Document:

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                                                                   EXHIBIT 10.67

                            STOCK PURCHASE AGREEMENT

                                  BY AND AMONG

                       PINNACLE WEST CAPITAL CORPORATION,

                          EL DORADO INVESTMENT COMPANY

                                       AND

                                    USEC INC.

                                   DATED AS OF

                                  JULY 29, 2004

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                                TABLE OF CONTENTS

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Article 1         DEFINITIONS..................................................................1

         1.1      Definitions..................................................................1

Article 2         SALE AND PURCHASE OF COMPANY SHARES.........................................11

         2.1      Sale and Purchase of Company Shares.........................................11

         2.2      Purchase Price..............................................................11

         2.3      Preliminary Merger..........................................................11

         2.4      Closing.....................................................................11

         2.5      Closing Deliveries by the Seller Parties....................................11

         2.6      Closing Deliveries by Purchaser.............................................13

         2.7      Net Working Capital Determination...........................................14

Article 3         REPRESENTATIONS AND WARRANTIES REGARDING THE
                  SELLER PARTIES..............................................................15

         3.1      Organization and Authority of the Seller Parties............................15

         3.2      Authorization; Enforceability...............................................15

         3.3      No Conflicts................................................................16

         3.4      Brokers, Finders, etc.......................................................16

         3.5      Solvency....................................................................16

         3.6      Proceedings.................................................................16

Article 4         REPRESENTATIONS AND WARRANTIES REGARDING THE
                  COMPANY AND THE SUBSIDIARY..................................................17

         4.1      Organization and Authority of Company.......................................17

         4.2      No Conflicts................................................................17

         4.3      Notices and Consents........................................................18

         4.4      Capitalization of the Company; Title to the Company Shares..................18

         4.5      Capitalization of the Subsidiary; Title to the Subsidiary Shares............19

         4.6      Financial Statements........................................................20

         4.7      No Guarantees, Sureties, Indemnities........................................20

         4.8      Books and Records...........................................................21

         4.9      Taxes.......................................................................21

         4.10     Absence of Changes; Absence of Undisclosed Liabilities......................23
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         4.11     Proceedings.................................................................24

         4.12     Material Contracts..........................................................25

         4.13     Insurance...................................................................27

         4.14     Title to Assets.............................................................28

         4.15     Sufficiency of Assets.......................................................28

         4.16     Condition of Facilities and Equipment.......................................28

         4.17     Accounts Receivables........................................................28

         4.18     Accounts Payable............................................................29

         4.19     Intellectual Property.......................................................29

         4.20     Permits.....................................................................30

         4.21     Environmental Matters.......................................................31

         4.22     Compliance with Applicable Laws.............................................31

         4.23     Employees...................................................................32

         4.24     Benefit Plans...............................................................33

         4.25     Customers and Suppliers.....................................................36

         4.26     Affiliate Contracts.........................................................36

         4.27     Bank Accounts...............................................................36

         4.28     NRC Matters.................................................................37

         4.29     New Technology..............................................................37

Article 5         REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................37

         5.1      Organization and Authority of Purchaser.....................................37

         5.2      Authorization; Enforceability...............................................38

         5.3      No Conflicts................................................................38

         5.4      Notices and Consents........................................................38

         5.5      Proceedings.................................................................38

         5.6      Accredited Investor; Investment Intent......................................39

         5.7      Non-Foreign Status..........................................................39

         5.8      Brokers, Finders, etc.......................................................39

Article 6         COVENANTS OF THE PARTIES....................................................39
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         6.1      Conduct of Business.........................................................39

         6.2      Further Assurances..........................................................41

         6.3      Confidentiality; Announcements..............................................42

         6.4      Tax Matters.................................................................43

         6.5      Employment Matters..........................................................49

         6.6      Payment of Company and Subsidiary Debt Obligations..........................49

         6.7      No Solicitation.............................................................50

         6.8      Non-Competition; No Solicitation of Employees...............................50

         6.9      Termination of Affiliate Contracts..........................................51

         6.10     Change of Control Arrangements..............................................51

         6.11     Access to Company and Subsidiary Information................................51

         6.12     Use of Company and Subsidiary Name After the Closing........................52

         6.13     Parent Support Obligations..................................................52

Article 7         CONDITIONS FOR CLOSING......................................................53

         7.1      Conditions to Obligations of the Seller Parties.............................53

         7.2      Conditions to Obligations of Purchaser......................................53

Article 8         TERMINATION.................................................................55

         8.1      Termination.................................................................55

         8.2      Effect of Termination.......................................................56

Article 9         SURVIVAL AND INDEMNIFICATION................................................56

         9.1      Survival....................................................................56

         9.2      Indemnification By the Seller Parties.......................................56

         9.3      Indemnification by Purchaser................................................57

         9.4      Limitations on Indemnification Claims.......................................58

         9.5      Timing of Indemnification Claims............................................59

         9.6      Third-Party Claim Procedures................................................60

         9.7      Reserve Indemnity...........................................................62

         9.8      Exclusive Remedy............................................................62

Article 10        MISCELLANEOUS...............................................................62
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         10.1     Expenses....................................................................62

         10.2     Specific Performance........................................................63

         10.3     Severability................................................................63

         10.4     Notices.....................................................................63

         10.5     Dispute Resolution..........................................................64

         10.6     Headings; Interpretation....................................................65

         10.7     Entire Agreement............................................................65

         10.8     Governing Law, etc..........................................................66

         10.9     Binding Effect; Assignment..................................................66

         10.10    No Third Party Beneficiaries................................................66

         10.11    Amendment; Waivers, etc.....................................................66

         10.12    Dates and Times.............................................................66

         10.13    Joint Preparation...........................................................67

         10.14    Limitation of Liability.....................................................67

         10.15    Counterparts................................................................67

LIST OF EXHIBITS

Exhibit A         Form of General Release
Exhibit B         Form of Right-to-Use Opinion
Exhibit C         Form of Indemnification Agreement
Exhibit D         Form of Retention/Confidentiality/Non-compete Agreement
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<PAGE>

                            STOCK PURCHASE AGREEMENT

         This Stock Purchase Agreement (this "Agreement"), dated as of July 29,
2004, is made by and among PINNACLE WEST CAPITAL CORPORATION, an Arizona
corporation ("Parent"), EL DORADO INVESTMENT COMPANY, an Arizona corporation
("El Dorado" and, together with Parent, the "Seller Parties"), and USEC INC., a
Delaware corporation ("Purchaser"). The Seller Parties and Purchaser are
sometimes referred to herein collectively as the "Parties" and each individually
as a "Party".

                                    RECITALS

         A.       Parent is the legal and beneficial owner of one hundred
percent (100%) of the issued and outstanding shares of capital stock of El
Dorado. El Dorado is the legal and beneficial owner of 1,051,439,075 shares of
Class A Common Stock of NAC Holding Inc., a Delaware corporation (including any
successor thereto, the "Company"), which shares constitute ninety-nine point
seventy-six percent (99.76%) of the issued and outstanding shares of capital
stock of the Company. The Company is the legal and beneficial owner of 1,100,100
shares of common stock, par value $0.01 per share (the "Subsidiary Shares"), of
NAC International Inc., a Delaware corporation (the "Subsidiary"), which shares
constitute all of the issued and outstanding shares of capital stock of the
Subsidiary.

         B.       The Seller Parties wish to cause El Dorado to sell, and
Purchaser wishes to purchase from El Dorado, all of the issued and outstanding
shares of capital stock of the Company for the consideration and on the terms
and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises,
representations, and warranties herein contained, and on the terms and subject
to the conditions herein set forth, the Parties agree as follows:

                                   ARTICLE 1
                                   DEFINITIONS

         1.1      Definitions. Except as otherwise expressly provided in this
Agreement, or unless the context otherwise requires, whenever used in this
Agreement (including in the Schedules), the following terms will have the
respective meanings indicated below.

                  "Additional Reserves" has the meaning set forth in Section
         9.7.

                  "Adjustment Notice" has the meaning set forth in Section
         2.7(b).

                  "Affiliate" of a Person means a Person that, directly or
         indirectly through one or more intermediaries, controls, is controlled
         by, or is under common control with, the first Person. For purposes of
         this definition, "control" (including the terms "controlled by" and
         "under common control with") means the possession, directly or
         indirectly, of the power to direct or cause the direction of the
         management or policies of a Person, whether through the ownership of
         voting securities, by contract or credit arrangement, as trustee or
         executor, or otherwise.

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                  "Affiliated Group" means any affiliated group within Code
         Section 1504(a) or any similar group defined under a similar provision
         of any other Applicable Law which includes Parent or any of its
         Affiliates (other than the Company and the Subsidiary).

                  "Agreement" means this Agreement, including the Schedules and
         Exhibits hereto, as may be amended from time to time in accordance with
         the provisions hereof.

                  "Applicable Law" means, with respect to any Person, any
         constitution, treaty, statute, law (including common law), rule,
         regulation, ordinance, code, Governmental Approval, or any order,
         decision, injunction, judgment, award or decree of any Governmental
         Authority, in any such case to the extent applicable to such Person or
         any of its Affiliates or any of their respective assets and/or
         businesses.

                  "APS" means Arizona Public Service Company.

                  "APS Agreement" has the meaning set forth in Section 6.13(b).

                  "Benefit Plan" means each Employee Plan (expressly including
         the Employment Contracts) sponsored, maintained or contributed to or
         required to be contributed to by the Company or the Subsidiary or any
         ERISA Affiliate for the benefit of any Employee or any former employee
         of the Company or the Subsidiary.

                  "Business Day" means any day other than a Saturday, Sunday or
         other day on which banks in Phoenix, Arizona or New York, New York are
         permitted or required by Applicable Law to close.

                  "Claim Threshold" has the meaning set forth in Section 9.4.

                  "Claims Period" has the meaning set forth in Section 9.5.

                  "Closing" has the meaning set forth in Section 2.4.

                  "Closing Date" has the meaning set forth in Section 2.4.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Company" has the meaning set forth in Recital A to this
         Agreement.

                  "Company Required Consents" has the meaning set forth in
         Section 4.3.

                  "Company Shares" has the meaning set forth in Section 2.3.

                  "Consent" means any consent, approval, authorization, waiver,
         permit, grant, franchise, concession, agreement, license, exemption,
         certificate, declaration or order of, or any registration or filing
         with, any Person, including any Governmental Authority.

                  "Customary License Arrangements" means a non-exclusive royalty
         free license (or sublicense) appearing as an incidental feature in a
         contract for the sale of goods or the performance of consulting or
         development services in the ordinary course of the

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         licensor's business, permitting the use of the licensed Intellectual
         Property for: (i) using or maintaining the goods and services which are
         the subject of the contract and delivered by the licensor under such
         contract, (ii) exercising rights of ownership in work product produced
         by the licensor under such contract, and/or (iii) enabling a
         Governmental Authority to reproduce, prepare derivative works, perform
         and/or display publicly copyrighted data or Software first produced by
         the licensor in the performance of a contract with the Governmental
         Authority. In no event will any contract that includes the transfer of
         ownership or the exclusive license of any Intellectual Property rights
         be considered a "Customary License Arrangement."

                  "Determination Date" has the meaning set forth in Section
         2.7(d).

                  "DOE" means the United States Department of Energy.

                  "Effective Time" means 11:59 p.m. (New York, New York time) on
         the date immediately preceding the Closing Date.

                  "El Dorado" has the meaning set forth in the introductory
         paragraph on page 1 of this Agreement.

                  "Employee" has the meaning set forth in Section 4.23(a).

                  "Employee Plan" means each employee benefit plan (within the
         meaning of Section 3(3) of ERISA) and each other employment, fringe
         benefit, or other retirement, bonus, deferred or incentive compensation
         plan, program, arrangement or agreement sponsored, maintained or
         contributed to or required to be contributed to by the Company or the
         Subsidiary or any ERISA Affiliate for the benefit of any current or
         former employee or director of the Company or the Subsidiary or any
         ERISA Affiliate.

                  "Employment Contracts" has the meaning set forth in Section
         4.23(c).

                  "Environmental Laws" mean all Applicable Laws, regulations,
         standards, requirements, ordinances, policies, guidelines, orders,
         approvals, notices, Permits or directives, or parts thereof, pertaining
         to environmental or occupational health and safety matters, in effect
         as at the date hereof, including laws and regulations relating to
         Releases or threatened Releases of Hazardous Substances, or otherwise
         relating to the manufacture, processing, distribution, use, treatment,
         storage, disposal, transport or handling of Hazardous Substances or
         containers or casks containing Hazardous Substances or otherwise
         subject to any such laws.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended.

                  "ERISA Affiliate" means any trade or business, whether or not
         incorporated, that together with the Company or the Subsidiary is or
         ever was deemed a "single employer" within the meaning of Section
         4001(b)(1) of ERISA or Section 414 of the Code.

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                  "Estimated Working Capital Adjustment" has the meaning set
         forth in Section 2.7(a).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended.

                  "Financial Statements" has the meaning set forth in Section
         4.6(a).

                  "GAAP" means generally accepted accounting principles as in
         effect in the United States of America as determined by the Financial
         Accounting Standards Board from time to time applied on a consistent
         basis as of the date of any application thereof.

                  "Governmental Approval" means any Consent of, with, or from
         any Governmental Authority.

                  "Governmental Authority" means any nation or government,
         including any foreign nation or government, any state, province,
         county, municipality or other political subdivision thereof, any entity
         (including but not limited to the International Atomic Energy Agency
         and the European Union and its institutions and communities) exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government, including any registrar of
         Intellectual Property (whether technically governmental or not) and
         including any government authority, agency, department, board,
         commission or instrumentality of the United States, any State of the
         United States or any political subdivision thereof, any court, tribunal
         or arbitrator(s) of competent jurisdiction, any self-regulatory
         organization (including the New York Stock Exchange) or any Indian
         tribal authority.

                  "Government Contract" has the meaning set forth in Section
         4.12(c).

                  "Hazardous Substance" means any substance that: (i) is or
         contains asbestos, urea formaldehyde foam insulation, polychlorinated
         biphenyls, petroleum or petroleum-derived substances or wastes, radon
         gas or related materials, (ii) requires investigation, removal or
         remediation or for which there are restrictions pursuant to any
         Environmental Law regarding its use or disposal, under any
         Environmental Law, or is defined, listed or identified as a "hazardous
         waste," "toxic substance," "toxic material," "pollutant," "hazardous
         substance" or the like, or (iii) is toxic, explosive, corrosive,
         flammable, infectious, radioactive, carcinogenic, mutagenic, or
         otherwise hazardous and is regulated by any Governmental Authority or
         Environmental Law.

                  "Indemnification Agreement" has the meaning set forth in
         Section 6.13(a).

                  "Indemnitee" has the meaning set forth in Section 9.6(a).

                  "Indemnitor" has the meaning set forth in Section 9.6(a).

                  "Indemnity Payment" has the meaning set forth in Section
         6.13(a).

                  "Independent Accountants" has the meaning set forth in Section
         2.7(c).

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<PAGE>

                  "Independent Firm" has the meaning set forth in Section
         6.4(m).

                  "Initial Termination Date" has the meaning set forth in
         Section 8.1(b).

                  "Intellectual Property" means trademarks, service marks, trade
         names, Internet domain names, designs, logos, slogans, and general
         intangibles of like nature, together with all goodwill associated with,
         and all registrations and applications for, any of the foregoing;
         patents and industrial designs (including any continuations,
         divisionals, continuations-in-part, renewals, reissues, and
         applications for any of the foregoing); copyrights (including
         copyrights in Software and databases and any registrations and
         applications for any of the foregoing); mask works (as defined under 17
         U.S.C. Section 901) and any registrations and applications for mask
         works; trade secrets, know-how, proprietary processes, formulae,
         algorithms, models, and methodologies (collectively, trade secrets);
         and rights of publicity relating to the use of the names, likenesses,
         voices, signatures and biographical information of real persons.

                  "IRS" means the Internal Revenue Service.

                  "Knowledge" means:

                  (a)      when used to qualify a representation, warranty or
         other statement of the Seller Parties contained herein, the actual,
         direct and personal knowledge, after reasonable inquiry by them of
         Persons whom they believe, in good faith, to be the Persons generally
         responsible for the subject matters to which the knowledge is pertinent
         as of the date of inquiry, of Peter J. Walier (Chief Executive Officer
         of the Company), Michael R. Clarke (Chief Financial Officer of the
         Company), Steven M. Buckner (Vice President, Business Operations of the
         Subsidiary), Robert E. Helfrich (General Counsel and Corporate
         Secretary of the Company), Kent Cole (Vice President of Projects and
         Site Transportation Services of the Subsidiary), Charles Pennington
         (Vice President, Marketing and Business Development of the Subsidiary),
         Thomas Danner (Vice President, Engineering of the Subsidiary), Dan
         Collier (Vice President, Consulting of the Subsidiary) and/or John R.
         Finn (Venture Investments Manager of El Dorado), whom the Seller
         Parties reasonably believe in good faith to be the individuals
         generally responsible for the matters in respect of which the Seller
         Parties' or the Company's "Knowledge" is referenced herein;

                  (b)      when used to qualify a representation, warranty or
         other statement of Purchaser, the actual, direct and personal
         knowledge, after reasonable inquiry by them of Persons whom they
         believe, in good faith, to be the Persons generally responsible for the
         subject matters to which the knowledge is pertinent as of the date of
         inquiry, of William H. Timbers (President and Chief Executive Officer
         of Purchaser) and/or Timothy B. Hansen (Senior Vice President, General
         Counsel and Secretary of Purchaser), whom Purchaser reasonably believes
         in good faith to be the individuals generally responsible for the
         matters in respect of which Purchaser's "Knowledge" is referenced
         herein; and

                  (c)      all references to the Knowledge of the Seller Parties
         shall include the Knowledge of the Company and the Knowledge of the
         Subsidiary.

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<PAGE>

                  "Liability" means, with respect to any Person, any liability
         or obligation of such Person of any kind, character or description,
         whether known or unknown, absolute or contingent, accrued or unaccrued,
         disputed or undisputed, liquidated or unliquidated, secured or
         unsecured, joint or several, due or to become due, vested or unvested,
         executory, determined, determinable or otherwise, and whether or not
         the same is required to be accrued on the financial statements of such
         Person.

                  "Lien" means any mortgage, deed of trust, pledge, lien,
         charge, hypothecation, security interest, encumbrance, adverse right,
         interest or claim, lease, sublease, license, easement, right of way,
         covenant, encroachment, title defect, option, right of first refusal,
         proxy, voting trust or agreement or other restriction or limitation of
         any nature whatsoever.

                  "Loss" and "Losses" have the meanings set forth in Section
         9.2.

                  "Maine Yankee Guarantee" has the meaning set forth in Section
         6.13(b).

                  "Material Adverse Effect" means a material adverse effect on
         the assets, business, properties, condition (financial and otherwise),
         prospects or the results of operations of the Company and the
         Subsidiary, taken as a whole, or on the ability of the Seller Parties
         to consummate the transactions contemplated by this Agreement;
         provided, however, that the following will not be considered when
         determining whether a Material Adverse Effect has occurred: (i) any
         general social, political or economic condition or event, the effects
         of which are not specific or unique to the Company or the Subsidiary or
         the industry in which either operates, including stock market
         fluctuations, acts of war or terrorism, or the consequences of any of
         the foregoing; (ii) any change in the general conditions of the
         industry in which the Company or the Subsidiary operates that is not
         disproportionately adverse to the Company and the Subsidiary; (iii) any
         change in currency exchange rates or interest rates; or (iv) any change
         in Applicable Law that is not disproportionately adverse to the Company
         and the Subsidiary.

                  "Material Contracts" has the meaning set forth in Section
         4.12.

                  "Minority Shareholders" has the meaning set forth in Section
         2.3.

                  "Net Working Capital" means the amount, as of the Effective
         Time, by which (i) the sum of (A) cash and cash equivalents of the
         Company and/or the Subsidiary (whether on-hand, in bank or other
         financial institution accounts of the Company, the Subsidiary, or any
         Affiliate thereof, or held as deposits by Third Parties) (which are
         generally categorized as "Cash" on the Company's and/or the
         Subsidiary's internal financial statements) (excluding any amounts paid
         or payable in respect of the Seller Parties' obligations pursuant to
         Section 6.6), (B) any and all accounts receivable of the Company and/or
         the Subsidiary from current or former customers and other amounts
         receivable of the Company and/or the Subsidiary (which are generally
         categorized as "A/R-Trade" and "A/R-Other" on the Company's and/or the
         Subsidiary's internal financial statements), (C) unbilled amounts that
         will be payable by customers of the Company and/or the Subsidiary for
         goods or services provided or performed by the Company and/or the

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<PAGE>

         Subsidiary before the Effective Time upon issuance of invoice therefor
         (which are generally categorized as "A/R-Rev in Excess of Billings" on
         the Company's and/or the Subsidiary's internal financial statements),
         and (D) prepaid expenses of the Company and/or the Subsidiary (which
         are generally categorized as "Prepaid Expenses" on the Company's and/or
         the Subsidiary's internal financial statements), exceed (ii) the sum of
         (W) the trade and vendor accounts payable of the Company and/or the
         Subsidiary (which are generally categorized as "Accounts Payable" on
         the Company's and/or the Subsidiary's internal financial statements),
         excluding any amounts owed to Seller Parties or any of their Affiliates
         (other than APS), (X) all deposits, credits and other prepayments
         received by the Company and/or the Subsidiary before the Effective Time
         for goods to be provided or services to be performed by the Company
         and/or the Subsidiary after the Effective Time (which are generally
         categorized as "Deferred Revenue" on the Company's and/or the
         Subsidiary's internal financial statements), (Y) the current portion of
         amounts related to capital leases (which are generally categorized as
         "Capital Leases" on the Company's and/or the Subsidiary's internal
         financial statements), and (Z) accrued expenses and other current
         liabilities relating to the ongoing operation of the Company's and/or
         the Subsidiary's business (which are generally categorized as "Accrued
         Expenses & Other Liab" on the Company's and/or the Subsidiary's
         internal financial statements), excluding from this clause (ii) any
         amounts related to capital leases or long term indebtedness other than
         as provided in (Y) above, excluding any amounts paid or payable in
         respect of the Seller Parties' obligations pursuant to Section 6.6 and
         further excluding any amounts owed to the Seller Parties or any of
         their Affiliates (other than APS). Based on the foregoing formula, the
         Net Working Capital may be a negative amount.

                  "New Cask Technology" has the meaning set forth in Section
         4.29.

                  "NMMSS" has the meaning set forth in Section 7.2(i).

                  "NRC" means the U.S. Nuclear Regulatory Commission.

                  "Parent" has the meaning set forth in the introductory
         paragraph on page 1 of this Agreement.

                  "Parent Group" means the Affiliated Group of which Parent is
         the common parent as of the Closing Date.

                  "Parent Support Obligations" has the meaning set forth in
         Section 6.13(a).

                  "Party" and "Parties" have the meanings set forth in the
         introductory paragraph on page 1 of this Agreement.

                  "Permit" means, with respect to any Person, any license,
         permit, registration, Consent, certificate (including any Certificate
         of Compliance from the NRC), order, approval, security clearance or
         other authorization required by any Governmental Authority for such
         Person to lawfully (i) own, lease or use a particular asset, (ii)
         occupy, access or use particular real property, or (iii) conduct its
         business as presently conducted.

                                       7
<PAGE>

                  "Permitted Lien" means (i) any statutory Lien for Taxes not
         yet due or delinquent or being contested in good faith by appropriate
         proceedings and for which an appropriate reserve has been established
         in accordance with GAAP and which is set forth on Schedule 4.14, (ii)
         any Lien incurred or deposit made in the ordinary course of business in
         connection with workers' compensation, unemployment insurance and other
         types of social security or to secure public or statutory obligations
         that does not interfere with the present use of the relevant assets or
         property, (iii) any mechanics', carriers', warehousemen's, workers',
         repairers' and similar liens, arising in the ordinary course of
         business by operation of Applicable Law with respect to a Liability
         that is not yet due or delinquent or which is being contested in good
         faith by appropriate proceedings and for which an appropriate reserve
         has been established in accordance with GAAP and which is set forth on
         Schedule 4.14, (iv) any imperfection or irregularity of title or other
         Lien that, individually or in the aggregate, does not, or would not
         reasonably be expected to, have a Material Adverse Effect or interfere
         with the present use of the relevant assets or property, (v) zoning,
         planning or other land use and environmental regulations by any
         Governmental Authority, (vi) rights of setoff and banker's Liens with
         respect to funds on deposit in a financial institution in the ordinary
         course of business that do not interfere with the present use of such
         funds, (vii) any other matter identified as a Permitted Lien on
         Schedule 4.14, or (viii) any Lien to be released before or in
         connection with the Closing and identified on Schedule 4.14.

                  "Person" means any natural person, firm, partnership,
         association, corporation, company, limited liability company,
         partnership, trust, business trust, Governmental Authority, or other
         unincorporated entity or organization.

                  "Post-Closing Net Working Capital Determination" has the
         meaning set forth in Section 2.7(b).

                  "Post-Closing Tax Period" means, collectively, (i) all taxable
         periods beginning after the Closing Date, and (ii) the portion of any
         Straddle Period after the Closing Date.

                  "Pre-Closing Tax Period" means, collectively, (i) all taxable
         periods ending on or before the Closing Date, and (ii) the portion of
         any Straddle Period through the end of the Closing Date.

                  "Preliminary Merger" has the meaning set forth in Section 2.3.

                  "Proceeding" means any action, arbitration, mediation, audit,
         hearing, investigation, litigation or lawsuit (whether civil, criminal,
         administrative, judicial or investigative, whether formal or informal,
         and whether public or private) commenced, brought, conducted or heard
         by or before, or otherwise involving, any Governmental Authority,
         mediator or arbitrator.

                  "Proposed Acquisition Transaction" has the meaning set forth
         in Section 6.7(a).

                  "Purchase Order" has the meaning set forth in Section 4.7.

                  "Purchase Price" has the meaning set forth in Section 2.2.

                                       8
<PAGE>

                  "Purchaser" has the meaning set forth in the introductory
         paragraph on page 1 of this Agreement.

                  "Purchaser Indemnitees" has the meaning set forth in Section
         9.2.

                  "Purchaser Required Consents" has the meaning set forth in
         Section 5.4.

                  "Rejection Notice" has the meaning set forth in Section
         2.7(b).

                  "Release" means any release, spill, emission, emptying,
         leaking, injection, deposit, disposal, discharge, dispersal, leaching,
         pumping, pouring or migration into the atmosphere, soil, surface water,
         groundwater or otherwise onto, above or underneath any real property.

                  "Representatives" has the meaning set forth in Section 6.11.

                  "Reserve Amount" has the meaning set forth in Section 4.12(c).

                  "Reserve Excess" has the meaning set forth in Section 9.7.

                  "Reserve Shortfall" has the meaning set forth in Section 9.7.

                  "SEC" means the U.S. Securities and Exchange Commission.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Seller Indemnitees" has the meaning set forth in Section 9.3.

                  "Seller Parties" has the meaning set forth in the introductory
         paragraph on page 1 of this Agreement.

                  "Software" means (i) computer programs, including
         implementation of algorithms, models, and methodologies, whether in
         source code or object code form, (ii) electronic databases and
         compilations of data, and (iii) documentation, including user manuals
         and training materials, relating to any of the foregoing.

                  "Straddle Period" means any taxable period that includes, but
         does not end on, the Closing Date.

                  "Subsidiary" has the meaning set forth in Recital A to this
         Agreement.

                  "Subsidiary Shares" has the meaning set forth in Recital A to
         this Agreement.

                  "Tax" means any federal, state, provincial, county, local,
         municipal, foreign or other income, alternative, minimum, accumulated
         earnings, personal holding company, franchise, capital stock, net
         worth, capital, profits, windfall profits, gross receipts, value added,
         privilege, sales, use, goods and services, excise, customs duties,
         transfer, conveyance, mortgage, registration, stamp, documentary,
         recording, premium, severance, environmental (including taxes under
         Section 59A of the Code), real property, personal

                                       9
<PAGE>

         property, transfer, ad valorem, intangibles, rent, occupancy, license,
         occupational, employment, unemployment insurance, social security,
         disability, workers' compensation, payroll, health care, registration,
         withholding, estimated recapture or other tax, duty, fee, levy, custom,
         tariff, impost, obligation or other governmental charge or assessment
         of any kind whatsoever or deficiencies thereof (including all interest
         and penalties thereon and additions thereto whether disputed or not).

                  "Tax Claim" shall mean any claim with respect to Taxes made by
         any Taxing Authority that, if pursued successfully, would reasonably be
         expected to serve as the basis for a claim for indemnification under
         Section 6.4(c).

                  "Tax Proceeding" has the meaning specified in Section
         6.4(d)(ii).

                  "Tax Provisions" shall mean Section 4.9 and Section 6.4.

                  "Tax Return" means any return, report, declaration, election,
         disclosure, estimate, form, claim for refund or information return or
         statement relating to Taxes, including any schedule or attachment
         thereto, and including any amendment, supplement or revocation thereof
         permitted or required by a Taxing Authority relating to Taxes.

                  "Tax Sharing Agreements" has the meaning specified in Section
         4.9(a)(v).

                  "Taxing Authority" shall mean any Governmental Authority
         having or purporting to exercise jurisdiction with respect to any Tax.

                  "Third Party" means a Person that is not a Party or an
         Affiliate of a Party, and is not acting in the capacity as agent for a
         Party or any of its Affiliates.

                  "Third Party Claim" means any claim against any Indemnitee by
         a Third Party, whether or not involving a Proceeding.

                  "Transfer Taxes" means any and all transfer, documentary,
         sales, use, excise, stock, filing, permit, license, stamp,
         registration, value added, recording, escrow and other similar Taxes
         and fees (including any out-of-pocket filing expenses, penalties and
         interest).

                  "Treasury Regulations" means the Treasury Regulations
         promulgated under the Code, and the term "Treasury Regulation" followed
         by a particular Section number reference means that particular section
         or subsection of the Treasury Regulations.

                  "US Fire Indemnity Agreement" has the meaning set forth in
         Section 6.13(b).

                  "WARN Act" has the meaning set forth in Section 4.23(e).

                  "Working Capital Adjustment" has the meaning set forth in
         Section 2.7.

                                       10
<PAGE>

                                   ARTICLE 2
                       SALE AND PURCHASE OF COMPANY SHARES

         2.1      Sale and Purchase of Company Shares. Upon the terms and
subject to the conditions of this Agreement, at the Closing, the Seller Parties
will cause El Dorado to sell, assign and transfer to Purchaser, and Purchaser
will purchase and acquire from El Dorado, all legal and beneficial right, title
and interest in and to the Company Shares, free and clear of any and all Liens.

         2.2      Purchase Price. The purchase price for the Company Shares will
be cash in the amount of Sixteen Million and no/100 Dollars ($16,000,000.00),
subject to adjustment as determined pursuant to the provisions of Section 2.7
(as adjusted, the "Purchase Price"), payable by Purchaser to El Dorado upon the
terms and subject to the conditions of this Agreement.

         2.3      Preliminary Merger. As promptly as practicable following the
execution of this Agreement, El Dorado will reorganize the ownership structure
of the Company pursuant to a short-form merger under Delaware law (the
"Preliminary Merger") pursuant to which the Company will be merged with a
wholly-owned subsidiary of El Dorado organized for the sole purpose of
effectuating the Preliminary Merger, with the Company being the surviving
entity. Prior to executing and filing any documents necessary or advisable to
effect the Preliminary Merger, the Seller Parties shall provide Purchaser
reasonable opportunity to comment thereon. In connection with the Preliminary
Merger, each record holder of outstanding shares of capital stock of the
Company, other than El Dorado (collectively, the "Minority Shareholders"), will
have his, her or its shares of such stock converted into a right to receive a
specified cash payment from El Dorado. Immediately after giving effect to the
Preliminary Merger, El Dorado will be the legal and beneficial owner of all of
the issued and outstanding shares of capital stock of the post-merger Company
(the "Company Shares"). The Seller Parties will cause to be cancelled all
outstanding warrants issued by the Company and held by the Seller Parties for
the purchase of shares of capital stock of the Company. The Seller Parties agree
that the Minority Shareholders shall be entitled to appraisal rights pursuant to
Section 262 of the Delaware General Corporation Law, and the Seller Parties
agree that they shall be solely liable for any payments required in connection
therewith, as well as all other costs and Liabilities in connection with the
Preliminary Merger.

         2.4      Closing. Upon the terms and subject to the conditions hereof,
the closing of the sale and purchase of the Company Shares as provided herein
(the "Closing") will take place at 10:00 a.m. local time on the second (2nd)
Business Day following the satisfaction or waiver (subject to Applicable Law) of
the conditions precedent specified in Article 7 (other than those conditions
that by their nature are to be fulfilled only at the Closing, but subject to the
fulfillment or waiver (subject to Applicable Law) of such conditions) (the
"Closing Date"), at the offices of Snell & Wilmer L.L.P., One Arizona Center,
400 E. Van Buren, Phoenix, Arizona, or at such other time and place as the
Parties may agree in writing.

         2.5      Closing Deliveries by the Seller Parties. At the Closing, the
Seller Parties will deliver or cause to be delivered to Purchaser the following:

                                       11
<PAGE>

                  (a)      a Certificate of Good Standing of the Company
         (post-Preliminary Merger) issued by the Delaware Secretary of State
         dated not more than ten (10) days before the Closing Date;

                  (b)      a Certificate of Good Standing of the Subsidiary
         issued by the Delaware Secretary of State and a Certificate of Good
         Standing of the Subsidiary issued by the applicable corporate
         regulatory authority for the State of Georgia, each dated not more than
         ten (10) days before the Closing Date;

                  (c)      certificates from public officials as to the good
         standing or similar qualification of the Company and the Subsidiary to
         do business as a foreign corporation in each and every state where the
         Company or the Subsidiary is so qualified;

                  (d)      a copy, certified by an executive officer of El
         Dorado, of resolutions of the directors of El Dorado authorizing and
         approving the execution and delivery of this Agreement and the
         consummation of the transactions contemplated hereby;

                  (e)      separate certificates of each Seller Party, each in
         form and substance satisfactory to Purchaser (acting reasonably) duly
         executed by an executive officer of such Seller Party, on behalf of
         such Seller Party and not in such officer's personal capacity,
         certifying that (i) the conditions for Closing set forth in Section
         7.2(a) and Section 7.2(b) have been fulfilled and (ii) each of such
         Seller Party's conditions for Closing as set forth in Section 7.1 has
         been satisfied or waived;

                  (f)      copies of all written Company Required Consents;

                  (g)      evidence of the discharge of Liens on the Company
         Shares, the Subsidiary Shares and the assets of the Company and the
         Subsidiary, other than Permitted Liens;

                  (h)      the stock certificates representing the Company
         Shares, together with one or more stock powers duly executed in blank
         sufficient to vest in Purchaser good title to the Company Shares;

                  (i)      the stock certificates representing the Subsidiary
         Shares duly registered to the Company;

                  (j)      written resignations of the Company's and the
         Subsidiary's directors and, to the extent specified by Purchaser in
         writing, written resignations of (or, if any such officer fails to
         resign, evidence of the termination of) the Company's and the
         Subsidiary's officers, in each case dated as of the Closing Date;

                  (k)      the minute books, stock books, stock ledgers and
         other corporate and business records of the Company and the Subsidiary
         (provided, however, that the Seller Parties may retain copies of those
         corporate and business records of the Company and the Subsidiary that
         the Seller Parties deem necessary or appropriate for their own legal
         compliance and record-keeping purposes) and the Company and Subsidiary
         corporate seals (if any);

                                       12
<PAGE>

                  (l)      a general release in favor of the Company and the
         Subsidiary in the form of Exhibit A hereto, duly executed by the Seller
         Parties, and dated as of the Closing Date;

                  (m)      a statement duly executed by El Dorado pursuant to
         Treasury Regulation Section 1.1445-2(b), certifying as to El Dorado's
         non-foreign status;

                  (n)      the Indemnification Agreement, duly executed by
         Parent;

                  (o)      a right-to-use opinion of outside patent counsel of
         the Company or the Subsidiary substantially in the form of Exhibit B
         hereto, the costs of which opinion shall be shared equally by the
         Seller Parties and Purchaser; and

                  (p)      such other documents and instruments required to be
         delivered by the Seller Parties at or prior to the Closing Date
         pursuant to this Agreement or as Purchaser may reasonably require to
         further and give effect to the transactions contemplated in this
         Agreement to take place at the Closing.

         2.6      Closing Deliveries by Purchaser. At the Closing, Purchaser
will deliver or cause to be delivered to the Seller Parties the following:

                  (a)      a Certificate of Good Standing of Purchaser issued
         by the Delaware Secretary of State dated not more than ten (10) days
         before the Closing Date;

                  (b)      a copy, certified by an officer of Purchaser, of
         resolutions of the directors of Purchaser authorizing and approving the
         execution and delivery of this Agreement and the consummation of the
         transactions contemplated hereby;

                  (c)      a certificate, in form and substance satisfactory to
         the Seller Parties (acting reasonably) duly executed by an executive
         officer of Purchaser, on behalf of Purchaser and not in such officer's
         personal capacity, certifying that (i) the conditions for Closing set
         forth in Section 7.1(a) and Section 7.1(b) have been fulfilled and (ii)
         each of Purchaser's conditions for Closing as set forth in Section 7.2
         has been satisfied or waived;

                  (d)      payment by wire transfer of immediately available
         U.S. funds to the bank account designated by the Seller Parties in
         writing no later than five (5) Business Days prior to the Closing in
         the amount of Sixteen Million and no/100 Dollars ($16,000,000.00), plus
         or minus, as applicable, the Estimated Working Capital Adjustment;

                  (e)      the Indemnification Agreement, duly executed by
         Purchaser; and

                  (f)      such other documents and instruments required to be
         delivered by Purchaser at or prior to the Closing Date pursuant to this
         Agreement or as the Seller Parties may reasonably require to further
         and give effect to the transactions contemplated in this Agreement to
         take place at the Closing.

                                       13
<PAGE>

         2.7      Net Working Capital Determination. The Seller Parties and
Purchaser will determine (i) the amount, if any, by which the Net Working
Capital is a positive amount, and (ii) the amount, if any, by which the Net
Working Capital amount is a negative amount (the amount described in clause (i)
or (ii), the "Working Capital Adjustment"), the determination and payment
thereof to be made as follows:

                  (a)      At least five (5) Business Days before the Closing
         Date, the Seller Parties and Purchaser, acting in good faith, will
         agree upon a mutually acceptable estimate of the Net Working Capital
         based on the most currently available month-end financial records of
         the Company and the Subsidiary and other appropriate information (the
         "Estimated Working Capital Adjustment"). If the Estimated Working
         Capital Adjustment is a positive amount, the Purchase Price payable at
         the Closing will be increased by such amount, and, if the Estimated
         Working Capital Adjustment is a negative amount, the Purchase Price
         payable at the Closing will be decreased by such amount, in each case
         pursuant to Section 2.6(d).

                  (b)      Within forty-five (45) days after the Closing Date,
         Purchaser will deliver to the Seller Parties written notice (the
         "Adjustment Notice") of Purchaser's post-closing determination of the
         Net Working Capital (the "Post-Closing Net Working Capital
         Determination"), as derived from Purchaser's review of the financial
         and other books and records of the Company and the Subsidiary as of the
         Effective Time and prepared in a manner consistent with GAAP and the
         formula and methodology used for purposes of determining the Estimated
         Working Capital Adjustment. The Adjustment Notice will contain
         reasonable detail as to how the Post-Closing Net Working Capital
         Determination was determined by Purchaser along with copies of any and
         all materials used in preparing the Post-Closing Net Working Capital
         Determination. Within thirty (30) days after the Seller Parties'
         receipt of the Adjustment Notice, the Seller Parties will notify
         Purchaser in writing of the Seller Parties' acceptance or rejection of
         the Post-Closing Net Working Capital Determination as set forth in the
         Adjustment Notice. Any notice of rejection ("Rejection Notice") by the
         Seller Parties must include reasonable detail as to the reasons for
         such rejection and, if appropriate, the Seller Parties' proposed
         calculation of the Post-Closing Net Working Capital Determination. If
         (i) by written notice to Purchaser, the Seller Parties accept the
         Post-Closing Net Working Capital Determination as set forth in the
         Adjustment Notice, or (ii) the Seller Parties fail to deliver any
         notice of acceptance or rejection of the Post-Closing Net Working
         Capital Determination within the prescribed thirty (30)-day period
         (which failure will result in the Seller Parties being deemed to have
         irrevocably accepted and agreed with the Post-Closing Net Working
         Capital Determination), the Post-Closing Net Working Capital
         Determination as set forth in the Adjustment Notice will be final and
         binding on the Parties.

                  (c)      If the Seller Parties deliver a Rejection Notice to
         Purchaser under Section 2.7(b), the Seller Parties and Purchaser and
         their respective representatives will promptly (and in any event within
         ten (10) Business Days) attempt in good faith to resolve the
         differences between the Seller Parties and Purchaser as set forth in
         the Rejection Notice. If the Seller Parties and Purchaser are unable to
         resolve such matter within thirty (30) days after the date of delivery
         of the Seller Parties' Rejection Notice to Purchaser, the Seller
         Parties and Purchaser will refer the dispute to a mutually acceptable
         firm of

                                       14
<PAGE>

         independent certified public accountants (the "Independent
         Accountants") for review and final determination of the Post-Closing
         Net Working Capital Determination. The Independent Accountants may
         request of the Seller Parties or Purchaser such documents and
         information as may be necessary or appropriate for proper determination
         of the matter, and the Seller Parties and Purchaser will cooperate to
         promptly satisfy any such request. Any such documents provided to the
         Independent Accountants shall be provided on a confidential basis and
         shall be concurrently provided to the other Parties. The determination
         by the Independent Accountants of the Post-Closing Net Working Capital
         Determination will be final and binding on the Seller Parties and
         Purchaser, and such determination shall be deemed the Post-Closing Net
         Working Capital Determination for purposes of Section 2.7(d). The costs
         of the Independent Accountants in undertaking such review and
         determination will be shared equally by the Seller Parties and
         Purchaser.

                  (d)      Within ten (10) Business Days after the date of the
         final agreement of the Seller Parties and Purchaser, the final
         determination by the Independent Accountants or the deemed acceptance
         by the Seller Parties (as the case may be) of the Post-Closing Net
         Working Capital Determination (such date, the "Determination Date"),
         either:

                           (i)      Purchaser will pay to El Dorado by wire
                  transfer of immediately available U.S. funds the amount (if
                  any) by which the Post-Closing Net Working Capital
                  Determination exceeds the Estimated Working Capital
                  Adjustment; or

                           (ii)     The Seller Parties will pay to Purchaser by
                  wire transfer of immediately available U.S. funds the amount
                  (if any) by which the Estimated Working Capital Adjustment
                  exceeds the Post-Closing Net Working Capital Determination.

