall continue to make payments pursuant to its Down REIT Guaranty until such
time as the Obligations have been paid in full (and the Commitments have been
terminated and any Letter of Credit returned), after taking into account any
such distributions of Down REIT Guaranty Proceeds in respect of Indebtedness
other than the Obligations.

 

(b)                                 Nothing contained
herein shall be deemed (1) to limit, modify, or alter the rights of the
Administrative Agent, the Banks and the Designated Lenders under any Down REIT
Guaranty, (2) to subordinate the Obligations to any Public Debt, or (3) to
give any holder of Public Debt (or any trustee for such holder) any rights of
subrogation.

 

(c)                                  This Section 9.18
and all Down REIT Guaranties, are for the sole benefit
of the Administrative Agent, the Banks and the Designated Lenders and their
respective successors and assigns. 
Nothing contained herein or in any Down REIT Guaranty shall be deemed
for the benefit of any holder of Public Debt, or any trustee for such holder; nor
shall anything contained herein or therein be construed to impose on the
Administrative Agent, any Bank or any Designated Lender any fiduciary duties,
obligations or responsibilities to the holders of any Public Debt or their
trustees (including, but not limited to, any duty to pursue

 

128

 

any Down REIT
Guarantor for payment under its Down REIT Guaranty).

 

SECTION 9.19                    USA
PATRIOT Act Notice.  Each Bank
that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Bank) hereby notifies the Borrower
that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Bank or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.

 

SECTION 9.20                    Public/Private Information.  The Borrower hereby acknowledges that (a) the
Administrative Agent and/or the Syndication Agent will make available to the
Banks and the Fronting Bank materials and/or information provided by or on
behalf of the Borrower hereunder (collectively, “Borrower Materials”) by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the “Platform”) and (b) certain of the Banks may be “public-side”
lenders (i.e., Banks that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”).  The Borrower hereby agrees
that (w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to
have authorized the Administrative Agent, the Syndication Agent, the Fronting
Banks and the Banks to treat such Borrower Materials as not containing any
material non-public information with respect to the Borrower or its securities
for purposes of United States Federal and state securities laws (provided,
however, that to the extent such Borrower Materials constitute Information,
they shall be treated as set forth in Section 9.15); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform marked “PUBLIC” or through a portion of the Platform designated
“Public Investor;” and (z) the Administrative Agent and the Syndication Agent
shall be entitled to treat any Borrower Materials that are not marked

 

129

 

“PUBLIC” as being suitable only for posting
on a portion of the Platform not designated “Public Investor.”

 

130

 

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

 

 

	
   

  	
  ERP OPERATING LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: Equity Residential

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Mark J. Parrell

  	
   

  
	
   

  	
   

  	
  Name: Mark J. Parrell

  
	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile number: (312) 454-0039

  
	
   

  	
  Address:

  	
  Two North Riverside Plaza

  
	
   

  	
   

  	
  Suite 400

  
	
   

  	
   

  	
  Chicago, Illinois 60606

  
	
   

  	
   

  	
  Attn:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  For purposes of agreeing to be bound

  	
   

  	
   

  
	
  by the provisions of Section 5.13
  only:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EQUITY RESIDENTIAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Mark J. Parrell

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Mark J. Parrell

  	
   

  	
   

  
	
   

  	
  Title: First Vice President

  	
   

  	
   

  
								

 

 

Commitments

 

	
  $65,000,000

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
  Administrative Agent, as

  
	
   

  	
  Swingline Lender and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael W. Edwards

  	
   

  
	
   

  	
  Name: 
  Michael W. Edwards

  
	
   

  	
  Title: 
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Mail Code IL1-231-10-35

  
	
   

  	
  231 South LaSalle Street

  
	
   

  	
  Chicago, Illinois 60697

  
	
   

  	
  Attention: 
  Michael W. Edwards

  
	
   

  	
  Telecopy: 
  312-974-4970

  

 

132

 

	
  $65,000,000

  	
  JPMORGAN CHASE BANK, N.A., as

  
	
   

  	
  Syndication Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Marc Costantino

  	
   