                                   ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES
                          REGARDING THE SELLER PARTIES

         In order to induce Purchaser to enter into this Agreement and
consummate the transactions contemplated hereby, Parent, as to itself and El
Dorado only, and El Dorado, as to itself only, hereby represent and warrant to
Purchaser as follows:

         3.1      Organization and Authority of the Seller Parties. Each of
Parent and El Dorado is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona. Each of the Seller Parties
has all requisite corporate power and corporate authority to own its assets, to
carry on its business as presently conducted by it and to enter into this
Agreement and each other agreement and instrument to be executed and delivered
by it pursuant hereto and to consummate the transactions contemplated hereunder
and thereunder.

         3.2      Authorization; Enforceability. Each of the Seller Parties (as
applicable) has taken all necessary and appropriate corporate action to
authorize its execution and delivery of this Agreement and each other agreement
and instrument to be executed and delivered by it pursuant hereto and the
consummation of the transactions contemplated hereunder and thereunder. This
Agreement and each other agreement and instrument to be executed by the Seller
Parties (as

                                       15
<PAGE>

applicable) and delivered by the Seller Parties pursuant hereto are, or at the
time they are executed by the applicable Seller Parties and each other party
thereto will be, legally binding upon and enforceable against the Seller Parties
(as applicable) in accordance with their respective terms, except as limited by
(i) Applicable Laws of general application regarding bankruptcy, insolvency,
reorganization, moratorium and other Applicable Laws of general application
affecting enforcement of creditors' rights generally, and (ii) Applicable Laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

         3.3      No Conflicts. The execution, delivery, and performance by the
Seller Parties of this Agreement and each other agreement and instrument to be
executed and delivered by it pursuant hereto and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) breach or
violate any provision of the Articles of Incorporation and Bylaws of any of the
Seller Parties, or any resolution adopted by the respective boards of directors
or shareholders of any of the Seller Parties, (ii) give any Person the right to
exercise any remedy or obtain any relief under any Applicable Law to which any
of the Seller Parties is subject, or (iii) result in the imposition or creation
of any Lien upon the Company Shares or the Subsidiary Shares.

         3.4      Brokers, Finders, etc. The Seller Parties and the Company have
engaged Houlihan Lokey Howard & Zukin Capital as investment banker and broker in
connection with the sale of the Company Shares and the Subsidiary Shares, and
all fees and expenses of Houlihan Lokey Howard & Zukin Capital will be paid
solely by the Seller Parties. None of the Seller Parties, the Company, or the
Subsidiary nor any other Person acting on their behalf, has engaged, contracted
or dealt with any other Person that is or would be entitled to a broker's
commission, finder's fee, investment banker's fee, expense reimbursement or
similar payment from Purchaser or the Company or the Subsidiary for brokering or
otherwise arranging the transaction contemplated hereby or introducing the
Parties to each other. Houlihan Lokey Howard & Zukin Capital will execute a
waiver letter, dated as of the Closing Date, releasing the Company and the
Subsidiary from any payment obligation whatsoever.

         3.5      Solvency. Each of the Seller Parties is, and immediately after
giving effect to the transactions contemplated by this Agreement will be,
solvent, and there are no bankruptcy, insolvency, receivership or other similar
proceedings pending against any of the Seller Parties or being contemplated by
any of the Seller Parties or, to the Knowledge of the Seller Parties, threatened
against any of them.

         3.6      Proceedings. Except as may be indicated on Schedule 4.11,
except as contemplated in Section 262 of the Delaware General Corporation Law in
connection with the Preliminary Merger, and except for other Proceedings brought
by or on behalf of any Minority Shareholder after the date hereof, which shall
be governed exclusively by Section 7.2(j) and Section 9.2(c) hereof, there is no
Proceeding pending or threatened against any of the Seller Parties, or any
Affiliate of the Seller Parties (other than the Company and the Subsidiary),
relating to the Company or the Subsidiary or the transactions contemplated by
this Agreement.

                                       16
<PAGE>

                                   ARTICLE 4
          REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY AND THE
                                   SUBSIDIARY

         In order to induce Purchaser to enter into this Agreement and
consummate the transactions contemplated hereby, Parent, as to itself and El
Dorado only, and El Dorado, as to itself, the Company and the Subsidiary only,
hereby represent and warrant to Purchaser as follows:

         4.1      Organization and Authority of Company. Each of the Company and
the Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of the Company and the
Subsidiary has all requisite corporate power and corporate authority to own its
assets, to carry on its business as presently conducted by it and to enter into
and perform the contracts and agreements to which it is a party. Each of the
Company and the Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the assets owned or used by
it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified in any such
jurisdiction would not have a Material Adverse Effect. The states or other
jurisdictions in which the Company and/or the Subsidiary are so qualified as of
the date hereof are listed on Schedule 4.1. The Company has no subsidiaries,
other than the Subsidiary, and does not own, directly or indirectly, any equity,
partnership or other ownership interest in any other Person. The Company is a
holding company and does not conduct, and has not conducted, any operations
other than those incidental to its ownership interest in the Subsidiary. The
Subsidiary has no subsidiaries and does not own, directly or indirectly, any
equity, partnership or other ownership interest in any other Person.

         4.2      No Conflicts. Assuming the Seller Parties give or cause to be
given the required notices and obtain or cause to be obtained the required
Consents referred to in Section 4.3 and subject to the qualifications
specifically identified on Schedule 4.3, the execution, delivery, and
performance by the Seller Parties of this Agreement and the consummation of the
transactions contemplated hereby do not and will not:

                  (a)      breach or violate (i) any provision of the
         Certificate of Incorporation and Bylaws of the Company or the
         Subsidiary, or (ii) any resolution adopted by the board of directors or
         shareholders of the Company or the Subsidiary;

                  (b)      contravene, conflict with or violate any Applicable
         Laws or give any Person the right to challenge any of the transactions
         contemplated by this Agreement or to exercise any remedy or obtain any
         relief under any Applicable Law to which the Company or the Subsidiary
         or any of their assets, may be subject;

                  (c)      contravene, conflict with or result in a violation or
         breach of any of the terms or requirements of, or give any Governmental
         Authority the right to revoke, withdraw, suspend, cancel, terminate or
         modify, any Permit or Governmental Approval that is held by, or has
         been granted to, the Company or the Subsidiary or any applicable
         pending application for such a Permit or Governmental Approval or for
         any amendment to, or extension of, any such existing Permit or
         Governmental Approval;

                                       17
<PAGE>

                  (d)      except with respect to payments under Employment
         Contracts relating to a Change of Control (as such term is defined
         therein), breach any provision of, or give any Person the right to
         declare a default (with or without notice or lapse of time or both) or
         exercise any remedy under, or to accelerate the maturity or performance
         of, or payment under, or to cancel, terminate or modify, any Material
         Contract; or

                  (e)      result in the imposition or creation of any Lien upon
         the Company Shares or the Subsidiary Shares or upon or with respect to
         any of the assets of the Company or the Subsidiary except as
         contemplated in this Agreement.

         4.3      Notices and Consents. Except for those Consents set forth on
Schedule 4.3 (the "Company Required Consents"), none of the Seller Parties, the
Company or the Subsidiary is required to give any notice to, or obtain any
Consent from, any Third Party or Governmental Authority or other Person in
connection with the execution and delivery by the Seller Parties of this
Agreement or the consummation of the transactions contemplated hereby.

         4.4      Capitalization of the Company; Title to the Company Shares.

                  (a)      At the date of execution and delivery of this
         Agreement, the authorized capital of the Company consists of
         1,054,450,000 shares of voting Class A Common Stock, par value $0.01
         per share, of which 1,053,714,701 shares are issued and outstanding,
         and 550,000 shares of non-voting Class B Common Stock, par value $0.01
         per share, of which 300,833 shares are issued and outstanding. At the
         date of execution and delivery of this Agreement, El Dorado is the
         record and beneficial owner of 1,051,439,075 shares of Class A Common
         Stock of the Company, free and clear of any and all Liens, and El
         Dorado does not own any shares of Class B Common Stock of the Company.
         At the date of execution and delivery of this Agreement, the Persons
         identified in Schedule 4.4(a) own the number of shares of Class A
         Common Stock and Class B Common Stock of the Company as is set forth by
         their respective names. There are no options, warrants, calls, rights,
         commitments or agreements of any character to which Parent or El Dorado
         is a party or by which it is bound obligating Parent or El Dorado to
         issue, deliver or sell, pledge, grant a security interest on or
         encumber or cause to be issued, delivered or sold, pledged or
         encumbered or a security interest to be granted on, any shares of
         capital stock of the Company or obligating Parent or El Dorado to
         grant, extend or enter into, or cause to be granted, extended or
         entered into, any such option, warrant, call, right, commitment or
         agreement. All issued and outstanding shares of capital stock of the
         Company have been duly authorized and are validly issued, fully paid
         and non-assessable, and have not been issued in violation of any
         pre-emptive rights of any Person.

                  (b)      Except for (i) outstanding warrants to purchase
         367,500,000 shares of Class A Common Stock of the Company and certain
         outstanding debt of the Company which is convertible into shares of
         Class A Common Stock of the Company, all of which warrants and
         convertible debt are held by El Dorado free and clear of any and all
         Liens, and (ii) outstanding options to purchase an aggregate of 142,000
         shares of Class B Common Stock of the Company, which are held by
         certain current and former employees of the Company, and which at the
         Closing Date will be exercisable solely into the

                                       18
<PAGE>

         consideration payable solely by El Dorado pursuant to the
         Preliminary Merger, there are no other outstanding securities
         convertible into or exchangeable for shares of capital stock of the
         Company, nor any outstanding subscriptions, options, rights, warrants,
         calls, rights of first refusal or offer, or other agreements or
         commitments (contingent or otherwise) obligating the Company to issue
         or transfer from treasury any shares of its capital stock or to issue,
         grant or sell other securities convertible into or exchangeable for
         shares of its capital stock; and there are no subscriptions, options,
         warrants, calls, rights, commitments or agreements of any character to
         which the Company is a party or by which it is bound obligating the
         Company to issue, deliver or sell, pledge, grant a security interest on
         or encumber or cause to be issued, delivered or sold, pledged or
         encumbered or a security interest to be granted on, any shares of
         capital stock of the Company or obligating the Company to grant, extend
         or enter into any such subscription, option, warrant, call, right,
         commitment or agreement.

                  (c)      Following the Preliminary Merger, and as of the
         Closing, El Dorado will be the sole record and beneficial owner of all
         of the issued and outstanding shares of capital stock of the Company,
         free and clear of any and all Liens.

                  (d)      At the time of Closing, immediately after giving
         effect to the sale and purchase of the Company Shares as contemplated
         herein, Purchaser will be the sole record and beneficial owner of the
         Company Shares, free and clear of any and all Liens.

         4.5      Capitalization of the Subsidiary; Title to the Subsidiary
Shares.

                  (a)      The authorized capital of the Subsidiary consists of
         2,000,000 shares of Common Stock, par value $0.01 per share, of which
         only the Subsidiary Shares are issued and outstanding, all of which
         shares are owned beneficially and of record by the Company, free and
         clear of any and all Liens, except Liens granted under document numbers
         11 and 14 of Schedule 4.26, all of which Liens shall be released in
         full prior to the Closing. All issued and outstanding shares of capital
         stock of the Subsidiary have been duly authorized and are validly
         issued, fully paid and non-assessable, and have not been issued in
         violation of any pre-emptive rights of any Person.

                  (b)      There are no outstanding securities convertible into
         or exchangeable for shares of capital stock of the Subsidiary, nor any
         outstanding subscriptions, options, rights, warrants, calls, rights of
         first refusal or offer or other agreements or commitments (contingent
         or otherwise) obligating the Subsidiary to issue or transfer from
         treasury any shares of its capital stock or to issue, grant or sell
         other securities convertible into or exchangeable for shares of its
         capital stock. There are no subscriptions, options, warrants, calls,
         rights, commitments or agreements of any character to which the Company
         is a party or by which it is bound obligating the Company to issue,
         deliver or sell, pledge, grant a security interest on or encumber or
         cause to be issued, delivered or sold, pledged or encumbered or a
         security interest to be granted on, any shares of capital stock of the
         Subsidiary or obligating the Company to grant, extend or enter into any
         such subscription, option, warrant, call, right, commitment or
         agreement.

                                       19
<PAGE>

         4.6      Financial Statements.

                  (a)      The Company has provided to Purchaser copies of the
         audited consolidated financial statements of the Company and its
         consolidated subsidiaries as at and for the period ended December 31,
         2003, together with the report thereon of Deloitte & Touche LLP,
         independent auditors, and of the audited consolidated financial
         statements of the Company and its consolidated subsidiaries as at and
         for the periods ended December 31, 2002 and 2001, together with the
         report thereon of Ernst & Young LLP, independent auditors, including in
         each case a balance sheet, a statement of income and retained earnings,
         a statement of cash flows and any applicable notes thereto
         (collectively, the "Financial Statements"). The Financial Statements
         fairly present the financial condition and results of operations of the
         Company and the Subsidiary in all material respects as of their
         respective dates. The Financial Statements have been prepared in
         accordance with GAAP, consistently applied, except as disclosed
         therein.

                  (b)      Executive officers of the Company have signed, and
         the Company has furnished to Parent, a certification with respect to
         the consolidated audited financial statements of the Company as at and
         for the period ended December 31, 2003 in form substantially similar to
         that required by Section 906 of the Sarbanes-Oxley Act of 2002, a copy
         of which certification has been provided to Purchaser.

                  (c)      As of the Effective Time, the Company and/or the
         Subsidiary will have cash and cash equivalents in an amount not less
         than $1 million.

         4.7      No Guarantees, Sureties, Indemnities. Neither the Company nor
the Subsidiary has granted or given any guaranty, surety bond, material
indemnity or similar contingent obligation in respect of the obligations or
Liabilities of any other Person where such guaranty, surety bond, indemnity or
similar contingent obligation is presently in effect, except (i) as otherwise
disclosed on Schedule 4.7; (ii) for any such obligations or Liabilities
involving less than Fifty Thousand Dollars ($50,000); (iii) for indemnities
given in contracts or agreements under which the Company or the Subsidiary, as
applicable, completed full performance on or after July 1, 2002 and before
January 1, 2003, in connection with which the Seller Parties hereby represent
and warrant that there are no facts or circumstances that would lead to a claim
thereunder; (iv) for indemnities given in contracts or agreements which were
fully performed by the Company or the Subsidiary, as applicable, prior to July
1, 2002, in connection with which, to the Knowledge of the Seller Parties, there
are no facts or circumstances which would lead the Seller Parties to reasonably
conclude that a claim thereunder may be forthcoming; (v) for indemnities given
in any purchase order or other agreement under which the Company or the
Subsidiary procures goods or services (each, a "Purchase Order") and pursuant to
which the Company or the Subsidiary, as applicable, agreed to indemnify the
seller, supplier, or vendor under the Purchase Order against Liabilities (A) for
infringement of patent laws resulting from the seller's, supplier's, or vendor's
use of the Company's or the Subsidiary's designs, drawings, or specifications in
the performance of the Purchase Order, or (B) for third party bodily injury or
property damage to the extent caused by the intentional or negligent acts of the
Company or the Subsidiary, other than third party bodily injury or property
damage resulting from a nuclear incident; and (vi) for indemnities given by the
Company or the Subsidiary in contracts or agreements for the sale or licensing
of goods or services and pursuant to which the Company or

                                       20
<PAGE>

the Subsidiary, as applicable, agreed to indemnify the purchaser or licensee
thereunder against Liabilities resulting from the Company's or the Subsidiary's
infringement of patent laws in connection with the goods or services covered by
such contract or agreement; provided, however, that the foregoing clauses (v)
and (vi) in no way limit the Seller Parties' representations in clauses (iii)
and (iv).

         4.8      Books and Records. The minute books and other corporate books
and records of the Company and the Subsidiary are complete and correct in all
material respects. The Company maintains accurate books and records reflecting
its consolidated assets and liabilities and maintains proper and adequate
internal accounting controls which provide reasonable assurance that, among
other things, (i) transactions are executed with management's authorization;
(ii) transactions are recorded as necessary to permit preparation of the
consolidated financial statements of the Company and the Subsidiary; and (iii)
accounts, notes and other receivables and inventory are recorded accurately and
proper and adequate procedures are implemented to effect the collection thereof
on a current and timely basis.

         4.9      Taxes.

                  (a)      Except as set forth on Schedule 4.9(a):

                           (i)      except for Tax Returns the due date of
                  which are after the date hereof, the Company and the
                  Subsidiary (or Parent on the behalf of each) have each timely
                  filed with the appropriate Taxing Authorities all Tax Returns
                  that either the Company or the Subsidiary was required to file
                  through the date hereof, and all such Tax Returns were true,
                  correct and complete in all material respects;

                           (ii)     all Taxes owed by or attributable to the
                  Company or the Subsidiary with respect to Tax Returns the due
                  date of which (as extended, if applicable) is on or before the
                  date hereof have been timely paid, and all other Taxes due and
                  payable by or attributable to the Company or the Subsidiary
                  with respect to any part of the Pre-Closing Tax Period
                  (whether or not a Tax Return is due by the Closing Date) have
                  been paid or are accrued on the applicable Financial
                  Statements, or will be paid or accrued on the books and
                  records of the Company or the Subsidiary (as applicable) as of
                  the Closing Date;

                           (iii)    the Company and the Subsidiary have each
                  withheld and paid all Taxes required under Applicable Law to
                  have been withheld and paid in connection with any amounts
                  paid or owing to any employee, independent contractor,
                  creditor, stockholder or other Person;

                           (iv)    there are no audits, actions, suits,
                  investigations, claims or Proceedings relating to Taxes or any
                  Tax Return of the Company or the Subsidiary now pending, or to
                  the Knowledge of the Seller Parties, threatened or proposed,
                  and neither the Company nor the Subsidiary has received any
                  notice of any proposed audits, actions, suits, investigations,
                  claims or Proceedings relating to Taxes or any Tax Returns;

                                       21
<PAGE>

                           (v)     neither the Company nor the Subsidiary is a
                  party to, bound by or obligated under, any Tax sharing
                  agreement, Tax indemnification agreement, Tax allocation
                  agreement or similar agreement, arrangement or understanding,
                  whether written or unwritten (collectively, "Tax Sharing
                  Agreements") nor does the Company or the Subsidiary have any
                  potential liability or obligation to any person as a result
                  of, or pursuant to, any such Tax Sharing Agreement;

                           (vi)    since January 1, 1995, neither the Company
                  nor the Subsidiary is, nor ever has been, nor is successor to
                  any entity that has been, a member of any consolidated,
                  affiliated, combined, unitary or similar group for U.S.
                  federal, state, local or foreign Tax purposes, other than a
                  group the parent of which is Parent or the Company;

                           (vii)   to the Knowledge of the Seller Parties, no
                  jurisdiction where either the Company or the Subsidiary does
                  not file a Tax Return has made a claim that either the Company
                  or the Subsidiary is required to file a Tax Return for such
                  jurisdiction;

                           (viii)  neither the Company nor the Subsidiary has
                  received a written ruling from any Taxing Authority, and no
                  closing agreement pursuant to Code Section 7121 (or similar
                  provision of state, local or foreign law) has been entered
                  into by or with respect to either the Company or the
                  Subsidiary; and

                           (ix)    within the two (2) years prior to the date
                  hereof, neither the Company nor the Subsidiary has constituted
                  either a "distributing corporation" or a "controlled
                  corporation" within the meaning of Code Section 355 in a
                  distribution of stock qualifying or intended to qualify for
                  tax-free treatment under Code Section 355.

                  (b)      Except as set forth on Schedule 4.9(b), with respect
         to each taxable period for the Company and the Subsidiary ending on or
         before the date hereof, (i) no deficiency or proposed adjustment which
         has not been paid in full and either settled or otherwise resolved for
         any amount of Taxes has been asserted or assessed by any Taxing
         Authority against the Company or the Subsidiary, (ii) none of the
         Company, the Subsidiary, or any Affiliate of either of them, has
         consented to extend the time in which any Taxes payable by or
         attributable to any Tax Return item of the Company or the Subsidiary
         may be assessed or collected by any Taxing Authority, and (iii) none of
         the Company, the Subsidiary, or any Affiliate of either of them, has
         requested or been granted an extension of the time for filing any Tax
         Return with respect to Taxes payable by or attributable to the Company
         or the Subsidiary.

                  (c)      The Parent Group has filed all income Tax Returns
         that the Parent Group was required to file for each taxable period
         during which the Company or the Subsidiary was a member of the Parent
         Group, other than Tax Returns the due date for filing of which falls
         after the date hereof (including as a result of any filing extension
         granted to the Parent Group). All such income Tax Returns filed by the
         Parent Group are true, correct and complete in all material respects.
         All material income Taxes owed by the

                                       22
<PAGE>

         Parent Group have been paid for each taxable period during which the
         Company or the Subsidiary was a member of the Parent Group.

         4.10      Absence of Changes; Absence of Undisclosed Liabilities.

                  (a)      Except as set forth on Schedule 4.10 or as consented
         to by Purchaser pursuant to Section 6.1, since December 31, 2003, there
         has not been, and no fact or condition exists which would have, or
         insofar as reasonably can be foreseen could have, a Material Adverse
         Effect and the Company and the Subsidiary have conducted their
         businesses in the ordinary course consistent with prior practice, and,
         since such date, neither the Company nor the Subsidiary has:

                           (i)     except for sales of goods or services in the
                  ordinary course of business consistent with prior practice,
                  sold, transferred, leased or licensed to others or otherwise
                  disposed of any material asset, except in the ordinary course
                  of business consistent with prior practice in an amount not
                  exceeding Fifty Thousand Dollars ($50,000);

                           (ii)    suffered any damage, destruction, or loss
                  (whether or not covered by insurance) in excess of Fifty
                  Thousand Dollars ($50,000);

                           (iii)   received any notice of termination of any
                  Material Contract (other than by virtue of expiration of the
                  term thereof) or materially amended, terminated, or agreed to
                  materially amend or terminate, any Material Contract;

                           (iv)    instituted, settled, or agreed to settle any
                  Proceeding;

                           (v)     suffered any material loss of customers
                  (except by virtue of the expiration of the term of a Material
                  Contract as contemplated by the parenthetical in clause (iii)
                  above) or received any notice of any pending material loss of
                  customers;

                           (vi)    made any material change in the rate of
                  compensation, commission, bonus, retirement, welfare, fringe,
                  or severance benefit or vacation pay or other direct or
                  indirect compensation to or in respect of any director,
                  officer or employee;

                           (vii)   had any claims made under any performance or
                  payment bond or guaranty or other form of credit enhancement
                  provided to a Company or Subsidiary customer by the Company or
                  the Subsidiary or on the Company's or the Subsidiary's behalf;

                           (viii)  received notice of any claim for breach of
                  warranty by the Company or the Subsidiary under any Material
                  Contract or for breach by the Company or the Subsidiary of any
                  license or Certificate of Compliance issued to the Company or
                  the Subsidiary by the NRC;

                                       23
<PAGE>

                           (ix)   (A) changed any financial or Tax accounting
                  methods, policies or practices of the Company or the
                  Subsidiary or with respect to the assets or liabilities of the
                  Company or the Subsidiary, except as required by a change in
                  GAAP or SEC rules, regulations or guidelines or Applicable
                  Law, (B) made, revoked, or amended any Tax election of the
                  Company or the Subsidiary or with respect to the assets of the
                  Company or the Subsidiary, (C) filed any amended Tax Return or
                  claim for refund of the Company or the Subsidiary or with
                  respect to the assets of the Company or the Subsidiary, (D)
                  consented to extend the period of limitations for the payment
                  or assessment of any Tax of the Company or the Subsidiary or
                  with respect to the assets of the Company or the Subsidiary,
                  (E) entered into any closing agreement affecting any Tax
                  liability or refund of the Company or the Subsidiary or with
                  respect to the assets of the Company or the Subsidiary, or (F)
                  settled or compromised any Tax liability or refund of the
                  Company or the Subsidiary or with respect to the assets of the
                  Company or the Subsidiary;

                           (x)     suffered any material adverse change in its
                  financial condition, results of operation, assets,
                  Liabilities, reserves, business, operations or prospects; or

                           (xi)    incurred any Liability (other than pursuant
                  to agreements entered into in the ordinary course of business
                  consistent with past practice) except immaterial items
                  incurred in the ordinary course of business and consistent
                  with past practice, none of which exceeds Fifty Thousand
                  Dollars ($50,000), or increased, or experienced any change in
                  any assumptions underlying or methods of calculating, any bad
                  debt, contingency or other reserves.

                  (b)      Except for immaterial Liabilities incurred in the
         ordinary course of business and consistent with past practice, since
         December 31, 2003, neither the Company nor the Subsidiary has incurred
         any Liability that has, or would be reasonably likely to have, a
         Material Adverse Effect. The reserves reflected in the Financial
         Statements are appropriate and reasonable and, to the Knowledge of the
         Seller Parties, there are no facts or circumstances which would lead
         the Seller Parties to reasonably conclude that such reserves are not
         adequate.

         4.11     Proceedings. Except as set forth on Schedule 4.11, except as
contemplated in Section 262 of the Delaware General Corporation Law in
connection with the Preliminary Merger, and except for other Proceedings brought
by or on behalf of any Minority Shareholder after the date hereof, which shall
be governed exclusively by Section 7.2(j) and Section 9.2(c) hereof:

                  (a)      there is no Proceeding pending or, to the Knowledge
         of the Seller Parties, threatened relating to or affecting the Company
         or the Subsidiary or the transactions contemplated by this Agreement;
         and

                  (b)      neither the Company nor the Subsidiary nor any Seller
         Party nor APS is party to or bound by any decree, order, injunction,
         settlement agreement, arbitration

                                       24
<PAGE>

         decision, award or any agreement entered into in any Proceeding with
         respect to or affecting the properties, assets, personnel or business
         activities of the Company or the Subsidiary.

         4.12     Material Contracts.

                  (a)      Schedule 4.12(a) contains an accurate list as of the
         date hereof of each agreement, contract, commitment or other written
         instrument of any type described below to which the Company or the
         Subsidiary is a party or by which the Company or the Subsidiary is
         bound (collectively, the "Material Contracts"):

                           (i)     any lease of real property (whether the
                  Company or the Subsidiary is in the capacity of lessor, lessee
                  or sublessee) or other agreement providing for the recurring
                  use of or access to real property by the Company or the
                  Subsidiary;

                           (ii)    any loan agreement, indenture, credit
                  facility, mortgage, security agreement, pledge agreement, deed
                  of trust, bond, note, guaranty, surety, indemnity and/or other
                  agreement or instrument relating to the borrowing of money or
                  obtaining of extensions of credit, except to the extent that
                  any such agreement or instrument will cease to be in effect as
                  of or prior to the Closing Date;

                           (iii)   any agreement containing a license to
                  Intellectual Property, whether the Company or the Subsidiary
                  is the licensee or licensor thereunder, other than (A)
                  agreements for the sale of goods or services, in which the
                  total consideration paid to the licensor is less than Fifty
                  Thousand Dollars ($50,000) and pursuant to which the license
                  granted contains only Customary License Arrangements; (B)
                  agreements for the sale of goods or services, in which the
                  total consideration paid to the licensor is equal to or more
                  than Fifty Thousand Dollars ($50,000) and in which the
                  delivery of goods or performance of services was fully
                  completed prior to January 1, 2003 and pursuant to which the
                  license granted contains only Customary License Arrangements;
                  and (C) licenses of commercially-available mass-produced'
                  shrink-wrap" Software products (e.g., Microsoft Office, Adobe
                  Acrobat) acquired for less than Fifty Thousand Dollars
                  ($50,000);

                           (iv)    any hedging arrangements, forward sales
                  contracts and derivative arrangements in excess of a notional
                  amount of Fifty Thousand Dollars ($50,000) and with a term of
                  over one year;

                           (v)    any open purchase order for capital
                  expenditures or contract for capital expenditures by the
                  Company or the Subsidiary in excess of Fifty Thousand Dollars
                  ($50,000);

                           (vi)    any performance bond, completion bond, bid
                  bond, suretyship agreement or similar instrument;

                                       25
<PAGE>

                           (vii)   any contract or agreement that subjects the
                  Company or the Subsidiary to restrictions on the competitive
                  conduct of its business or that prohibits the Company or the
                  Subsidiary from soliciting customers, vendors or employees of
                  Third Parties;

                           (viii)  any settlement agreement, covenant not to
                  sue, consent to use (other than as may be contained in a
                  Customary License Arrangement) or other agreement with a Third
                  Party that restricts the Company's or the Subsidiary's use of
                  its Intellectual Property or restricts the Company's or the
                  Subsidiary's business to accommodate a Third Party's
                  Intellectual Property (other than as may be contained in the
                  agreements covered in subsection (iii) above);

                           (ix)    any agreement for the provision by the
                  Company or the Subsidiary to any Person of goods or services
                  for which the Company or the Subsidiary is expected to derive
                  revenues of more than Fifty Thousand Dollars ($50,000) in any
                  twelve (12)-month period following the date of this Agreement;

                           (x)     any joint venture, partnership, royalty or
                  similar agreement involving the sharing of profits and/or
                  expenses;

                           (xi)    any agreement (other than any agreement
                  entered into in the ordinary course of business consistent
                  with past practice) for the acquisition, divestiture, lease or
                  license of material assets or Liabilities of the Company or
                  the Subsidiary which, as of the date of this Agreement, has
                  not yet been performed or which has continuing material
                  indemnity or other performance obligations on the part of the
                  Company or the Subsidiary;

                           (xii)   any agreement providing for the leasing to or
                  by the Company or the Subsidiary of equipment having a fair
                  market value of more than Fifty Thousand Dollars ($50,000);

                           (xiii)  any Employment Contract, collective
                  bargaining or similar labor agreement, director compensation
                  or indemnity agreement or consulting agreement;

                           (xiv)   any material warranty given by the Company or
                  the Subsidiary, other than (A) any warranty involving less
                  than Fifty Thousand Dollars ($50,000), (B) for warranties
                  given in contracts or agreements under which the Company or
                  the Subsidiary, as applicable, completed full performance on
                  or after July 1, 2002 and before January 1, 2003, in
                  connection with which the Seller Parties hereby represent and
                  warrant that there are no facts or circumstances that would
                  lead to a claim thereunder, and (C) for warranties given in
                  contracts or agreements which were fully performed by the
                  Company or the Subsidiary, as applicable, prior to July 1,
                  2002, in connection with which, to the Knowledge of the Seller
                  Parties, there are no facts or circumstances which would lead
                  the Seller Parties to reasonably conclude that a claim
                  thereunder may be forthcoming; and

                                       26
<PAGE>

                           (xv)    any other contract, agreement or commitment
                  (A) with respect to which the aggregate amount that could
                  reasonably be expected to be paid by the Company or the
                  Subsidiary thereunder would exceed Fifty Thousand Dollars
                  ($50,000) in any twelve (12)-month period following the date
                  of this Agreement, or (B) that is otherwise material to the
                  Company or the Subsidiary.

                  (b)      All Material Contracts are in full force and effect
         and are enforceable against the Company and/or the Subsidiary and, to
         the Knowledge of the Seller Parties, each other party thereto;
         provided, however, that, for those Material Contracts that have been
         terminated or expired, the foregoing representation shall apply only
         with respect to those provisions that survived such termination or
         expiration. Except as disclosed on Schedule 4.12(b), (i) the Company
         and/or the Subsidiary and, to the Knowledge of the Seller Parties, each
         other party thereto are in material compliance with their respective
         covenants and obligations under the Material Contracts, and (ii)
         neither the Company nor the Subsidiary has received any notice of, and
         the Seller Parties have no Knowledge of, any plan or intention of any
         Third Party to any Material Contract to exercise any right to cancel or
         terminate, or reduce the benefits to the Company and/or the Subsidiary
         under, any such Material Contract.

                  (c)      With respect to those Material Contracts which are
         prime contracts or subcontracts between the Company or the Subsidiary
         and either the United States Government or any prime contractor of the
         United States Government (other than the contract listed as Item 19 on
         Schedule 4.12(a)(ix)) (each, a "Government Contract"), all of which are
         set forth on Schedule 4.12(c), (i) all certifications and
         representations made therein by the Company or the Subsidiary were
         complete and accurate in all material respects at the time they were
         made; (ii) all cost and pricing data submitted by the Company or the
         Subsidiary in connection therewith was current, accurate and complete
         in all material respects at the time of submission, and has been
         updated in all material respects as and when required by Applicable Law
         or the terms of the applicable Government Contract in question; and
         (iii) the Company or the Subsidiary, as applicable, has established
         reserves on its financial statements in the amount of $160,000 for
         possible overcharges or potentially disputed or unallowable costs with
         respect to work performed or costs incurred thereunder as of the date
         hereof (the "Reserve Amount"). Schedule 4.12(c) also contains an
         accurate list as of the date hereof of any pending bids made by the
         Company or the Subsidiary for any Government Contracts.

         4.13     Insurance.

                  (a)      Each of the Company and the Subsidiary is insured
         and has been continuously insured since January 1, 2000 with
         financially responsible and nationally recognized insurers in such
         amounts and against such types of risks as is customary and appropriate
         in its industry. The Company has provided to Purchaser accurate and
         complete copies of all policies of insurance (including riders and
         amendments thereto) obtained by the Company, the Subsidiary or any of
         their Affiliates to which the Company or the Subsidiary is a party or
         under which the Company or the Subsidiary is covered as of the date
         hereof, each of which is identified on Schedule 4.13(a). All such
         policies are in full force and effect, all premiums due thereon have
         been paid, the Company and the

                                       27
<PAGE>

         Subsidiary are otherwise in compliance in all material respects with
         the terms and provisions of such policies, and adequate reserves have
         been taken in accordance with GAAP for potential losses for which the
         Company or the Subsidiary would be financially responsible under the
         terms and provisions of such policies.

                  (b)      Schedule 4.13(b) contains a complete summary
         description dating back to January 1, 2000 of (i) the loss experience
         under each such policy of insurance, including a statement describing
         each claim having a value in excess of Fifty Thousand Dollars ($50,000)
         (which statement includes the name of the claimant, the policy of
         insurance being claimed under and the status of such claim), and (ii)
         the loss experience for all claims during such period that were
         self-insured by the Company or the Subsidiary, including the number and
         aggregate cost of such claims. None of the Seller Parties, the Company
         nor the Subsidiary has received any written notice of cancellation or
         termination with respect to any insurance policy of the Company or the
         Subsidiary or under which the Company or the Subsidiary is covered, and
         none of the Seller Parties, the Company nor the Subsidiary has received
         notice from any of the Company's or the Subsidiary's insurance carriers
         that any insurance premiums will be increased in the future or that any
         insurance coverage presently provided for will not be available to the
         Company or the Subsidiary in the future on substantially the same terms
         as now in effect.

                  (c)      The maximum level of insurance coverage maintained
         by the Company and the Subsidiary is as set forth in Schedule 4.13(c),
         and such coverage is adequate to cover, and each of the Company and the
         Subsidiary is otherwise in compliance with, all material insurance
         requirements imposed thereon under contracts or other agreements to
         which the Company or the Subsidiary is a party.

         4.14     Title to Assets. Except as set forth on Schedule 4.14, the
Company and the Subsidiary have good, clear, record, and marketable or insurable
title to their assets and properties, free and clear of any and all Liens, other
than Permitted Liens.

         4.15     Sufficiency of Assets. The real and personal property of the
Company and the Subsidiary constitute all of the assets (tangible and
intangible) necessary for the continued conduct of the Company's and the
Subsidiary's businesses after the Closing in substantially the same manner as
presently being conducted.

         4.16     Condition of Facilities and Equipment. The facilities, plants,
machinery and equipment of the Company and the Subsidiary are in good working
order and condition, ordinary wear and tear excepted, and are being operated and
maintained in all material respects in accordance with prescribed operating
instructions (if any) necessary to ensure the effectiveness of equipment
warranties and/or service plans.

         4.17     Accounts Receivable. (i) All accounts receivable of the
Company and the Subsidiary reflected in the Financial Statements have arisen
only from bona fide transactions in the ordinary course of business, and (ii) to
the Knowledge of the Seller Parties, there are no facts or circumstances (other
than general social and economic conditions) which would result in any material
increase in the uncollectibility of such receivables in excess of the reserves
of $139,945 therefor reflected in the Financial Statements.

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<PAGE>

         4.18     Accounts Payable. Since December 31, 2003, the Company and the
Subsidiary have satisfied, paid and/or discharged their accounts payable and
other current Liabilities in accordance with their respective terms, except for
(i) accounts payable that are not yet due and payable as of the date hereof,
(ii) accounts payable or other current Liabilities that are the subject of a
bona fide dispute and identified on Schedule 4.18, or (iii) accounts payable to
any of the Seller Parties or any Affiliate thereof other than to APS (all of
which, other than as between the Company, on the one hand, and the Subsidiary,
on the other hand, will be settled or discharged on or before the Closing Date).

         4.19     Intellectual Property.

                  (a)      Schedule 4.19(a) contains a complete and accurate
         list of all patents (including applications therefor), trade marks and
         service marks (including registrations and applications therefor and
         material unregistered trademarks and service marks), trade names,
         Internet domain names, copyrights (including registrations and
         applications therefore), and Software (excluding commercially
         mass-produced Software products (e.g. Microsoft Office, Adobe Acrobat)
         licensed pursuant to "shrink-wrap" agreements for less than Fifty
         Thousand Dollars ($50,000)), that are, in each case owned by or
         licensed to the Company or the Subsidiary as of the date hereof,
         including, in the case of patents, registered trademarks, service
         marks, copyrights and pending applications therefor, details of
         registration and/or application filings with the United States Patent
         and Trademark Office, United States Copyright Office or similar
         Governmental Authorities in other jurisdictions.

                  (b)      Except as disclosed on Schedule 4.19(b):

                           (i)     the Company and/or the Subsidiary are the
                  sole and exclusive beneficial and record owners of the
                  Intellectual Property items listed in Schedule 4.19(a) and own
                  or have the right to use all Intellectual Property used in the
                  business as currently conducted, except where the failure to
                  possess such right would not, individually or in the
                  aggregate, reasonably be expected to have a Material Adverse
                  Effect;

                           (ii)    except as would not, individually or in the
                  aggregate, reasonably be expected to have a Material Adverse
                  Effect, all of the items of Intellectual Property set forth on
                  Schedule 4.19(a) are in compliance with formal legal
                  requirements (including, to the extent applicable, payment of
                  filing, examination and maintenance fees, proofs of working or
                  use, timely post-registration filing of affidavits of use and
                  incontestability and renewal applications), and are subsisting
                  and, to the Knowledge of the Seller Parties, are valid and
                  enforceable;

                           (iii)   to the Knowledge of the Seller Parties, no
                  item of Intellectual Property owned by or licensed to the
                  Company or the Subsidiary is currently being infringed,
                  diluted, misappropriated, or otherwise violated, or challenged
                  or threatened in any way;

                                       29
<PAGE>

                           (iv)    to the Knowledge of the Seller Parties, none
                  of the products or services sold, or processes or know-how
                  used, or business conducted by the Company or the Subsidiary
                  infringes, dilutes, misappropriates, or otherwise violates any
                  Intellectual Property right of any other Person, or has been
                  alleged to do so;

                           (v)     there are no Proceedings pending or, to the
                  Knowledge of the Seller Parties, threatened against the
                  Company or the Subsidiary or any of the Seller Parties before
                  any Governmental Authority involving any of the Intellectual
                  Property owned or used by the Company or the Subsidiary;

                           (vi)    the Company and the Subsidiary take
                  reasonable measures to protect the confidentiality of material
                  trade secrets owned or used by the Company or the Subsidiary;

                           (vii)   no Affiliate of the Company or the
                  Subsidiary, or any current or former partner, director,
                  stockholder, officer, or employee of the Company or the
                  Subsidiary or any of the Seller Parties (or any of their
                  respective predecessors in interest) will, after giving effect
                  to the transactions contemplated hereby, own or retain any
                  rights to own or use any of the Intellectual Property on
                  Schedule 4.19(a) or otherwise owned by or licensed to the
                  Company or the Subsidiary;

                           (viii)  the consummation of the transactions
                  contemplated hereby will not result in the loss or impairment
                  of the Company's or the Subsidiary's rights to own or use any
                  Intellectual Property; and

                           (ix)    except as may be contained in the agreements
                  set forth in Schedule 4.12(a), there are no settlements,
                  covenants not to use, consents to use (other than as may be
                  contained in a Customary License Arrangement), or any
                  judgments, orders or similar obligations that restrict the
                  Company's or the Subsidiary's right to own or use any
                  Intellectual Property listed in Schedule 4.19(a), or restrict
                  the Company's or the Subsidiary's right to conduct its
                  business in order to accommodate any Third Party's
                  Intellectual Property rights or any Intellectual Property
                  rights of the Seller Parties.

         4.20     Permits. Each of the Company and the Subsidiary possesses all
material Permits which are required in order for it to lawfully own its
properties and assets and to conduct its business as presently conducted and to
meet its contractual obligations to its customers and other Persons, including
its Affiliates, and all such Permits as of the date hereof are listed under Part
1 of Schedule 4.20. Each such Permit is in full force and effect in accordance
with its terms. There is no outstanding written notice of revocation and there
are no Proceedings pending or, to the Knowledge of the Seller Parties,
threatened that seek the revocation or suspension of any Permit. Each of the
Company and the Subsidiary is in compliance in all material respects with the
provisions of each such Permit that it holds. Any notice, other filing or other
registration required to be made by the Company or the Subsidiary with any
Governmental Authority in connection with Purchaser's acquisition of the Company
Shares in order to protect and maintain the effectiveness of any Permit is
described under Part 2 of Schedule 4.20.

                                       30
<PAGE>

         4.21     Environmental Matters. Except as disclosed on Schedule 4.21,
(i) the Company has complied in all material respects, and is presently in
compliance in all material respects, with all applicable Environmental Laws
pertaining to the ownership and operation of its assets and properties and the
conduct of its business, (ii) neither the Company nor the Subsidiary has
received any written communication alleging that it, or any of its contractors
or subcontractors, currently is not in material compliance with or is liable
under any applicable Environmental Law, (iii) each of the Company and the
Subsidiary has all material Permits required for its operation pursuant to
applicable Environmental Laws, all such Permits are in full force and effect,
and each of the Company and the Subsidiary has been and is in material
compliance with respect to such Permits, (iv) to the extent relevant, each of
the Company and the Subsidiary has applied in a timely fashion for a renewal of
all Permits required for its operations pursuant to applicable Environmental
Laws, (v) to the Knowledge of the Seller Parties, any contractors or
subcontractors retained by the Company or the Subsidiary with respect to the
Company's or the Subsidiary's operations, including the fabrication or transport
of casks, are and have been in material compliance with all applicable
Environmental Laws in connection with the performance of any task related to the
business of the Company or the Subsidiary, including holding all required
Permits under applicable Environmental Laws, and have not caused or been
responsible for a Release of Hazardous Substances in connection with their
performance of any task related to the business of the Company or the
Subsidiary, (vi) neither the Company nor the Subsidiary has received any written
requests for information relating to its, or its subcontractors, compliance with
or potential liability under any applicable Environmental Laws, (vii) neither
the Company nor the Subsidiary is subject to any judicial or administrative
orders or decrees relating in any way to Environmental Laws or Hazardous
Substances, (viii) to the Knowledge of the Seller Parties, there have been no
Releases of Hazardous Substances (A) on any real property currently owned,
leased or operated by the Company or the Subsidiary or (B) resulting from
operations in connection with the business of the Company or the Subsidiary
conducted by a contractor or subcontractor of the Company or the Subsidiary on
any real property owned, leased or operated by the contractor or subcontractor,
and (ix) neither the Company nor the Subsidiary has taken, or failed to take,
any action that could reasonably be expected to result in any material Liability
relating to (A) the environmental conditions on, under, or about any real
property that is presently owned, leased or operated by the Company or the
Subsidiary, (B) the environmental conditions on, under, or about any real
property formerly owned, leased or operated by the Company or the Subsidiary,
(C) the use, management, handling, transport, treatment, generation, storage,
disposal or release of any Hazardous Substance, or (D) any applicable
Environmental Law. The Company has provided to Purchaser true, complete and
accurate copies of all environmental reports, assessments, audits or other
studies related to the Company or the Subsidiary, that are in the possession,
custody or control of the Seller Parties, the Company or the Subsidiary. Set
forth, on Part II of Schedule 4.21 is an accurate list of all the Company's and
the Subsidiary's Permits issued or obtained pursuant to applicable Environmental
Laws as of the date hereof.

         4.22     Compliance with Applicable Laws. Except for laws covered under
Section 4.9, Section 4.19, Section 4.20, Section 4.21, Section 4.23, Section
4.24 and Section 4.28, each of the Company and the Subsidiary is, and since
January 1, 2003, has been, in material compliance with all Applicable Laws
governing, affecting or relating to it, its properties and assets, its personnel
and the conduct of its businesses, and, to the Knowledge of the Seller Parties,
neither

                                       31
<PAGE>

the Company nor the Subsidiary is under investigation with respect to any
violation of, and has not been given notice of or been charged with any
violation of, Applicable Laws.

         4.23     Employees.

                  (a)      Set forth on Schedule 4.23(a) is an accurate list of
         employees of each of the Company and the Subsidiary as of the date
         hereof, listed separately (the "Employees") and at least the following
         details for each Employee: (i) name, (ii) part-time or full-time
         status, (iii) title and/or job description, (iv) employment
         commencement date, (v) salary or wage, and (vi) bonus or other
         contingent compensation.

                  (b)      With respect to the Employees, except as described on
         Schedule 4.23(b), there has not been since January 1, 2000, there does
         not presently exist, and there is not overtly threatened (i) any
         strike, slowdown, picketing, work stoppage, lockout or mass employee
         grievance process, (ii) any material charge, grievance proceeding,
         arbitration, controversy or other employee claim against or affecting
         the Company or the Subsidiary (or any director, officer or employee
         thereof), (iii) any union or other employee association organizational
         activity or other labor or employment dispute against or affecting the
         Company or the Subsidiary, or (iv) any application for recognition or
         certification of a collective bargaining agent.

                  (c)      Schedule 4.23(c) contains a complete list of each
         employment or change of control contract for any Employee or for any
         former employee of the Company or the Subsidiary under which the
         Company or the Subsidiary has continuing Liabilities as of the date
         hereof (collectively, the "Employment Contracts"), and copies of all
         such Employment Contracts have been provided to Purchaser. Except as
         otherwise expressly provided under the Employment Contracts, the
         employment of each Employee can be terminated upon not more than thirty
         (30) days' notice without severance, penalty or premium, other than
         payment of accrued salaries, wages, vacation pay and other benefits.

                  (d)      Except as described on Schedule 4.23(d), none of the
         Seller Parties, the Company or the Subsidiary is a party to, nor bound
         by, any labor or collective bargaining agreement or any other agreement
         with a labor union with respect to employees of the Company or the
         Subsidiary and there are no labor or collective bargaining agreements
         that pertain to any of the employees of the Company or the Subsidiary,
         nor are any such employees represented by any labor organization with
         respect to such employment.

                  (e)      Except as described on Schedule 4.23(e), the Company
         and the Subsidiary are in material compliance with all Applicable Laws
         respecting employment and employment practices, terms and conditions of
         employment, health and safety, and wages and hours with respect to the
         employees of the Company and the Subsidiary, including the Worker
         Adjustment and Retraining Notification Act and any similar applicable
         state, local or foreign law requiring notice to employees in the event
         of a plant closing or layoff (the "WARN Act"), the Immigration Reform
         and Control Act, all laws and executive orders respecting employment
         discrimination, disability rights or benefits, equal opportunity, plant
         closure issues, affirmative action, workers' compensation, employee
         benefits, severance payments, labor relations, employee leave issues,
         wage and hour

                                       32
<PAGE>

         standards, occupational safety and health requirements, unemployment
         insurance and related matters, and the collection and payment of
         withholding or social security taxes and any similar tax, and none of
         the Seller Parties, the Company or the Subsidiary is engaged in any
         unfair labor practice with respect to the employees of the Company or
         the Subsidiary except for any noncompliance or practices that could
         not, individually or in the aggregate, reasonably be expected to have a
         Material Adverse Effect; and none of the Seller Parties, the Company or
         the Subsidiary is delinquent in payments to any employees of the
         Company or the Subsidiary for any services or amounts required to be
         reimbursed or otherwise paid to such employees.

                  (f)      Except as described on Schedule 4.23(f), none of the
         Seller Parties, the Company or the Subsidiary, nor any of their
         respective employees, agents or representatives, has committed a
         material unfair labor practice as defined in the National Labor
         Relations Act with respect to the current or former employees of the
         Company or the Subsidiary and there is no material unfair labor
         practice complaint or other allegation of labor law violation against
         any of the Seller Parties, the Company or the Subsidiary with respect
         to the current or former employees of the Company or the Subsidiary
         pending before the National Labor Relations Board or any other
         Governmental Authority.

                  (g)      Except as described on Schedule 4.23(g), and except
         for such matters as would not, individually or in the aggregate,
         reasonably be expected to have a Material Adverse Effect, none of the
         Seller Parties, the Company or the Subsidiary has received notice of
         any actual or threatened investigation, charge or complaint against any
         of the Seller Parties, the Company or the Subsidiary with respect to
         the current or former employees of the Company or the Subsidiary
         pending before the Equal Employment Opportunity Commission or any other
         Governmental Authority regarding an unlawful employment practice.

         4.24     Benefit Plans.

                  (a)      Schedule 4.24(a) sets forth a list of each Benefit
         Plan as of the date hereof. With respect to each Benefit Plan, the
         Seller Parties have made available to Buyer:

                           (i)     a copy of each Benefit Plan (including all
                  amendments thereto);

                           (ii)    a copy of the annual report and actuarial
                  report, if required under ERISA or the Code, with respect to
                  each Benefit Plan for the last two (2) plan years ending prior
                  to the date hereof;

                           (iii)   if the Benefit Plan is funded through a trust
                  or any Third Party funding vehicle, a copy of the trust or
                  other funding agreement (including all amendments thereto) and
                  the latest financial statements with respect to the last
                  reporting period ended immediately prior to the date thereof;

                           (iv)    a copy of the most recent Summary Plan
                  Description, together with each Summary of Material
                  Modifications, if required under ERISA, with respect to each
                  Benefit Plan; and

                                       33
<PAGE>

                           (v)     the most recent determination letter
                  received from the IRS with respect to each Benefit Plan that
                  is intended to be qualified under Section 401(a) of the Code.

                  (b)      No Liability under Title IV of ERISA has been
         incurred by the Company, the Subsidiary or any ERISA Affiliate since
         the effective date of ERISA that has not been satisfied in full, and no
         condition exists that presents a material risk to the Company or the
         Subsidiary of incurring any Liability under Title IV of ERISA, other
         than Liability for premiums due to the Pension Benefit Guaranty
         Corporation. To the extent that the representation in this subsection
         (b) applies to Section 4064, 4069 or 4204 of ERISA, it is made not only
         with respect to the Employee Plans but also with respect to any
         employee benefit plan, program, agreement or arrangement subject to
         Title IV of ERISA to which the Company, the Subsidiary or any ERISA
         Affiliate made, or was required to make, contributions during the
         five-year period ending on the Closing Date.

                  (c)      The Pension Benefit Guaranty Corporation has not
         instituted proceedings to terminate any Employee Plan and no condition
         exists that presents a material risk that such proceedings will be
         instituted. Any contribution or premium required to be paid to or in
         respect of an Employee Plan under the terms of the Employee Plan,
         Section 302 of ERISA or Section 412 of the Code, have, to the extent
         due, been paid in full or properly recorded on the financial statements
         or records of the Company, the Subsidiary or an ERISA Affiliate, and no
         Employee Plan or any trust established thereunder currently has any
         "accumulated funding deficiency" (as defined in Section 302 of ERISA or
         Section 412 of the Code), whether or not waived. The present value of
         the projected benefit obligations under each Benefit Plan subject to
         Title IV of ERISA, determined upon the basis of the actuarial
         assumptions used for funding purposes in the most recent actuarial
         report prepared with respect to such Benefit Plan, did not, as of its
         most recent valuation date, exceed the then current value of the assets
         of such Benefit Plan allocable to such projected benefit obligations.

                  (d)      No Benefit Plan is a multiemployer plan (within the
         meaning of Section 3(37) or 4001(a)(3) of ERISA).

                  (e)      Each Benefit Plan has been operated and administered
         in all material respects in accordance with its terms and Applicable
         Laws, including ERISA and the Code. There are no pending (or, to the
         Seller Parties' Knowledge, threatened) claims involving the Benefit
         Plans (other than routine claims for benefits). A favorable opinion
         letter from the IRS regarding qualification of the form of a Benefit
         Plan under all currently effective provisions of Section 401(a) of the
         Code (except for requirements for which the remedial amendment period
         has not passed) has been received by the prototype plan sponsor for
         each Benefit Plan that is intended to be "qualified" within the meaning
         of Section 401(a) of the Code, and, to the Knowledge of the Seller
         Parties, no facts exist that would reasonably be expected to result in
         the revocation of any such opinion letter.

                  (f)      Except as may be provided in any Employment Contract
         or as set forth on Schedule 4.24(f), the consummation of the
         transactions contemplated by this Agreement will not, either alone or
         in combination with any other event, (i) result in any payment

                                       34
<PAGE>

         becoming due, or increase the amount of compensation due, to any
         Employee or former employee or current or former director of the
         Company or the Subsidiary, (ii) increase any benefits payable under any
         Benefit Plan, or (iii) accelerate the time of payment or vesting, or
         increase the amount of, or otherwise enhance, any benefit due to any
         Employee or former employee or current or former director of the
         Company or the Subsidiary.

                  (g)      No Benefit Plan provides benefits, including death or
         medical benefits (whether or not insured), with respect to current or
         former employees after retirement or other termination of service
         (other than (i) coverage mandated by Sections 601-608 of ERISA and
         Section 4980F(g) of the Code, (ii) death benefits or retirement
         benefits under any employee pension benefit plan (within the meaning of
         Section 3(2) of ERISA), (iii) benefits the full cost of which is borne
         by the current or former employee (or his or her beneficiary), (iv)
         deferred compensation benefits accrued as Liabilities on the books of
         the Company, the Subsidiary or an ERISA Affiliate, or (v) severance
         benefits under Employment Contracts).

                  (h)      To the Knowledge of the Seller Parties, no
         representations or communications, oral or written, with respect to the
         participation, eligibility for benefits, vesting, benefit accrual or
         coverage under any Employee Plan have been made to any Employee or any
         former employee or current or former director of the Company or the
         Subsidiary (or any of their respective representatives or
         beneficiaries) which are not in accordance with the terms and
         conditions of the Employee Plans.

                  (i)      Except as disclosed on Schedule 4.24(i), no leased
         employee (within the meaning of Section 414(n) of the Code) performs
         (or during the preceding three (3) years performed) services for the
         Company or the Subsidiary; each of the Company and the Subsidiary has
         at all times been in material compliance with Applicable Laws regarding
         the classification of employees and independent contractors; and no
         person engaged by the Company or the Subsidiary as an independent
         contractor, third party contract laborer, temporary employee, or
         "leased employee" has ever been improperly excluded from participation
         in a Benefit Plan, nor has the Company or the Subsidiary used the
         services of such individuals to an extent that would reasonably be
         expected to result in the disqualification of any of the Employee Plans
         or the imposition of material penalties or excise taxes with respect to
         the Employee Plans by the IRS, the Department of Labor, the Pension
         Benefit Guaranty Corporation, or any other Governmental Authority.

                  (j)      Except as required by Applicable Law or as described
         on Schedule 4.24(j), since January 1, 2004, there has been no amendment
         to, written interpretation or announcement (whether or not written) by
         the Company, the Subsidiary or any ERISA Affiliate relating to, or
         change in employee participation or coverage under, any Benefit Plan
         that would increase the expense of maintaining such Benefit Plan above
         the level of the expense incurred in respect thereof for the preceding
         twelve (12) months.

                  (k)      With respect to each of the Benefit Plans, the
         provisions of Section 4980B(f) of the Code and Sections 601-609 of
         ERISA and the provisions of the Health

                                       35
<PAGE>

         Insurance Portability and Accountability Act of 1996 have been complied
         with in all material respects.

         4.25     Customers and Suppliers. Except as set forth on Schedule 4.25,
since January 1, 2003, there has not been any material adverse change in the
business relationship of the Company or the Subsidiary with any customer who
accounted for more than five percent (5%) of the Company's or the Subsidiary's
sales during the period from January 1, 2002 to December 31, 2002 or from
January 1, 2003 to December 31, 2003, or any supplier or contractor from whom
the Company or the Subsidiary purchased more than five percent (5%) of the goods
or services which it purchased during the same periods. Since December 31, 2003,
no material licensor or licensee of the Company or the Subsidiary has cancelled
or otherwise adversely modified its license with the Company or the Subsidiary
and, to the Knowledge of the Seller Parties, (i) no such Person has declared any
intention to do so, and (ii) subject to the qualifications specifically
identified on Schedule 4.3, the consummation of the transactions contemplated by
this Agreement will not adversely affect any of such relationships.

         4.26     Affiliate Contracts. Schedule 4.26 contains a true and
complete list of each agreement, contract, arrangement or understanding as of
the date hereof between (a) the Company or the Subsidiary, on the one hand, and
(b) any Affiliate of the Company or the Subsidiary, on the other.

         4.27     Bank Accounts. Schedule 4.27 sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which the Company or the Subsidiary maintains safe
deposit boxes, checking accounts or other accounts of any nature and the names
of all Persons authorized to draw thereon, make withdrawals therefrom or have
access thereto. As of the Closing Date, only then-current Employees shall be
authorized to draw thereon, make withdrawals therefrom or have access thereto.

         4.28     NRC Matters.

                  (a)      Each of the Company and the Subsidiary is in material
         compliance with all applicable regulations under the Atomic Energy Act,
         including the regulations of the NRC, affecting or relating to it, its
         properties and assets, its personnel and the conduct of its businesses,
         including the requirements of 10 C.F.R. Part 71 and 10 C.F.R. Part 72,
         and each of the Company and the Subsidiary is in material compliance
         with all requirements, provisions, terms and conditions of every
         license and Certificate of Compliance issued to the Company or the
         Subsidiary by the NRC, or any other agency, under all applicable
         regulations under the Atomic Energy Act.

                  (b)      Except as set forth on Schedule 4.28, neither the
         Company nor the Subsidiary has been given written notice or, to the
         Knowledge of the Seller Parties, any other notice of or been charged
         with actual or potential violation of any applicable regulations under
         the Atomic Energy Act, including those of the NRC, or the terms and
         conditions of any license or Certificate of Compliance granted to the
         Company or the Subsidiary by the NRC, and neither the Company nor the
         Subsidiary is the subject of any pending or ongoing proceeding, or, to
         the Knowledge of the Seller Parties, any investigation or inquiry, or
         any enforcement action, special inspection, diagnostic

                                       36
<PAGE>

         evaluation, or other action (including rules of general application
         proposed by the NRC and published in the Federal Register that, to the
         Knowledge of the Seller Parties, would be likely to materially
         adversely affect the conduct of the Company's or the Subsidiary's
         business) by or before the NRC, or any other agency, under any
         applicable regulations under the Atomic Energy Act.

                  (c)      Every spent fuel transportation cask and every spent
         fuel storage cask owned by the Company or the Subsidiary is operated
         and maintained in material compliance with all applicable regulations
         under the Atomic Energy Act, including those of the NRC, and the
         applicable Certificates of Compliance for each cask.

                  (d)      Each spent fuel transportation cask and each spent
         fuel storage cask maintained by the Company or the Subsidiary on behalf
         of its customers is maintained in material compliance with all
         applicable regulations under the Atomic Energy Act, including those of
         the NRC, and the applicable Certificates of Compliance for each cask.

                  (e)      All Certificates of Compliance for each spent fuel
         transportation or storage cask owned by the Company or the Subsidiary
         are in material compliance with NRC regulations and the conditions of
         the Certificates of Compliance, and any pending amendments to such
         Certificates of Compliance filed by or on behalf of the Company or the
         Subsidiary are in material compliance with NRC regulations. To the
         Seller Parties' Knowledge, there are no facts or circumstances
         reasonably likely to result in the Company or the Subsidiary failing to
         receive NRC approval of any such amendments.

         4.29     New Technology. The Seller Parties have disclosed to
Purchaser all facts Known to them material to the Subsidiary's proposed "new
generation technology" relating to the Subsidiary's cask systems (the "New Cask
Technology"), including all facts Known to them that are material to the design
of, the applications of, the Company's or the Subsidiary's Intellectual Property
rights with respect to, any prospective NRC licensing of, the competitiveness in
the market for dry storage and transportation casks in the United States of, and
the expected date of commercial operation of, the New Cask Technology. To the
Knowledge of the Seller Parties, the New Cask Technology does not and will not
infringe, dilute, misappropriate or otherwise violate any Intellectual Property
right of any other Person, and it has not been alleged to do so. The Seller
Parties do not have any Knowledge of facts or circumstances that would likely
result in the New Cask Technology failing to operate in the manner described to
Purchaser or to receive an NRC Certificate of Compliance by March 31, 2006 or to
receive a patent pursuant to the patent application filed in the United States
Patent and Trademark Office on March 8, 2004.

                                   ARTICLE 5
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

         In order to induce the Seller Parties to enter into this Agreement and
consummate the transactions contemplated hereby, Purchaser hereby represents and
warrants to the Seller Parties as follows:

         5.1      Organization and Authority of Purchaser. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.

                                       37
<PAGE>

Purchaser has all requisite corporate power and authority to own its assets, to
carry on its business as presently conducted by it and to enter into this
Agreement and each other agreement and instrument to be executed and delivered
by it pursuant hereto and consummate the transactions contemplated hereunder and
thereunder.

         5.2      Authorization; Enforceability. Purchaser has taken all
necessary and appropriate corporate action to authorize its execution and
delivery of this Agreement and each other agreement and instrument to be
executed and delivered by Purchaser pursuant hereto and its consummation of the
transactions contemplated hereunder and thereunder. This Agreement and each
other agreement and instrument to be executed and delivered by Purchaser
pursuant hereto are, or at the time they are executed by Purchaser and each
other party thereto will be, legally binding upon and enforceable against
Purchaser in accordance with their respective terms, except as limited by (i)
Applicable Laws of general application regarding bankruptcy, insolvency,
reorganization, moratorium and other Applicable Laws of general application
affecting enforcement of creditors' rights generally, and (ii) Applicable Laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.

         5.3      No Conflicts. Assuming that Purchaser gives the required
notices and obtains the required Consents referred to in Section 5.4, the
execution, delivery, and performance by Purchaser of this Agreement and each
other agreement and instrument to be executed and delivered by it pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
do not and will not:

                  (a)      breach or violate (i) any provision of the
         Certificate of Incorporation or Bylaws of Purchaser, or (ii) any
         resolution adopted by the board of directors or shareholder(s) of
         Purchaser; or

                  (b)      contravene, conflict with or violate any Applicable
         Laws or give any Person the right to challenge any of the transactions
         contemplated by this Agreement or to exercise any remedy or obtain any
         relief under any Applicable Law to which Purchaser may be subject.

         5.4      Notices and Consents. Except for those Consents set forth on
Schedule 5.4 (the "Purchaser Required Consents"), Purchaser is not required to
give any notice to or obtain any Consent from any Third Party or Governmental
Authority or other Person in connection with the execution and delivery of this
Agreement and each other agreement and instrument to be executed and delivered
by it pursuant hereto or the consummation of the transactions contemplated
hereby or thereby.

         5.5      Proceedings. There is no Proceeding underway, pending, or to
the Knowledge of Purchaser, threatened, by or against or affecting Purchaser or
any of its Affiliates in connection with Purchaser's entering into this
Agreement and each other agreement and instrument to be executed and delivered
by it pursuant hereto or the intended consummation by Purchaser of the
transactions contemplated hereby or thereby, nor to the Knowledge of Purchaser
has any event occurred or does any circumstance exist that is reasonably likely
to give rise to, or serve as a basis for, the commencement of any such
Proceeding.

                                       38
<PAGE>

         5.6      Accredited Investor; Investment Intent. Purchaser is an
"Accredited Investor", as that term is defined under Rule 501(a) of Regulation D
promulgated under the Securities Act. Purchaser has had reasonable opportunity
to ask questions of, and has received answers from the Seller Parties concerning
the Company and the Company Shares, and has received such other information
which Purchaser considers reasonably necessary or appropriate to evaluate the
risks and merits of its investment in the Company Shares. Purchaser intends to
purchase the Company Shares for investment purposes only and not with a view to
the resale or other distribution thereof.

         5.7      Non-Foreign Status. Purchaser is in compliance with Article XI
of its Certificate of Incorporation (relating to limitations on foreign
ownership).

         5.8      Brokers, Finders, etc. Neither Purchaser nor any Affiliate or
other Person acting on its behalf has engaged, contracted or dealt with any
Person that is or would be entitled to a broker's commission, finder's fee,
investment banker's fee, expense reimbursement or similar payment from the
Seller Parties or any of its Affiliates for brokering or otherwise arranging the
transactions contemplated hereby or introducing the Parties to each other.

                                   ARTICLE 6
                            COVENANTS OF THE PARTIES

         6.1      Conduct of Business. From the date hereof until the Closing
Date or the earlier termination of this Agreement, except as set forth on
Schedule 6.1 or as otherwise expressly permitted or required by this Agreement
or as otherwise consented to by Purchaser in writing, the Seller Parties will,
or will cause each of the Company and the Subsidiary (as applicable) to:

                  (a)      carry on the Company's and the Subsidiary's business
         in the ordinary course, in substantially the same manner as heretofore
         conducted, and use commercially reasonable efforts to preserve intact
         its present business organization, maintain its properties in good
         operating condition and repair, keep available the services of its
         present officers and its employees, and preserve its relationships with
         its customers, suppliers and others having business dealings with it,
         including regulatory authorities, with the goal and intent that its
         goodwill and ongoing business will be on the Closing Date substantially
         the same as it is on the date hereof;

                  (b)      pay all accounts payable and other obligations of the
         Company and the Subsidiary when they become due and payable in the
         ordinary course of business consistent with prior practice, except for
         (i) accounts payable or other obligations that are the subject of a
         bona fide dispute, or (ii) accounts payable to any of the Seller
         Parties or any Affiliate thereof other than APS (all of which, other
         than as between the Company, on the one hand, and the Subsidiary, on
         the other hand, will be settled or discharged on or before the Closing
         Date);

                  (c)      except as necessary to effect the Preliminary Merger,
         not (i) amend the Certificate of Incorporation or Bylaws of the Company
         or the Subsidiary other than amendments which are ministerial in nature
         or otherwise immaterial; (ii) split, combine or reclassify the
         outstanding shares of Company or Subsidiary capital stock; (iii)
         declare,

                                       39
<PAGE>

         set aside or pay any dividend payable in cash, stock or property in
         respect of any Company or Subsidiary capital stock; or (iv) repurchase,
         redeem or otherwise acquire any shares of Company or Subsidiary capital
         stock or any securities convertible into or exchangeable or exercisable
         for any shares of Company or Subsidiary capital stock;

                  (d)      not issue, sell or dispose of any shares of, or
         securities convertible into or exchangeable or exercisable for, or
         options, warrants, calls, commitments or rights of any kind to acquire,
         any shares of, Company or Subsidiary capital stock of any class;

                  (e)      not (i) incur or assume any long-term Company or
         Subsidiary indebtedness or, except in the ordinary course of business
         consistent with prior practice, incur or assume any Company or
         Subsidiary short-term indebtedness exceeding Fifty Thousand Dollars
         ($50,000) in the aggregate; (ii) make any loans, advances or capital
         contributions to any other Person; (iii) enter into any material
         commitment or transaction; (iv) write down the value of any inventory
         or write off as uncollectible any notes or accounts receivable except
         as required by GAAP or SEC rules, regulations or guidelines; (v)
         license, dispose of or permit to lapse any rights to any Intellectual
         Property; or (vi) change any of the banking or safe deposit
         arrangements identified on Schedule 4.27;

                  (f)      deploy maintenance capital in respect of the
         Company's and the Subsidiary's assets and properties in the ordinary
         course of business consistent with prior practice;

                  (g)      not organize any subsidiary of the Company or the
         Subsidiary or make any Company or Subsidiary acquisition of, or
         investment in, assets or stock of, or otherwise make a capital
         contribution to, any other Person or entity, other than acquisitions of
         assets in connection with the ordinary course performance of its
         obligations under the Material Contracts and acquisitions of assets in
         the ordinary course of business consistent with prior practice and not
         to exceed singularly or in the aggregate Fifty Thousand Dollars
         ($50,000);

                  (h)      maintain insurance of the Company and the Subsidiary
         with financially responsible and nationally recognized insurers in such
         amounts and against such risks and losses as are consistent with the
         insurance maintained by the Company and the Subsidiary in the ordinary
         course of business consistent with prior practice;

                  (i)      use commercially reasonable efforts to maintain in
         effect or renew all existing governmental franchises or Permits
         required for the ongoing operations of the Company and the Subsidiary;

                  (j)      perform in all material respects all of the Company's
         and the Subsidiary's obligations under all Material Contracts (except
         as described in Section 6.1(b) regarding bona fide payment disputes)
         and not modify, amend or terminate any Material Contracts or waive,
         release or assign any material rights or claims or offer any discounts
         or credits, except in the ordinary course of business consistent with
         prior practice;

                  (k)      comply in all material respects with all Applicable
         Laws;

                                       40
<PAGE>

                  (l)      (i) not change any financial or Tax accounting
         methods, policies or practices of the Company or the Subsidiary or with
         respect to the assets of the Company or the Subsidiary, except as
         required by a change in GAAP or SEC rules, regulations or guidelines or
         Applicable Law, (ii) not make, revoke, or amend any Tax election of the
         Company or the Subsidiary or with respect to the assets of the Company
         or the Subsidiary, (iii) not file any amended Tax Return or claim for
         refund of the Company or the Subsidiary or with respect to the assets
         of the Company or the Subsidiary, (iv) not consent to extend the period
         of limitations for the payment or assessment of any Tax of the Company
         or the Subsidiary or with respect to the assets of the Company or the
         Subsidiary, (v) not enter into any closing agreement affecting any Tax
         liability or refund of the Company or the Subsidiary or with respect to
         the assets of the Company or the Subsidiary, and (vi) not settle or
         compromise any Tax liability or refund of the Company or the Subsidiary
         or with respect to the assets of the Company or the Subsidiary;

                  (m)      not (i) enter into any new employment contract or,
         except as required by Section 6.10(a) hereof, amend any Employment
         Contract, (ii) increase the compensation or wages of or pay bonuses to
         Employees, except for such increases or payments in the ordinary course
         of business consistent with past practice for Employees who are not
         officers of the Company or the Subsidiary, or (iii) except as may be
         required by Applicable Law, amend or terminate any Benefit Plan or
         establish any new employee benefit plan, program, arrangement or
         agreement;

                  (n)      not sell, transfer, lease, license, encumber or
         otherwise dispose of any property or asset of the Company or the
         Subsidiary, other than dispositions of property or assets in connection
         with the ordinary course performance of its obligations under the
         Material Contracts or dispositions of property or assets made in the
         ordinary course of business consistent with prior practice for which
         the proceeds of such disposition are retained by the Company and in an
         amount not to exceed singularly or in the aggregate Fifty Thousand
         Dollars ($50,000); and

                  (o)      not take any action or knowingly omit to take any
         action, which action or omission would or is reasonably likely to
         result in any of the conditions to the Closing not being satisfied or
         any representations or warranty of the Seller Parties or the Company
         made under this Agreement to be untrue or inaccurate at, or as of any
         time prior to, the Closing Date;

         provided, however, that nothing herein will restrict the Company or the
Subsidiary from using its working capital to repay indebtedness of the Company
or the Subsidiary, including indebtedness to the Seller Parties, subject to the
provisions of Section 2.7 hereof.

         6.2      Further Assurances. Each Party will undertake commercially
reasonable efforts and do all reasonable acts and things necessary, proper or
advisable to consummate the transactions contemplated hereby, and will cooperate
reasonably with the other Parties, both before and after the Closing, in
connection with any steps required to be taken as part of its obligations under
this Agreement. Without limiting the generality of the foregoing:

                                       41
<PAGE>

                  (a)      Each of the Seller Parties will (i) as promptly as
         practicable, file or supply, or cause to be filed or supplied with all
         relevant Governmental Authorities and other Persons, all applications,
         notifications and information required to be filed or supplied by it
         pursuant to Applicable Law or any contract or agreement in connection
         with this Agreement and the consummation of the transactions
         contemplated hereby, (ii) promptly provide Purchaser with copies of all
         such filings and inform Purchaser of any written communications
         received from any Governmental Authority or other Person in connection
         with the Company Required Consents, (iii) as promptly as practicable,
         use reasonable efforts to obtain, or cause to be obtained, all Company
         Required Consents, (iv) coordinate and cooperate with Purchaser in
         obtaining the consent described in Section 7.2(i), (v) coordinate and
         cooperate with Purchaser in exchanging such information and supplying
         such assistance as may be reasonably requested by Purchaser in
         connection with any notices, filings or other actions required to be
         made or taken by Purchaser in connection with this Agreement, and (vi)
         promptly notify Purchaser in writing, at any time before the Closing
         Date, of any fact, condition, event, or occurrence of which it has
         Knowledge that will or could reasonably result in the failure of any of
         the conditions contained in Section 7.1 or Section 7.2 to be satisfied;
         and

                  (b)      Purchaser will (i) as promptly as practicable, file
         or supply, or cause to be filed or supplied with all relevant
         Governmental Authorities and other Persons, all applications,
         notifications and information required to be filed or supplied by it
         pursuant to Applicable Law or any contract or agreement in connection
         with this Agreement and the consummation of the transactions
         contemplated hereby, (ii) promptly provide the Seller Parties with
         copies of all such filings and inform the Seller Parties of any
         communications received from any Governmental Authority or other Person
         in connection with the Purchaser Required Consents, (iii) as promptly
         as practicable, use reasonable efforts to obtain, or cause to be
         obtained, all Purchaser Required Consents, (iv) coordinate and
         cooperate with the Seller Parties in obtaining the consent described in
         Section 7.2(i), (v) coordinate and cooperate with the Seller Parties in
         exchanging such information and supplying such assistance as may be
         reasonably requested by the Seller Parties in connection with any
         notices, filings or other actions required to be made or taken by the
         Seller Parties in connection with this Agreement, and (vi) promptly
         notify the Seller Parties in writing, at any time before the Closing
         Date, of any fact, condition, event, or occurrence of which Purchaser
         becomes aware that will or could reasonably result in the failure of
         any of the conditions contained in Section 7.1 or Section 7.2 to be
         satisfied.

         6.3      Confidentiality; Announcements.

                  (a)      Subject to Section 6.3(b), for a period of three (3)
         years following the date of this Agreement, the Parties will keep the
         terms and conditions of this Agreement and of the transactions
         contemplated hereby confidential, and the Seller Parties and their
         Affiliates shall keep confidential all information related to the
         Company or the Subsidiary and their business and no Party will, nor
         will it permit any Affiliate to, make any public announcement in
         respect of this Agreement or the transactions contemplated hereby
         without the prior written consent of the other Parties; provided,
         however, that trade secrets included in the Intellectual Property of
         the Company or the Subsidiary shall be

                                       42
<PAGE>

         kept confidential indefinitely; provided further that the foregoing
         confidentiality and non-disclosure obligations will not apply to any
         Party to the extent that (i) disclosure of such information is
         reasonably necessary to consummate the transactions contemplated
         hereby, (ii) disclosure of such information is required pursuant to
         Applicable Law (including the Exchange Act and the rules and policies
         of the New York Stock Exchange), or an order of any Governmental
         Authority, (iii) disclosure of such information is reasonably necessary
         for such Party to enforce its rights under this Agreement or any other
         agreement or instrument delivered by or to such Party pursuant to this
         Agreement, or (iv) such information is already in the public domain
         other than as a result of a breach of this Section 6.3(a) or any other
         confidentiality or non-disclosure obligation owed to any Party by any
         Person (including any other Party); provided further that to the extent
         feasible, prior to disclosing any such information to a Third Party
         pursuant to clause (i) or (iii) above, a Party shall notify the other
         Parties of the proposed disclosure and use its commercially reasonable
         efforts to obtain from the Third Party reliable assurance that such
         information will be accorded confidential treatment.

                  (b)      With respect to any initial public announcement of
         the consummation of the transactions contemplated hereby, the Parties
         will use their reasonable best efforts to reach agreement on the
         contents and timing thereof and, with respect to any subsequent
         announcement, through the six-month anniversary of the Closing Date, or
         any announcement relating to any litigation brought by Minority
         Shareholders, at any time, each Party will (i) consult with the other
         Parties with respect to the contents of such announcement, (ii) provide
         the other Parties reasonable opportunity to comment thereon, and (iii)
         use reasonable efforts to incorporate any such comments. However, such
         requirements for cooperation will not serve to delay any Party from
         making any such required public announcement within any specific time
         period mandated by Applicable Law or otherwise on a timely basis.

         6.4      Tax Matters.

                  (a)      Filing of Tax Returns for Periods Through Closing
         Date.

                           (i)     The Seller Parties will accurately complete
                  and file or cause to be completed and filed on a timely basis
                  all (A) affiliated, combined, consolidated or unitary Tax
                  Returns that include the Seller Parties or any of their
                  Affiliates, and (B) Tax Returns of the Company or the
                  Subsidiary, for any taxable period that ends on or before the
                  Closing Date. For all periods that end on or before the
                  Closing Date, Parent will include the Company and the
                  Subsidiary in Parent's consolidated federal income Tax
                  Return(s). Parent will include the income of the Company and
                  the Subsidiary (including any deferred items triggered into
                  income under Treasury Regulation Section 1.1502-13 and any
                  excess loss account taken into income under Treasury
                  Regulation Section 1.1502-19) on Parent's consolidated federal
                  income Tax Returns for all periods falling within the
                  Pre-Closing Tax Period. All income Tax Returns to be filed by
                  the Seller Parties pursuant to this Section 6.4(a)(i) will be
                  prepared and filed in a manner consistent with the Seller
                  Parties' prior practice, except for accounting method changes
                  that do not relate to any Company or Subsidiary Tax Return
                  item and except as required by any change in

                                       43
<PAGE>

                  Applicable Law. The Seller Parties shall use reasonable
                  efforts to consult Purchaser if the Seller Parties propose to
                  file a Tax Return pursuant to this Section that includes a tax
                  position not previously taken if such action could have a
                  material adverse impact on Purchaser, any Affiliate of
                  Purchaser, the Company or the Subsidiary.

                           (ii)    Purchaser will, except to the extent that
                  such Tax Returns are the responsibility of the Seller Parties
                  pursuant to Section 6.4(a)(i), prepare or cause to be
                  prepared, and timely file or cause to be timely filed, all Tax
                  Returns of the Company or the Subsidiary with respect to
                  Straddle Periods. At least ten (10) days prior to the due date
                  for the payment of a Tax with respect to a Straddle Period,
                  Purchaser shall deliver to the Seller Parties a written
                  calculation of the Seller Parties' share of such Tax (in
                  accordance with Section 6.4(b)) and the Tax Return relating to
                  such Tax, and at least five (5) days prior to the due date for
                  payment of such Tax, the Seller Parties will pay Purchaser the
                  amount of Taxes shown on such Tax Returns that relate to the
                  portion of the Straddle Period through the end of the Closing
                  Date (as determined in accordance with Section 6.4(b));
                  provided, however, that the failure of Purchaser to make such
                  timely delivery shall not relieve the Seller Parties of any of
                  their obligations with respect to Taxes and indemnity
                  obligations therefor under the Tax Provisions, except to the
                  extent that the Seller Parties are actually prejudiced
                  thereby. Purchaser's calculation of the Seller Parties' share
                  of such a Tax for a Straddle Period shall be subject to
                  approval of the Seller Parties.

                           (iii)   Purchaser will cause the Company and the
                  Subsidiary to file income Tax Returns or will include the
                  Company and the Subsidiary in Purchaser's affiliated,
                  combined, unitary or consolidated income Tax Returns, for all
                  periods other than periods ending on or before the Closing
                  Date.

                  (b)      Straddle Period. With respect to any Straddle
         Period, the amount of any Taxes payable by or attributable to the
         Company and the Subsidiary based on or measured in whole or in part by
         income or receipts of the Company and the Subsidiary for the
         Pre-Closing Tax Period will be determined based on an interim closing
         of the books as of the close of business on the Closing Date (and for
         such purpose, the taxable period of any partnership or other
         pass-through entity in which the Company or the Subsidiary holds a
         beneficial interest will be deemed to terminate at such time). The
         amount of other Taxes attributable to or payable by the Company or the
         Subsidiary for a Straddle Period which relates to the Pre-Closing Tax
         Period will be deemed to be the amount of such Tax for such Straddle
         Period multiplied by a fraction, the numerator of which is the number
         of days in the taxable period ending on (and including) the Closing
         Date and the denominator of which is the number of days in such
         Straddle Period.

                  (c)      Tax Indemnification.

                           (i)     The Seller Parties shall pay or cause to be
                  paid, shall be jointly and severally liable for, and shall
                  indemnify, defend and hold Purchaser and its Affiliates
                  (including the Company and the Subsidiary after the Closing
                  Date)

                                       44
<PAGE>

                  harmless from and against any and all (A) Taxes of the Company
                  and the Subsidiary for any Pre-Closing Tax Period, (B) Taxes
                  of the Seller Parties imposed on the Company or the Subsidiary
                  under Treasury Regulation Section 1.1502-6 (or any similar
                  provision of state, local or foreign Tax law) by reason of the
                  Company or the Subsidiary having been a member of any
                  affiliated, consolidated, combined, or unitary group on or
                  before the Closing Date, (C) any liability for Taxes as a
                  result of transferee or successor liability or under any Tax
                  Sharing Agreement, (D) any liability for Taxes as a result of
                  any breach of any representation or warranty made by the
                  Seller Parties in Section 4.9, and (E) Transfer Taxes
                  resulting from the transactions contemplated by this Agreement
                  pursuant to Section 6.4(j).

                           (ii)    Payment in full of any amount due from the
                  Seller Parties under this Section 6.4(c) shall be made to
                  Purchaser in immediately available funds at least two (2)
                  Business Days before the date payment of the Taxes to which
                  such payment relates is due, or, if no Tax is payable, within
                  fifteen (15) days after written demand is made for such
                  payment.

                  (d)      Tax Contests.

                           (i)     If any Taxing Authority asserts a Tax Claim,
                  then the Party hereto first receiving notice of such Tax Claim
                  shall promptly provide written notice thereof to the other
                  Party or Parties hereto; provided, however, that the failure
                  of such Party to give such prompt notice shall not relieve the
                  other Party of any of its obligations with respect to Taxes
                  and indemnity obligations therefor under the Tax Provisions,
                  except to the extent that the other Party is actually
                  prejudiced thereby. Such notice shall specify in reasonable
                  detail, to the extent known, the basis for such Tax Claim and
                  shall include a copy of the relevant portion of any
                  correspondence received from the Taxing Authority.

                           (ii)    The Seller Parties shall have the right and
                  obligation to control, at their own expense, any audit,
                  examination, contest, litigation or other proceeding by or
                  against any Taxing Authority (a "Tax Proceeding") in respect
                  of the Company or the Subsidiary for any taxable period that
                  ends on or before the Closing Date; provided, however, that,
                  in the event of any Tax Claim in excess of One Thousand
                  Dollars ($1,000), (A) the Seller Parties shall provide
                  Purchaser with a timely and reasonably detailed account of
                  each stage of such Tax Proceeding, (B) the Seller Parties
                  shall use reasonable efforts to consult with Purchaser before
                  taking any significant action in connection with such Tax
                  Proceeding, (C) the Seller Parties shall use reasonable
                  efforts to consult with Purchaser and offer Purchaser an
                  opportunity to comment before submitting any written materials
                  prepared or furnished in connection with such Tax Proceeding,
                  (D) the Seller Parties shall defend such Tax Proceeding
                  diligently and in good faith as if they were the only party in
                  interest in connection with such Tax Proceeding, (E) Purchaser
                  shall be entitled to participate, at its own expense, in such
                  Tax Proceeding and receive copies of any written materials
                  relating to such Tax Proceeding received from the relevant
                  Taxing Authority, and (F) the Seller

                                       45
<PAGE>

                  Parties shall not settle, compromise or abandon any issues
                  relating to such Tax Proceeding, if such action could have a
                  materially adverse impact on Purchaser or any Affiliate of
                  Purchaser (including the Company and the Subsidiary after the
                  Closing Date), without obtaining the prior written consent of
                  Purchaser.

                           (iii)   In the case of a Tax Proceeding for a
                  Straddle Period of the Company and the Subsidiary, Purchaser
                  shall have the right to control, at its own expense, such Tax
                  Proceeding; provided, however, that (A) Purchaser shall
                  provide the Seller Parties with a timely and reasonably
                  detailed account of each stage of such Tax Proceeding, (B)
                  Purchaser shall use reasonable efforts to consult with the
                  Seller Parties before taking any significant action in
                  connection with such Tax Proceeding, (C) Purchaser shall use
                  reasonable efforts to consult with the Seller Parties and
                  offer the Seller Parties an opportunity to comment before
                  submitting any written materials prepared or furnished in
                  connection with such Tax Proceeding, (D) Purchaser shall
                  defend such Tax Proceeding diligently and in good faith as if
                  it were the only party in interest in connection with such Tax
                  Proceeding, (E) the Seller Parties shall be entitled to
                  participate, at their own expense, in such Tax Proceeding and
                  receive copies of any written materials relating to such Tax
                  Proceeding received from the relevant Taxing Authority, and
                  (F) Purchaser shall not settle, compromise or abandon any such
                  Tax Proceeding, if such action could have a materially adverse
                  impact on the Seller Parties or any Affiliate of the Seller
                  Parties, without obtaining the prior written consent of the
                  Seller Parties.