  
	
   

  	
   

  	
  Name: 
  Marc Costantino

  
	
   

  	
   

  	
  Title: 
  Vice President

  

 

133

 

	
  $60,000,000

  	
  COMMERZBANK AG, NEW YORK AND GRAND

  CAYMAN BRANCHES, as Documentation

  Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ralph Marra

  	
   

  
	
   

  	
   

  	
  Name: 
  Ralph Marra

  
	
   

  	
   

  	
  Title: 
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Kerstin Micke

  	
   

  
	
   

  	
   

  	
  Name: 
  Kerstin Micke

  
	
   

  	
   

  	
  Title: 
  Assistant Treasurer

  

 

134

 

	
  $60,000,000

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as Documentation Agent

  and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Le Roy Savage

  	
   

  
	
   

  	
   

  	
  Name:  Le Roy Savage

  
	
   

  	
   

  	
  Title:  Vice President

  

 

135

 

	
  $50,000,000

  	
  PNC BANK, N.A., as Managing Agent

  and as a Bank

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Michael E. Smith

  	
   

  
	
   

  	
   

  	
  Name: 
  Michael E. Smith

  
	
   

  	
   

  	
  Title:  Senior Vice President

  

 

136

 

	
  $60,000,000

  	
  WELLS FARGO BANK, N.A., as

  Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Scott S. Solis

  	
   

  
	
   

  	
   

  	
  Name: 
  Scott S. Solis

  
	
   

  	
   

  	
  Title:  Vice President

  

 

137

 

	
  $25,000,000

  	
  THE BANK OF NEW YORK, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Rick Laudisi

  	
   

  
	
   

  	
   

  	
  Name: 
  Rick Laudisi

  
	
   

  	
   

  	
  Title:  Vice President

  

 

138

 

	
  $30,000,000

  	
  CITICORP NORTH AMERICA INC., as a

  Co-Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Blake R. Gronich

  	
   

  
	
   

  	
   

  	
  Name: 
  Blake R. Gronich

  
	
   

  	
   

  	
  Title:  Vice President

  

 

139

 

	
  $50,000,000

  	
  LASALLE BANK NATIONAL ASSOCIATION,

  as a Managing Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jay Palmer

  	
   

  
	
   

  	
   

  	
  Name: 
  Jay Palmer

  
	
   

  	
   

  	
  Title:  FVP

  

 

140

 

 

	
  $30,000,000

  	
  MORGAN STANLEY BANK, as a Co-Agent

  and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Daniel Twenge

  	
   

  
	
   

  	
   

  	
  Name: 
  Daniel Twenge

  
	
   

  	
   

  	
  Title:

  	
   Vice President

   Morgan Stanley Bank

  
					

 

141

 

	
  $35,000,000

  	
  THE ROYAL BANK OF SCOTLAND plc, as

  a Co-Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Bruce Ferguson

  	
   

  
	
   

  	
   

  	
  Name: 
  Bruce Ferguson

  
	
   

  	
   

  	
  Title:  Senior Vice President

  

 

142

 

	
  $35,000,000

  	
  MIZUHO CORPORATE BANK, LTD., as a

  Co-Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Yuichi Hirashima

  	
   

  
	
   

  	
   

  	
  Name: 
  Yuichi Hirashima

  
	
   

  	
   

  	
  Title:  Deputy General Manager

  

 

143

 

	
  $35,000,000

  	
  THE BANK OF NOVA SCOTIA, as a

  Co-Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  R.H. [illegible]

  	
   

  
	
   

  	
   

  	
  Name: 
  R.H. [illegible]

  
	
   

  	
   

  	
  Title:  Managing Director

  

 

144

 

	
  $30,000,000

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, as a Co-Agent and as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Brenda Casey

  	
   

  
	
   

  	
   

  	
  Name: 
  Brenda Casey

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Linda Wang

  	
   

  
	
   

  	
   

  	
  Name:  Linda Wang

  
	
   

  	
   

  	
  Title:  Vice President

  
						

 

145

 