                  (e)      Purchaser Consolidated Returns. Notwithstanding any
         other provision of this Agreement, (i) Purchaser shall be entitled to
         control in all respects, and none of the Seller Parties, nor any
         Affiliate of the Seller Parties shall be entitled to participate in,
         any Tax Proceeding with respect to any affiliated, consolidated,
         combined or unitary Tax Return that includes Purchaser, and (ii)
         Purchaser and its Affiliates shall not be required to provide any
         Person with any affiliated, consolidated, combined or unitary Tax
         Return or copy thereof that includes Purchaser (provided, however, that
         to the extent that such Tax Returns would be required to be delivered
         but for this Section 6.4(e), the person that would be required to
         deliver such Tax Returns shall instead deliver pro forma Tax Returns
         relating solely to the Company or the Subsidiary).

                  (f)      Seller Party Consolidated Returns. Notwithstanding
         any other provision of this Agreement, (i) the Seller Parties shall be
         entitled to control in all respects, and neither Purchaser nor any of
         its Affiliates shall be entitled to participate in, any Tax Proceeding
         with respect to any affiliated, consolidated, combined or unitary Tax
         Return that includes the Seller Parties, and (ii) the Seller Parties
         shall not be required to provide any Person with any affiliated,
         consolidated, combined or unitary Tax Return or copy thereof that
         includes the Seller Parties (provided, however, that to the extent that
         such Tax Returns would be required to be delivered but for this
         subsection (ii) of Section 6.4(f), the person that would be required to
         deliver such Tax Returns shall instead deliver pro forma Tax Returns
         relating solely to the Company and/or the Subsidiary).

                                       46
<PAGE>

                  (g)      Cooperation. Each Party hereto shall provide to the
         other Party hereto such cooperation, documentation and information as
         either of them reasonably may request in (i) filing any Tax Return,
         amended Tax Return or claim for refund, (ii) determining a liability
         for Taxes or an indemnity obligation therefor under the Tax Provisions
         or a right to refund of Taxes, (iii) conducting any Tax Proceeding,
         (iv) determining an allocation of Taxes between a Pre-Closing Tax
         Period and Post-Closing Tax Period or (v) understanding the financial
         and tax accounting of the Seller Parties for the Company and the
         Subsidiary with respect to any Pre-Closing Tax Period or Straddle
         Period. Such cooperation, documentation and information shall include
         providing copies of all relevant portions of relevant Tax Returns,
         together with all relevant portions of relevant accompanying schedules
         and relevant work papers, relevant documents relating to rulings or
         other determinations by Taxing Authorities and relevant records
         concerning the ownership and Tax basis of property and other
         information, which any such Party may possess or control. Each Party
         will retain all Tax Returns, schedules and work papers, and all
         material records and other documents relating to Tax matters, of the
         relevant entities for their respective Tax periods ending on or prior
         to the Closing Date until the later of (x) the expiration of the
         statute of limitations for the Tax periods to which the Tax Returns and
         other documents relate or (y) eight (8) years following the due date
         (without extension) for such Tax Returns. Thereafter, the Party holding
         such Tax Returns or other documents may dispose of them after offering
         the other Party reasonable notice and opportunity to take possession of
         such Tax Returns and other documents at such other Party's own expense.
         Each Party shall make its employees reasonably available on a mutually
         convenient basis at its cost to provide explanation of any documents or
         information so provided.

                  (h)      Tax Sharing Agreements. Anything in any other
         agreement to the contrary notwithstanding, all liabilities and
         obligations between the Seller Parties or any of their Affiliates
         (other than the Company or the Subsidiary) on the one hand and the
         Company or the Subsidiary on the other hand, under any Tax Sharing
         Agreement in effect prior to the Closing Date (other than this
         Agreement) that are not paid or satisfied at or prior to the Closing
         shall cease and terminate as of the Closing Date as to all past,
         present and future taxable periods.

                  (i)      Tax Treatment.

                           (i)     The Seller Parties, the Company, and the
                  Subsidiary, and each of their respective Affiliates shall
                  treat any and all payments under Sections 2.7(d), 6.4(c),
                  6.4(k), or Article 9 as an adjustment to the Purchase Price to
                  the maximum extent permitted by applicable Tax laws.

                           (ii)    Neither Purchaser nor the Seller Parties
                  shall make or file any election under Code Section 338(h)(10)
                  (or any similar provision of the law of any state or other
                  taxing jurisdiction) with respect to the sale of the Company
                  Shares (or the acquisition of shares in the Subsidiary)
                  pursuant to this Agreement. For purposes of all Tax Returns
                  and other applicable filings, the Seller Parties and Purchaser
                  will report the transactions contemplated hereby as a sale of
                  the Company Shares.

                                       47
<PAGE>

                  (j)      Survival of Obligations. Notwithstanding anything in
         this Agreement to the contrary, (i) the obligations of the Parties set
         forth in the Tax Provisions with respect to Taxes and indemnity
         obligations therefor shall not be subject to any restrictions or
         limitations of any kind other than as expressly set forth in the Tax
         Provisions and shall survive the Closing, and (ii) the representations
         and warranties in Section 4.9 with respect to Taxes and indemnity
         obligations therefor shall survive, until thirty (30) days after the
         expiration of all applicable statutes of limitations (giving effect to
         any extensions or waivers thereof).

                  (k)      Transfer Taxes. All Transfer Taxes that are payable
         or that arise as a result of the consummation of the transactions
         contemplated by this Agreement shall be borne by the Seller Parties.
         The Seller Parties will prepare any Tax Returns that must be filed in
         connection with any Transfer Taxes and will provide a copy to Purchaser
         for its comment and approval.

                  (l)      Approvals, Consents, etc. To the extent that the law
         places such responsibility on Purchaser and solely to the extent set
         forth on Schedule 6.4(l), Purchaser shall obtain material approvals,
         Consents, licenses, Permits, waivers or authorizations relating to
         Taxes or Tax Returns, and shall make filings with respect thereto, in
         connection with the consummation of the transactions contemplated by
         this Agreement. Except as provided pursuant to the preceding sentence,
         the Seller Parties shall obtain all material approvals, Consents,
         licenses, Permits, waivers or authorizations relating to Taxes or Tax
         Returns, and shall make all filings with respect thereto, in connection
         with the consummation of the transactions contemplated by this
         Agreement.

                  (m)      Dispute Resolution. In the event that the Seller
         Parties and Purchaser disagree as to the amount or calculation of any
         payment to be made under this Agreement relating to Taxes, or the
         interpretation or application of any provision under this Agreement
         relating to Taxes, the Parties shall attempt in good faith to resolve
         such dispute. If such dispute is not resolved within sixty (60) days
         following the commencement of the dispute, the Seller Parties and
         Purchaser shall jointly retain a nationally recognized law or
         accounting firm, which firm is independent of both Parties (the
         "Independent Firm"), to resolve the dispute. The Independent Firm shall
         act as an arbitrator to resolve all points of disagreement and its
         decision shall be final and binding upon all Parties involved.
         Following the decision of the Independent Firm, the Seller Parties and
         Purchaser shall each take or cause to be taken any action necessary to
         implement the decision of the Independent Firm. The fees and expenses
         relating to the Independent Firm shall be borne fifty percent (50%) by
         the Seller Parties and fifty percent (50%) by Purchaser.

                  (n)      Coordination. Notwithstanding anything in this
         Agreement to the contrary, in the event there is a conflict between the
         Tax Provisions and any other provision contained in this Agreement, the
         Tax Provisions shall control.

                                       48
<PAGE>

         6.5      Employment Matters.

                  (a)      The Company and the Subsidiary are and have been in
         material compliance with all notice and other requirements under the
         WARN Act. The Seller Parties shall not, and shall cause the Company and
         the Subsidiary not to, at any time ninety (90) days before the Closing
         Date, without complying fully with the notice requirements and other
         requirements of the WARN Act, effectuate (i) a "plant closing" as
         defined in the WARN Act affecting any site of employment or one or more
         facilities or operating units within any site of employment of the
         Company or the Subsidiary; or (ii) a "mass layoff" as defined in the
         WARN Act affecting any site of employment of the Company or the
         Subsidiary. In addition, the Seller Parties hereby agree to jointly and
         severally indemnify Purchaser and to defend and hold Purchaser harmless
         from and against any and all claims, losses, damages, expenses,
         obligations and liabilities (including costs of collection, attorney's
         fees and other costs of defense) which Purchaser may incur in
         connection with any suit or claim of violation brought against
         Purchaser under the WARN Act, which relates to actions taken by the
         Company or the Subsidiary with regard to any site of employment or one
         or more facilities or operating units within any site of employment of
         the Company or the Subsidiary prior to the Closing Date.

                  (b)      On or before the Closing Date, the Seller Parties
         shall cause the Company to provide a list to Purchaser of the name and
         site of employment of any and all of the employees of the Company and
         the Subsidiary who have experienced, or will experience, an "employment
         loss" under the WARN Act within the ninety (90) days prior to the
         Closing Date. Purchaser agrees that, following the Closing, it will
         cause the Company and the Subsidiary to maintain the employment of a
         sufficient number of the Company's and the Subsidiary's employees so as
         to preclude any requirement for the giving by the Company or the
         Subsidiary or any of its Affiliates before the Closing of any layoff,
         closing or other termination notice pursuant to the provisions of the
         WARN Act.

                  (c)      Effective not later than immediately before the
         Closing, the Seller Parties shall (i) cause to be transferred to the
         Company or the Subsidiary any assets held (other than assets held by
         the Company, the Subsidiary, or any of their subsidiaries) on or after
         the date hereof in any account where such assets are earmarked or
         reserved for the payment of benefits under a Benefit Plan and (ii)
         cause the Company or the Subsidiary to be treated as the sole settlor
         of any trust whose assets are earmarked or reserved for the payment of
         benefits under a Benefit Plan with all of the rights presently held by
         any settlor thereunder.

         6.6      Payment of Company and Subsidiary Debt Obligations. On or
before the Closing Date, the Seller Parties shall cause the Company or the
Subsidiary to pay or cause to be paid and discharged all outstanding
indebtedness of the Company and the Subsidiary for borrowed money, but excluding
any indebtedness of the Subsidiary to the Company or of the Company to the
Subsidiary; provided, however, that, unless otherwise expressly provided herein,
the Seller Parties will have no obligation to pay or discharge or cause to be
paid or discharged (i) any current account payable or other current liability of
the Company or the Subsidiary that is taken into account in the calculation of
the Net Working Capital Adjustment, (ii) any real estate lease or capital lease
obligation of the Company or the Subsidiary, or (iii) any guaranty, surety,

                                       49
<PAGE>

indemnity or similar obligation or other covenant or performance obligation of
the Company or the Subsidiary that arises under or in connection with any
contract (including any Material Contract) to which the Company or the
Subsidiary is party, by which the Company or the Subsidiary is bound or under
which the Company or the Subsidiary receives a direct benefit in connection with
the conduct of the Company's or the Subsidiary's business (other than any
contract or obligation identified on Schedule 6.6). For the avoidance of doubt,
on or before the Closing Date, the Seller Parties shall cause the Company to pay
or cause to be paid and/or discharged all indebtedness identified on Schedule
6.6.

         6.7      No Solicitation.

                  (a)      From the date hereof through the Closing, none of the
         Seller Parties, their Affiliates nor their respective representatives
         (including investment bankers, attorneys and accountants) shall,
         directly or indirectly, enter into, solicit, initiate or continue any
         discussions or negotiations with, or encourage or respond to any
         inquiries or proposals by, or participate in any negotiations with, or
         provide any information to, or otherwise cooperate in any other way
         with, any Person, concerning any sale of all or a portion of the
         Company or the Subsidiary, or of any shares of capital stock of the
         Company or the Subsidiary or any merger, consolidation, liquidation,
         dissolution or similar transaction involving the Company or the
         Subsidiary, except the Preliminary Merger (each such transaction being
         referred to herein as a "Proposed Acquisition Transaction") other than
         with (i) Purchaser and its representatives, or (ii) as required by
         Applicable Law. None of the Seller Parties, the Company nor any of
         their Affiliates shall, directly or indirectly, through any officer,
         director, employee, representative, agent or otherwise, solicit,
         initiate or encourage the submission of any proposal or offer from any
         Person (including a "person" as defined in Section 13(d)(3) of the
         Exchange Act) relating to any Proposed Acquisition Transaction. Each of
         the Seller Parties represents that neither it nor the Company nor the
         Subsidiary is directly or indirectly now engaged in discussions or
         negotiations with any Person other than Purchaser with respect to any
         of the foregoing.

                  (b)      The Seller Parties shall promptly notify Purchaser if
         any discussions or negotiations are sought to be initiated, any inquiry
         or proposal is made, or any information is requested with respect to
         any Proposed Acquisition Transaction and notify Purchaser of the
         identity of the prospective purchaser or soliciting party and any other
         information relating to such inquiry or proposal Known to the Seller
         Parties, subject to any confidentiality agreements to which the Seller
         Parties, the Company or the Subsidiary are party as of the date of the
         Exclusivity Agreement, dated as of April 13, 2004, between Purchaser
         and El Dorado.

         6.8      Non-Competition; No Solicitation of Employees.

                  (a)      Each of the Seller Parties agrees that effective upon
         the Closing it will not, for a period of five (5) years following the
         Closing Date, either directly or indirectly, through any subsidiary or
         otherwise, engage in any business similar to or which competes with the
         business of the Company or the Subsidiary as conducted as of the date
         hereof and the Closing Date, including, but not limited to, the
         licensing of, and manufacture and sale of products incorporating, the
         New Cask Technology.

                                       50
<PAGE>

                  (b)      For a period of two (2) years following the Closing
         Date, none of the Seller Parties or their subsidiaries shall, directly
         or indirectly, solicit for employment or otherwise solicit the services
         of any of the officers, senior managers or key employeeS of the Company
         or the Subsidiary as of the Closing Date; provided, however, that this
         non-solicitation covenant shall not cover any officer, senior manager,
         or key employee (i) terminated or otherwise released by the Company or
         the Subsidiary from the date of such termination or release or (ii) who
         contacts any of the Seller Parties or their subsidiaries on his or her
         own initiative and without any solicitation by any of the Seller
         Parties or their subsidiaries.

         6.9      Termination of Affiliate Contracts. Except as set forth on
Schedule 6.9 and except as agreed to in writing by the Seller Parties and
Purchaser, all contracts, agreements or arrangements between the Company or the
Subsidiary, on the one hand, and any Affiliates of the Company or the
Subsidiary, on the other, including any agreements or understandings (written or
oral) with respect thereto, shall terminate simultaneously with the Closing
without any further action or liability on the part of the parties thereto or be
terminated by the Seller Parties and other parties thereto on or prior to the
Closing Date.

         6.10     Change of Control Arrangements.

                  (a)      Prior to the Effective Time, the Seller Parties shall
         cause the Company and/or the Subsidiary (as applicable) to amend the
         Second Amended Employment Agreement, dated July 1, 2004, with Peter J.
         Walier, to provide that, as of the Effective Time, one of the Seller
         Parties, and not the Company or the Subsidiary, shall be liable to Mr.
         Walier for any 2004 Retention Bonus (as defined therein) and for any
         Incentive and any Bonus Incentive (each as defined therein) payable
         thereunder in connection with the consummation of the transactions
         contemplated by this Agreement, and the Seller Parties shall make such
         payment pursuant to the Amended Employment Agreement, as so amended.

                  (b)      Purchaser shall be responsible and shall pay or shall
         cause the Company or the Subsidiary to pay any severance-related
         Liabilities of the Company and the Subsidiary to officers and Employees
         of the Company and the Subsidiary that arise under the Employment
         Contracts after the Closing, including any severance-related
         Liabilities arising from the resignations or terminations required by
         Section 2.5(j) hereof.

         6.11     Access to Company and Subsidiary Information. Upon reasonable
notice and subject to Applicable Laws and any confidentiality obligations, the
Seller Parties shall cause the Company and the Subsidiary to afford to the
officers, directors, employees, accountants, counsel, investment bankers,
financial advisors and other representatives (collectively, "Representatives")
of Purchaser reasonable access, during normal business hours throughout the
period prior to the Closing Date, to all of the Company's and the Subsidiary's
properties, books, contracts, commitments and records and, during such period,
the Seller Parties shall cause the Company and the Subsidiary to furnish
promptly to Purchaser and its Representatives, (a) access to each report,
schedule and other document filed or received by the Company or the Subsidiary
pursuant to the requirements of Applicable Laws or filed with or sent to any
Governmental Authority and (b) access to all information concerning the Company
or the Subsidiary and their

                                       51
<PAGE>

directors and officers and such other matters as may be reasonably requested by
the Purchaser or its Representatives in connection with any filings,
applications or approvals required or contemplated by this Agreement or for any
other reason related to the transactions contemplated by this Agreement.
Purchaser shall, and shall cause its Representatives to, hold in confidence all
documents and information concerning the Company or the Subsidiary furnished to
it in connection with the transactions contemplated by this Agreement. The
Seller Parties shall reasonably cooperate with Purchaser's integration planning
efforts. Without limiting the scope of the cooperation obligation related to Tax
matters under Section 6.4(g), after the Closing Date, the Seller Parties shall
provide Purchaser such supplementary information or documents as Purchaser, the
Company or the Subsidiary may reasonably request in order to understand the
records and information of the Company and the Subsidiary as of the Effective
Time.

         6.12     Use of Company and Subsidiary Name After the Closing. From and
as of the Closing and continuing indefinitely thereafter, the Seller Parties and
their Affiliates shall not use the name "NAC" or "Nuclear Assurance Corporation"
or any similar variation thereof in any business venture or activity. Nothing
herein will prohibit the Seller Parties from using the names "NAC" or "Nuclear
Assurance Company" in any announcements or other descriptions of the
transactions contemplated in this Agreement or in Tax Returns or other filings
with Governmental Authorities.

         6.13     Parent Support Obligations.

                  (a)      Purchaser acknowledges that Parent has entered into
         certain guarantee and indemnity obligations in support of the Company's
         and/or the Subsidiary's obligations to certain of its customers,
         certain of which parent support obligations are described on Schedule
         6.13 (the "Parent Support Obligations"). At the Closing, Purchaser and
         Parent shall enter into an indemnification agreement substantially in
         the form set forth in Exhibit C to this Agreement (the "Indemnification
         Agreement"), pursuant to which Purchaser shall agree to indemnify
         Parent for up to $2 million of any liabilities incurred by Parent under
         the Parent Support Obligations arising out of the performance of the
         Company's and/or the Subsidiary's obligations under the applicable
         customer contracts after the Closing (each such payment an "Indemnity
         Payment").

                  (b)      Following the Closing, neither the Company nor the
         Subsidiary will utilize the General Agreement of Indemnity, dated March
         1, 2001, by and between United States Fire Insurance Company, Parent,
         the Company and the Subsidiary (the "US Fire Indemnity Agreement") for
         any purpose other than to support that certain Agreement, dated April
         27, 1999 between the Subsidiary and APS (as agent for the participants
         in the Arizona Nuclear Power Project) for Supply of Transportable Dry
         Spent Fuel Storage System (Contract No. 500219319) (the "APS
         Agreement") (which does not include, for purposes of this Agreement,
         the amendments thereof dated July 12, 2004 and June 9, 2004). When the
         Subsidiary has received notice of final acceptance of all of its work
         under the APS Agreement, Purchaser and the Seller Parties promptly will
         take all steps necessary to cause the US Fire Indemnity Agreement to be
         terminated and provide Parent with evidence satisfactory to Parent of
         such termination, and Parent will have no further obligation
         thereunder. When the Subsidiary has received notice of final acceptance
         of all of its work under the UMS Hardware Supply Agreement (as such
         term is defined in that

                                       52
<PAGE>

         certain Amended and Restated Parent Guarantee, dated April 22, 2003, by
         Parent for the benefit of Maine Yankee Atomic Power Company (the "Maine
         Yankee Guarantee")), Purchaser and the Seller Parties promptly will
         take all steps necessary to cause the Maine Yankee Guarantee to be
         terminated and provide Parent with evidence satisfactory to Parent of
         such termination, and Parent will have no further obligation
         thereunder.

                  (c)      The Seller Parties shall cause the reimbursement and
         indemnity agreements of the Company and the Subsidiary to the Seller
         Parties set forth on Schedule 4.7 and relating to the Parent Support
         Obligations to terminate effective as of the Closing Date.

                                   ARTICLE 7
                             CONDITIONS FOR CLOSING

         7.1      Conditions to Obligations of the Seller Parties. The
obligation of the Seller Parties to consummate the transactions contemplated by
this Agreement will be subject to the fulfillment (or waiver by the Seller
Parties in their sole discretion) of the following conditions on or prior to the
Closing Date:

                  (a)      the representations and warranties of Purchaser
         contained in this Agreement that are qualified by materiality will be
         true, accurate and complete, and the representations and warranties of
         Purchaser contained in this Agreement that are not so qualified will be
         true, accurate and complete in all material respects, in each case as
         of the date hereof and on and as of the Closing Date with the same
         effect as though made at such time, except for changes expressly
         contemplated by this Agreement and except for any particular
         representation or warranty that specifically addresses matters only as
         of a particular date (which will remain true as of such date);

                  (b)      Purchaser will have duly performed and complied in
         all material respects with all of its covenants, obligations and
         agreements required by this Agreement to be performed or complied with
         by Purchaser on or before the Closing Date;

                  (c)      no Applicable Law will have been enacted or made
         effective and no order, judgment, decree or decision of any
         Governmental Authority will have been issued or made that serves to
         restrain, enjoin or prohibit the consummation of the transactions
         contemplated hereby, and no Proceeding will have been commenced and be
         continuing that seeks to restrain, enjoin or prohibit the consummation
         of the transactions contemplated hereby;

                  (d)      Purchaser will have obtained the Purchaser Required
         Consents, the failure of which to obtain would prevent, materially
         delay or materially impair Purchaser's ability to consummate the
         transactions contemplated by this Agreement; and

                  (e)      the Seller Parties will have received the
         deliverables required to be made to them pursuant to Section 2.6.

         7.2      Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement will be
subject to the fulfillment

                                       53
<PAGE>

(or waiver by Purchaser in its sole discretion) of the following conditions on
or prior to the Closing Date:

                  (a)      the representations and warranties of the Seller
         Parties contained in this Agreement that are qualified by materiality
         will be true, accurate and complete, and the representations and
         warranties of the Seller Parties contained in this Agreement that are
         not so qualified will be true, accurate and complete in all material
         respects, in each case as of the date hereof and on and as of the
         Closing Date with the same effect as though made at such time, except
         for changes expressly contemplated by this Agreement and except for any
         particular representation or warranty that specifically addresses
         matters only as of a particular date (which will remain true as of such
         date);

                  (b)      the Seller Parties will have duly performed and
         complied in all material respects with all of their covenants,
         obligations and agreements required by this Agreement to be performed
         or complied with by the Seller Parties on or before the Closing Date;

                  (c)      no Applicable Law will have been enacted or made
         effective and no order, judgment, decree or decision of any
         Governmental Authority will have been issued or made that serves to
         restrain, enjoin or prohibit the consummation of the transactions
         contemplated hereby, no Proceeding will have been commenced and be
         continuing that seeks to restrain, enjoin or prohibit the consummation
         of the transactions contemplated hereby, and no antitrust agency shall
         have threatened to restrain, enjoin or prohibit the consummation of the
         transactions contemplated hereby or impose terms or conditions that
         would reasonably be expected to have a Material Adverse Effect (which
         would be deemed to include the divestiture, or placement in trust or
         similar arrangement, of the Company, the Subsidiary or any material
         assets or business thereof);

                  (d)      no event, occurrence, fact, condition, change,
         development, or circumstance will have occurred since the date of this
         Agreement which has or would reasonably be expected to have a Material
         Adverse Effect;

                  (e)      the Seller Parties will have obtained the Company
         Required Consents, the failure of which to obtain would have or would
         be reasonably likely to have, individually or in the aggregate, a
         Material Adverse Effect;

                  (f)      Purchaser will have obtained the Purchaser Required
         Consents, the failure of which to obtain would prevent, materially
         delay or materially impair Purchaser's ability to consummate the
         transactions contemplated by this Agreement;

                  (g)      Purchaser will have received the deliverables
         required to be made to it pursuant to Section 2.5;

                  (h)      the Company or Subsidiary key employees identified on
         Schedule 7.2(h) shall have entered into retention/confidentiality/non-
         compete agreements with the Company and/or the Subsidiary substantially
         in the form set forth in Exhibit D with such economic terms as are
         disclosed by Purchaser to the Seller Parties;

                                       54
<PAGE>

                  (i)      the DOE and the NRC, or their respective staffs,
         shall have consented, or Purchaser shall have otherwise obtained
         adequate assurance to its sole satisfaction that there is no objection
         by the DOE or the NRC, or their respective staffs, to the operation by
         the Subsidiary of the Nuclear Materials Management and Safeguards
         System database ("NMMSS") after the Closing Date, on such terms and
         conditions, if any, which would not have or reasonably be expected to
         have a Material Adverse Effect (it being understood that terms or
         conditions which materially impact the economic benefit of the
         operation by the Subsidiary of NMMSS after the Closing Date, or that
         require the divestiture, or placement in trust or similar arrangement,
         of the Company, the Subsidiary or any material assets or business
         thereof, would be deemed to be a Material Adverse Effect);

                  (j)      no Proceeding will have been commenced, and be
         continuing, by or on behalf of a Minority Shareholder or relating to
         the Preliminary Merger which has or would reasonably be expected to
         have a Material Adverse Effect or a material adverse effect on
         Purchaser or the transactions contemplated hereby; and

                  (k)      Purchaser shall be reasonably satisfied that there
         has not been, and there is not reasonably likely to be, a materially
         adverse development with respect to the NRC licensing of the New Cask
         Technology, including the timing of completion thereof.

                                   ARTICLE 8
                                   TERMINATION

         8.1      Termination. This Agreement may be terminated at any time
prior to the Closing Date:

                  (a)      by the written agreement of the Seller Parties and
         Purchaser;

                  (b)      by the Seller Parties or Purchaser, by written notice
         to the other, if the transactions contemplated hereby have not been
         consummated pursuant hereto by 5:00 p.m. (New York, New York time) on
         the date that is ninety (90) days from the date hereof (the "Initial
         Termination Date"), unless the failure to close is due to the failure
         of the notifying Party to perform or comply with any of the covenants,
         agreements, or conditions hereof to be performed or complied with by it
         prior to the Closing Date; provided, however, that, if on the Initial
         Termination Date, the condition to Closing set forth in Section 7.2(e),
         Section 7.2(f) or Section 7.2(i) shall not have been fulfilled but all
         other conditions to the Closing shall have been fulfilled or shall be
         capable of being fulfilled, and the applicable Parties are diligently
         pursuing fulfillment of the condition, then the Initial Termination
         Date shall be extended for an additional thirty (30) day period;

                  (c)      by the Seller Parties, by written notice to
         Purchaser, if there shall have been a material breach of any
         representation or warranty, or a material breach of any covenant or
         agreement of Purchaser hereunder, which breach would prevent,
         materially delay or materially impair Purchaser's ability to consummate
         the transactions contemplated by this Agreement, and such breach shall
         not have been remedied within

                                       55
<PAGE>

         thirty (30) days after receipt by Purchaser of notice in writing from
         the Seller Parties, specifying the nature of such breach and requesting
         that it be remedied;

                  (d)      by Purchaser, by written notice to the Seller
         Parties, if there shall have been a material breach of any
         representation or warranty, or a material breach of any covenant or
         agreement of the Seller Parties hereunder, which breach would result in
         a Material Adverse Effect, and such breach shall not have been remedied
         within thirty (30) days after receipt by the Seller Parties of notice
         in writing from Purchaser, specifying the nature of such breach and
         requesting that it be remedied; or

                  (e)      by the Seller Parties or Purchaser, by written notice
         to the other, if any Applicable Law is adopted or issued, which has the
         effect, as supported by the written opinion of outside counsel for such
         Party, of prohibiting the Closing, or by any Party if any court of
         competent jurisdiction in the United States or any state shall have
         issued an order, judgment or decree permanently restraining, enjoining
         or otherwise prohibiting the Closing, and such order, judgment or
         decree shall have become final and nonappealable.

         8.2      Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 8.1, this Agreement will become
void and have no effect, without any Liability to any Person in respect hereof
or of the transactions contemplated hereby on the part of any Party, or any of
their directors, officers, employees, agents, consultants, representatives,
advisers, stockholders or Affiliates, except, in connection with a termination
pursuant to Section 8.1(c) or Section 8.1(d), for any Liability resulting from
such Party's breach of this Agreement. For the avoidance of doubt, the Parties
agree that, in the event this Agreement is terminated because the transactions
contemplated hereby do not close solely because the condition to closing set
forth in Section 7.2(h) has not been fulfilled, no Party shall have any
Liability to another Party if the Seller Parties shall have used their
commercially reasonable efforts to cause the fulfillment of such condition.
Notwithstanding the foregoing, the provisions of Section 6.3, this Section 8.2,
and Article 10, and the definitions herein applicable to any of such provisions,
will survive termination of this Agreement indefinitely or until the earlier
specified time referred to in such provision.

                                   ARTICLE 9
                          SURVIVAL AND INDEMNIFICATION

         9.1      Survival. All representations, warranties, covenants and
obligations of the Seller Parties and Purchaser contained in this Agreement will
survive the Closing and the consummation of the transactions contemplated
hereby, subject to the provisions of Section 9.5. The waiver by the Seller
Parties or Purchaser of any of their respective conditions for Closing based
upon the accuracy of any representation or warranty of the other Party, or on
the performance of or compliance with any covenant or obligation of the other
Party, will not affect the right to indemnification, reimbursement or other
remedy based upon such representations, warranties, covenants and obligations.

         9.2      Indemnification By the Seller Parties. Subject to the
limitations set forth in this Article 9 and in Section 10.14, the Seller Parties
hereby covenant and agree that, to the fullest extent permitted by Applicable
Law, they will, jointly and severally, defend, indemnify and hold

                                       56
<PAGE>

harmless Purchaser, its Affiliates (which, after the Closing, will include the
Company, the Subsidiary and their respective successors) and its and their
respective officers, directors, employees and agents (collectively, the
"Purchaser Indemnitees") for, from and against any and all claims, Liabilities,
obligations, losses, fines, penalties, costs, interest, amounts paid in
settlement of claims, Proceedings, deficiencies or damages (whether absolute,
accrued, conditional, or otherwise) including any out-of-pocket expenses and
reasonable attorneys' fees incurred in the investigation or defense of any of
the same or in asserting any of their respective rights hereunder (each
individually, a "Loss" and collectively, "Losses"), whether or not involving a
Third Party Claim against any Purchaser Indemnitee, resulting from or arising
out of:

                  (a)      any breach or inaccuracy of any representation or
         warranty made by any of the Seller Parties in this Agreement or any
         other agreement and instrument to be executed and delivered by it
         pursuant hereto;

                  (b)      any breach by any Seller Party of any of its
         covenants or obligations hereunder or under any other agreement and
         instrument to be executed and delivered by it pursuant hereto;

                  (c)      the Preliminary Merger or any action initiated by
         Minority Shareholders prior to or after the Closing; and/or

                  (d)      any Reserve Shortfall pursuant to Section 9.7.

         9.3      Indemnification by Purchaser. Subject to the limitations set
forth in this Article 9 and in Section 10.14, Purchaser hereby covenants and
agrees that, to the fullest extent permitted by Applicable Law, it will defend,
indemnify and hold harmless each of the Seller Parties, its Affiliates (which,
before the Closing, will include the Company, the Subsidiary and their
respective successors) and its and their respective officers, directors,
employees and agents (collectively, the "Seller Indemnitees") for, from and
against, and to pay or reimburse the Seller Indemnitees for, any and all Losses,
whether or not involving a Third Party Claim against any Seller Indemnitee,
resulting from or arising out of:

                  (a)      any breach or inaccuracy of any representation or
         warranty made by Purchaser in this Agreement or any other agreement and
         instrument to be executed and delivered by it pursuant hereto;

                  (b)      any breach by Purchaser of any of its covenants or
         obligations hereunder or under any other agreement and instrument to be
         executed and delivered by it pursuant hereto;

                  (c)      the conduct by Purchaser, directly or indirectly,
         (including through the Company or the Subsidiary) of the businesses of
         the Company and the Subsidiary following the Closing; and/or

                  (d)      any Reserve Excess pursuant to Section 9.7.

In no event shall the Seller Parties seek to enforce the foregoing indemnities
(or any other provision of this Agreement) with respect to Losses suffered by
their Affiliates pursuant to the

                                       57
<PAGE>

performance by the Company and the Subsidiary of contracts between the Company
and/or the Subsidiary and the Seller Parties' Affiliates, including APS. All
such Losses shall be addressed under the terms of such contracts or Applicable
Law.

         9.4     Limitations on Indemnification Claims. Neither the Seller
Parties nor Purchaser will have any Liability pursuant to Section 6.5(a),
Section 9.2 or Section 9.3, as applicable, unless the aggregate amount of Losses
otherwise subject to its, or, in the case of the Seller Parties, taken together,
their, indemnification obligations thereunder exceeds Two Hundred Thousand
Dollars ($200,000) (the "Claim Threshold"), whereupon such Party shall be liable
for all Losses exceeding the Claim Threshold, subject to the further limitations
of this Agreement; provided, however, that in determining the Liability for any
breach of representation, warranty, covenant or agreement under this Agreement,
all references to a materiality or similar qualifier or Material Adverse Effect
shall be disregarded; and provided further that the Claim Threshold shall not
apply with respect to any breach by the Seller Parties of their representations
and warranties in Section 3.4, Section 4.4 or Section 4.5, Section 4.6(c) or
their covenants in Section 2.7 or Section 6.10(a), with respect to any breach by
Purchaser of its representations and warranties in Section 5.8 or its covenants
in Section 2.7, Section 6.10(b) or Section 6.13, or with respect to any
Liability arising pursuant to Section 9.2(c). Notwithstanding the foregoing or
any other provision of this Agreement other than the Tax Provisions:

                  (a)      the Seller Parties will not have any indemnification
         liability under this Agreement in respect of any Loss to the extent
         that such Loss is covered by insurance held by Purchaser or any
         Affiliate thereof (which, following the Closing, will include the
         Company and the Subsidiary and their respective successors), and
         Purchaser will not have any indemnification liability under this
         Agreement in respect of any Loss to the extent that such Loss is
         covered by insurance held by the Seller Parties or any Affiliate
         thereof (which, following the Closing, will exclude the Company and the
         Subsidiary and their respective successors); provided, however, that
         (i) to the extent the insurance company denies coverage, such Loss
         shall not be deemed to be "covered" by insurance and (ii) a Loss shall
         not be deemed to be "covered" by insurance to the extent of any
         applicable deductible or self-insurance retention;

                  (b)      a Purchaser Indemnitee or Seller Indemnitee (as the
         case may be) will be required to undertake reasonable efforts to
         mitigate any Loss in respect of which a claim for indemnification is
         made or in respect of which the amount of such Loss is added (or
         permitted to be added) to the Claim Threshold; provided, however, that
         a Purchaser Indemnitee or Seller Indemnitee (as the case may be) shall
         not be required pursuant hereto to incur any material costs or
         prosecute or defend any Proceeding;

                  (c)      the aggregate Liability of the Seller Parties for all
         Losses claimed by Purchaser Indemnitees under Section 6.5(a), Section
         9.2(a), Section 9.2(b) (other than for breach of the Seller Parties'
         obligations under Section 6.10(a)) or Section 9.2(d) will not exceed an
         amount equal to thirty-five percent (35%) of the Purchase Price;
         provided, however, that the aggregate liability of the Seller Parties
         for all Losses claimed by Purchaser Indemnitees as a result of any
         violation of Section 3.2, Section 4.4, or Section 4.5 will not exceed
         an amount equal to the Purchase Price; and

                                       58
<PAGE>

                  (d)      the aggregate liability of Purchaser for all Losses
         claimed by Seller Indemnitees under Section 9.3(a), Section 9.3(b)
         (other than for breach of Purchaser's obligations under Section 6.10(b)
         or Section 6.13) or Section 9.3(d) will not exceed an amount equal to
         thirty-five percent (35%) of the Purchase Price; provided, however,
         that the aggregate liability of Purchaser for all Losses claimed by
         Seller Indemnitees as a result of any violation of Section 5.2 will not
         exceed an amount equal to the Purchase Price.

         9.5      Timing of Indemnification Claims. No Purchaser Indemnitee will
be entitled to recover under an indemnification claim against the Seller Parties
under Section 6.5(a) or Section 9.2, and no Seller Indemnitee will be entitled
to recover under an indemnification claim against Purchaser under Section 9.3,
unless such claiming Person has delivered to the applicable indemnifying Party
written notice of such claim for indemnification within the following applicable
claims period (each, a "Claims Period"):

                  (a)      with respect to any indemnification claim arising out
         of (i) the breach by any Party of any representation, warranty,
         covenant or agreement relating to such Party's authority and/or ability
         to enter into this Agreement and each other agreement and instrument to
         be executed and delivered by it pursuant hereto and consummate the
         transactions contemplated hereby or thereby, (ii) the breach by the
         Seller Parties of any representation, warranty or covenant regarding El
         Dorado's title to the Company Shares or the Company's title to the
         Subsidiary Shares, and their ability to transfer the same to Purchaser,
         free and clear of all Liens, (iii) any fraudulent act or willful
         misrepresentation by any Party with respect to this Agreement and/or
         the transactions contemplated hereby, and (iv) the conduct by Purchaser
         (directly or indirectly) of the businesses of the Company and the
         Subsidiary following the Closing, the Claims Period will commence on
         the date of the Closing and continue until thirty (30) days after
         expiration of the limitation period applicable thereto under the
         applicable statute of limitations;

                  (b)      with respect to any indemnification claim arising out
         of the breach by the Seller Parties of any of their covenants in
         Section 6.8 and Section 6.12, the Claims Period will commence on the
         date of the Closing and continue until thirty (30) days after the
         expiration of the period specified in such provision;

                  (c)      with respect to any indemnification claim arising out
         of the breach by the Seller Parties or Purchaser of any other
         representation, warranty, covenant or agreement in this Agreement or in
         any agreement, instrument or other document executed and delivered
         pursuant hereto, the Claims Period will commence on the date of the
         Closing and continue until the second (2nd) anniversary of the Closing
         Date; provided, however, that, with respect to any indemnification
         claim arising out of the breach by the Seller Parties of any of their
         representations and warranties in Section 4.12(c), the Claims Period
         will commence on the date of the Closing and continue until the third
         (3rd) anniversary of the Closing Date.

Notwithstanding the foregoing, if prior to 5:00 p.m. (New York time) on the last
day of the applicable Claims Period, the Party against which an indemnification
claim has been made hereunder has been properly notified in writing of such
claim for indemnity hereunder and such

                                       59
<PAGE>

claim has not been finally resolved or disposed of as of such date, then such
claim will continue to survive and will remain a basis for indemnity hereunder
until such claim is finally resolved or disposed of in accordance with the terms
of this Agreement.

         9.6      Third-Party Claim Procedures.

                  (a)      Promptly after receipt by a Seller Indemnitee or a
         Purchaser Indemnitee, as the case may be (an "Indemnitee") of notice of
         the assertion of a Third-Party Claim against it, such Indemnitee will
         give prompt notice to the Party obligated to indemnify such Indemnitee
         under Section 9.2 or Section 9.3 as the case may be (each, an
         "Indemnitor") of the assertion of such Third-Party Claim, provided,
         however, that the failure to so notify the Indemnitor will not relieve
         the Indemnitor of any liability that it may have to such Indemnitee,
         except to the extent that the Indemnitor demonstrates that the defense
         of such Third-Party Claim was materially prejudiced by the Indemnitee's
         failure to give such prompt notice.

                  (b)      If an Indemnitee gives notice to an Indemnitor
         pursuant to Section 9.6(a) of the assertion of a Third-Party Claim, the
         Indemnitor will be entitled to participate in the defense of such
         Third-Party Claim (at its sole cost) and, subject to Section 9.6(c), to
         assume control of the defense of such Third-Party Claim with counsel
         reasonably satisfactory to the Indemnitee. After notice from the
         Indemnitor to the Indemnitee of its election to assume the defense of
         such Third-Party Claim, the Indemnitor will not, so long as it
         diligently conducts such defense, be liable to the Indemnitee under
         Section 9.2 or 9.3 (as applicable) for any fees of other counsel or any
         other expenses with respect to the defense of such Third-Party Claim,
         in each case subsequently incurred by the Indemnitee in connection with
         the defense of such Third-Party Claim, other than reasonable costs of
         investigation. If the Indemnitor assumes the defense of a Third-Party
         Claim, (i) such assumption will conclusively establish for purposes of
         this Agreement that the claims made in that Third-Party Claim are
         within the scope of, and subject to, indemnification as provided
         herein, and (ii) no compromise or settlement of such Third-Party Claims
         may be effected by the Indemnitor or will be binding on the Indemnitee
         without the Indemnitee's prior written consent (not to be unreasonably
         withheld or delayed), unless (A) there is no finding or admission of
         any violation of law or of the rights of any Person, (B) an
         unconditional term thereof is the release from all Liability with
         respect to such claim to each Indemnitee that is the subject of such
         Third-Party Claim, except as provided in clause (C), and (C) the sole
         relief provided is monetary damages that are paid in full by the
         Indemnitor. If notice is given by an Indemnitee to an Indemnitor of the
         assertion of any Third-Party Claim and the Indemnitor does not, within
         ten (10) Business Days after the Indemnitee's notice is given, give
         notice to the Indemnitee of its election to assume the defense of such
         Third-Party Claim, the Indemnitee will be entitled, to the Indemnitor's
         exclusion and at the Indemnitor's cost, to fully assume the defense of
         such Third-Party Claim, and the Indemnitor will be bound by any
         determination made in such Third-Party Claim or any compromise or
         settlement effected by the Indemnitee in respect thereof.

                  (c)      Notwithstanding the foregoing provisions of this
         Section 9.6, the Indemnitee may require that the Indemnitor not assume
         or maintain control of, or actively

                                       60
<PAGE>

         participate in (in which case, the Indemnitor will not assume, maintain
         control of or actively participate in) the defense of, a Third Party
         Claim against the Indemnitee if (i) the Indemnitor is also a Person
         against whom the Third-Party Claim is made and the Indemnitee
         determines in good faith that joint representation of the Indemnitor
         and Indemnitee would be inappropriate, (ii) the Indemnitee requests,
         and the Indemnitor fails to provide, reasonable assurance to the
         Indemnitee of the Indemnitor's financial capacity to defend such
         Third-Party Claim and to provide indemnification with respect thereto,
         or (iii) the Indemnitee determines in good faith that there is a
         reasonable probability that the Third-Party Claim may adversely affect
         it or its Affiliates other than as a result of monetary damages for
         which it would be entitled to indemnification under this Agreement. In
         any of these events, the Indemnitee may, by written notice to the
         Indemnitor, assume the exclusive right to defend, compromise or settle
         such Third-Party Claim, but the Indemnitor will not be bound by any
         compromise or settlement of such Third-Party Claim for the purposes of
         this Agreement without its prior written consent to such compromise or
         settlement.

                  (d)      Each of the Seller Parties and Purchaser hereby
         consents, to the extent that it is an Indemnitor in respect of a
         Third-Party Claim, to the nonexclusive jurisdiction of any court or
         arbitration panel in which a Proceeding in respect of such Third-Party
         Claim is brought against any Indemnitee for purposes of any claim that
         an Indemnitee may have under this Agreement with respect to such
         Proceeding or the matters alleged therein, and agrees that process may
         be served on any Indemnitor with respect to such a claim anywhere in
         the world.

                  (e)      With respect to any Third-Party Claim subject to
         indemnification under Section 9.2 or Section 9.3, (i) the Indemnitee(s)
         and the Indemnitor(s), as the case may be, will keep the other(s) fully
         informed of the status of such Third-Party Claim and any related
         actions or proceedings at all stages thereof, and (ii) the Parties
         agree (each at its own expense) to render to each other such assistance
         as they may reasonably require of each other and to cooperate in good
         faith with each other in order to ensure the proper and adequate
         defense of any Third-Party Claim.

                  (f)      With respect to any Third-Party Claim subject to
         indemnification under Section 9.2 or Section 9.3, the Parties agree to
         cooperate in such a manner as to preserve to the greatest extent
         possible the confidentiality of all confidential and proprietary
         information of the Parties and the attorney-client and work-product
         privileges as between the Parties and their respective legal advisors.
         In connection therewith, each Party agrees that (i) it will use all
         reasonable efforts in respect of any Third-Party Claim in which it
         assumes or participates in the defense to avoid production of
         confidential and proprietary information (consistent with Applicable
         Law and rules of procedure), and (ii) all communications between each
         Party and counsel responsible for or participating in the defense of
         any Third-Party Claim will, to the greatest extent possible, be made so
         as to preserve any applicable attorney-client or work-product
         privilege.

                  (g)      With respect to any Third-Party Claim subject to
         indemnification under Section 9.2(c), reasonable expenses (including
         attorneys' fees) incurred by the Indemnitee

                                       61
<PAGE>

         in connection therewith shall be paid by the Indemnitor as they are
         incurred in advance of the final disposition of such Third-Party Claim.

         9.7      Reserve Indemnity. If, within three (3) years of the Closing
Date, pursuant to any audit or review by any Governmental Authority in
connection with the Government Contracts set forth on Schedule 4.12(c), the
Company or the Subsidiary shall be required to make any payment or payments for
possible overcharges or potentially disputed or unallowable costs with respect
to work performed or costs incurred under such Government Contracts as of the
Closing Date in excess of the Reserve Amount plus any additional amounts
reserved between the date hereof and the Closing Date in respect thereof (the
"Additional Reserves"), then the Seller Parties shall indemnify Purchaser for
such excess amount (the "Reserve Shortfall"), subject to Section 9.4(c) and the
Claim Threshold. If, however, after such three-year period has expired, amounts
so payable by the Company or the Subsidiary, if any, are less than the Reserve
Amount plus the Additional Reserves, then Purchaser shall remit to the Seller
Parties for the difference between the amounts actually paid and the Reserve
Amount plus the Additional Reserves (the "Reserve Excess"), subject to Section
9.4(d) and the Claim Threshold. The Claims Period for claims pursuant to this
Section 9.7 will commence on the date of the Closing and continue until thirty
(30) days after the third anniversary of the Closing Date. Purchaser shall use
its commercially reasonable efforts to defend the position of the Company or the
Subsidiary, as the case may be, in connection with any such audit or review by a
Governmental Authority and, upon the written request of either of the Seller
Parties, will promptly provide the Seller Parties with reasonable information
regarding the scope or status of any such audit or review.

         9.8      Exclusive Remedy. Except to the extent provided in Section
10.2, from and after the Closing, the indemnification obligations and remedies
set forth in this Article 9 will be the sole and exclusive remedy of the Seller
Parties and Purchaser with respect to the matters for which indemnification may
be sought pursuant to this Article 9, except in the event of fraud. Without
limiting the generality of the foregoing, no Proceeding based upon predecessor
or successor liability, contribution, tort or strict liability, in each case
except to the extent such claim is based on fraud, may be maintained by the
Seller Parties or Purchaser against the other with respect to the matters for
which indemnification is provided pursuant to this Article 9. Notwithstanding
anything to the contrary contained in this Article 9, the representations,
warranties, covenants, agreements, obligations, indemnities, and time limits
pertaining to matters addressed in the Tax Provisions shall be governed solely
as provided therein.

                                   ARTICLE 10
                                  MISCELLANEOUS

         10.1      Expenses. Except as otherwise expressly provided in this
Agreement, the Seller Parties and Purchaser will bear their respective expenses,
costs and fees (including attorneys' and other advisors' fees) in connection
with the transactions contemplated hereby, including the preparation, execution,
and delivery of this Agreement and the other agreements and instruments to be
entered into pursuant hereto and the preparation and filing of any notices or
applications with respect to required Consents, whether or not the transactions
contemplated hereby are consummated.

                                       62
<PAGE>

         10.2      Specific Performance. The Parties hereby acknowledge and
agree that the rights of each Party to consummate the transactions contemplated
hereby are special, unique and of extraordinary character, and that if any Party
refuses or otherwise fails to consummate the sale and purchase of the Company
Shares as contemplated herein (other than as permitted by the provisions
hereof), such refusal or failure would result in irreparable injury to the other
Party, the exact amount of which would be difficult to ascertain or estimate and
the remedies at law for which would not be reasonable or adequate compensation.
Accordingly, if any Party refuses or otherwise fails to consummate the sale and
purchase of the Company Shares as contemplated herein (other than as permitted
by the provisions hereof), then, in addition to any other remedy which may be
available to the other Party at law or in equity, such other Party will be
entitled to seek specific performance and injunctive relief, without posting
bond or other security, and without the necessity of proving actual or
threatened damages, which remedy such Party will be entitled to seek in any
court of competent jurisdiction.

         10.3      Severability. If any provision of this Agreement, or the
application of any such provision to any Person or circumstance, is held to be
unenforceable or invalid by any Governmental Authority or arbitrator or under
any Applicable Law, the Parties will negotiate an equitable adjustment to the
provisions of this Agreement with the view to effecting, to the greatest extent
possible, the original purpose and intent of this Agreement, and in any event,
the validity and enforceability of the remaining provisions of this Agreement
will not be affected thereby.

         10.4      Notices. All notices, requests, demands, claims and other
communications required or permitted to be given or made hereunder must be in
writing. Any notice, request, demand, claim, or other communication hereunder
will be deemed duly given and received (i) if personally delivered, when so
delivered, (ii) if mailed, five (5) Business Days after having been sent by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, (iii) if sent through an
overnight delivery service in circumstances to which such service guarantees
next day delivery, the next Business Day following being so sent, and (iv) if
sent by electronic facsimile, once such notice or other communication is
transmitted to the fax number specified below and the appropriate printed
confirmation of transmission is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (ii) above or sent by overnight delivery service in accordance with
clause (iii) above:

                  (a)      If to the Seller Parties, addressed to:

                  El Dorado Investment Company
                  400 N. 5th Street
                  Mail Station 9988
                  Phoenix, Arizona  85004
                  Facsimile:  (602) 250-3887
                  Attn:  John R. Finn

                                       63
<PAGE>

                  with a copy to:

                  Snell & Wilmer L.L.P.
                  One Arizona Center
                  400 E. Van Buren
                  Phoenix, Arizona 85004-2202
                  Facsimile:  (602) 382-6070
                  Attn:  Matthew P. Feeney

                  (b)      If to Purchaser, addressed to:

                  USEC Inc.
                  2 Democracy Center
                  6903 Rockledge Drive
                  Bethesda, MD  20817
                  Facsimile:  (301) 564-3201
                  Attn:  General Counsel

                  with a copy to:

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  1440 New York Avenue, NW
                  Washington, DC  20005
                  Facsimile: (202) 393-5760
                  Attention:  Pankaj K. Sinha

Any Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including electronic mail), but no such notice,
request, demand, claim or other communication will be deemed to have been duly
given or received unless and until it actually is received by the Party for
which it is intended and the notifying Party can provide evidence of such actual
receipt. Any Party may change its address or fax number for the receipt of
notices, requests, demands, claims and other communications hereunder by giving
each other Party notice of such change in the manner herein set forth.

         10.5     Dispute Resolution. Subject to the provisions of Section 10.2,
any dispute or difference between the Parties arising out of or in connection
with this Agreement or the transactions contemplated hereby, including any
dispute between an Indemnitee and any Indemnitor under Article 9, which the
Parties are unable to resolve themselves will be submitted to and resolved by
arbitration before a single arbitrator, for amounts in dispute under One Million
Dollars ($1,000,000), and otherwise before a panel of three (3) arbitrators,
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association, as supplemented or modified by the provisions of this Section 10.5.
The arbitrator(s) will consider the dispute at issue in New York, New York
within one hundred twenty (120) days (or such other period as may be acceptable
to the Parties) of the designation of the arbitrator. The arbitrator(s) will be
bound to follow the laws of the State of Delaware, decisional and statutory, in
reaching any decision and making any award and will deliver a written award,
including written findings of fact and conclusions of law, with respect to the
dispute to each of the Parties, who will promptly

                                       64
<PAGE>

act in accordance therewith. In no event will the arbitrator(s) have the power
to award damages in connection with any dispute in excess of actual compensatory
damages. In particular, the arbitrator(s) may not multiply actual damages or
award consequential, indirect, special or punitive damages, including damages
for lost profits or loss of business opportunity. Any award of the arbitrator(s)
will be final, conclusive and binding on the Parties; provided, however, that
any Party may seek the vacating, modification or correction of the
arbitrator(s)' decision or award as provided under Section 10 and Section 11 of
the Federal Arbitration Act 9 U.S.C. Section 1-14. Any determination made or
award rendered pursuant to the arbitration provisions of this Section 10.5 shall
be subject to Section 6.3(a) hereof. Notwithstanding the foregoing sentence, any
Party may enforce any award rendered pursuant to the arbitration provisions of
this Section 10.5 by bringing suit in any court of competent jurisdiction. All
costs and expenses attributable to the arbitrator(s) will be allocated between
the Parties in such manner as the arbitrator(s) determine to be appropriate
under the circumstances. The Parties agree that either or both of them may file
a copy of this Section 10.5 with any arbitrator or court as written evidence of
the knowing, voluntary and bargained agreement between the Parties with respect
to the subject matter of this Section 10.5. Notwithstanding anything to the
contrary contained in this Section 10.5, any dispute or difference between the
Parties relating to Taxes, or the interpretation or application of any of the
Tax Provisions, shall be resolved solely as set forth in the Tax Provisions.

         10.6     Headings; Interpretation. The headings contained in this
Agreement are for purposes of convenience only and will not affect the meaning
or interpretation of this Agreement. Unless otherwise expressly indicated, any
reference in this Agreement (including any Schedule hereto) to an "Article,"
"Section," "subsection," "paragraph" or "subparagraph" followed by a number or
letter or combination of the two will be a reference to the particular Article,
Section, subsection, paragraph or subparagraph of this Agreement bearing such
number, letter or combination thereof. The terms "hereof," "herein," "hereunder"
and comparable terms refer, unless otherwise expressly indicated, to this
Agreement as a whole and not to any particular Article, Section, subsection,
paragraph, subparagraph or other subdivision hereof or any Schedule, Exhibit or
other attachment hereto. The terms "include," "includes" and "including" will be
deemed to be followed by the words "without limitation." Whenever the context so
requires, the singular number will include the plural and the plural will
include the singular, and the gender of any pronoun will include the other
gender or neuter, as applicable. Any reference in this Agreement to a particular
statute, regulation or code (including any specific provision thereof) includes
all regulations and rules thereunder, all amendments thereto in force from time
to time (including amendments to provision references) and every Applicable Law
in effect that supplements, replaces or supercedes such statute, regulation or
code. Whenever consent or approval of any Party is required pursuant to this
Agreement, unless expressly stated that such consent or approval is to be given
in the sole discretion of such Party, such consent or approval shall not be
unreasonably withheld or delayed. Unless otherwise expressly indicated, the
phrase "the transactions contemplated hereby" will be deemed to include the sale
of the Company Shares to Purchaser and the Preliminary Merger, each in
accordance with the provisions of this Agreement.

         10.7     Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) constitutes the entire and complete agreement between the
Parties with respect to the subject matter hereof and supersedes and replaces
all prior agreements, commitments, communications,

                                       65
<PAGE>

representations and understandings, both written and oral, between the Parties
with respect to the subject matter hereof (including any letter of intent
between the Seller Parties and Purchaser or any of their respective Affiliates).

         10.8     Governing Law, etc. This Agreement will be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of Delaware, without giving effect to the conflict of laws
rules thereof.

         10.9     Binding Effect; Assignment. This Agreement will be binding
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign its rights or delegate or cause to be
assumed its obligations hereunder without the prior written consent of the other
Parties; provided, however, that Purchaser may assign its right to purchase the
Company Shares to any Affiliate of Purchaser as long as such Affiliate agrees in
writing to be bound by the applicable terms of this Agreement and no such
assignment shall relieve Purchaser from its obligations hereunder and El Dorado
may assign its rights to receive the Purchase Price to Parent and no such
assignment shall relieve El Dorado from its obligations hereunder. Any attempted
assignment, delegation or assumption not in accordance with this Section 10.9
will be null and void and of no effect whatsoever.

         10.10    No Third Party Beneficiaries. Except as provided in Article 9
with respect to indemnification of Indemnitees hereunder, nothing in this
Agreement will confer any rights upon any Person other than the Parties and
their respective successors and permitted assigns.

         10.11    Amendment; Waivers, etc. No amendment, modification, or
discharge of this Agreement, and no waiver hereunder, will be valid or binding
unless set forth in writing and duly executed by the Party against whom
enforcement of the amendment, modification, discharge, or waiver is sought. Any
such waiver will constitute a waiver only with respect to the specific matter
described in such writing and will in no way impair the rights of the Party
granting such waiver in any other respect or at any other time. Neither the
waiver by any Party of a breach of or a default under any provision of this
Agreement, nor the failure by any Party, on one or more occasions, to enforce
any provision of this Agreement or to exercise any right or privilege hereunder,
will be construed as a waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions, rights, or privileges
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any Party may otherwise have at law or
in equity. The rights and remedies of any Party based upon, arising out of or
otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant, or agreement, or failure to fulfill any condition will in no
way be limited by the fact that the act, omission, occurrence, or other state of
facts upon which any claim of any such inaccuracy or breach is based may also be
the subject matter of any other representation, warranty, covenant, or agreement
as to which there is no inaccuracy or breach. The representations and warranties
of the Seller Parties will not be affected or deemed waived by reason of any
investigation made by or on behalf of Purchaser (including by any of its
advisors, consultants or representatives) or by reason of the fact that
Purchaser or any of such advisors, consultants or representatives knew or should
have known that any such representation or warranty is or might be inaccurate.

         10.12    Dates and Times. Dates and times set forth in this Agreement
for the performance of the Parties' respective obligations will be strictly
construed, time being of the

                                       66
<PAGE>

essence of this Agreement. All provisions in this Agreement which specify or
provide a method to compute a number of days for the performance, delivery,
completion or observance by a Party of any action, covenant, agreement,
obligation or notice hereunder will mean and refer to calendar days, unless
otherwise expressly provided. If the date specified or computed under this
Agreement for the performance, delivery, completion or observance of a covenant,
agreement, obligation or notice by any Party, or for the occurrence of any event
provided for herein, is a day other than a Business Day, then the date for such
performance, delivery, completion, observance or occurrence will automatically
be extended to the next Business Day following such date.

         10.13    Joint Preparation. This Agreement and each agreement or
instrument entered into by the Parties pursuant to the provisions hereof will be
considered for all purposes as having been prepared through the joint efforts of
the Parties. No presumption will apply in favor of any Party in the
interpretation of this Agreement or any such other agreement or instrument or in
the resolution of any ambiguity of any provision hereof or thereof based on the
preparation, substitution, submission or other event of negotiation, drafting or
execution hereof or thereof.

         10.14    Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION
OF THIS AGREEMENT, IN NO EVENT WILL ANY PARTY BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING DAMAGES FOR
LOSS OF PROFITS OR BUSINESS OPPORTUNITY, INCURRED BY ANY OTHER PERSON, WHETHER
IN CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF THE PARTY WHO IS THE SUBJECT
OF SUCH CLAIM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

         10.15    Counterparts. This Agreement may be executed in several
counterparts and delivered in original form or by electronic facsimile, each of
which will be deemed an original and all of which will together constitute one
and the same instrument.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       67
<PAGE>

         IN WITNESS WHEREOF, the Parties have duly executed this Stock Purchase
Agreement as of the date first above written.

SELLER PARTIES:

PINNACLE WEST CAPITAL CORPORATION

By: /s/ Donald E. Brandt
    --------------------
Name: Donald E. Brandt
      ----------------
Its: Executive Vice President and Chief Financial Officer
     ----------------------------------------------------

EL DORADO INVESTMENT
COMPANY

By: /s/ Donald E. Brandt
    --------------------
Name: Donald E. Brandt
      ----------------
Its: Treasurer
     ---------

PURCHASER:

USEC INC.

By: /s/ Ellen C. Wolf
    -----------------
Name: Ellen C. Wolf
      -------------
Its: Sr. V.P. and C.F.O.
     -------------------

                                       68exv10w1

 

Exhibit 10.1

AMENDED AND RESTATED

REVOLVING LOAN AGREEMENT

dated as of May 24, 2004

among

AVALONBAY COMMUNITIES, INC.,

as Borrower,

JPMORGAN CHASE BANK and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Bank and Syndication Agent,

FLEET NATIONAL BANK,

as a Bank, Swing Lender and Issuing Bank

MORGAN STANLEY BANK,

WELLS FARGO BANK, NATIONAL ASSOCIATION

and DEUTSCHE BANK TRUST COMPANY AMERICAS,

as a Bank and Documentation Agent,

THE OTHER BANKS SIGNATORY HERETO,

each as a Bank,

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger,

and

FLEET NATIONAL BANK,

as Administrative Agent

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I   DEFINITIONS; ETC	 	 	1	 
	 
	 	Section 1.01	 	Definitions	 	 	1	 
	 
	 	Section 1.02	 	Accounting Terms	 	 	17	 
	 
	 	Section 1.03	 	Computation of Time Periods	 	 	17	 
	 
	 	Section 1.04	 	Rules of Construction	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II   THE LOANS	 	 	17	 
	 
	 	Section 2.01	 	Ratable Loans; Bid Rate Loans; Purpose	 	 	17	 
	 
	 	Section 2.02	 	Bid Rate Loans	 	 	18	 
	 
	 	Section 2.03	 	Advances, Generally	 	 	22	 
	 
	 	Section 2.04	 	Procedures for Advances	 	 	22	 
	 
	 	Section 2.05	 	Interest Periods; Renewals	 	 	23	 
	 
	 	Section 2.06	 	Interest	 	 	23	 
	 
	 	Section 2.07	 	Fees	 	 	23	 
	 
	 	Section 2.08	 	Notes	 	 	24	 
	 
	 	Section 2.09	 	Prepayments	 	 	25	 
	 
	 	Section 2.10	 	Cancellation of Commitments	 	 	25	 
	 
	 	Section 2.11	 	Method of Payment	 	 	25	 
	 
	 	Section 2.12	 	Elections, Conversions or Continuation of Loans	 	 	26	 
	 
	 	Section 2.13	 	Minimum Amounts	 	 	26	 
	 
	 	Section 2.14	 	Certain Notices Regarding Elections, Conversions and Continuations of Loans	 	 	26	 
	 
	 	Section 2.15	 	Late Payment Premium	 	 	27	 
	 
	 	Section 2.16	 	Letters of Credit	 	 	27	 
	 
	 	Section 2.17	 	Swing Loans	 	 	28	 
	 
	 	Section 2.18	 	Extension Of Maturity	 	 	30	 
	 
	 	Section 2.19	 	Additional Loan Commitments	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III   YIELD PROTECTION; ILLEGALITY, ETC	 	 	32	 
	 
	 	Section 3.01	 	Additional Costs	 	 	32	 
	 
	 	Section 3.02	 	Limitation on Types of Loans	 	 	33	 
	 
	 	Section 3.03	 	Illegality	 	 	34	 

-i-

 

	 	 	 	 	 	 	 	 	 
	 
	 	Section 3.04	 	Treatment of Affected Loans	 	 	34	 
	 
	 	Section 3.05	 	Certain Compensation	 	 	34	 
	 
	 	Section 3.06	 	Capital Adequacy	 	 	35	 
	 
	 	Section 3.07	 	Substitution of Banks	 	 	35	 
	 
	 	Section 3.08	 	Applicability	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV   CONDITIONS PRECEDENT	 	 	37	 
	 
	 	Section 4.01	 	Conditions Precedent to the Initial Advance	 	 	37	 
	 
	 	Section 4.02	 	Conditions Precedent to Each Advance	 	 	38	 
	 
	 	Section 4.03	 	Deemed Representations	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V   REPRESENTATIONS AND WARRANTIES	 	 	39	 
	 
	 	Section 5.01	 	Due Organization	 	 	39	 
	 
	 	Section 5.02	 	Power and Authority; No Conflicts; Compliance With Laws	 	 	39	 
	 
	 	Section 5.03	 	Legally Enforceable Agreements	 	 	39	 
	 
	 	Section 5.04	 	Litigation	 	 	39	 
	 
	 	Section 5.05	 	Good Title to Properties	 	 	40	 
	 
	 	Section 5.06	 	Taxes	 	 	40	 
	 
	 	Section 5.07	 	ERISA	 	 	40	 
	 
	 	Section 5.08	 	No Default on Outstanding Judgments or Orders, Etc.	 	 	40	 
	 
	 	Section 5.09	 	No Defaults on Other Agreements	 	 	41	 
	 
	 	Section 5.10	 	Government Regulation	 	 	41	 
	 
	 	Section 5.11	 	Environmental Protection	 	 	41	 
	 
	 	Section 5.12	 	Solvency	 	 	41	 
	 
	 	Section 5.13	 	Financial Statements	 	 	41	 
	 
	 	Section 5.14	 	Valid Existence of Affiliates	 	 	41	 
	 
	 	Section 5.15	 	Insurance	 	 	42	 
	 
	 	Section 5.16	 	Accuracy of Information; Full Disclosure	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI   AFFIRMATIVE COVENANTS	 	 	42	 
	 
	 	Section 6.01	 	Maintenance of Existence	 	 	42	 
	 
	 	Section 6.02	 	Maintenance of Records	 	 	42	 
	 
	 	Section 6.03	 	Maintenance of Insurance	 	 	42	 
	 
	 	Section 6.04	 	Compliance with Laws; Payment of Taxes	 	 	42	 
	 
	 	Section 6.05	 	Right of Inspection	 	 	43	 
	 
	 	Section 6.06	 	Compliance With Environmental Laws	 	 	43	 

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	 	Section 6.07	 	Maintenance of Properties	 	 	43	 
	 
	 	Section 6.08	 	Payment of Costs	 	 	43	 
	 
	 	Section 6.09	 	Reporting and Miscellaneous Document Requirements	 	 	43	 
	 
	 	Section 6.10	 	Principal Prepayments as a Result of Reduction in Total Loan Commitment	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII   NEGATIVE COVENANTS	 	 	45	 
	 
	 	Section 7.01	 	Mergers Etc.	 	 	45	 
	 
	 	Section 7.02	 	Investments	 	 	45	 
	 
	 	Section 7.03	 	Sale of Assets	 	 	46	 
	 
	 	Section 7.04	 	Distributions	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII   FINANCIAL COVENANTS	 	 	46	 
	 
	 	Section 8.01	 	Consolidated Tangible Net Worth	 	 	46	 
	 
	 	Section 8.02	 	Relationship of Total Outstanding Indebtedness to Capitalization Value	 	 	46	 
	 
	 	Section 8.03	 	Relationship of Combined EBITDA to Interest Expense	 	 	46	 
	 
	 	Section 8.04	 	Relationship of Combined EBITDA to Combined Debt Service	 	 	46	 
	 
	 	Section 8.05	 	Ratio of Unsecured Indebtedness to Unencumbered Asset Value	 	 	47	 
	 
	 	Section 8.06	 	Relationship of Unencumbered Combined EBITDA to Unsecured Interest Expense	 	 	47	 
	 
	 	Section 8.07	 	Relationship of Dividends to Funds From Operations	 	 	47	 
	 
	 	Section 8.08	 	Relationship of Secured Indebtedness to Capitalization Value	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX   EVENTS OF DEFAULT	 	 	47	 
	 
	 	Section 9.01	 	Events of Default	 	 	47	 
	 
	 	Section 9.02	 	Remedies	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X   ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS	 	 	50	 
	 
	 	Section 10.01	 	Appointment, Powers and Immunities of Administrative Agent	 	 	50	 
	 
	 	Section 10.02	 	Reliance by Administrative Agent	 	 	50	 
	 
	 	Section 10.03	 	Defaults	 	 	51	 
	 
	 	Section 10.04	 	Rights of Administrative Agent as a Bank	 	 	51	 
	 
	 	Section 10.05	 	Indemnification of Administrative Agent	 	 	51	 
	 
	 	Section 10.06	 	Non-Reliance on Administrative Agent and Other Banks	 	 	52	 
	 
	 	Section 10.07	 	Failure of Administrative Agent to Act	 	 	52	 
	 
	 	Section 10.08	 	Resignation or Removal of Administrative Agent	 	 	52	 

-iii-

 

	 	 	 	 	 	 	 	 	 
	 
	 	Section 10.09	 	Amendments Concerning Agency Function	 	 	53	 
	 
	 	Section 10.10	 	Liability of Administrative Agent	 	 	53	 
	 
	 	Section 10.11	 	Transfer of Agency Function	 	 	53	 
	 
	 	Section 10.12	 	Non-Receipt of Funds by Administrative Agent	 	 	53	 
	 
	 	Section 10.13	 	Withholding Taxes	 	 	54	 
	 
	 	Section 10.14	 	Minimum Commitment by Agents	 	 	54	 
	 
	 	Section 10.15	 	Pro Rata Treatment	 	 	54	 
	 
	 	Section 10.16	 	Sharing of Payments Among Banks	 	 	55	 
	 
	 	Section 10.17	 	Possession of Documents	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI   NATURE OF OBLIGATIONS	 	 	55	 
	 
	 	Section 11.01	 	Absolute and Unconditional Obligations	 	 	55	 
	 
	 	Section 11.02	 	Non-Recourse to Borrower's Principals	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XII   MISCELLANEOUS	 	 	56	 
	 
	 	Section 12.01	 	Binding Effect of Request for Advance	 	 	56	 
	 
	 	Section 12.02	 	Amendments and Waivers	 	 	56	 
	 
	 	Section 12.03	 	Usury	 	 	57	 
	 
	 	Section 12.04	 	Expenses; Indemnification	 	 	57	 
	 
	 	Section 12.05	 	Assignment; Participation	 	 	58	 
	 
	 	Section 12.06	 	Documentation Satisfactory	 	 	59	 
	 
	 	Section 12.07	 	Notices	 	 	60	 
	 
	 	Section 12.08	 	Setoff	 	 	60	 
	 
	 	Section 12.09	 	Table of Contents; Headings	 	 	60	 
	 
	 	Section 12.10	 	Severability	 	 	60	 
	 
	 	Section 12.11	 	Counterparts	 	 	60	 
	 
	 	Section 12.12	 	Integration	 	 	60	 
	 
	 	Section 12.13	 	Governing Law	 	 	60	 
	 
	 	Section 12.14	 	Waivers	 	 	60	 
	 
	 	Section 12.15	 	Jurisdiction; Immunities	 	 	61	 
	 
	 	Section 12.16	 	Designated Lender	 	 	61	 
	 
	 	Section 12.17	 	No Bankruptcy Proceedings	 	 	62	 
	 
	 	Section 12.18	 	USA Patriot Act	 	 	62	 
	 
	 	Section 12.19	 	Transitional Arrangements	 	 	62	 

-iv-

 

AMENDED AND RESTATED REVOLVING LOAN AGREEMENT dated as of May 24, 2004 (this
“Agreement”) among AVALONBAY COMMUNITIES, INC., a corporation organized and
existing under the laws of the State of Maryland (“Borrower”); JPMORGAN CHASE
BANK (“JPMC”), FLEET NATIONAL BANK or any successor thereto (in its individual
capacity and not as Administrative Agent, “Fleet”) and the other lenders
signatory hereto, as Banks; MORGAN STANLEY BANK, WELLS FARGO BANK, NATIONAL
ASSOCIATION and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Documentation Agent;
and FLEET NATIONAL BANK, as administrative agent for the Banks (in such
capacity, together with its successors in such capacity, “Administrative
Agent”; JPMC, Fleet, the other lenders signatory hereto, such other lenders who
from time to time become Banks pursuant to Section 2.19, 3.07 or 12.05 and, if
applicable, any of the foregoing lenders’ Designated Lender, each a “Bank” and
collectively, the “Banks”).

     Borrower, JPMC, Fleet, certain of the Banks and the Administrative Agent
entered into that certain Revolving Loan Agreement, dated as of May 24, 2001
(the “2001 Credit Agreement”) and now desire to amend and restate the 2001
Credit Agreement in its entirety in accordance with the terms and provisions
contained herein. Accordingly, in consideration of the premises and the mutual
agreements, covenants and conditions hereinafter set forth, Borrower,
Administrative Agent and each of the Banks agree as follows:

ARTICLE I

DEFINITIONS; ETC.

     Section 1.01 Definitions. As used in this Agreement the following
terms have the following meanings:

“Absolute Bid Rate” has the meaning specified in Section 2.02(c)(2).

“Absolute Bid Rate Loan” means a Bid Rate Loan bearing interest at the Absolute
Bid Rate.

“Absolute Rate Auction” means a solicitation of Bid Rate Quotes setting forth
Absolute Bid Rates pursuant to Section 2.02.

“Acceptance Letter” has the meaning specified in Section 2.19.

“Accordion Amount” means, at any time, $150,000,000.

“Acquisition” means the acquisition by Borrower, directly or indirectly, of an
interest in multi-family real estate.

“Additional Costs” has the meaning specified in Section 3.01.

“Administrative Agent” has the meaning specified in the preamble.

“Administrative Agent’s Office” means Administrative Agent’s address located at
777 Main Street, Hartford, Connecticut 06115, or such other address in the
United States as Administrative Agent may designate by written notice to
Borrower and the Banks.

-1-

 

“Affiliate” means, with respect to any Person (the “first Person”), any other
Person (1) which directly or indirectly controls, or is controlled by, or is
under common control with the first Person; or (2) 10% or more of the
beneficial interest in which is directly or indirectly owned or held by the
first Person. The term “control” means the possession, directly or indirectly,
of the power, alone, to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.

“Agreement” has the meaning specified in the preamble.

“Applicable Lending Office” means, for each Bank and for its LIBOR Loan, Bid
Rate Loan(s) or Base Rate Loan, as applicable, the lending office of such Bank
(or of an Affiliate of such Bank) designated as such on its signature page
hereof or in the applicable Assignment and Acceptance, or such other office of
such Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to Administrative Agent and Borrower as the office by which its LIBOR
Loan, Bid Rate Loan(s) or Base Rate Loan (and, in the case of the Swing Lender,
its Swing Loan), as applicable, is to be made and maintained.

“Applicable Margin” means, with respect to Base Rate Loans and LIBOR Loans (and
for purposes of determining the Banks’ L/C Fee Rate under Section 2.16(f)), the
respective rates per annum determined at any time, based on the range into
which Borrower’s Credit Rating then falls, in accordance with the following
table (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):

    	 	 	 	 	 
	
  
	Range of Borrower's
	 	 	 	 
	Credit Rating
	 	Applicable Margin	 	Applicable Margin
	(S&P/Moody's or other
	 	for Base Rate Loans	 	for LIBOR Loans
	agency equivalent)
	 	(% per annum)	 	(% per annum)
	
  
	Below BBB- or unrated/

            Below Baa3 or unrated
	 	0.25	 	1.15
	
  
	BBB-/Baa3
	 	0.00	 	0.95
	
  
	BBB/Baa2
	 	0.00	 	0.75
	
  
	BBB+/Baa1
	 	0.00	 	0.55
	
  
	A- or higher/A3 or
            higher
	 	0.00	 	0.50
	
  

“Assignee” has the meaning specified in Section 12.05.

“Assignment and Acceptance” means an Assignment and Acceptance, substantially
in the form of EXHIBIT E, pursuant to which a Bank assigns and an Assignee
assumes rights and obligations in accordance with Section 12.05.

“Authorization Letter” means a letter agreement executed by Borrower in the
form of EXHIBIT A.

“Available Total Loan Commitment” has the meaning specified in Section 2.01(b).

-2-

 

“Bank” and “Banks” have the respective meanings specified in the preamble;
provided, however, that the term “Bank” shall exclude each Designated Lender
when used in reference to a Ratable Loan, the Loan Commitments or terms
relating to the Ratable Loans and the Loan Commitments.

“Bank Parties” means Administrative Agent, Issuing Bank, Swing Lender and the
Banks.

“Banking Day” means (1) any day on which commercial banks are not authorized or
required to close in New York City and (2) whenever such day relates to a LIBOR
Loan, a LIBOR Bid Rate Loan, an Interest Period with respect to a LIBOR Loan or
a LIBOR Bid Rate Loan, or notice with respect to a LIBOR Loan or a LIBOR Bid
Rate Loan or a LIBOR Auction, a day on which dealings in Dollar deposits are
also carried out in the London interbank market and banks are open for business
in London.

“Base Rate” means, for any day, the higher of (1) the Federal Funds Rate for
such day plus .50%, or (2) the Prime Rate for such day.

“Base Rate Loan” means all or any portion (as the context requires) of a Bank’s
Ratable Loan which shall accrue interest at a rate determined in relation to
the Base Rate.

“Bid Borrowing Limit” means the lesser of $250,000,000 or fifty percent (50%)
of the Total Loan Commitment.

“Bid Rate Loan” has the meaning specified in Section 2.01(c).

“Bid Rate Loan Note” has the meaning specified in Section 2.08.

“Bid Rate Quote” means an offer by a Bank to make a Bid Rate Loan in accordance
with Section 2.02.

“Bid Rate Quote Request” has the meaning specified in Section 2.02(a).

“Borrower” has the meaning specified in the preamble.

“Borrower’s Accountants” means Ernst & Young, or such other accounting firm(s)
selected by Borrower and reasonably acceptable to the Super-Majority Banks.

“Borrower’s Credit Rating” means the rating assigned from time to time to
Borrower’s unsecured and unsubordinated long-term indebtedness by,
respectively, S&P, Moody’s and/or one or more other nationally-recognized
rating agencies reasonably approved by Administrative Agent. If such a rating
is assigned by only one (1) such rating agency, it must be either S&P or
Moody’s. If such a rating is assigned by two (2) such rating agencies, at
least one (1) must be S&P or Moody’s, and “Borrower’s Credit Rating” shall be
the lower of said ratings, except if the aforesaid ratings are greater than one
(1) rating level apart, in which case “Borrower’s Credit Rating” shall be the
average of said ratings. If such a rating is obtained from more than two (2)
such rating agencies, “Borrower’s Credit Rating” shall be the higher of the
lowest two (2) ratings, if at least one (1) of such two (2) is either S&P or
Moody’s; if neither of the two (2) lowest ratings is from S&P or Moody’s, then
“Borrower’s Credit Rating” shall be the lower of the ratings from S&P and

-3-

 

Moody’s. Unless such indebtedness of Borrower is rated by either S&P or
Moody’s, “Borrower’s Credit Rating” shall be considered unrated for purposes of
this Agreement.

“Borrower’s Principals” means the officers and directors of Borrower at any
applicable time.

“Borrower’s Share of UJV Combined Outstanding Indebtedness” means the sum of
the indebtedness of each of the UJVs contributing to UJV Combined Outstanding
Indebtedness multiplied by Borrower’s respective beneficial fractional
interests in each such UJV.

“Capitalization Value” means, as of the end of any calendar quarter, the sum of
(1) Combined EBITDA (less all leasing commissions and management and
development fees, net of any expenses applicable thereto, contributing to
Combined EBITDA) for such quarter annualized (i.e., multiplied by four (4)),
capitalized at a rate of 8.0% per annum (i.e., divided by 8.0%), (2) such
leasing commissions and management and development fees for such quarter,
annualized, (i.e., multiplied by four (4)), capitalized at a rate of 25% per
annum (i.e., divided by 25%), (3) Cash and Cash Equivalents of Borrower and its
Consolidated Businesses, as of the end of such quarter, as reflected in
Borrower’s Consolidated Financial Statements and (4) the lesser of (a) the
aggregate book value (on a cost basis) of the properties of Borrower and its
Consolidated Businesses under development plus Borrower’s beneficial interest
in the book value (on a cost basis) of the properties of the UJVs under
development or (b) 20% of the sum of the amounts determined pursuant to clauses
(1), (2) and (3) of this definition.

“Capital Lease” means any lease which has been or should be capitalized on the
books of the lessee in accordance with GAAP.

“Cash and Cash Equivalents” means (1) cash, (2) direct obligations of the
United States Government, including, without limitation, treasury bills, notes
and bonds, (3) 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, (4) 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 an Aa rating by Moody’s, an AA rating by S&P or
better rated credit, floating rate notes, other money market instruments and
letters of credit each issued by Approved Banks, (5) 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 an Aa rating by Moody’s, an AA
rating by S&P or better rated credit, (6) 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, (7) repurchase agreements with major banks and primary
government security dealers fully secured by the United States Government or
agency collateral equal to or exceeding the principal amount on a daily basis
and held in safekeeping and (8) real estate loan pool participations,
guaranteed by an AA rating given by S&P or an Aa2 rating given by Moody’s or
better rated credit. For purposes of this definition, “Approved Bank” means a
financial institution which has (x) (A) a minimum net worth of $500,000,000
and/or (B) total assets of at least $10,000,000,000 and (y) a minimum long-term
debt rating of A+ by S&P or A1 by Moody’s.

-4-

 

“Closing Date” means the date this Agreement has been executed by all parties.

“Code” means the Internal Revenue Code of 1986, including the rules and
regulations promulgated thereunder.

“Combined Debt Service” means, for any period of time, (1) Borrower’s share of
total debt service (including principal) paid or payable by Borrower and its
Consolidated Businesses during such period (other than debt service on
construction loans until completion of the relevant construction and other
capitalized interest) plus a deemed annual capital expense charge of $150 per
apartment unit owned by Borrower or its Consolidated Businesses plus (2)
Borrower’s beneficial interest in (a) total debt service (including principal)
paid or payable by the UJVs during such period (other than debt service on
construction loans until completion of the relevant construction and other
capitalized interest) plus (b) a deemed annual capital expense charge of $150
per apartment unit owned by the UJVs plus (3) preferred dividends and
distributions paid or payable by Borrower and its Consolidated Businesses
during such period.

“Combined EBITDA” means, for any period of time, the sum, without duplication,
of (1) Borrower’s share of revenues less operating expenses, general and
administrative expenses and property taxes before Interest Expense, income
taxes, gains or losses on the sale of real estate and/or marketable securities,
depreciation and amortization and extraordinary items for Borrower and its
Consolidated Businesses, and adjusted, if material, for non-cash revenue
attributable to straight lining of rents and (2) Borrower’s beneficial interest
in revenues less operating expenses, general and administrative expenses and
property taxes before Interest Expense, income taxes, gains or losses on the
sale of real estate and/or marketable securities, depreciation and amortization
and extraordinary items (after eliminating appropriate intercompany amounts)
applicable to each of the UJVs, and adjusted, if material, for non-cash revenue
attributable to straight lining of rents, in all cases as reflected in
Borrower’s Consolidated Financial Statements.

“Consolidated Business” means, individually, each Affiliate of Borrower who is
or should be included in Borrower’s Consolidated Financial Statements in
accordance with GAAP.

“Consolidated Financial Statements” means, with respect to any Person, the
consolidated balance sheet and related consolidated statement of operations,
accumulated deficiency in assets and cash flows, and footnotes thereto, of such
Person, prepared in accordance with GAAP.

“Consolidated Outstanding Indebtedness” means, as of any time, Borrower’s share
of all indebtedness and liability for borrowed money, secured or unsecured, of
Borrower and its Consolidated Businesses, including mortgage and other notes
payable but excluding any indebtedness which is margin indebtedness on cash and
cash equivalent securities, all as reflected in Borrower’s Consolidated
Financial Statements.

“Consolidated Tangible Net Worth” means, at any date, Borrower’s share of the
consolidated stockholders’ equity of Borrower and its Consolidated Businesses
less their consolidated Intangible Assets, all determined as of such date. For
purposes of this definition, “Intangible Assets” means with respect to any such
intangible assets, the amount (to the extent reflected in determining such
consolidated stockholders’ equity) of (1) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve (12)

-5-

 

months after the acquisition of such business) subsequent to September 30, 1994
in the book value of any asset (other than real property assets) owned by
Borrower or a Consolidated Business and (2) all debt discount and expense,
deferred charges, goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry-forwards, copyrights, organization
or developmental expenses and other intangible assets (in each case, not
adjusted for depreciation).

“Construction-in-Process” means a property on which construction of
improvements (excluding non-revenue generating capital expenditures and
excluding costs incurred prior to construction, all as set forth in related
quarterly financial statements or supplemental financial information attached
thereto) has commenced and is proceeding to completion in the ordinary course
but has not yet been completed (as such completion shall be evidenced by a
temporary or permanent certificate of occupancy permitting use of such property
by the general public). Any such property shall be treated as
Construction-in-Process until the earlier of (i) 12 months from the date of
completion (as evidenced by a certificate of occupancy permitting use of such
property by the general public) or (ii) such property achieves the occupancy
requirements set forth in clause (2) of the definition of Unencumbered
Wholly-Owned Assets.