	
  $25,000,000

  	
  THE GOVERNOR AND COMPANY OF THE

  BANK OF IRELAND, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Iain Donovan

  	
   

  
	
   

  	
   

  	
  Name:  Iain Donovan

  
	
   

  	
   

  	
  Title:  Authorised Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Daniel McAneney

  	
   

  
	
   

  	
   

  	
  Name:  Daniel McAneney

  
	
   

  	
   

  	
  Title:  Authorised Signatory

  
					

 

146

 

	
  $60,000,000

  	
  SUNTRUST BANK, as Documentation

  Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nancy B. Richards

  	
   

  
	
   

  	
   

  	
  Name: 
  Nancy B. Richards

  
	
   

  	
   

  	
  Title:  Vice President

  

 

147

 

	
  $60,000,000

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  Documentation Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Megan McBride

  	
   

  
	
   

  	
   

  	
  Name: 
  Megan McBride

  
	
   

  	
   

  	
  Title: 
  Senior Vice President

  

 

148

 

	
  $25,000,000

  	
  UNION BANK OF CALIFORNIA N.A., as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Trowbridge

  	
   

  
	
   

  	
   

  	
  Name: 
  Patrick Trowbridge

  
	
   

  	
   

  	
  Title:  Vice President

  

 

149

 

	
  $25,000,000

  	
  CREDIT SUISSE FIRST BOSTON, ACTING

  THROUGH ITS CAYMAN ISLANDS BRANCH,

  as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bill O’Daly

  	
   

  
	
   

  	
   

  	
  Name: 
  Bill O’Daly

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cassandra Droogan

  	
   

  
	
   

  	
   

  	
  Name: 
  Cassandra Droogan

  
	
   

  	
   

  	
  Title:  Associate

  
					

 

150

 

	
  $25,000,000

  	
  KEYBANK NATIONAL ASSOCIATION, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Woods

  	
   

  
	
   

  	
   

  	
  Name: 
  Donald Woods

  
	
   

  	
   

  	
  Title:  [illegible]

  

 

151

 

	
  $15,000,000

  	
  BANK HAPOALIM B.M., as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Surless

  	
   

  
	
   

  	
   

  	
  Name: 
  James P. Surless

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lenroy Hackett

  	
   

  
	
   

  	
   

  	
  Name: 
  Lenroy Hackett

  
	
   

  	
   

  	
  Title:  First Vice President

  
					

 

152

 

	
  $25,000,000

  	
  COMERICA BANK, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jessica L. Kempf

  	
   

  
	
   

  	
   

  	
  Name: 
  Jessica L. Kempf

  
	
   

  	
   

  	
  Title:  Assistant Vice President

  

 

153

 

	
  $15,000,000

  	
  MALAYAN BANKING BERHAD, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wan Fadzmi Othman

  	
   

  
	
   

  	
   

  	
  Name: 
  Wan Fadzmi Othman

  
	
   

  	
   

  	
  Title:  General Manager

  

 

154

 

	
  $15,000,000

  	
  THE NORTHERN TRUST COMPANY, as a

  Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eleanor Grumman

  	
   

  
	
   

  	
   

  	
  Name: 
  Eleanor Grumman

  
	
   

  	
   

  	
  Title:  Vice President

  

 

155

 

	
  $15,000,000

  	
  PEOPLE’S BANK, as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Jonassen

  	
   

  
	
   

  	
   

  	
  Name: 
  Steven Jonassen

  
	
   

  	
   

  	
  Title:  Vice President

  

 

156

 

	
  $30,000,000

  	
  MERRILL LYNCH BANK USA, as a

  Co-Agent and as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Louis Alder

  	
   

  
	
   

  	
   

  	
  Name: 
  Louis Alder

  
	
   

  	
   

  	
  Title:  Director

  

 

157

 

	
  $35,000,000

  	
  UFJ BANK LIMITED, as a Co-Agent and

  as a Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jesse McDonald

  	
   

  
	
   

  	
   

  	
  Name: Jesse McDonald

  
	
   

  	
   

  	
  Title:  Vice President

  

 

158

 

Total Commitments

 

$1,000,000,000

 

159

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]