“Contingent Obligations” means, without duplication, Borrower’s share of (1)
any contingent obligations of Borrower or its Consolidated Businesses required
to be shown on the balance sheet of Borrower and its Consolidated Businesses in
accordance with GAAP and (2) any obligation required to be disclosed in the
footnotes to Borrower’s Consolidated Financial Statements, guaranteeing
partially or in whole any non-Recourse Debt, 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 Borrower or any of its Consolidated Businesses or
of any other Person. The amount of any Contingent Obligation described in
clause (2) 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
(using the Base Rate as a discount rate) 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), 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 Borrower
and/or one or more of its Consolidated Businesses is required to perform
thereunder) as recorded on the balance sheet and on the footnotes to the most
recent Borrower’s Consolidated Financial Statements required to be delivered
pursuant to this Agreement. 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. Subject to the
preceding sentence, (1) in the case of a joint and several guaranty given by
Borrower or one of its Consolidated Businesses 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

-6-

 

and Cash Equivalents to secure all or any part of such Person’s guaranteed
obligations and (2) in the case of joint and several guarantees given by a
Person in which Borrower owns an interest (which guarantees are non-recourse to
Borrower), to the extent the guarantees, in the aggregate, exceed 10% of
Capitalization Value, the amount in excess of 10% shall be deemed to be a
Contingent Obligation of Borrower. Notwithstanding anything contained herein
to the contrary, “Contingent Obligations” shall be deemed not to include
guarantees of unadvanced funds under any indebtedness of Borrower or its
Consolidated Businesses or of construction loans to the extent the same have
not been drawn. All matters constituting “Contingent Obligations” shall be
calculated without duplication.

“Continue”, “Continuation” and “Continued” refer to the continuation pursuant
to Section 2.12 of a LIBOR Loan as a LIBOR Loan from one Interest Period to the
next Interest Period.

“Convert”, “Conversion” and “Converted” refer to a conversion pursuant to
Section 2.12 of a Base Rate Loan into a LIBOR Loan or a LIBOR Loan into a Base
Rate Loan, each of which may be accompanied by the transfer by a Bank (at its
sole discretion) of all or a portion of its Ratable Loan from one Applicable
Lending Office to another.

“Debt” means (1) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade obligations);
(2) obligations as lessee under Capital Leases; (3) current liabilities in
respect of unfunded vested benefits under any Plan; (4) obligations under
letters of credit issued for the account of any Person; (5) all obligations
arising under bankers’ or trade acceptance facilities; (6) all guarantees,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations to purchase any of the items
included in this definition, to provide funds for payment, to supply funds to
invest in any Person, or otherwise to assure a creditor against loss; (7) all
obligations secured by any Lien on property owned by the Person whose Debt is
being measured, whether or not the obligations have been assumed; and (8) all
obligations under any agreement providing for contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described above in this definition..

“Declining Bank” has the meaning specified in Section 2.19.

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

“Default Rate” means a rate per annum equal to: (1) with respect to Base Rate
Loans and Swing Loans, a variable rate 3% above the rate of interest then in
effect thereon; and (2) with respect to LIBOR Loans and Bid Rate Loans, a fixed
rate 3% above the rate(s) of interest in effect thereon (including the
Applicable Margin or the LIBOR Bid Margin, as the case may be) at the time of
Default until the end of the then current Interest Period therefor and,
thereafter, a variable rate 3% above the rate of interest for a Base Rate Loan.

“Designated Lender” means a special purpose corporation that (i) shall have
become a party to this Agreement pursuant to Section 12.16 and (ii) is not
otherwise a Bank.

“Designating Lender” has the meaning specified in Section 12.16.

-7-

 

“Designation Agreement” means an agreement in substantially the form of EXHIBIT
F, entered into by a Bank and a Designated Lender and accepted by
Administrative Agent.

“Disposition” means a sale (whether by assignment, transfer or Capital Lease)
of an asset.

“Documentation Agent” means, individually and collectively, Morgan Stanley
Bank, Wells Fargo Bank, National Association and Deutsche Bank Trust Company
Americas.

“Dollars” and the sign “$” mean lawful money of the United States of America.

“Elect” and “Election” refer to election, if any, by Borrower pursuant to
Section 2.12 to have all or a portion of an advance of the Ratable Loans be
outstanding as LIBOR Loans.

“Environmental Discharge” means any discharge or release of any Hazardous
Materials in violation of any applicable Environmental Law.

“Environmental Law” means any applicable Law relating to pollution or the
environment, including Laws relating to noise or to emissions, discharges,
releases or threatened releases of Hazardous Materials into the work place, the
community or the environment, or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials.

“Environmental Notice” means any written complaint, order, citation or notice
from any Person (1) affecting or relating to Borrower’s compliance with any
Environmental Law in connection with any activity or operations at any time
conducted by Borrower, (2) relating to (a) the existence of any Hazardous
Materials contamination or Environmental Discharges or threatened Hazardous
Materials contamination or Environmental Discharges at any of Borrower’s
locations or facilities or (b) remediation of any Environmental Discharge or
Hazardous Materials at any such location or facility or any part thereof; or
(3) relating to any violation or alleged violation by Borrower of any relevant
Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, including
the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as Borrower, or any trade or business which is under common control
(within the meaning of Section 414(c) of the Code) with Borrower, or any
organization which is required to be treated as a single employer with Borrower
under Section 414(m) or 414(o) of the Code.

“Event of Default” has the meaning specified in Section 9.01.

“Extension Option” and “Notice to Extend” have the respective meanings
specified in Section 2.18.

“Facility Fee Rate” means the rate per annum determined, at any time, based on
Borrower’s Credit Rating in accordance with the following table. Any change in
Borrower’s Credit Rating which

-8-

 

causes it to move into a different range on the table shall effect an immediate
change in the Facility Fee Rate.

    	 	 	 	 	 
	
  
	Borrower's Credit Rating (S&P/Moody's)	 	Facility Fee Rate
	 	 	(% per annum)
	
  
	Below BBB- or unrated/Below
            Baa3 or unrated
	 	 	0.25	 
	
  
	BBB-/Baa3
	 	 	0.20	 
	
  
	BBB/Baa2
	 	 	0.15	 
	
  
	BBB+/Baa1
	 	 	0.15	 
	
  
	A- or higher/A3 or
            higher
	 	 	0.15	 
	
  

“Federal Funds Rate” means, for any day, the rate per annum (expressed on a
360-day basis of calculation) equal to the weighted average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank
of New York for such day provided that (1) if such day is not a Banking Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the immediately preceding Banking Day as so published on the next succeeding
Banking Day; and (2) if no such rate is so published on such next succeeding
Banking Day, the Federal Funds Rate for such day shall be the average of the
rates quoted by three (3) Federal Funds brokers to Administrative Agent on such
day on such transactions.

“First Solicitation” has the meaning specified in Section 2.19.

“Fiscal Year” means each period from January 1 to December 31.

“Fleet” has the meaning specified in the preamble.

“Funds From Operations” means “funds from operations” as defined in accordance
with resolutions adopted by the Board of Governors of the National Association
of Real Estate Investment Trusts as in effect from time to time.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in
Section 5.13 (except for changes concurred in by Borrower’s Accountants).

“Good Faith Contest” means the contest of an item if: (1) the item is
diligently contested in good faith, and, if appropriate, by proceedings timely
instituted; (2) reserves that are adequate based on reasonably foreseeable
likely outcomes are established with respect to the contested item; (3) during
the period of such contest, the enforcement of any contested item is
effectively stayed, delayed or postponed; and (4) the failure to pay or comply
with the contested item during the period of the contest is not likely to
result in a Material Adverse Change.

“Governmental Approvals” means any authorization, consent, approval, license,
permit, certification, or exemption of, registration or filing with or report
or notice to, any Governmental Authority.

-9-

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

“Hazardous Materials” means any pollutant, effluents, emissions, contaminants,
toxic or hazardous wastes or substances, as any of those terms are defined from
time to time in or for the purposes of any relevant Environmental Law,
including asbestos fibers and friable asbestos, polychlorinated biphenyls, and
any petroleum or hydrocarbon-based products or derivatives.

“Initial Advance” means the first advance of proceeds of the Loans.

“Interest Expense” means, for any period of time, Borrower’s share of the
consolidated interest expense (without deduction of consolidated interest
income, and excluding (x) interest expense on construction loans and (y) other
capitalized interest expense in respect of either construction activity or
construction loans, in any such case under clauses (x) or (y), only until
completion of the relevant construction) of Borrower and its Consolidated
Businesses, including, without limitation or duplication (or, to the extent not
so included, with the addition of), (1) the portion of any rental obligation in
respect of any Capital Lease obligation allocable to interest expense in
accordance with GAAP; (2) the amortization of Debt discounts; (3) any expense,
payments or fees (other than up-front fees) with respect to interest rate swap
or similar agreements; and (4) the interest expense and items listed in clauses
(1) through (3) above applicable to each of the UJVs multiplied by Borrower’s
respective beneficial interests in the UJVs, in all cases as reflected in
Borrower’s Consolidated Financial Statements.

“Interest Period” means, (1) with respect to any LIBOR Loan, the period
commencing on the date the same is advanced, Converted from a Base Rate Loan or
Continued, as the case may be, and ending, as Borrower may select pursuant to
Section 2.05, on the numerically corresponding day in the first, second or
third calendar month thereafter, provided that each such Interest Period which
commences on the last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Banking Day of the appropriate calendar
month; (2) with respect to any LIBOR Bid Rate Loan, the period commencing on
the date the same is advanced and ending, as Borrower may select pursuant to
Section 2.02, on the numerically corresponding day in the first, second or
third calendar month thereafter, provided that each such Interest Period which
commences on the last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Banking Day of the appropriate calendar
month; and (3) with respect to any Absolute Bid Rate Loan, the period
commencing on the date the same is advanced and ending, as Borrower may select
pursuant to Section 2.02, provided, however, that each such period shall not be
less than fourteen (14) days nor more than ninety (90) days.

“Invitation for Bid Rate Quotes” has the meaning specified in Section 2.02 (b).

“Issuing Bank” means Fleet in its capacity as issuing bank of the Letters of
Credit under the Letter of Credit facility described in Section 2.16, and its
successors in such capacity.

“JPMC” has the meaning specified in the preamble.

-10-

 

“Law” means any federal, state or local statute, law, rule, regulation,
ordinance, order, code, or rule of common law, now or hereafter in effect, and
in each case as amended, and any judicial or administrative order, consent
decree or judgment.

“Letter of Credit” has the meaning specified in Section 2.16(a).

“LIBOR Auction” means a solicitation of Bid Rate Quotes setting forth LIBOR Bid
Margins pursuant to Section 2.02.

“LIBOR Base Rate” means, with respect to any Interest Period therefor, the rate
per annum (rounded up, if necessary, to the nearest 1/100 of 1%) that appears
on Dow Jones Page 3750 at approximately 11:00 a.m. (London time) on the date
(the “LIBOR Determination Date”) two (2) Banking Days prior to the first day of
the applicable Interest Period, for the same period of time as the Interest
Period; or, if such rate does not appear on Dow Jones Page 3750 as of
approximately 11:00 a.m. (London time) on the LIBOR Determination Date, the
rate (rounded up, if necessary, to the nearest 1/100 of 1%) for deposits in
Dollars for a period comparable to the applicable Interest Period that appears
on the Reuters Screen LIBOR Page as of approximately 11:00 a.m. (London time)
on the LIBOR Determination Date. If such rate does not appear on either Dow
Jones Page 3750 or on the Reuters Screen LIBOR Page as of approximately 11:00
a.m. (London time) on the LIBOR Determination Date, the LIBOR Base Rate for the
Interest Period will be determined on the basis of the offered rates for
deposits in Dollars for the same period of time as such Interest Period that
are offered by four (4) major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the LIBOR Determination Date.
Administrative Agent will request that the principal London office of each of
the four (4) major banks provide a quotation of its Dollar deposit offered
rate. If at least two (2) such quotations are provided, the LIBOR Base Rate
will be the arithmetic mean of the quotations. If fewer than two (2)
quotations are provided as requested, the LIBOR Base Rate will be determined on
the basis of the rates quoted for loans in Dollars to leading European banks
for amounts comparable to such amount requested by Borrower for the same period
of time as such Interest Period offered by major banks in New York City at
approximately 11:00 a.m. (New York time) on the LIBOR Determination Date. In
the event that Administrative Agent is unable to obtain any such quotation as
provided above, it will be deemed that the LIBOR Base Rate cannot be
determined. For purposes of the foregoing definition, “Dow Jones Page 3750”
means the display designated as “Page 3750” on the Dow Jones Markets Service
(or such other page as may replace Page 3750 on that service or such other
service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for Dollar deposits); and “Reuters Screen LIBOR Page”
means the display designated as page “LIBO” on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that service for
the purpose of displaying interbank rates from London in Dollars).

“LIBOR Bid Margin” has the meaning specified in Section 2.02(c)(2).

“LIBOR Bid Rate” means the rate per annum equal to the sum of (1) the LIBOR
Interest Rate for the LIBOR Bid Rate Loan and Interest Period in question and
(2) the LIBOR Bid Margin.

“LIBOR Bid Rate Loan” means a Bid Rate Loan bearing interest at the LIBOR Bid
Rate.

-11-

 

“LIBOR Interest Rate” means, for any LIBOR Loan or LIBOR Bid Rate Loan, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by Administrative Agent to be equal to the quotient of (1) the LIBOR
Base Rate for such LIBOR Loan or LIBOR Bid Rate Loan, as the case may be, for
the Interest Period therefor divided by (2) one minus the LIBOR Reserve
Requirement for such LIBOR Loan or LIBOR Bid Rate Loan, as the case may be, for
such Interest Period.

“LIBOR Loan” means all or any portion (as the context requires) of any Bank’s
Ratable Loan which shall accrue interest at rate(s) determined in relation to
LIBOR Interest Rate(s).

“LIBOR Reserve Requirement” means, for any LIBOR Loan or LIBOR Bid Rate Loan,
the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period for such LIBOR Loan or LIBOR Bid Rate Loan under Regulation D
by member banks of the Federal Reserve System in New York City with deposits
exceeding $1,000,000,000 against “Eurocurrency liabilities” (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the LIBOR
Reserve Requirement shall also reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (1)
any category of liabilities which includes deposits by reference to which the
LIBOR Base Rate is to be determined as provided in the definition of “LIBOR
Base Rate” in this Section 1.01 or (2) any category of extensions of credit or
other assets which include loans the interest rate on which is determined on
the basis of rates referred to in said definition of “LIBOR Base Rate”.

“Lien” means any mortgage, deed of trust, pledge, negative pledge, security
interest, hypothecation, assignment for collateral purposes, deposit
arrangement, lien (statutory or other), or other security agreement or charge
of any kind or nature whatsoever of any third party (excluding any right of
setoff but including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable Law of any jurisdiction to evidence
any of the foregoing and carriers, warehousemen, mechanics and other similar
inchoate liens that have not been insured against in a manner reasonably
satisfactory to Administrative Agent).

“Loan” means, with respect to each Bank, collectively, its Ratable Loan and Bid
Rate Loan(s), and, in the case of the Swing Lender, its Swing Loan(s).

“Loan Commitment” means, with respect to each Bank, the obligation to make a
Ratable Loan in the principal amount set forth in Schedule 1 (subject to change
in accordance with the terms of this Agreement).

“Loan Documents” means this Agreement, the Notes, the Authorization Letter and
the Solvency Certificate.

“Majority Banks” means at any time the Banks having Pro Rata Shares aggregating
at least 51%; provided, however, that during the existence of an Event of
Default, the “Majority Banks” shall be the Banks holding at least 51% of the
then aggregate unpaid principal amount of the Loans. For purposes of this
definition, a Bank’s Loan shall be deemed to include its participating interest
in

-12-

 

Swing Loans pursuant to Section 2.17(c) and the Swing Lender’s Loans shall be
deemed to exclude such participating interests of other Banks.

“Material Adverse Change” means an effect resulting from any circumstance or
event or series of circumstances or events, of whatever nature, which does or
could reasonably be expected to, on more than an interim basis, either (1)
materially and adversely impair the ability of Borrower and its Consolidated
Businesses, taken as a whole, to fulfill its material obligations or (2) cause
a Default or an Event of Default.

“Material Affiliates” means the Affiliates of Borrower described on EXHIBIT C,
together with (or excluding) any Affiliates of Borrower which are hereafter
from time to time reasonably determined by Administrative Agent to be material
(or no longer material), upon written notice to Borrower, based on the most
recent Borrower’s Consolidated Financial Statements.

“Maturity Date” means May 24, 2007, subject to extension in accordance with
Section 2.18.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a Plan defined as such in Section 3(37) of ERISA to
which contributions have been made by Borrower or any ERISA Affiliate and which
is covered by Title IV of ERISA.

“New Bank” and “New Note” have the respective meanings specified in Section
2.19.

“Note” and “Notes” have the respective meanings specified in Section 2.08.

“Obligations” means each and every obligation, covenant and agreement of
Borrower, now or hereafter existing, contained in this Agreement, and any of
the other Loan Documents, whether for principal, reimbursement obligations,
interest, fees, expenses, indemnities or otherwise, and any amendments or
supplements thereto, extensions or renewals thereof or replacements therefor,
including but not limited to all indebtedness, obligations and liabilities of
Borrower to Administrative Agent and any Bank now existing or hereafter
incurred under or arising out of or in connection with the Notes, this
Agreement, the other Loan Documents, and any documents or instruments executed
in connection therewith; in each case whether direct or indirect, joint or
several, absolute or contingent, liquidated or unliquidated, now or hereafter
existing, renewed or restructured, whether or not from time to time decreased
or extinguished and later increased, created or incurred, and including all
indebtedness of Borrower, under any instrument now or hereafter evidencing or
securing any of the foregoing.

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

“Participant” and “Participation” have the respective meanings specified in
Section 12.05.

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

-13-

 

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

“Plan” means any employee benefit or other plan established or maintained, or
to which contributions have been made, by Borrower or any ERISA Affiliate and
which is covered by Title IV of ERISA or to which Section 412 of the Code
applies.

“presence”, when used in connection with any Environmental Discharge or
Hazardous Materials, means and includes presence, generation, manufacture,
installation, treatment, use, storage, handling, repair, encapsulation,
disposal, transportation, spill, discharge and release.

“Prime Rate” means the variable per annum rate of interest designated from time
to time by Administrative Agent at its principal office as its “prime rate” (it
being understood that the “prime rate” is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer).

“Pro Rata Share” means, for purposes of this Agreement and with respect to each
Bank, a fraction, the numerator of which is the amount of such Bank’s Loan
Commitment and the denominator of which is the Total Loan Commitment.

“Prohibited Transaction” means any transaction proscribed by Section 406 of
ERISA or Section 4975 of the Code and to which no statutory or administrative
exemption applies.

“Ratable Loan” has the meaning specified in Section 2.01(b).

“Ratable Loan Note” has the meaning specified in Section 2.08.

“Recourse Debt” means Debt, recourse for the satisfaction of which is not
limited to specified collateral.

“Refunded Swing Loans” and “Refunding Date” have the respective meanings
specified in Section 2.17.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System.

“Regulatory Change” means, with respect to any Bank, any change after the date
of this Agreement in United States federal, state, municipal or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
including such Bank of or under any United States, federal, state, municipal or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty (30) day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. §2615.

-14-

 

“Requested Increase” has the meaning specified in Section 2.19.

“Secured Indebtedness” means that portion of Total Outstanding Indebtedness
that is secured by a Lien.

“Shortfall” has the meaning specified in Section 2.19.

“Solvency Certificate” means a certificate in the form of EXHIBIT D, to be
delivered by Borrower pursuant to the terms of this Agreement.

“Solvent” means, when used with respect to any Person, that the fair value of
the property of such Person, on a going concern basis, is greater than the
total amount of liabilities (including, without limitation, contingent
liabilities) of such Person.

“S&P” means Standard and Poor’s Ratings Services, a division of McGraw-Hill
Companies.

“Super-Majority Banks” means at any time the Banks having Pro Rata Shares
aggregating at least 66-2/3%; provided, however, that during the existence of
an Event of Default, the “Super-Majority Banks” shall be the Banks holding at
least 66-2/3% of the then aggregate unpaid principal amount of the Loans. For
purposes of this definition, a Bank’s Loan shall be deemed to include its
participating interest in Swing Loans pursuant to Section 2.17(c) and the Swing
Lender’s Loans shall be deemed to exclude such participating interests of other
Banks.

“Supplemental Fee Letter” means, collectively, those certain letter agreements,
each dated as of April 19, 2004, between Borrower and JPMC.

“Supplemental Note” has the meaning specified in Section 2.19.

“Swing Lender” means Fleet in its capacity as the lender under the Swing Loan
facility described in Section 2.17, and its successors in such capacity.

“Swing Loan” means a loan made by the Swing Lender pursuant to Section 2.17.

“Swing Loan Commitment” means $20,000,000.

“Swing Loan Note” has the meaning specified in Section 2.08.

“Swing Loan Refund Amount” has the meaning specified in Section 2.17.

“Syndication Agent” means JPMorgan Chase Bank.

“Syndication Expiration Date” has the meaning specified in Section 2.19.

“Total Loan Commitment” means an amount equal to the aggregate amount of all
Loan Commitments (i.e., initially, $500,000,000), as the same may increase
pursuant to Section 2.19 or decrease pursuant to Section 2.10.

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“Total Outstanding Indebtedness” means, at any time, the sum, without
duplication, of (1) Consolidated Outstanding Indebtedness; (2) Borrower’s Share
of UJV Combined Outstanding Indebtedness; and (3) Contingent Obligations.

“UJV Combined Outstanding Indebtedness” means, as of any time, all indebtedness
and liability for borrowed money, secured or unsecured, of the UJV’s, on a
combined basis, including mortgage and other notes payable but excluding any
indebtedness which is margin indebtedness on cash and cash equivalent
securities, all as reflected in the balance sheets of each of the UJVs,
prepared in accordance with GAAP.

“UJVs” means the unconsolidated joint ventures (including general and limited
partnerships) in which Borrower owns a beneficial interest and which are
accounted for under the equity method in Borrower’s Consolidated Financial
Statements.

“Unencumbered Asset Value” means, as of the end of any calendar quarter,
without duplication, (1) Unencumbered Combined EBITDA for such quarter,
annualized (i.e., multiplied by four (4)), capitalized at a rate of 8.0% per
annum (i.e., divided by 8.0%) plus (2) Unencumbered Land and
Construction-in-Process, valued at cost in accordance with GAAP (up to a
maximum of 10% of Unencumbered Asset Value), plus (3) Unencumbered Wholly-Owned
Assets owned for less than twelve (12) months, valued at cost in accordance
with GAAP, plus (4) the portion of Combined EBITDA for such quarter annualized,
capitalized at 8.0% per annum (i.e., divided by 8.0%), which is attributable to
assets that have been completed for more than twelve (12) months and would
qualify as Unencumbered Wholly-Owned Assets except that they have not achieved
the occupancy requirements set forth in clause (2) of the definition of
Unencumbered Wholly-Owned Assets (up to a maximum of 10% of Unencumbered Asset
Value).

“Unencumbered Combined EBITDA” means that portion of Combined EBITDA
attributable to Unencumbered Wholly-Owned Assets (assuming general and
administrative expense is allocated proportionately to Unencumbered
Wholly-Owned Assets).

“Unencumbered Land and Construction-in-Process” means all land held for future
development and Construction-in-Process reflected on Borrower’s Consolidated
Financial Statements, wholly-owned, directly or indirectly, by Borrower which
are not, and the direct or indirect interests of Borrower therein are not,
subject to any lien to secure all or any portion of Secured Indebtedness or any
other encumbrances which in the reasonable judgment of the Administrative Agent
may diminish the value of the asset in question.

“Unencumbered Wholly-Owned Assets” means income-producing assets, reflected on
Borrower’s Consolidated Financial Statements, wholly owned, directly or
indirectly, by Borrower which (1) are not, and the direct or indirect interests
of Borrower therein are not, subject to any Lien to secure all or any portion
of Secured Indebtedness or any other encumbrances which, in the reasonable
judgment of Administrative Agent, may diminish the value of the asset in
question and (2) complies with the occupancy requirements set forth in the
immediately following sentence. In order to qualify as an Unencumbered
Wholly-Owned Asset for a particular calendar quarter an asset must (1) have
average occupancy for the twelve (12)-month period ending with such quarter of
80% or more and (2) have average quarterly occupancy for at least three (3) of
the four (4) calendar quarters during such twelve (12)-month period of 80% or
more.

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“Unsecured Indebtedness” means that portion of Total Outstanding Indebtedness
that is not secured by a Lien.

“Unsecured Interest Expense” means that portion of Interest Expense relating to
Unsecured Indebtedness.

     Section 1.02 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP.

     Section 1.03 Computation of Time Periods. Except as otherwise
provided herein, in this Agreement, in the computation of periods of time from
a specified date to a later specified date, the word “from” means “from and
including” and words “to” and “until” each means “to but excluding”.

     Section 1.04 Rules of Construction. Except as provided otherwise,
when used in this Agreement (1) “or” is not exclusive; (2) a reference to a Law
includes any amendment, modification or supplement to, or replacement of, such
Law; (3) a reference to a Person includes its permitted successors and
permitted assigns; (4) all terms used in the singular shall have a correlative
meaning when used in the plural and vice versa; (5) a reference to an
agreement, instrument or document shall include such agreement, instrument or
document as the same may be amended, modified or supplemented from time to time
in accordance with its terms and as permitted by the Loan Documents; (6) all
references to Articles, Sections or Exhibits shall be to Articles, Sections and
Exhibits of this Agreement unless otherwise indicated; (7) “hereunder”,
“herein”, “hereof” and the like refer to this Agreement as a whole; and (8) all
Exhibits to this Agreement shall be incorporated into this Agreement.

ARTICLE II

THE LOANS

     Section 2.01 Ratable Loans; Bid Rate Loans; Purpose.

     (a) Subject to the terms and conditions of this Agreement, the Banks agree
to make loans to Borrower as provided in this Article II.

     (b) Each of the Banks severally agrees to make loans to Borrower (each
such loan by a Bank, a “Ratable Loan”) in an amount up to its Loan Commitment,
pursuant to which the Bank shall from time to time advance and re-advance to
Borrower an amount equal to its Pro Rata Share of the excess (the “Available
Total Loan Commitment”) of the Total Loan Commitment over the sum of (1) all
previous advances (including Bid Rate Loans and Swing Loans) made by the Banks
which remain unpaid and (2) the outstanding amount of all Letters of Credit and
unreimbursed drawings on all Letters of Credit. Within the limits set forth
herein, Borrower may borrow from time to time under this paragraph (b) and
prepay from time to time pursuant to Section 2.09 (subject, however, to the
restrictions on prepayment set forth in said Section), and thereafter re-borrow
pursuant to this paragraph (b). The Ratable Loans may be outstanding as (1)
Base Rate Loans; (2) LIBOR Loans; or (3) a combination of the foregoing, as
Borrower shall elect and notify

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Administrative Agent in accordance with Section 2.14. The LIBOR Loan, Bid
Rate Loan and Base Rate Loan of each Bank shall be maintained at such Bank’s
Applicable Lending Office.

     (c) In addition to Ratable Loans pursuant to paragraph (b) above, so long
as Borrower’s Credit Rating is BBB- or higher by S&P or Baa3 or higher by
Moody’s or an equivalent rating by another nationally-recognized rating agency,
as reasonably approved by Administrative Agent, one or more Banks may, at
Borrower’s request and in their sole discretion, make non-ratable loans which
shall bear interest at the LIBOR Bid Rate or the Absolute Bid Rate in
accordance with Section 2.02 (such loans being referred to in this Agreement as
“Bid Rate Loans”). Borrower may borrow Bid Rate Loans from time to time
pursuant to this paragraph (c) in an amount up to the Available Total Loan
Commitment at the time of the borrowing (taking into account any repayments of
the Loans made simultaneously therewith) and shall repay such Bid Rate Loans as
required by Section 2.08, and it may thereafter re-borrow pursuant to this
paragraph (c); provided, however, that the aggregate outstanding principal
amount of Bid Rate Loans at any particular time shall not exceed the Bid
Borrowing Limit.

     (d) The obligations of the Banks under this Agreement are several, and no
Bank shall be responsible for the failure of any other Bank to make any advance
of a Loan to be made by such other Bank. However, the failure of any Bank to
make any advance of the Loan to be made by it hereunder on the date specified
therefor shall not relieve any other Bank of its obligation to make any advance
of its Loan specified hereby to be made on such date.

     (e) Borrower shall use the proceeds of the Loans for general capital and
working capital requirements of Borrower and its Consolidated Businesses and
UJVs (which shall include, but not be limited to, Acquisitions and/or costs
incurred in connection with the development, construction or reconstruction of
multi-family real estate properties). In no event shall proceeds of the Loans
be used in a manner that would violate Regulation U or in connection with a
hostile acquisition.

     Section 2.02 Bid Rate Loans.

     (a) When Borrower wishes to request offers from the Banks to make Bid Rate
Loans, it shall transmit to Administrative Agent by facsimile a request (a “Bid
Rate Quote Request”) substantially in the form of EXHIBIT G-1 so as to be
received not later than 12:00 Noon (New York time) on (x) the fifth Banking Day
prior to the date for funding of the LIBOR Bid Rate Loan(s) proposed therein in
the case of a LIBOR Auction or (y) the second Banking Day prior to the date for
funding of the Absolute Bid Rate Loan(s) proposed therein in the case of an
Absolute Rate Auction, specifying:

       (1) the proposed date of funding of the Bid Rate Loan(s), which
shall be a Banking Day;

       (2) the aggregate amount of the Bid Rate Loans requested, which
shall be $10,000,000 or a larger integral multiple of $500,000;

       (3) the duration of the Interest Period(s) applicable thereto,
subject to the provisions of the definition of “Interest Period” in
Section 1.01 and the provisions of Section 2.05; and

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       (4) whether the Bid Rate Quotes requested are to set forth a LIBOR
Bid Margin (to be used to compute the LIBOR Bid Rate) or an Absolute Bid
Rate.

Borrower may request offers to make Bid Rate Loans for more than one (1)
Interest Period in a single Bid Rate Quote Request. No more than two (2) Bid
Rate Quote Requests may be submitted by Borrower during any calendar month and
no more than twenty-four (24) Bid Rate Quote Requests per year may be submitted
by Borrower.

     (b) Promptly (the same day, if possible) upon receipt of a Bid Rate Quote
Request, Administrative Agent shall send to the Banks by facsimile an
invitation (an “Invitation for Bid Rate Quotes”) substantially in the form of
EXHIBIT G-2, which shall constitute an invitation by Borrower to the Banks to
submit Bid Rate Quotes offering to make Bid Rate Loans to which such Bid Rate
Quote Request relates in accordance with this Section.

     (c) (1) Each Bank may submit a Bid Rate Quote containing an offer or
offers to make Bid Rate Loans in response to any Invitation for Bid Rate
Quotes. Each Bid Rate Quote must comply with the requirements of this
paragraph (c) and must be submitted to Administrative Agent by facsimile not
later than (x) 2:00 p.m. (New York time) on the fourth Banking Day prior to the
proposed date of the LIBOR Bid Rate Loan(s) in the case of a LIBOR Auction or
(y) 9:30 a.m. (New York time) on the Banking Day immediately preceding the
proposed date of the Absolute Bid Rate Loan(s) in the case of an Absolute Rate
Auction; provided that Bid Rate Quotes submitted by Administrative Agent (or
any Affiliate of Administrative Agent) in its capacity as a Bank may be
submitted, and may only be submitted, if Administrative Agent or such Affiliate
notifies Borrower of the terms of the offer or offers contained therein not
later than (x) one (1) hour prior to the deadline for the other Banks in the
case of a LIBOR Auction or (y) thirty (30) minutes prior to the deadline for
the other Banks in the case of an Absolute Rate Auction. Any Bid Rate Quote so
made shall (subject to Borrower’s satisfaction of the conditions precedent set
forth in this Agreement to its entitlement to an advance) be irrevocable except
with the written consent of Administrative Agent given on the instructions of
Borrower. Bid Rate Loans to be funded pursuant to a Bid Rate Quote may, as
provided in Section 12.16, be funded by a Bank’s Designated Lender. A Bank
making a Bid Rate Quote shall, if then known, specify in its Bid Rate Quote
whether the related Bid Rate Loans are intended to be funded by such Bank’s
Designated Lender, as provided in Section 12.16, provided, however, that
whether or not the same is specified in a Bank’s Bid Rate Quote, such Bank’s
Bid Rate Loan(s) may be funded by its Designated Lender at the time of funding
thereof.

       (2) Each Bid Rate Quote shall be in substantially the form of
EXHIBIT G-3 and shall in any case specify:

              (i) the proposed date of funding of the Bid Rate Loan(s);

              (ii) the principal amount of the Bid Rate Loan(s) for which each
such offer is being made, which principal amount (w) may be greater than
or less than the Loan Commitment of the quoting Bank, (x) must be in the
aggregate $10,000,000 or a larger integral multiple of $500,000, (y) may
not exceed the principal amount of Bid Rate Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to the

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principal amount of Bid Rate Loans for which offers being made by
such quoting Bank may be accepted;

              (iii) in the case of a LIBOR Auction, the margin above or below the
applicable LIBOR Interest Rate (the “LIBOR Bid Margin”) offered for each
such LIBOR Bid Rate Loan, expressed as a percentage per annum (specified
to the nearest 1/1,000th of 1%) to be added to (or subtracted from) the
applicable LIBOR Interest Rate;

              (iv) in the case of an Absolute Rate Auction, the rate of interest,
expressed as a percentage per annum (specified to the nearest 1/1,000th
of 1%) (the “Absolute Bid Rate”), offered for each such Absolute Bid Rate
Loan;

              (v) the applicable Interest Period; and

              (vi) the identity of the quoting Bank.

A Bid Rate Quote may set forth up to three (3) separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Bid Rate Quotes.

       (3) Any Bid Rate Quote shall be disregarded if it:

              (i) is not substantially in conformity with EXHIBIT G-3 or does not
specify all of the information required by sub-paragraph (c)(2) above;

              (ii) contains qualifying, conditional or similar language (except
for an aggregate limitation as provided in sub-paragraph (c)(2)(ii)
above);

              (iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Bid Rate Quotes; or

              (iv) arrives after the time set forth in sub-paragraph (c)(1) above.

     (d) Administrative Agent shall (x) not later than 3:00 p.m. (New York
time) on the fourth Banking Day prior to the proposed date of funding of the
LIBOR Bid Rate Loan(s) in the case of a LIBOR Auction or (y) not later than
10:30 a.m. (New York time) on the Banking Day immediately preceding the
proposed date of funding of the Absolute Bid Rate Loan(s) in the case of an
Absolute Rate Auction, notify Borrower in writing of the terms of any Bid Rate
Quote submitted by a Bank that is in accordance with paragraph (c). In
addition, Administrative Agent shall, on the Banking Day of its receipt
thereof, notify Borrower in writing of any Bid Rate Quote that amends, modifies
or is otherwise inconsistent with a previous Bid Rate Quote submitted by such
Bank with respect to the same Bid Rate Quote Request. Any such subsequent Bid
Rate Quote shall be disregarded by Administrative Agent unless such subsequent
Bid Rate Quote is submitted solely to correct a manifest error in such former
Bid Rate Quote. Administrative Agent’s notice to Borrower shall specify (A) the
aggregate principal amount of Bid Rate Loans for which offers have been
received for each Interest Period specified in the related Bid Rate Quote
Request, (B) the respective principal amounts, LIBOR Bid Margins and Absolute
Bid Rates so offered and (C) if applicable, limitations on the aggregate
principal amount of Bid Rate Loans for which offers in any single Bid Rate
Quote may be accepted.

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     (e) Not later than 9:30 a.m. (New York time) on (x) the third Banking Day
prior to the proposed date of funding of the LIBOR Bid Rate Loan in the case of
a LIBOR Auction or (y) the Banking Day immediately preceding the proposed date
of funding of the Absolute Bid Rate Loan in the case of an Absolute Rate
Auction, Borrower shall notify Administrative Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to paragraph (d). If
Borrower fails to notify Administrative Agent of its acceptance of such offers,
it shall be deemed to have rejected such offers. A notice of acceptance shall
be substantially in the form of EXHIBIT G-4 and shall specify the aggregate
principal amount of offers for each Interest Period that are accepted.
Borrower may accept any Bid Rate Quote in whole or in part; provided that:

              (i) the principal amount of each Bid Rate Loan may not exceed the
applicable amount set forth in the related Bid Rate Quote Request or be
less than $500,000 per Bank and shall be an integral multiple of
$100,000;

              (ii) acceptance of offers with respect to a particular Interest
Period may only be made on the basis of ascending LIBOR Bid Margins or
Absolute Bid Rates, as the case may be, offered for such Interest Period
from the lowest effective cost; and

              (iii) Borrower may not accept any offer that is described in
sub-paragraph (c)(3) or that otherwise fails to comply with the
requirements of this Agreement.

     (f) If offers are made by two (2) or more Banks with the same LIBOR Bid
Margins or Absolute Bid Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are accepted
for the related Interest Period, the principal amount of Bid Rate Loans in
respect of which such offers are accepted shall be allocated by Administrative
Agent among such Banks as nearly as possible (in multiples of $100,000, as
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Administrative Agent shall promptly (and in
any event within one (1) Banking Day after such offers are accepted) notify
Borrower and each such Bank in writing of any such allocation of Bid Rate
Loans. Determinations by Administrative Agent of the allocation of Bid Rate
Loans shall be conclusive in the absence of manifest error.

     (g) In the event that Borrower accepts the offer(s) contained in one (1)
or more Bid Rate Quotes in accordance with paragraph (e), the Bank(s) making
such offer(s) shall make a Bid Rate Loan in the accepted amount (as allocated,
if necessary, pursuant to paragraph (f)) on the date specified therefor, in
accordance with the procedures specified in Section 2.04, and such Bid Rate
Loan shall bear interest at the accepted LIBOR Bid Rate or Absolute Bid Rate,
as the case may be, for the applicable Interest Period.

     (h) Notwithstanding anything to the contrary contained herein, each Bank
shall be required to fund its Pro Rata Share of the Available Total Loan
Commitment in accordance with Section 2.01(b) despite the fact that any Bank’s
Loan Commitment may have been or may be exceeded as a result of such Bank’s
making Bid Rate Loans.

     (i) A Bank who is notified that it has been selected to make a Bid Rate
Loan as provided above may designate its Designated Lender (if any) to fund
such Bid Rate Loan on its behalf, as described in Section 12.16. Any
Designated Lender which funds a Bid Rate Loan shall

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on and after the time of such funding become the obligee under such Bid
Rate Loan and be entitled to receive payment thereof when due. No Bank shall
be relieved of its obligation to fund a Bid Rate Loan, and no Designated Lender
shall assume such obligation, prior to the time the applicable Bid Rate Loan is
funded.

     (j) Administrative Agent shall promptly notify each Bank which submitted a
Bid Rate Quote of Borrower’s acceptance or non-acceptance thereof. At the
request of any Bank which submitted a Bid Rate Quote, Administrative Agent will
promptly notify all Banks which submitted Bid Rate Quotes of (a) the aggregate
principal amount of, and (b) the range of Absolute Bid Rates or LIBOR Bid
Margins of, the accepted Bid Rate Loans for each requested Interest Period.

     Section 2.03 Advances, Generally. The Initial Advance shall be in
the minimum amount of $500,000 and in integral multiples of $100,000 above such
amount and shall be made upon satisfaction of the conditions set forth in
Section 4.01. Subsequent advances shall be made no more frequently than twice
weekly thereafter, upon satisfaction of the conditions set forth in Section
4.02. The amount of each advance subsequent to the Initial Advance shall be in
the minimum amount of $500,000 (unless less than $500,000 is available for
disbursement pursuant to the terms hereof at the time of any subsequent
advance, in which case the amount of such subsequent advance shall be equal to
such remaining availability) and in integral multiples of $100,000 above such
amount. Additional restrictions on the amounts and timing of, and conditions
to the making of, advances of Bid Rate Loans are set forth in Section 2.02.

     Section 2.04 Procedures for Advances. In the case of advances of
Ratable Loans hereunder, Borrower shall submit to Administrative Agent a
request for each advance, stating the amount requested and certifying the
purpose, in general terms, for which such advance is to be used, no later than
11:00 a.m. (New York time) on the date, in the case of advances of Base Rate
Loans, which is one (1) Banking Day, and, in the case of advances of LIBOR
Loans, which is three (3) Banking Days, prior to the date the advance is to be
made. In the case of advances of Swing Loans hereunder, Borrower shall submit
to Administrative Agent a request for such advance, stating the amount
requested and certifying the purpose, in general terms, for which such advance
is to be used, no later than 11:00 a.m. (New York time) on the date which is
one (1) Banking Day prior to the date the advance is to be made. In the case
of advances of Bid Rate Loans hereunder, Borrower shall submit a Bid Rate Quote
Request at the time specified in Section 2.02, accompanied by a certification
of the purpose, in general terms, for which the advance is to be used.
Administrative Agent, on the Banking Day of its receipt and approval of the
request for advance, will so notify the Banks (or, in the case of Swing Loans,
the Swing Lender) either by telephone or by facsimile. Not later than 11:00
a.m. (New York time) on the date of each advance, each Bank (in the case of
Ratable Loans) or the applicable Bank(s) (in the case of Bid Rate Loans) or the
Swing Lender (in the case of Swing Loans) shall, through its Applicable Lending
Office and subject to the conditions of this Agreement, make the amount to be
advanced by it on such day available to Administrative Agent, at Administrative
Agent’s Office and in immediately available funds for the account of Borrower.
The amount so received by Administrative Agent shall, subject to the conditions
of this Agreement, be made available to Borrower, in immediately available
funds, by Administrative Agent’s crediting an account of Borrower designated by
Borrower and maintained with Administrative Agent at Administrative Agent’s
Office.

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     Section 2.05 Interest Periods; Renewals. In the case of the LIBOR
Loans and Bid Rate Loans, Borrower shall select an Interest Period of any
duration in accordance with the definition of Interest Period in Section 1.01,
subject to the following limitations: (1) no Interest Period may extend beyond
the Maturity Date; and (2) if an Interest Period would end on a day which is
not a Banking Day, such Interest Period shall be extended to the next Banking
Day, unless such Banking Day would fall in the next calendar month, in which
event such Interest Period shall end on the immediately preceding Banking Day.
Only twelve (12) discrete segments of a Bank’s Ratable Loan bearing interest at
a LIBOR Interest Rate, for a designated Interest Period, pursuant to a
particular Election, Conversion or Continuation, may be outstanding at any one
time (each such segment of each Bank’s Ratable Loan corresponding to a
proportionate segment of each of the other Banks’ Ratable Loans). Upon notice
to Administrative Agent as provided in Section 2.14, Borrower may Continue any
LIBOR Loan on the last day of the Interest Period of the same or different
duration in accordance with the limitations provided above. If Borrower shall
fail to give notice to Administrative Agent of such a Continuation, such LIBOR
Loan shall automatically become a LIBOR Loan with an Interest Period of one (1)
month on the last day of the current Interest Period. Administrative Agent
shall notify each of the Banks, either by telephone or by facsimile, at least
two (2) Banking Days prior to the termination of the Interest Period in
question in the event of such failure by Borrower to give such notice of
Continuation.

     Section 2.06 Interest. Borrower shall pay interest to
Administrative Agent for the account of the applicable Bank on the outstanding
and unpaid principal amount of the Loans, at a rate per annum as follows: (1)
for Base Rate Loans at a rate equal to the Base Rate plus the Applicable
Margin; (2) for LIBOR Loans at a rate equal to the applicable LIBOR Interest
Rate plus the Applicable Margin; (3) for LIBOR Bid Rate Loans at a rate equal
to the applicable LIBOR Bid Rate; (4) for Absolute Bid Rate Loans at a rate
equal to the applicable Absolute Bid Rate; and (5) for Swing Loans at a three
(3)-day LIBOR rate, as determined by the Swing Lender. Any principal amount
not paid when due (when scheduled, at acceleration or otherwise) shall bear
interest thereafter, payable on demand, at the Default Rate.

     The interest rate on Base Rate Loans shall change when the Base Rate
changes. Interest on Base Rate Loans, LIBOR Loans, Bid Rate Loans and Swing
Loans shall not exceed the maximum amount permitted under applicable Law.
Interest shall be calculated for the actual number of days elapsed on the basis
of, in the case of Base Rate Loans, LIBOR Loans, Bid Rate Loans and Swing
Loans, three hundred sixty (360) days.

     Accrued interest shall be due and payable in arrears upon and with respect
to any payment or prepayment of principal and, (x) in the case of Base Rate
Loans, LIBOR Loans and Swing Loans, on the first Banking Day of each calendar
month and (y) in the case of Bid Rate Loans, at the expiration of the Interest
Period applicable thereto; provided, however, that interest accruing at the
Default Rate shall be due and payable on demand.

     Section 2.07 Fees.

     (a) Borrower agrees to pay to and for the accounts of the parties
specified therein, the fees provided for in the Supplemental Fee Letter.

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     (b) Borrower shall pay to Administrative Agent for the account of each
Bank a facility fee computed on the daily Loan Commitment of such Bank
(irrespective of usage) at a rate per annum equal to the daily Facility Fee
Rate, calculated on the basis of a year of three hundred sixty (360) days for
the actual number of days elapsed. The accrued facility fee shall be due and
payable quarterly in arrears on the tenth (10th) day of October, January,
April and July of each year, commencing on the first such date after the
Closing Date, and upon the Maturity Date (as stated or by acceleration or
otherwise) or earlier termination of the Loan Commitments.

     Section 2.08 Notes. The Ratable Loan made by each Bank under this
Agreement shall be evidenced by, and repaid with interest in accordance with, a
single promissory note of Borrower in the form of EXHIBIT B duly completed and
executed by Borrower, in the principal amount equal to such Bank’s Loan
Commitment, payable to such Bank for the account of its Applicable Lending
Office (each such note, as the same may hereafter be amended, modified,
extended, severed, assigned, renewed or restated from time to time, including
any new or substitute notes pursuant to Section 2.19, 3.07 or 12.05, a “Ratable
Loan Note”). The Bid Rate Loans of the Banks shall be evidenced by a single
global promissory note of Borrower, in the form of EXHIBIT B-1, duly completed
and executed by Borrower, in the principal amount of $250,000,000, payable to
Administrative Agent for the account of the respective Banks making Bid Rate
Loans (such note, as the same may hereafter be amended, modified, extended,
severed, assigned, substituted, renewed or restated from time to time, the “Bid
Rate Loan Note”). The Swing Loan of the Swing Lender shall be evidenced by,
and repaid with interest in accordance with, a promissory note of Borrower, in
the form of EXHIBIT B-2, duly completed and executed by Borrower, payable to
the Swing Lender (such note, as the same may hereafter be amended, modified
extended, severed, assigned, substituted, renewed or restated from time to
time, the “Swing Loan Note”). A particular Bank’s Ratable Loan Note, together
with its interest, if any, in the Bid Rate Loan Note, and, in the case of the
Swing Lender, the Swing Loan Note, are referred to collectively in this
Agreement as such Bank’s “Note”; all such Ratable Loan Notes, the Bid Rate Loan
Note and the Swing Loan Note are referred to collectively in this Agreement as
the “Notes”. The Ratable Loan Notes shall mature, and all outstanding
principal and accrued interest and other sums thereunder shall be paid in full,
on the Maturity Date, as the same may be accelerated. The outstanding
principal amount of each Bid Rate Loan evidenced by the Bid Rate Loan Note, and
all accrued interest and other sums with respect thereto, shall become due and
payable to the Bank making such Bid Rate Loan at the earlier of the expiration
of the Interest Period applicable thereto or the Maturity Date, as the same may
be accelerated. Principal amounts evidenced by the Swing Loan Notes shall
become due and payable at the earlier of three (3) Banking Days after said
amounts are advanced or the Maturity Date.

     Each Bank is hereby authorized by Borrower to endorse on the schedule
attached to the Ratable Loan Note held by it, the amount of each advance and
each payment of principal received by such Bank for the account of its
Applicable Lending Office(s) on account of its Ratable Loan, which endorsement
shall, in the absence of manifest error, be conclusive as to the outstanding
balance of the Ratable Loan made by such Bank. The Swing Lender is hereby
authorized by Borrower to endorse on the schedule attached to the Swing Loan
Note held by it, the amount of each advance and each payment of principal
received by the Swing Lender for the account of its Applicable Lending
Office(s) on account of its Swing Loan, which endorsement shall, in the absence
of manifest error, be conclusive as to the outstanding balance of the Swing
Loan made by the Swing Lender. Administrative Agent is hereby authorized by
Borrower to endorse on the schedule attached to the Bid Rate Loan Note the
amount of each LIBOR Bid Rate Loan and/or

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Absolute Bid Rate Loan, the name of the Bank making the same, the date of the
advance thereof, the interest rate applicable thereto and the expiration of the
Interest Period applicable thereto (i.e., the maturity date thereof). The
failure by Administrative Agent or any Bank to make such notations with respect
to the Loans or each advance or payment shall not limit or otherwise affect the
obligations of Borrower under this Agreement or the Notes. In case of any
loss, theft, destruction or mutilation of any Bank’s Note, Borrower shall, upon
its receipt of an affidavit of an officer of such Bank as to such loss, theft,
destruction or mutilation and an appropriate indemnification, execute and
deliver a replacement Note to such Bank in the same principal amount and
otherwise of like tenor as the lost, stolen, destroyed or mutilated Note.

     Section 2.09 Prepayments. Without prepayment premium or penalty
but subject to Section 3.05, Borrower may, upon at least one (1) Banking Day’s
notice to Administrative Agent in the case of the Base Rate Loans and Swing
Loans, and at least three (3) Banking Days’ notice to Administrative Agent (who
shall provide such notice, promptly upon receipt, to each of the Banks) in the
case of LIBOR Loans, prepay the Ratable Loans, provided that (1) any partial
prepayment under this Section shall be in integral multiples of $500,000; (2) a
LIBOR Loan or Swing Loan may be prepaid at any time, subject, however, to the
provisions of Section 3.05; and (3) each prepayment under this Section shall
include all interest accrued on the amount of principal prepaid through the
date of prepayment. Prepayment of Bid Rate Loans shall not be permitted.

     Section 2.10 Cancellation of Commitments.

     (a) At any time, Borrower shall have the right, without premium or
penalty, to terminate any unused Loan Commitments (i.e., to terminate Loan
Commitments to the extent of the Available Total Loan Commitment) or unused
commitment of the Swing Lender to make Swing Loans, in whole or in part, from
time to time, provided that: (1) Borrower shall give notice of each such
termination to Administrative Agent (who shall provide such notice, promptly
upon receipt, to each of the Banks) and the Swing Lender, if applicable, no
later then 10:00 a.m. (New York time) on the date which is fifteen (15) Banking
Days prior to the effectiveness of such termination; (2) the Loan Commitments
of each of the Banks, or Swing Lender, as applicable, must be terminated
ratably and simultaneously with those of the other Banks, or Swing Lender, as
applicable; (3) each partial termination of the Loan Commitments, or
commitments to make Swing Loans, as a whole (and corresponding reduction of the
Total Loan Commitment) shall be in an integral multiple of $1,000,000 and (4)
no partial cancellation of the Loan Commitments shall reduce the Total Loan
Commitment to an amount below $200,000,000.

     (b) The Loan Commitments, to the extent terminated, may not be reinstated.

     Section 2.11 Method of Payment. Borrower shall make each payment
under this Agreement and under the Notes not later than 11:00 a.m. (New York
time) on the date when due in Dollars to Administrative Agent at Administrative
Agent’s Office in immediately available funds. Administrative Agent will
thereafter, on the day of its receipt of each such payment, cause to be
distributed to each Bank (1) such Bank’s appropriate share determined pursuant
to Section 10.15 of the payments of principal and interest in like funds for
the account of such Bank’s Applicable Lending Office; and (2) fees payable to
such Bank in accordance with the terms of this Agreement. In the event
Administrative Agent fails to pay funds received from Borrower to the Banks on
the date on which Borrower is credited with payment, Administrative Agent shall
pay interest on such

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amounts at the Federal Funds Rate until such payment to the Banks is made.
Borrower hereby authorizes Administrative Agent and the Banks, if and to the
extent payment by Borrower is not made when due under this Agreement or under
the Notes, to charge from time to time against any account Borrower maintains
with Administrative Agent or any Bank any amount so due to Administrative Agent
and/or the Banks. Except to the extent provided in this Agreement, whenever
any payment to be made under this Agreement or under the Notes is due on any
day other than a Banking Day, such payment shall be made on the next succeeding
Banking Day, and such extension of time shall in such case be included in the
computation of the payment of interest and other fees, as the case may be.

     Section 2.12 Elections, Conversions or Continuation of Loans.
Subject to the provisions of Article III and Sections 2.05 and 2.13, Borrower
shall have the right to Elect to have all or a portion of any advance of the
Ratable Loans be LIBOR Loans, to Convert Base Rate Loans into LIBOR Loans, to
Convert LIBOR Loans into Base Rate Loans, or to Continue LIBOR Loans as LIBOR
Loans, at any time or from time to time, provided that (1) Borrower shall give
Administrative Agent notice of each such Election, Conversion or Continuation
as provided in Section 2.14; and (2) a LIBOR Loan may be Converted or Continued
only on the last day of the applicable Interest Period for such LIBOR Loan.
Except as otherwise provided in this Agreement, each Election, Continuation and
Conversion shall be applicable to each Bank’s Ratable Loan in accordance with
its Pro Rata Share.

     Section 2.13 Minimum Amounts. With respect to the Ratable Loans as
a whole, each Election and each Conversion shall be in an amount at least equal
to $1,000,000 and in integral multiples of $500,000.

     Section 2.14 Certain Notices Regarding Elections, Conversions and
Continuations of Loans. Notices by Borrower to Administrative Agent of
Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable
and shall be effective only if received by Administrative Agent not later than
10:30 a.m. (New York time) on the number of Banking Days prior to the date of
the relevant Election, Conversion or Continuation specified below:

	 	 	 	 	 
	 	 	Number of Banking Days Prior Notice
	Conversions into Base Rate Loans
	 	two (2)
	 
	 	 	 	 
	Elections of, Conversions into or

Continuations as, LIBOR Loans
	 	three (3)

Promptly following its receipt of any such notice, and no later than the close
of business on the Banking Day of such receipt, Administrative Agent shall so
advise the Banks either by telephone or by facsimile. Each such notice of
Election shall specify the portion of the amount of the advance that is to be
LIBOR Loans (subject to Section 2.13) and the duration of the Interest Period
applicable thereto (subject to Section 2.05); each such notice of Conversion
shall specify the LIBOR Loans or Base Rate Loans to be Converted; and each such
notice of Conversion or Continuation shall specify the date of Conversion or
Continuation (which shall be a Banking Day), the amount thereof (subject to
Section 2.13) and the duration of the Interest Period applicable thereto
(subject to Section 2.05). In the event that Borrower fails to Elect to have
any portion of an

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advance of the Ratable Loans be LIBOR Loans, the entire amount of such advance
shall constitute Base Rate Loans. In the event that Borrower fails to Continue
LIBOR Loans within the time period and as otherwise provided in this Section,
such LIBOR Loans will automatically become LIBOR Loans with an Interest Period
of one (1) month on the last day of the then current applicable Interest Period
for such LIBOR Loans. Administrative Agent shall notify each of the Banks,
either by telephone or by facsimile, at least two (2) Banking Days prior to the
termination of the Interest Period in question in the event of such failure by
Borrower.

     Section 2.15 Late Payment Premium. Borrower shall, at
Administrative Agent’s option and upon notice to Borrower, pay to
Administrative Agent for the account of the Banks a late payment premium in the
amount of 4% of any payments of interest under the Loans made more than ten
(10) days after the due date thereof, which shall be due with any such late
payment.

     Section 2.16 Letters of Credit.

     (a) Borrower, by notice to Administrative Agent and the Issuing Bank, may
request, in lieu of advances of proceeds of the Ratable Loans, that the Issuing
Bank issue unconditional, irrevocable standby letters of credit or direct-pay
letters of credit (each, a “Letter of Credit”) for the account of Borrower,
payable by sight drafts, for such beneficiaries and with such other terms as
Borrower shall specify. Promptly upon receipt of notice from the Issuing Bank
of the issuance, amendment or extension of a Letter of Credit, Administrative
Agent shall notify each of the Banks.

     (b) The amount of any Letter of Credit shall be limited to the lesser of
(x) $70,000,000 less the aggregate amount of all Letters of Credit theretofore
issued and outstanding or (y) the Available Total Loan Commitment, it being
understood that the amount of each Letter of Credit issued and outstanding
shall effect a reduction, by an equal amount, of the Available Total Loan
Commitment (such reduction to be allocated to each Bank’s Loan Commitment
ratably in accordance with the Banks’ respective Pro Rata Shares).

     (c) The amount of each Letter of Credit shall be further subject to the
limitations applicable to amounts of advances set forth in Section 2.03 and the
procedures for the issuance of each Letter of Credit shall be the same as the
procedures applicable to the making of advances as set forth in the first
sentence of Section 2.04. The Issuing Bank’s issuance of each Letter of Credit
shall be subject to notice from the Administrative Agent that it has determined
that Borrower has satisfied all conditions precedent to its entitlement to an
advance of proceeds of the Loans.

     (d) Each Letter of Credit shall expire no later than one (1) month prior
to the Maturity Date, but may have a so-called “evergreen” clause allowing for
the extension of the expiration date thereof upon the extension of the Maturity
Date pursuant to Section 2.18.

     (e) In connection with, and as a further condition to the issuance of,
each Letter of Credit, Borrower shall execute and deliver to Administrative
Agent and the Issuing Bank an application for the Letter of Credit on the
Issuing Bank’s standard form therefor, together with such other documents,
opinions and assurances as Administrative Agent and the Issuing Bank shall
reasonably require.

     (f) In connection with each Letter of Credit, Borrower hereby covenants to
pay to Administrative Agent the following fees: (1) a fee, payable quarterly
in arrears (on the first

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Banking Day of each calendar quarter following the issuance of the Letter
of Credit), for the account of the Banks, computed daily on the amount of the
Letter of Credit issued and outstanding at a rate per annum equal to the
“Banks’ L/C Fee Rate” (as hereinafter defined) and (2) the fee, for the Issuing
Bank’s account, required by the Supplemental Fee Letter between Borrower and
Fleet. In addition to the fees described in the preceding sentence, the
Borrower shall pay to the Issuing Bank such other customary letter of credit
charges when incurred. For purposes of this Agreement, the “Banks’ L/C Fee
Rate” shall mean, at any time, a rate per annum equal to the Applicable Margin
for LIBOR Loans less 0.125% per annum. It is understood and agreed that the
last installment of the fees provided for in this paragraph (f) with respect to
any particular Letter of Credit shall be due and payable on the first day of
the calendar quarter following the return, undrawn, or cancellation of such
Letter of Credit to the Issuing Bank, who shall promptly provide notice to
Administrative Agent of such return or cancellation, and Borrower’s receipt of
notice from Administrative Agent.

     (g) Upon any drawing under a Letter of Credit, the Issuing Bank shall
immediately provide notice to the Borrower and Administrative Agent of such
drawing. The Borrower shall reimburse the Issuing Bank on the date of any
drawing under a Letter of Credit. Such reimbursement shall be made with the
proceeds of an advance of Loans as set forth below unless such advance cannot
for any reason be made. The parties hereto acknowledge and agree that,
immediately upon notice from Administrative Agent of any drawing under a Letter
of Credit, each Bank shall, notwithstanding the existence of a Default or Event
of Default or the non-satisfaction of any conditions precedent to the making of
an advance of the Loans, advance proceeds of its Ratable Loan, in an amount
equal to its Pro Rata Share of such drawing, which advance shall be made to
Administrative Agent for the account of the Issuing Bank to reimburse the
Issuing Bank for such drawing. Each of the Banks further acknowledges that its
obligation to fund its Pro Rata Share of drawings under Letters of Credit as
aforesaid shall survive the Banks’ termination of this Agreement or enforcement
of remedies hereunder or under the other Loan Documents. In the event that any
Ratable Loan 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 any applicable bankruptcy or insolvency Law with respect to Borrower),
then each Bank shall purchase (on or as of the date such Ratable Loan would
otherwise have been made) from the Issuing Bank a participation interest in any
unreimbursed drawing in an amount equal to its Pro Rata Share of such
unreimbursed drawing.

     (h) Borrower agrees, upon the occurrence of an Event of Default and at the
written request of Administrative Agent, (1) to deposit with Administrative
Agent for the benefit of the Issuing Bank and the Banks cash collateral in the
amount of all the outstanding Letters of Credit, which cash collateral shall be
held by Administrative Agent for the benefit of the Issuing Bank and the Banks
as security for Borrower’s obligations in connection with the Letters of Credit
and (2) to execute and deliver to Administrative Agent and the Issuing Bank
such documents as Administrative Agent or the Issuing Bank reasonably requests
to confirm and perfect the assignment of such cash collateral to Administrative
Agent for the benefit of the Issuing Bank and the Banks.

     Section 2.17 Swing Loans.

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     (a) During the term of this Agreement, the Swing Lender agrees, on the
terms and conditions set forth in this Agreement, to make advances to Borrower
pursuant to this Section from time to time in amounts such that (i) the
aggregate of such advance and amount of Swing Loans theretofore advanced and
still outstanding does not at any time exceed the Swing Loan Commitment and
(ii) the amount of such advance does not exceed the Available Total Loan
Commitment. Each advance under this Section shall be in an aggregate principal
amount of $1,000,000 or a larger multiple of $100,000 (except that any such
advance may be in the aggregate available amount of Swing Loans determined in
accordance with the immediately preceding sentence). With the foregoing
limits, Borrower may borrow under this Section, repay or, to the extent
permitted by Section 2.09, prepay Swing Loans and reborrow under this Section
at any time during the term of this Agreement.

     (b) The Swing Lender shall, on behalf of Borrower (which hereby
irrevocably directs the Swing Lender to act on its behalf), on notice given by
the Swing Lender no later than 1:00 p.m. (New York time) on the Banking Day
immediately following the funding of any Swing Loan, request each Bank to make,
and each Bank hereby agrees to make, an advance of its Ratable Loan, in an
amount (with respect to each Bank, its “Swing Loan Refund Amount”) equal to
such Bank’s Pro Rata Share of the aggregate principal amount of the Swing Loans
(the “Refunded Swing Loans”) outstanding on the date of such notice, to repay
the Swing Lender. Unless any of the events described in paragraph (5) of
Section 9.01 with respect to Borrower shall have occurred and be continuing (in
which case the procedures of paragraph (c) of this Section shall apply), each
Bank shall make such advance of its Ratable Loan available to Administrative
Agent at Administrative Agent’s Office in immediately available funds, not
later than 1:00 p.m. (New York time), on the third Banking Day immediately
following the date of such notice. Administrative Agent shall pay the proceeds
of such advance of Ratable Loans to the Swing Lender, which shall immediately
apply such proceeds to repay Refunded Swing Loans. Effective on the day such
advances of Ratable Loans are made, the portion of the Swing Loans so paid
shall no longer be outstanding as Swing Loans, shall no longer be due as Swing
Loans under the Swing Loan Note held by the Swing Lender, and shall be due as
Ratable Loans under the respective Ratable Loan Notes issued to the Banks
(including the Swing Lender). Borrower authorizes the Swing Lender to charge
Borrower’s accounts with Administrative Agent (up to the amount available in
each such accounts) in order to immediately pay the amount of such Refunded
Swing Loans to the extent amounts received from the Banks are not sufficient to
repay in full such Refunded Swing Loans.

     (c) If, prior to the time advances of Ratable Loans would have otherwise
been made pursuant to paragraph (b) of this Section, one of the events
described in paragraph (5) of Section 9.01 with respect to the Borrower shall
have occurred and be continuing, each Bank shall, on the date such advances
were to have been made pursuant to the notice referred to in paragraph (b) of
this Section (the “Refunding Date”), purchase an undivided participating
interest in the Swing Loans in an amount equal to such Bank’s Swing Loan Refund
Amount. On the Refunding Date, each Bank shall transfer to the Swing Lender,
in immediately available funds, such Bank’s Swing Loan Refund Amount, and upon
receipt thereof, the Swing Lender shall deliver to such Bank a Swing Loan
participation certificate dated the date of the Swing Lender’s receipt of such
funds and in the Swing Loan Refund Amount of such Bank.

     (d) Whenever, at any time after the Swing Lender has received from any
Bank such Bank’s Swing Loan Refund Amount pursuant to paragraph (c) of this
Section, the Swing Lender

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receives any payment on account of the Swing Loans in which the Banks have
purchased Participations pursuant to said paragraph (c), the Swing Lender will
promptly distribute to each such Bank its ratable share (determined on the
basis of the Swing Loan Refund Amounts of all of the Banks) of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Bank’s participating interest was outstanding
and funded); provided, however, that in the event that such payment received by
the Swing Lender is required to be returned, such Bank will return to the Swing
Lender any portion thereof previously distributed to it by the Swing Lender.

     (e) Each Bank’s obligation to make an advance of its Ratable Loan as
provided in paragraph (b) of this Section or to purchase a participating
interest pursuant to paragraph (c) of this Section shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank, Borrower or any other Person may have against the Swing Lender
or any other Person, (ii) the occurrence or continuance of a Default or an
Event of Default, the termination or reduction of the Loan Commitments or the
non-satisfaction of any condition precedent to the making of any advance of the
Loans, (iii) any adverse change in the condition (financial or otherwise) of
Borrower or any other Person, (iv) any breach of this Agreement by Borrower,
any other Bank or any other Person or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

     (f) Notwithstanding anything above in this Section or elsewhere in this
Agreement to the contrary, in the event that the Swing Lender funds a Swing
Loan hereunder when it has actual knowledge that a monetary Default, or
material Event of Default (which, for the avoidance of doubt shall include any
violation of any provision of Article VII or Article VIII) has occurred and is
continuing, the Banks shall have the option, but not the obligation, to make
Ratable Loans to fund their ratable shares of such Swing Loan as contemplated
in paragraph (b) of this Section or to purchase participations as contemplated
in paragraph (c) of this Section.

     (g) For purposes of Article III, Swing Loans shall be deemed to be LIBOR
Loans.

     Section 2.18 Extension Of Maturity. Borrower shall have the option
(the “Extension Option”) to extend the original Maturity Date for a period of
one (1) year. Subject to the conditions set forth below, Borrower may exercise
the Extension Option by delivering a written notice to Administrative Agent
(who shall provide such notice, promptly upon receipt, to each of the Banks)
not more than ninety (90) days and not less than thirty (30) days prior to the
original Maturity Date (a “Notice to Extend”), stating that Borrower has
elected to extend the original Maturity Date for one (1) year. Borrower’s
delivery of the Notice to Extend shall be irrevocable and Borrower’s right to
exercise the Extension Option shall be subject to the following terms and
conditions: (i) there shall exist no Event of Default on both the date
Borrower delivers the Notice to Extend to Administrative Agent and on the
original Maturity Date, (ii) Borrower shall have paid to Administrative Agent
for the account of each Bank an extension fee equal to 0.15% of such Bank’s
Loan Commitment simultaneously with delivery of the Notice to Extend and (iii)
Borrower shall be in compliance with the covenants contained in Articles VII
and VIII, as evidenced by a certificate from Borrower of the sort required by
paragraph (3) of Section 6.09 (based on financial results for the most recent
calendar quarter for which Borrower is required to report financial results).

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     Section 2.19 Additional Loan Commitments.

     (a) Borrower may, from time to time, up to a maximum of three (3)
requests, request the Banks to increase their Loan Commitments, so as to
increase the Total Loan Commitment to an amount no greater than the sum of (1)
the Accordion Amount plus (2) $500,000,000 less (3) the amount of any reduction
of the Total Loan Commitment pursuant to Section 2.10. The increase in the
Total Loan Commitment pursuant to any such particular request shall be at least
an amount (the “Minimum Request”) equal to the lesser of (x) $50,000,000 or (y)
the Accordion Amount less all previous increases in the Total Loan Commitment
pursuant to this Section. Borrower shall make each such request by giving
notice to Syndication Agent no later than forty-five (45) days prior to the
date (the “Syndication Expiration Date”) that is twenty-seven (27) months after
the Closing Date, which notice shall set forth the amount (which shall be no
less than the Minimum Request) of the requested increase in the Total Loan
Commitment (the “Requested Increase”) and such other details with respect to
such increase as Syndication Agent shall reasonably request. Syndication Agent
will use commercially reasonable efforts, with the assistance of Borrower, to
arrange a syndicate of Banks with Loan Commitments (including the then-existing
Loan Commitments) aggregating the then existing Total Loan Commitment plus the
Requested Increase. Upon receipt of notice as aforesaid from Borrower,
Syndication Agent shall promptly send a copy of such notice to each Bank and
shall request that each Bank increase its Loan Commitment by an amount equal to
its Pro Rata Share of the Requested Increase (the “First Solicitation”). Each
Bank shall have the right, but not the obligation, to increase its Loan
Commitment by an amount equal to its Pro Rata Share of the Requested Increase,
and shall have a period of fifteen (15) days from the First Solicitation to
notify Syndication Agent whether or not such Bank elects so to increase its
Loan Commitment. Any Bank that fails to respond to the First Solicitation
within such fifteen (15)-day period will be deemed to have elected not to
increase its Loan Commitment. If all Banks elect to increase their respective
Loan Commitments by amounts equal to their respective Pro Rata Shares of the
Requested Increase, Syndication Agent shall so notify Borrower, Administrative
Agent and each of the Banks, and Borrower shall proceed in accordance with
paragraph (b) below. If any Bank (any such Bank, a “Declining Bank”) shall not
elect or shall be deemed to have elected not to increase its Loan Commitment as
aforesaid, (i) the amount of such Declining Bank’s Loan Commitment shall be
unchanged, (ii) Syndication Agent shall notify Borrower, Administrative Agent
and each of the Banks as to which Banks have elected to increase their Loan
Commitments and by what amounts and (iii) if Borrower so requests, Syndication
Agent shall either (A) solicit from the Banks that elected to increase their
respective Loan Commitments a further increase in their Loan Commitments in an
aggregate amount equal to all or any portion of the aggregate amount of the
Declining Banks’ Pro Rata Shares of the Requested Increase (the “Shortfall”) or
(B) submit a list of proposed syndicate members that are not then a party to
this Agreement to Borrower for its review and approval (such approval not to be
unreasonably withheld or delayed) in order to obtain additional commitments in
an amount equal to the Shortfall. From and after the Syndication Expiration
Date, Syndication Agent shall have no further obligation to syndicate the
Facility or to obtain or accept any additional Loan Commitments.

     (b) In connection with increases to the Loan Commitments of some or all of
the Banks as provided in paragraph (a) above, Borrower shall execute
supplemental Ratable Loan Notes (the “Supplemental Notes”) evidencing such
increases, as well as such other confirmatory modifications to this Agreement
as Syndication Agent shall reasonably request. In connection with the addition
of lenders as a result of solicitations by Syndication Agent pursuant to clause
(B) of

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paragraph (a) above (“New Banks”), Borrower, Administrative Agent and each
New Bank shall execute an Acceptance Letter in the form of EXHIBIT H, Borrower
shall execute a Ratable Loan Note to each New Bank in the amount of the New
Bank’s Loan Commitment (a “New Note”) and Borrower and Administrative Agent
(with the consent of only the New Banks and those Banks increasing their Loan
Commitments) shall execute such confirmatory modifications to this Agreement as
Administrative Agent shall reasonably request, whereupon the New Bank shall
become, and have the rights and obligations of, a “Bank”, with a Loan
Commitment in the amount set forth in such Acceptance Letter. The Banks shall
have no right of approval with respect to a New Bank’s becoming a Bank or the
amount of its Loan Commitment, provided, however, that Syndication Agent shall
have such right of approval, not to be unreasonably withheld. Each
Supplemental Note and New Note shall constitute “Ratable Loan Notes” for all
purposes of this Agreement.

     (c) If at the time a New Bank becomes a Bank (or a Bank increases its Loan
Commitment) pursuant to this Section there is any principal outstanding under
the Ratable Loan Notes of the previously admitted Banks (the “Existing Banks”),
such New Bank (or Bank increasing its Loan Commitment) shall remit to
Administrative Agent an amount equal to the Outstanding Percentage (as defined
below) multiplied by the Loan Commitment of the New Bank (or the amount of the
increase in the Loan Commitment of a Bank increasing its Loan Commitment),
which amount shall be deemed advanced under the Ratable Loan of the New Bank
(or the Bank increasing its Loan Commitment). Administrative Agent shall pay
such amount to the Existing Banks in accordance with the Existing Banks’
respective Pro Rata Shares (as calculated immediately prior to the admission of
the New Bank (or the increase in a Bank’s Loan Commitment)), and such payment
shall effect an automatic reduction of the outstanding principal balance under
the respective Ratable Loan Notes of the Existing Banks. For purposes of this
Section, the term “Outstanding Percentage” means the ratio of (i) the aggregate
outstanding principal amount under the Ratable Notes of the Existing Banks,
immediately prior to the admission of the New Bank (or the increase in the Loan
Commitment of a Bank), to (ii) the aggregate of the Loan Commitments of the
Existing Banks (as increased pursuant to this Section, if applicable) and the
New Bank.

     (d) The fees payable by the Borrower upon any increase of the Loan
Commitments shall be agreed upon by the Borrower, the Syndication Agent, the
New Banks and those Banks increasing their Loan Commitments. Nothing in this
Section 2.19 shall constitute or be deemed to constitute an agreement or
commitment by any Bank to increase its Loan Commitment hereunder.

ARTICLE III

YIELD PROTECTION; ILLEGALITY, ETC.

     Section 3.01 Additional Costs. Borrower shall pay directly to each
Bank from time to time on demand such amounts as such Bank may determine to be
necessary to compensate it for any increased costs which such Bank determines
are attributable to its making or maintaining a LIBOR Loan or a LIBOR Bid Rate
Loan, or its obligation to make or maintain a LIBOR Loan or a LIBOR Bid Rate
Loan, or its obligation to Convert a Base Rate Loan to a LIBOR Loan hereunder,
or any reduction in any amount receivable by such Bank hereunder in respect of
its LIBOR Loan or LIBOR Bid Rate Loan(s) or such obligations (such increases in
costs and reductions in amounts

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receivable being herein called “Additional Costs”), in each case resulting
from any Regulatory Change which:

       (1) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or the Notes in respect of any such LIBOR Loan
or LIBOR Bid Rate Loan (other than changes in the rate of general
corporate, franchise, branch profit, net income or other income tax
imposed on such Bank or its Applicable Lending Office by the jurisdiction
in which such Bank has its principal office or such Applicable Lending
Office); or

       (2) (other than to the extent the LIBOR Reserve Requirement is taken
into account in determining the LIBOR Rate at the commencement of the
applicable Interest Period) imposes or modifies any reserve, special
deposit, deposit insurance or assessment, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Bank
(including any LIBOR Loan or LIBOR Bid Rate Loan or any deposits referred
to in the definition of “LIBOR Interest Rate” in Section 1.01), or any
commitment of such Bank (including such Bank’s Loan Commitment
hereunder); or

       (3) imposes any other condition affecting this Agreement or the
Notes (or any of such extensions of credit or liabilities).

     Without limiting the effect of the provisions of the first paragraph of
this Section, in the event that, by reason of any Regulatory Change, any Bank
either (1) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits of other liabilities of
such Bank which includes deposits by reference to which the LIBOR Interest Rate
is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Bank which includes loans based on the LIBOR
Interest Rate or (2) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Bank so
elects by notice to Borrower (with a copy to Administrative Agent), the
obligation of such Bank to permit Elections of, to Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended (in which case the provisions
of Section 3.04 shall be applicable) until such Regulatory Change ceases to be
in effect.

     Determinations and allocations by a Bank for purposes of this Section of
the effect of any Regulatory Change pursuant to the first or second paragraph
of this Section, on its costs or rate of return of making or maintaining its
Loan or portions thereof or on amounts receivable by it in respect of its Loan
or portions thereof, and the amounts required to compensate such Bank under
this Section, shall be included in a calculation of such amounts given to
Borrower and shall be conclusive absent manifest error.

     Section 3.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of the LIBOR
Interest Rate for any Interest Period:

       (1) Administrative Agent reasonably determines (which determination
shall be conclusive), and provides Borrower, in writing, with reasonable
detail supporting such determination, that quotations of interest rates
for the relevant deposits referred to in the

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definition of “LIBOR Interest Rate” in Section 1.01 are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for the LIBOR Loans or LIBOR
Bid Rate Loans as provided in this Agreement; or

       (2) a Bank reasonably determines (which determination shall be
conclusive), and provides Borrower, in writing, with reasonable detail
supporting such determination, and promptly notifies Administrative Agent
that the relevant rates of interest referred to in the definition of
“LIBOR Interest Rate” in Section 1.01 upon the basis of which the rate of
interest for LIBOR Loans or LIBOR Bid Rate Loans for such Interest Period
is to be determined do not adequately cover the cost to such Bank of
making or maintaining such LIBOR Loan or LIBOR Bid Rate Loan for such
Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof, and so
long as such condition remains in effect, the Banks (or, in the case of the
circumstances described in clause (2) above, the affected Bank) shall be under
no obligation to permit Elections of LIBOR Loans, to Convert Base Rate Loans
into LIBOR Loans or to Continue LIBOR Loans and Borrower shall, on the last
day(s) of the then current Interest Period(s) for the affected outstanding
LIBOR Loans or LIBOR Bid Rate Loans, either (x) prepay the affected LIBOR Loans
or LIBOR Bid Rate Loans or (y) Convert the affected LIBOR Loans into Base Rate
Loans in accordance with Section 2.12 or convert the rate of interest under the
affected LIBOR Bid Rate Loans to the rate applicable to Base Rate Loans by
following the same procedures as are applicable for Conversions into Base Rate
Loans set forth in Section 2.12.

     Section 3.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to honor its obligation to make or maintain a LIBOR
Loan or LIBOR Bid Rate Loan hereunder, to allow Elections or Continuations of a
LIBOR Loan or to Convert a Base Rate Loan into a LIBOR Loan, then such Bank
shall promptly notify Administrative Agent and Borrower thereof and such Bank’s
obligation to make or maintain a LIBOR Loan or LIBOR Bid Rate Loan, or to
permit Elections of, to Continue, or to Convert its Base Rate Loan into, a
LIBOR Loan shall be suspended (in which case the provisions of Section 3.04
shall be applicable) until such time as such Bank may again make and maintain a
LIBOR Loan or a LIBOR Bid Rate Loan.

     Section 3.04 Treatment of Affected Loans. If the obligations of
any Bank to make or maintain a LIBOR Loan or a LIBOR Bid Rate Loan, or to
permit an Election of a LIBOR Loan, to Continue its LIBOR Loan, or to Convert
its Base Rate Loan into a LIBOR Loan, are suspended pursuant to Sections 3.01
or 3.03 (each LIBOR Loan or LIBOR Bid Rate Loan so affected being herein called
an “Affected Loan”), such Bank’s Affected Loan shall be automatically Converted
into a Base Rate Loan (or, in the case of an Affected Loan that is a LIBOR Bid
Rate Loan, the interest rate thereon shall be converted to the rate applicable
to Base Rate Loans) on the last day of the then current Interest Period for the
Affected Loan (or, in the case of a Conversion (or conversion) required by
Sections 3.01 or 3.03, on such earlier date as such Bank may specify to
Borrower).

     To the extent that such Bank’s Affected Loan has been so Converted (or the
interest rate thereon so converted), all payments and prepayments of principal
which would otherwise be applied to such Bank’s Affected Loan shall be applied
instead to its Base Rate Loan (or to its

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LIBOR Bid Rate Loan bearing interest at the converted rate) and such Bank shall
have no obligation to Convert its Base Rate Loan into a LIBOR Loan.

     Section 3.05 Certain Compensation. Other than in connection with a
Conversion of an Affected Loan, Borrower shall pay to Administrative Agent for
the account of the applicable Bank, upon the request of such Bank through
Administrative Agent which request includes a calculation of the amount(s) due,
such amount or amounts as shall be sufficient (in the reasonable opinion of
such Bank) to compensate it for any non-administrative, actual loss, cost or
expense which such Bank reasonably determines is attributable to:

       (1) any payment or prepayment of a LIBOR Loan or Bid Rate Loan made
by such Bank, or any Conversion or Continuation of a LIBOR Loan (or
conversion of the rate of interest on a LIBOR Bid Rate Loan) made by such
Bank, in any such case on a date other than the last day of an applicable
Interest Period, whether by reason of acceleration or otherwise; or

       (2) any failure by Borrower for any reason to Convert a Base Rate
Loan or a LIBOR Loan or Continue a LIBOR Loan to be Converted or
Continued by such Bank on the date specified therefor in the relevant
notice under Section 2.14; or

       (3) any failure by Borrower to borrow (or to qualify for a borrowing
of) a LIBOR Loan or Bid Rate Loan which would otherwise be made hereunder
on the date specified in the relevant Election notice under Section 2.14
or Bid Rate Quote acceptance under Section 2.02(e) given or submitted by
Borrower.

     Without limiting the foregoing, such compensation shall include any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after the date of such payment,
prepayment, Conversion or Continuation (or failure to Convert, Continue or
borrow). A determination of any Bank as to the amounts payable pursuant to
this Section shall be conclusive absent manifest error. No Bank shall make any
request pursuant to this Section 3.05 unless such amounts due to, and costs
incurred by, such Bank are equal to or greater than $100.

     Section 3.06 Capital Adequacy. If any Bank shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on 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 deemed by such Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank (with a copy to Administrative
Agent), Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such reduction. A certificate of
any Bank claiming compensation

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under this Section, setting forth in reasonable detail the basis therefor,
shall be conclusive absent manifest error.

     Section 3.07 Substitution of Banks. If any Bank (an “Affected
Bank”) (1) makes demand upon Borrower for (or if Borrower is otherwise required
to pay) Additional Costs pursuant to Section 3.01 or (2) is unable to make or
maintain a LIBOR Loan or LIBOR Bid Rate Loan as a result of a condition
described in Section 3.03 or clause (2) of Section 3.02, Borrower may, within
ninety (90) days of receipt of such demand or notice (or the occurrence of such
other event causing Borrower to be required to pay Additional Costs or causing
said Section 3.03 or clause (2) of Section 3.02 to be applicable), as the case
may be, give written notice (a “Replacement Notice”) to Administrative Agent
and to each Bank of Borrower’s intention either (x) to prepay in full the
Affected Bank’s Note and to terminate the Affected Bank’s entire Loan
Commitment or (y) to replace the Affected Bank with another financial
institution (the “Replacement Bank”) designated in such Replacement Notice. In
the event Borrower opts to give the notice provided for in clause (x) above,
and if the Affected Bank shall not agree within thirty (30) days of its receipt
thereof to waive the payment of the Additional Costs in question or the effect
of the circumstances described in Section 3.03 or clause (2) of Section 3.02,
then, so long as no Default or Event of Default shall exist, Borrower may
(notwithstanding the provisions of clause (2) of Section 2.10(a)) terminate the
Affected Bank’s entire Loan Commitment, provided that in connection therewith
it pays to the Affected Bank all outstanding principal and accrued and unpaid
interest under the Affected Bank’s Note, together with all other amounts, if
any, due from Borrower to the Affected Bank, including all amounts properly
demanded and unreimbursed under Sections 3.01 and 3.05.

     In the event Borrower opts to give the notice provided for in clause (y)
above, and if (i) Administrative Agent shall, within thirty (30) days of its
receipt of the Replacement Notice, notify Borrower and each Bank in writing
that the Replacement Bank is reasonably satisfactory to Administrative Agent
and (ii) the Affected Bank shall not, prior to the end of such thirty (30)-day
period, agree to waive the payment of the Additional Costs in question or the
effect of the circumstances described in Section 3.03 or clause (2) of Section
3.02, then the Affected Bank shall, so long as no Default or Event of Default
shall exist, assign its Note and all of its rights and obligations under this
Agreement to the Replacement Bank, and the Replacement Bank shall assume all of
the Affected Bank’s rights and obligations, pursuant to an agreement,
substantially in the form of an Assignment and Acceptance, executed by the
Affected Bank and the Replacement Bank. In connection with such assignment and
assumption, the Replacement Bank shall pay to the Affected Bank an amount equal
to the outstanding principal amount under the Affected Bank’s Note plus all
interest accrued thereon, plus all other amounts, if any (other than the
Additional Costs in question), then due and payable to the Affected Bank;
provided, however, that prior to or simultaneously with any such assignment and
assumption, Borrower shall have paid to such Affected Bank all amounts properly
demanded and unreimbursed under Sections 3.01 and 3.05. Upon the effective
date of such assignment and assumption, the Replacement Bank shall become a
Bank party to this Agreement and shall have all the rights and obligations of a
Bank as set forth in such Assignment and Acceptance, and the Affected Bank
shall be released from its obligations hereunder, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this Section, a substitute Ratable Loan Note (and, if applicable,
Swing Loan Note) shall be issued to the Replacement Bank by Borrower, in
exchange for the return of the Affected Bank’s Ratable Loan Note (and, if
applicable, Swing Loan Note). The obligations evidenced by such substitute
note shall constitute “Obligations” for all purposes of

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this Agreement and the other Loan Documents. In connection with Borrower’s
execution of substitute notes as aforesaid, Borrower shall deliver to
Administrative Agent evidence, satisfactory to Administrative Agent, of all
requisite corporate action to authorize Borrower’s execution and delivery of
the substitute notes and any related documents. If the Replacement Bank is not
incorporated under the Laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 10.13. Each Replacement
Bank shall be deemed to have made the representations contained in, and shall
be bound by the provisions of, Section 10.13.

     Borrower, Administrative Agent and the Banks shall execute such
modifications to the Loan Documents as shall be reasonably required in
connection with and to effectuate the foregoing.

     Section 3.08 Applicability. The provisions of this Article III
shall be applied to Borrower so as not to discriminate against Borrower
vis-a-vis similarly situated customers of the Banks.

ARTICLE IV

CONDITIONS PRECEDENT

     Section 4.01 Conditions Precedent to the Initial Advance. The
obligations of the Banks hereunder and the obligation of each Bank to make the
Initial Advance are subject to the condition precedent that Administrative
Agent shall have received and approved on or before the Closing Date (other
than with respect to paragraph (10) below which shall be required prior to the
Initial Advance) each of the following documents, and each of the following
requirements shall have been fulfilled:

       (1) Fees and Expenses. The payment of (a) all fees and
expenses incurred by Syndication Agent and Administrative Agent
(including, without limitation, the reasonable fees and expenses of legal
counsel) and (b) those fees specified in the Supplemental Fee Letter to
be paid by Borrower on or before the Closing Date;

       (2) Loan Agreement and Notes. This Agreement, the Ratable
Loan Notes for each of the Banks signatory hereto, the Bid Rate Loan Note
for Administrative Agent, and the Swing Note for the Swing Lender, each
duly executed by Borrower;

       (3) Financial Statements. (a) Audited Borrower’s
Consolidated Financial Statements as of and for the year ended December
31, 2003 and (b) unaudited Borrower’s Consolidated Financial Statements,
certified by the chief financial officer thereof, as of and for the
quarter ended March 31, 2004;

       (4) Evidence of Formation of Borrower. Certified (as of the
Closing Date) copies of Borrower’s certificate of incorporation and
by-laws, with all amendments thereto, and a certificate of the Secretary
of State of the jurisdiction of formation as to its good standing
therein;

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       (5) Evidence of All Corporate Action. Certified (as of the
Closing Date) copies of all documents evidencing the corporate action
taken by Borrower authorizing the execution, delivery and performance of
the Loan Documents and each other document to be delivered by or on
behalf of Borrower pursuant to this Agreement;

       (6) Incumbency and Signature Certificate of Borrower. A
certificate (dated as of the Closing Date) of the secretary of Borrower
certifying the names and true signatures of each person authorized to
sign on behalf of Borrower;

       (7) Solvency Certificate. A duly executed Solvency
Certificate;

       (8) Opinion of Counsel for Borrower. A favorable opinion,
dated the Closing Date, of Goodwin Procter LLP, counsel for Borrower, as
to such matters as Administrative Agent may reasonably request;

       (9) Authorization Letter. The Authorization Letter, duly
executed by Borrower;

       (10) Request for Advance. A request for an advance in
accordance with Section 2.04;

       (11) Certificate. The following statements shall be true and
Administrative Agent shall have received a certificate dated the Closing
Date signed by a duly authorized signatory of Borrower stating, to the
best of the certifying party’s knowledge, the following:

       (a) All representations and warranties contained in this
Agreement and in each of the other Loan Documents are true and
correct on and as of the Closing Date as though made on and as of
such date, and

       (b) No Default or Event of Default has occurred and is
continuing, or could result from the transactions contemplated by
this Agreement and the other Loan Documents; and

       (c) No Material Adverse Change exists on and as of the Closing
Date;

       (12) Supplemental Fee Letter. The Supplemental Fee Letter,
duly executed by Borrower;

       (13) Covenant Compliance. A covenant compliance certificate
of the sort required by paragraph (3) of Section 6.09 for the most recent
calendar quarter for which Borrower is required to report financial
results; and

       (14) Additional Materials. Such other approvals, documents,
instruments or opinions as Administrative Agent may reasonably request.

     Section 4.02 Conditions Precedent to Each Advance. The obligation
of each Bank to make each advance of the Loans, and the obligation of the
Issuing Bank to issue any Letter of Credit, shall be subject to satisfaction of
the following conditions precedent:

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       (1) All conditions of Section 4.01 shall have been and remain
satisfied as of the date of such advance or issuance;

       (2) No Default or Event of Default shall have occurred and be
continuing as of the date of the advance or issuance or would result from
the making of such advance or issuance;

       (3) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and
correct in all material respects as of the date of the advance or
issuance; and

       (4) Administrative Agent shall have received a request for an
advance in accordance with Section 2.04 or Administrative Agent and the
Issuing Bank shall have received a request for such Letter of Credit in
accordance with Section 2.16.

     Section 4.03 Deemed Representations. Each request by Borrower for,
and acceptance by Borrower of, an advance of proceeds of the Loans, and each
request by Borrower for, and each issuance by the Issuing Bank of, a Letter of
Credit, shall constitute a representation and warranty by Borrower that, as of
both the date of such request and the date of such advance or issuance (1) no
Default or Event of Default has occurred and is continuing or would result from
the making of such advance or issuance and (2) each representation or warranty
contained in this Agreement or the other Loan Documents is true and correct in
all material respects.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Administrative Agent and each Bank as
follows:

     Section 5.01 Due Organization. Borrower is duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
organization, has the power and authority to own its assets and to transact the
business in which it is now engaged, and, if applicable, is duly qualified for
the conduct of business and in good standing under the Laws of each other
jurisdiction in which such qualification is required and where the failure to
be so qualified would cause a Material Adverse Change.

     Section 5.02 Power and Authority; No Conflicts; Compliance With
Laws. The execution, delivery and performance of the obligations required
to be performed by Borrower of the Loan Documents does not and will not (a)
require the consent or approval of its shareholders or such consent or approval
has been obtained, (b) contravene either its certificate of incorporation or
by-laws, (c) to the best of Borrower’s knowledge, violate any provision of, or
require any filing, registration, consent or approval under, any Law
(including, without limitation, Regulation U), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it, (d) result in a breach of or constitute a default under or
require any consent under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which it may be a party or by which it
or its properties may be bound or affected except for consents which have been
obtained, (e) result in, or require, the creation or imposition of any Lien,
upon or with respect to any of its properties now owned or hereafter acquired
or (f) to the best of Borrower’s

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knowledge, cause it to be in default under any such Law, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument; to the best of its knowledge, Borrower is in
material compliance with all Laws applicable to it and its properties.

     Section 5.03 Legally Enforceable Agreements. Each Loan Document is
a legal, valid and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar Laws affecting
creditors’ rights generally.

     Section 5.04 Litigation. There are no actions, suits or
proceedings pending or, to its knowledge, threatened against Borrower or any of
its Affiliates before any court or arbitrator or any Governmental Authority
which are reasonably likely to result in a Material Adverse Change or challenge
the validity or enforceability of any of the Loan Documents.

     Section 5.05 Good Title to Properties. Borrower and each of its
Material Affiliates have good, marketable and legal title to all of the
properties and assets each of them purports to own (including, without
limitation, those reflected in the Consolidated Financial Statements referred
to in Section 5.13), only with exceptions which do not materially detract from
the value of such property or assets or the use thereof in Borrower’s and such
Material Affiliate’s business, and except to the extent that any such
properties and assets have been encumbered or disposed of since the date of
such financial statements without violating any of the covenants contained in
Article VII or elsewhere in this Agreement. Borrower and its Material
Affiliates enjoy peaceful and undisturbed possession of all leased property
necessary in any material respect in the conduct of their respective
businesses. All such leases are valid and subsisting and are in full force and
effect.

     Section 5.06 Taxes. Borrower has filed all tax returns (federal,
state and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies due and payable without the imposition of a
penalty, including interest and penalties, except to the extent they are the
subject of a Good Faith Contest. Borrower qualifies as a real estate investment
trust under the Code.

     Section 5.07 ERISA. Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event
nor a Prohibited Transaction has occurred with respect to any Plan which could
result in liability of Borrower; no notice of intent to terminate a Plan has
been filed nor has any Plan been terminated within the past five (5) years; no
circumstance exists which constitutes grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings;
Borrower and the ERISA Affiliates have not completely or partially withdrawn
under Sections 4201 or 4204 of ERISA from a Multiemployer Plan; Borrower and
the ERISA Affiliates have met the minimum funding requirements of Section 412
of the Code and Section 302 of ERISA of each with respect to the Plans of each
and there is no material “Unfunded Current Liability” (as such quoted term is
defined in ERISA) with respect to any Plan established or maintained by each;
and Borrower and the ERISA Affiliates have not incurred any liability to the
PBGC under ERISA (other than for the payment of premiums under Section 4007 of
ERISA). No part of the funds to be used by Borrower in satisfaction of its
obligations under this Agreement constitute “plan assets” of any “employee
benefit plan” within the meaning of ERISA or of any “plan” within the meaning
of Section 4975(e)(1) of the Code, as interpreted by the

-40-

 

Internal Revenue Service and the U.S. Department of Labor in rules,
regulations, releases, bulletins or as interpreted under applicable case law.

     Section 5.08 No Default on Outstanding Judgments or Orders, Etc.
Borrower and each of its Material Affiliates have satisfied all judgments which
are not being appealed or which are not fully covered by insurance, and are not
in default with respect to any judgment, order, writ, injunction, decree, rule
or regulation of any court, arbitrator or federal, state, municipal or other
Governmental Authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.

     Section 5.09 No Defaults on Other Agreements. Except as disclosed
to Administrative Agent in writing (who shall provide such information,
promptly upon receipt, to each of the Banks), Borrower is not a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any partnership, trust or other restriction which is
likely to result in a Material Adverse Change. Borrower is not in default in
any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
which is likely to result in a Material Adverse Change. Borrower and each of
its Material Affiliates are in compliance in all material respects with all
Laws applicable to it, except where no Material Adverse Change could occur as a
result of such non-compliance.

     Section 5.10 Government Regulation. Borrower is not subject to
regulation under the Investment Company Act of 1940 or any statute or
regulation limiting its ability to incur indebtedness for money borrowed as
contemplated hereby.

     Section 5.11 Environmental Protection. To the best of Borrower’s
knowledge, none of Borrower’s or its Material Affiliates’ properties contains
any Hazardous Materials that, under any Environmental Law currently in effect,
(1) would impose liability on Borrower that is likely to result in a Material
Adverse Change or (2) is likely to result in the imposition of a Lien on any
assets of Borrower or its Material Affiliates, in each case if not properly
handled in accordance with applicable Law or not covered by insurance or a
bond, in either case reasonably satisfactory to Administrative Agent. To the
best of Borrower’s knowledge, neither it nor any of its Material Affiliates is
in material violation of, or subject to any existing, pending or threatened
material investigation or proceeding by any Governmental Authority under any
Environmental Law.

     Section 5.12 Solvency. Borrower is, and upon consummation of the
transactions contemplated by this Agreement, the other Loan Documents and any
other documents, instruments or agreements relating thereto, will be, Solvent.

     Section 5.13 Financial Statements. The Borrower’s Consolidated
Financial Statements most recently delivered to the Banks pursuant to the terms
of this Agreement are in all material respects complete and correct and fairly
present the financial condition of the subject thereof as of the dates of and
for the periods covered by such statements, all in accordance with GAAP. There
has been no Material Adverse Change since the date of such most recently
delivered Borrower’s Consolidated Financial Statements.

     Section 5.14 Valid Existence of Affiliates. At the Closing Date,
the only Material Affiliates of Borrower are listed on EXHIBIT C. Each
Material Affiliate is a corporation,

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partnership or limited liability company duly organized and existing in
good standing under the Laws of the jurisdiction of its formation. As to each
Material Affiliate, its correct name, the jurisdiction of its formation,
Borrower’s percentage of beneficial interest therein, and the type of business
in which it is primarily engaged, are set forth on said EXHIBIT C. Borrower
and each of its Material Affiliates have the power to own their respective
properties and to carry on their respective businesses now being conducted.
Each Material Affiliate is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the respective businesses conducted by it or its respective properties, owned
or held under lease, make such qualification necessary and where the failure to
be so qualified would cause a Material Adverse Change.

     Section 5.15 Insurance. Borrower and each of its Material
Affiliates have in force paid insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same type of business and
similarly situated.

     Section 5.16 Accuracy of Information; Full Disclosure. Neither
this Agreement nor any documents, financial statements, reports, notices,
schedules, certificates, statements or other writings furnished by or on behalf
of Borrower to Administrative Agent or any Bank in connection with the
negotiation of this Agreement or the consummation of the transactions
contemplated hereby, or required herein to be furnished by or on behalf of
Borrower (other than projections which are made by Borrower in good faith),
contains any untrue or misleading statement of a material fact or omits a
material fact necessary to make the statements herein or therein not
misleading. To the best of Borrower’s knowledge, there is no fact which
Borrower has not disclosed to Administrative Agent and the Banks in writing
which materially affects adversely nor, so far as Borrower can now foresee,
will materially affect adversely the business affairs or financial condition of
Borrower or the ability of Borrower to perform this Agreement and the other
Loan Documents.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any of the Notes shall remain unpaid or the Loan Commitments remain
in effect, or any other amount is owing by Borrower to any Bank Party hereunder
or under any other Loan Document, Borrower shall, and, in the case of Sections
6.01 through 6.07, inclusive, shall cause each of its Material Affiliates to:

     Section 6.01 Maintenance of Existence. Preserve and maintain its
legal existence and good standing in the jurisdiction of its organization, and
qualify and remain qualified as a foreign entity in each other jurisdiction in
which such qualification is required except to the extent that failure to be so
qualified in such other jurisdictions is not likely to result in a Material
Adverse Change.

     Section 6.02 Maintenance of Records. Keep adequate records and
books of account, in which complete entries will be made reflecting all of its
financial transactions, in accordance with GAAP.

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     Section 6.03 Maintenance of Insurance. At all times, maintain and
keep in force insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are
usually carried by companies engaged in the same type of business and similarly
situated, which insurance shall be acceptable to Administrative Agent and may
provide for reasonable deductibility from coverage thereof. In connection with
the foregoing, it is understood that Borrower’s earthquake insurance coverage
in place as of the Closing Date is acceptable to Administrative Agent.

     Section 6.04 Compliance with Laws; Payment of Taxes. Comply in all
material respects with all Laws applicable to it or to any of its properties or
any part thereof, such compliance to include, without limitation, paying before
the same become delinquent all taxes, assessments and governmental charges
imposed upon it or upon its property, except to the extent they are the subject
of a Good Faith Contest.

     Section 6.05 Right of Inspection. At any reasonable time and from
time to time upon reasonable notice, permit Administrative Agent or any Bank or
any agent or representative thereof to examine and make copies and abstracts
from its records and books of account and visit its properties and to discuss
its affairs, finances and accounts with the independent accountants of
Borrower.

     Section 6.06 Compliance With Environmental Laws. Comply in all
material respects with all applicable Environmental Laws and timely pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, except to the extent there is a Good Faith Contest.

     Section 6.07 Maintenance of Properties. Do all things reasonably
necessary to maintain, preserve, protect and keep its properties in good
repair, working order and condition except where the cost thereof is not in
Borrower’s best interests and the failure to do so would not result in a
Material Adverse Change.

     Section 6.08 Payment of Costs. Pay all costs and expenses required
for the satisfaction of the conditions of this Agreement.

     Section 6.09 Reporting and Miscellaneous Document Requirements.
Furnish directly to Administrative Agent (who shall provide, promptly upon
receipt, to each of the Banks):

       (1) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each Fiscal Year,
Borrower’s Consolidated Financial Statements as of the end of and for
such Fiscal Year, in reasonable detail and stating in comparative form
the respective figures for the corresponding date and period in the prior
Fiscal Year and audited by Borrower’s Accountants;

       (2) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each calendar
quarter (other than the last quarter of the Fiscal Year), the unaudited
Borrower’s Consolidated Financial Statements as of the end of and for
such calendar quarter, in reasonable detail and stating in comparative
form the respective figures for the corresponding date and period in the
prior Fiscal Year;

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       (3) Certificate of No Default and Financial Compliance.
Within ninety (90) days after the end of each Fiscal Year and within
forty-five (45) days after the end of each calendar quarter, a
certificate of Borrower’s chief financial officer or treasurer (a)
stating that, to the best of his or her knowledge, no Default or Event of
Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, specifying the nature thereof and
the action which is proposed to be taken with respect thereto; (b)
stating that the covenants contained in Sections 7.02, 7.03 and 7.04 and
in Article VIII have been complied with (or specifying those that have
not been complied with) and including computations demonstrating such
compliance (or non-compliance); (c) setting forth the details of all
items comprising Total Outstanding Indebtedness, Secured Indebtedness,
Unencumbered Combined EBITDA, Interest Expense and Unsecured Indebtedness
(including amount, maturity, interest rate and amortization requirements
with respect to all Indebtedness and including an occupancy report for
each Unencumbered Wholly-Owned Asset for each of the preceding four (4)
calendar quarters and for such four (4) calendar quarter-period as a
whole); and (d) only at the end of each Fiscal Year, stating Borrower’s
taxable income;

       (4) Certificate of Borrower’s Accountants. Simultaneously
with the delivery of the annual financial statements required by
paragraph (1) of this Section, (a) a statement of Borrower’s Accountants
who audited such financial statements comparing the computations set
forth in the financial compliance certificate required by paragraph (3)
of this Section to the audited financial statements required by paragraph
(1) of this Section and (b) when the audited financial statements
required by paragraph (1) of this Section have a qualified auditor’s
opinion, a statement of Borrower’s Accountants who audited such financial
statements of whether any Default or Event of Default has occurred and is
continuing;

       (5) Notice of Litigation. Promptly after the commencement
and knowledge thereof, notice of all actions, suits, and proceedings
before any court or arbitrator, affecting Borrower which, if determined
adversely to Borrower is likely to result in a Material Adverse Change;

       (6) Notices of Defaults and Events of Default. As soon as
possible and in any event within ten (10) days after Borrower becomes
aware of the occurrence of a material Default or any Event of Default, a
written notice (which notice shall state that it is a “Notice of
Default”) setting forth the details of such Default or Event of Default
and the action which is proposed to be taken with respect thereto;

       (7) Sales or Acquisitions of Assets. Promptly after the
occurrence thereof, written notice (which may be in the form of a press
release sent to Administrative Agent) of (i) any Disposition or
acquisition (including Acquisitions) of assets (other than acquisitions
or Dispositions of investments such as certificates of deposit, Treasury
securities, money market deposits and other similar financial instruments
in the ordinary course of Borrower’s cash management) with respect to
which Borrower is required to file an “8-K”, or (ii) the granting of a
Lien on any Unencumbered Wholly-Owned Asset or Unencumbered Land or
Construction-In-Process, together with, in the case of any acquisition of
such an asset, copies of all material agreements governing the
acquisition and historical financial information and Borrower’s
projections with respect to the property acquired;

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       (8) Material Adverse Change. As soon as is practicable and
in any event within five (5) days after knowledge of the occurrence of
any event or circumstance which is likely to result in or has resulted in
a Material Adverse Change, written notice thereof;

       (9) Offices. Thirty (30) days’ prior written notice of any
change in the chief executive office or principal place of business of
Borrower;

       (10) Environmental and Other Notices. As soon as possible
and in any event within ten (10) days after receipt, copies of all
Environmental Notices received by Borrower which are not received in the
ordinary course of business and which relate to a situation which is
likely to result in a Material Adverse Change;

       (11) Insurance Coverage. Promptly, such information
concerning Borrower‘s insurance coverage as Administrative Agent may
reasonably request;

       (12) Proxy Statements, Etc.. Promptly after the sending or
filing thereof, copies of all proxy statements, financial statements and
reports which Borrower or its Material Affiliates sends to its
shareholders, and copies of all regular, periodic and special reports,
and all registration statements which Borrower or its Material Affiliates
files with the Securities and Exchange Commission or any Governmental
Authority which may be substituted therefor, or with any national
securities exchange;

       (13) Operating Statements. As soon as available and in any
event within forty-five (45) days after the end of each calendar quarter,
an operating statement for each property directly or indirectly owned in
whole or in part by Borrower;

       (14) Capital Expenditures. As soon as available and in any
event within forty-five (45) days after the end of each Fiscal Year, a
schedule of such Fiscal Year’s capital expenditures and a budget for the
next Fiscal Year’s planned capital expenditures for each property
directly or indirectly owned in whole or in part by Borrower; and

       (15) General Information. Promptly, such other information
respecting the condition or operations, financial or otherwise, of
Borrower or any properties of Borrower as Administrative Agent may from
time to time reasonably request.

     Section 6.10 Principal Prepayments as a Result of Reduction in Total
Loan Commitment. If the outstanding principal amount under the Notes at
any time exceeds the Total Loan Commitment, Borrower shall, within ten (10)
days of Administrative Agent’s written demand, make a payment in the amount of
such excess in reduction of such outstanding principal balance.

ARTICLE VII

NEGATIVE COVENANTS

So long as any of the Notes shall remain unpaid, or the Loan Commitments remain
in effect, or any other amount is owing by Borrower to any Bank Party hereunder
or under any other Loan Document, Borrower shall not do any or all of the
following:

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     Section 7.01 Mergers Etc. Merge or consolidate with (except where
Borrower is the surviving entity), or sell, assign, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired).

     Section 7.02 Investments. Directly or indirectly, make any loan or
advance to any Person or purchase or otherwise acquire any capital stock,
assets, obligations or other securities of, make any capital contribution to,
or otherwise invest in, or acquire any interest in, any Person (any such
transaction, an “Investment”) if such Investment constitutes the acquisition of
a minority interest in a Person (a “Minority Interest”) and the amount of such
Investment, together with the value of all other Minority Interests, would
exceed 20% of Capitalization Value, determined as of the end of the most recent
calendar quarter for which Borrower is required to have reported financial
results pursuant to Section 6.09. A 50% beneficial interest in a Person, in
connection with which the holder thereof exercises joint control over such
Person with the holder(s) of the other 50% beneficial interest, shall not
constitute a “Minority Interest” for purposes of this Section.

     Section 7.03 Sale of Assets. Effect (i) a Disposition of any of
its now owned or hereafter acquired assets (including equity interests
therein), including assets in which Borrower owns a beneficial interest through
its ownership of interests in joint ventures, (a) in one or more transactions
after the Closing Date aggregating more than 25% of Capitalization Value or (b)
if after giving effect to such Disposition, a Default or Event of Default would
exist, or (ii) the granting of a Lien on any Unencumbered Wholly-Owned Assets
or Unencumbered Land and Construction-In-Process, if after granting such Lien,
a Default or Event of Default would exist.

     Section 7.04 Distributions. In addition to the limitations under
Section 8.07, during the existence of any Event of Default, make, declare or
pay, directly or indirectly, any dividend or distribution to any of its equity
holders in an amount greater than the minimum dividend or distribution required
under the Code to maintain the real estate investment trust status of Borrower
under the Code, as evidenced by a detailed certificate of Borrower’s chief
financial officer or treasurer reasonably satisfactory in form and substance to
Administrative Agent; provided, however, that following acceleration of the
maturity of the Notes, Borrower shall not, directly or indirectly, make,
declare or pay any dividend or distribution to any of its equity holders.

ARTICLE VIII

FINANCIAL COVENANTS

So long as any of the Notes shall remain unpaid, or the Loan Commitments remain
in effect, or any other amount is owing by Borrower to any Bank Party under
this Agreement or under any other Loan Document, Borrower shall not permit or
suffer any or all of the following:

     Section 8.01 Consolidated Tangible Net Worth. At any time,
Consolidated Tangible Net Worth to be less than $2,000,000,000.

     Section 8.02 Relationship of Total Outstanding Indebtedness to
Capitalization Value. At any time, Total Outstanding Indebtedness to
exceed 60% of Capitalization Value.

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     Section 8.03 Relationship of Combined EBITDA to Interest Expense.
For any calendar quarter, the ratio of (1) Combined EBITDA to (2) Interest
Expense (each for the twelve (12)-month period ending with such quarter), to be
less than 2.25 to 1.00.

     Section 8.04 Relationship of Combined EBITDA to Combined Debt
Service. For any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Combined Debt Service (each for the twelve (12)-month period ending with such
quarter), to be less than 1.80 to 1.00.

     Section 8.05 Ratio of Unsecured Indebtedness to Unencumbered Asset
Value. At any time, the ratio of (1) Unsecured Indebtedness to (2)
Unencumbered Asset Value to exceed 60%.

     Section 8.06 Relationship of Unencumbered Combined EBITDA to Unsecured
Interest Expense. For any calendar quarter, the ratio of (1) Unencumbered
Combined EBITDA to (2) Unsecured Interest Expense (each for such calendar
quarter), to be less than 2.00 to 1.00.

     Section 8.07 Relationship of Dividends to Funds From Operations.
For any calendar year, dividends declared by Borrower on to exceed 95% of Funds
From Operations, each for such calendar year, or such greater amount as may be
required under the Code to maintain the real estate investment trust status of
Borrower under the Code, as evidenced by a detailed certificate of Borrower’s
chief financial officer or treasurer reasonably satisfactory in form and
substance to Administrative Agent.

     Section 8.08 Relationship of Secured Indebtedness to Capitalization
Value. At any time, Secured Indebtedness to exceed 40% of Capitalization
Value.

ARTICLE IX

EVENTS OF DEFAULT

     Section 9.01 Events of Default. Any of the following events shall
be an “Event of Default”:

       (1) If Borrower shall fail to pay the principal of any Notes as and
when due, and such failure to pay shall continue unremedied for five (5)
days after the due date of such amount; or fail to pay interest accruing
on any Notes as and when due, and such failure to pay shall continue
unremedied for five (5) days after written notice by Administrative Agent
of such failure to pay; or fail to make any payment required under
Section 6.10 as and when due; or fail to pay any fee or any other amount
due under this Agreement, any other Loan Document or the Supplemental Fee
Letter as and when due and such failure to pay shall continue unremedied
for two (2) Banking Days after written notice by Administrative Agent of
such failure to pay; or

       (2) If any representation or warranty made by Borrower in this
Agreement or in any other Loan Document or which is contained in any
certificate, document, opinion, financial or other statement furnished at
any time under or in connection with a Loan Document shall prove to have
been incorrect in any material respect on or as of the date made; or

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       (3) If Borrower shall fail (a) to perform or observe any term,
covenant or agreement contained in Article VII or Article VIII; or (b) to
perform or observe any term, covenant or agreement contained in this
Agreement (other than obligations specifically referred to elsewhere in
this Section 9.01) or any Loan Document, or any other document executed
by Borrower and delivered to Administrative Agent or the Banks in
connection with the transactions contemplated hereby and such failure
under this clause (b) shall remain unremedied for thirty (30) consecutive
calendar days after notice thereof (or such shorter cure period as may be
expressly prescribed in the applicable document); provided, however, that
if any such default under clause (b) above cannot by its nature be cured
within such thirty (30) day, or shorter, as the case may be, grace period
and so long as Borrower shall have commenced cure within such thirty (30)
day, or shorter, as the case may be, grace period and shall, at all times
thereafter, diligently prosecute the same to completion, Borrower shall
have an additional period, not to exceed sixty (60) days, to cure such
default; in no event, however, is the foregoing intended to effect an
extension of the Maturity Date; or

       (4) If Borrower shall fail (a) to pay any Recourse Debt (other than
the payment obligations described in paragraph (1) of this Section) in
any amount, or any Debt (other than Recourse Debt) in an amount equal to
or greater than $50,000,000, in any such case when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or
otherwise) after the expiration of any applicable grace period, or (b) to
perform or observe any material term, covenant, or condition under any
agreement or instrument relating to any such Debt, when required to be
performed or observed, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, after the
giving of notice or the lapse of time, or both (other than in cases
where, in the judgment of the Majority Banks, meaningful discussions
likely to result in (i) a waiver or cure of the failure to perform or
observe, or (ii) otherwise averting such acceleration are in progress
between Borrower and the obligee of such Debt), the maturity of such
Debt, or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled or otherwise
required prepayment), prior to the stated maturity thereof; or

       (5) If Borrower, or any Affiliate of Borrower to which $50,000,000
or more of Capitalization Value is attributable, shall (a) generally not,
or be unable to, or shall admit in writing its inability to, pay its
debts as such debts become due; or (b) make an assignment for the benefit
of creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its
assets; or (c) commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation Law of any jurisdiction, whether now or hereafter in effect;
or (d) have had any such petition or application filed or any such
proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is entered, or
which petition, application or proceeding remains undismissed or unstayed
for a period of sixty (60) days or more; or (e) be the subject of any
proceeding under which all or a substantial part of its assets may be
subject to seizure, forfeiture or divestiture; or (f) by any act or
omission indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any
substantial part of its property; or (g) suffer any such custodianship,

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receivership or trusteeship for all or any substantial part of its
property, to continue undischarged for a period of sixty (60) days or
more; or

       (6) If one or more judgments, decrees or orders for the payment of
money in an amount in excess of 5% of Consolidated Tangible Net Worth
(excluding any such judgments, decrees or orders which are fully covered
by insurance) in the aggregate shall be rendered against Borrower or any
of its Material Affiliates, and any such judgments, decrees or orders
shall continue unsatisfied and in effect for a period of thirty (30)
consecutive days without being vacated, discharged, satisfied or stayed
or bonded pending appeal; or

       (7) If any of the following events shall occur or exist with respect
to Borrower or any ERISA Affiliate: (a) any Prohibited Transaction
involving any Plan; (b) any Reportable Event with respect to any Plan;
(c) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (d) any event or
circumstance which would constitute grounds for the termination of, or
for the appointment of a trustee to administer, any Plan under Section
4042 of ERISA, or the institution by the PBGC of proceedings for any such
termination or appointment under Section 4042 of ERISA; or (e) complete
or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of
any Multiemployer Plan; and in each case above, if such event or
conditions, if any, could in the reasonable opinion of any Bank subject
Borrower to any tax, penalty, or other liability to a Plan, Multiemployer
Plan, the PBGC or otherwise (or any combination thereof) which in the
aggregate exceeds or is likely to exceed $50,000; or

       (8) If at any time Borrower is not a qualified real estate
investment trust under Sections 856 through 860 of the Code or is not a
publicly traded company listed on the New York Stock Exchange; or

       (9) If at any time any portion of Borrower’s assets constitute plan
assets for ERISA purposes (within the meaning of C.F.R. §2510.3-101); or

       (10) If, in the reasonable judgment of all of the Banks (and the
basis for such determination is provided to Borrower in writing in
reasonable detail), there shall occur a Material Adverse Change; or

       (11) If, during any period of up to twelve (12) consecutive months
commencing on or after the Closing Date, individuals who were directors
of Borrower at the beginning of such period (the “Continuing Directors”),
plus any new directors whose election or appointment was approved by a
majority of the Continuing Directors then in office, shall cease for any
reason to constitute a majority of the Board of Directors of Borrower; or

       (12) If, through any transaction or series of related transactions,
any Person (including Affiliates of such Person) shall acquire beneficial
ownership, directly or indirectly, of securities of Borrower (or of
securities convertible into securities of Borrower) representing 25% or
more of the combined voting power of all securities of Borrower entitled
to vote in the election of directors.

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     Section 9.02 Remedies. If any Event of Default shall occur and be
continuing, Administrative Agent shall, upon request of the Majority Banks, by
notice to Borrower, (1) declare the outstanding balance of the Notes, all
interest thereon, and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon such balance, all such interest, and all
such amounts due under this Agreement and under any other Loan Document shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by
Borrower; and/or (2) exercise any remedies provided in any of the Loan
Documents or by law. Notwithstanding the foregoing, if an Event of Default
under Section 9.01(10) shall occur and be continuing, Administrative Agent
shall not be entitled to exercise the foregoing remedies until (1) it has
received a written notice from all of the Banks (the “Unanimous Bank Notices”)
(i) requesting Administrative Agent exercise such remedies and (ii) indicating
each Bank’s conclusion in its reasonable judgment that a Material Adverse
Change has occurred and (2) Administrative Agent has provided notice to
Borrower, together with copies of all of the Unanimous Bank Notices.

ARTICLE X

ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS

     Section 10.01 Appointment, Powers and Immunities of Administrative
Agent. Each Bank hereby irrevocably appoints and authorizes Administrative
Agent to act as its agent hereunder and under any other Loan Document with such
powers as are specifically delegated to Administrative Agent by the terms of
this Agreement and any other Loan Document, together with such other powers as
are reasonably incidental thereto. Administrative Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement and any
other Loan Document or required by Law, and shall not by reason of this
Agreement be a fiduciary or trustee for any Bank except to the extent that
Administrative Agent acts as an agent with respect to the receipt or payment of
funds (nor shall Administrative Agent have any fiduciary duty to Borrower nor
shall any Bank have any fiduciary duty to Borrower or to any other Bank). No
implied covenants, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against Administrative Agent.
Neither Administrative Agent nor any of its directors, officers, employees,
attorneys-in-fact or affiliates shall be responsible to the Banks for any
recitals, statements, representations or warranties made by Borrower or any
officer, partner or official of Borrower or any other Person contained in this
Agreement or any other Loan Document, or in any certificate or other document
or instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or any other document or instrument
referred to or provided for herein or therein, for the perfection or priority
of any Lien securing the Obligations or for any failure by Borrower to perform
any of its obligations hereunder or thereunder. Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible, except as to
money or securities received by it or its authorized agents, for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither Administrative Agent nor any of its directors,
officers, employees, attorneys-in-fact, agents or affiliates shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith, except
for its or their own gross negligence or willful misconduct. Borrower

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shall pay any fee agreed to by Borrower and Administrative Agent with
respect to Administrative Agent’s services hereunder.

     Section 10.02 Reliance by Administrative Agent. Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by
Administrative Agent. Administrative Agent may deem and treat each Bank as the
holder of the Loan made by it for all purposes hereof and shall not be required
to deal with any Person who has acquired a Participation in any Loan or
Participation from a Bank. As to any matters not expressly provided for by
this Agreement or any other Loan Document, Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Majority Banks, Super-Majority Banks
or all Banks, as required by this Agreement, and such instructions of the
Majority Banks, Super-Majority Banks or all Banks, as the case may be, and any
action taken or failure to act pursuant thereto, shall be binding on all of the
Banks and any other holder of all or any portion of any Loan or Participation.

     Section 10.03 Defaults. Administrative Agent shall not be deemed
to have knowledge of the occurrence of a Default or Event of Default unless
Administrative Agent has received notice from a Bank or Borrower specifying
such Default or Event of Default and stating that such notice is a “Notice of
Default.” In the event that Administrative Agent receives such a notice of the
occurrence of a Default or Event of Default, Administrative Agent shall give
prompt notice thereof to the Banks. Administrative Agent, following
consultation with the Banks, shall (subject to Section 10.07 and Section 12.02)
take such action with respect to such Default or Event of Default which is
continuing as shall be directed by the Majority Banks; provided that, unless
and until Administrative Agent shall have received such directions,
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Banks; and provided further that Administrative Agent
shall not send a notice of Default or acceleration to Borrower without the
approval of the Majority Banks. In no event shall Administrative Agent be
required to take any such action which it determines to be contrary to Law or
to the Loan Documents. Each of the Banks acknowledges and agrees that no
individual Bank may separately enforce or exercise any of the provisions of any
of the Loan Documents, including, without limitation, the Notes, other than
through Administrative Agent.

     Section 10.04 Rights of Administrative Agent as a Bank. With
respect to its Loan Commitment and the Loan provided by it, Administrative
Agent in its capacity as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not
acting as Administrative Agent, and the term “Bank” or “Banks” shall, unless
the context otherwise indicates, include Administrative Agent in its capacity
as a Bank. Administrative Agent and its Affiliates may (without having to
account therefor to any Bank) accept deposits from, lend money to (on a secured
or unsecured basis), and generally engage in any kind of banking, trust or
other business with Borrower (and any Affiliates of Borrower) as if it were not
acting as Administrative Agent.

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     Section 10.05 Indemnification of Administrative Agent. Each Bank
agrees to indemnify Administrative Agent (to the extent not reimbursed under
Section 12.04 or under the applicable provisions of any other Loan Document,
but without limiting the obligations of Borrower under Section 12.04 or such
provisions), for its Pro Rata Share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in any way relating to or
arising out of this Agreement, any other Loan Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
or thereby (including, without limitation, the costs and expenses which
Borrower is obligated to pay under Section 12.04) or under the applicable
provisions of any other Loan Document or the enforcement of any of the terms
hereof or thereof or of any such other documents or instruments; provided that
no Bank shall be liable for (1) any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified,
(2) any loss of principal or interest with respect to Administrative Agent’s
Loan or (3) any loss suffered by Administrative Agent in connection with a swap
or other interest rate hedging arrangement entered into with Borrower.

     Section 10.06 Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrower and the decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any other Loan Document. Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any other Loan Document or any
other document referred to or provided for herein or therein or to inspect the
properties or books of Borrower. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of Borrower (or any
Affiliate of Borrower) which may come into the possession of Administrative
Agent or any of its Affiliates. Administrative Agent shall not be required to
file this Agreement, any other Loan Document or any document or instrument
referred to herein or therein, for record or give notice of this Agreement, any
other Loan Document or any document or instrument referred to herein or
therein, to anyone.

     Section 10.07 Failure of Administrative Agent to Act. Except for
action expressly required of Administrative Agent hereunder, Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Banks under Section
10.05 in respect of any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. If any indemnity
furnished by the Banks to Administrative Agent for any purpose shall, in the
reasonable opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the action indemnified against until such additional indemnity
is furnished.

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     Section 10.08 Resignation or Removal of Administrative Agent.
Administrative Agent hereby agrees not to unilaterally resign except in the
event it becomes an Affected Bank and is removed or replaced as a Bank pursuant
to Section 3.07, in which event it shall have the right to resign. Fleet
agrees that it may be replaced as Administrative Agent by the Majority Banks if
its Loan Commitment is reduced to $25,000,000 or less through assignments to
Assignees. In addition, Administrative Agent may be removed at any time with
cause by the Super-Majority Banks. In the case of any removal of
Administrative Agent, Borrower and the Banks shall be promptly notified
thereof. Upon any such resignation or removal of Administrative Agent, the
Super-Majority Banks shall have the right to appoint a successor Administrative
Agent, which successor Administrative Agent, so long as it is reasonably
acceptable to the Super-Majority Banks, shall be that Bank then having the
greatest Loan Commitment; if two (2) or more Banks have an equal greatest Loan
Commitment, the Super-Majority Banks shall select between or among them. If no
successor Administrative Agent shall have been so appointed by the
Super-Majority Banks and shall have accepted such appointment within thirty
(30) days after the Super-Majority Banks’ removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be one of the
Banks. The Super-Majority Banks or the retiring Administrative Agent, as the
case may be, shall upon the appointment of a successor Administrative Agent
promptly so notify Borrower and the other Banks. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent’s removal hereunder as Administrative Agent, the
provisions of this Article X shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Administrative Agent.

     Section 10.09 Amendments Concerning Agency Function.
Notwithstanding anything to the contrary contained herein, Administrative Agent
shall not be bound by any waiver, amendment, supplement or modification hereof
or of any other Loan Document which affects its duties, rights, and/or function
hereunder or thereunder unless it shall have given its prior written consent
thereto.

     Section 10.10 Liability of Administrative Agent. Administrative
Agent shall not have any liabilities or responsibilities to Borrower on account
of the failure of any Bank to perform its obligations hereunder or to any Bank
on account of the failure of Borrower to perform its obligations hereunder or
under any other Loan Document.

     Section 10.11 Transfer of Agency Function. Without the consent of
Borrower or any Bank, Administrative Agent may at any time or from time to time
transfer its functions as Administrative Agent hereunder to any of its offices
wherever located in the United States, provided that Administrative Agent shall
promptly notify Borrower and the Banks thereof.

     Section 10.12 Non-Receipt of Funds by Administrative Agent. (a)
Unless Administrative Agent shall have received notice from a Bank or Borrower
(either one as appropriate being the “Payor”) prior to the date on which such
Bank is to make payment hereunder to Administrative Agent of the proceeds of a
Loan or Borrower is to make payment to Administrative Agent, as the case may be
(either such payment being a “Required Payment”), which notice shall be
effective upon receipt, that the Payor will not make the Required Payment in

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full to Administrative Agent, Administrative Agent may assume that the
Required Payment has been made in full to Administrative Agent on such date,
and Administrative Agent in its sole discretion may, but shall not be obligated
to, in reliance upon such assumption, make the amount thereof available to the
intended recipient on such date. If and to the extent the Payor shall not have
in fact so made the Required Payment in full to Administrative Agent, the
recipient of such payment shall repay to Administrative Agent forthwith on
demand such amount made available to it together with interest thereon, for
each day from the date such amount was so made available by Administrative
Agent until the date Administrative Agent recovers such amount, at the
customary rate set by Administrative Agent for the correction of errors among
Banks for three (3) Banking Days and thereafter at the Base Rate.

     (a) If, after Administrative Agent has paid each Bank’s share of any
payment received or applied by Administrative Agent in respect of the Loan,
that payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency Law,
sharing of payments clause of any loan agreement or otherwise, such Bank shall,
at Administrative Agent’s request, promptly return its share of such payment or
application to Administrative Agent, together with such Bank’s proportionate
share of any interest or other amount required to be paid by Administrative
Agent with respect to such payment or application. In addition, if a court of
competent jurisdiction shall adjudge that any amount received and distributed
by Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to Administrative Agent
its share of the amount so adjudged to be repaid or shall pay over to the same
in such manner and to such Persons as shall be determined by such court.

     Section 10.13 Withholding Taxes. Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to Administrative Agent such forms,
certifications, statements and other documents as Administrative Agent may
request from time to time to evidence such Bank’s exemption from the
withholding of any tax imposed by any jurisdiction or to enable Administrative
Agent or Borrower to comply with any applicable Laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the Laws of the United States of America or any
state thereof, such Bank will furnish to Administrative Agent a United States
Internal Revenue Service Form W-8ECI in respect of all payments to be made to
such Bank by Borrower or Administrative Agent under this Agreement or any other
Loan Document or a United States Internal Revenue Service Form W-8BEN
establishing such Bank’s complete exemption from United States withholding tax
in respect of payments to be made to such Bank by Borrower or Administrative
Agent under this Agreement or any other Loan Document, or such other forms,
certifications, statements or documents, duly executed and completed by such
Bank as evidence of such Bank’s exemption from the withholding of U.S. tax with
respect thereto. Administrative Agent shall not be obligated to make any
payments hereunder to such Bank in respect of any Loan or Participation or such
Bank’s Loan Commitment or obligation to purchase Participations until such Bank
shall have furnished to Administrative Agent the requested form, certification,
statement or document.

     Section 10.14 Minimum Commitment by Syndication Agent. In the
event JPMC’s individual Loan Commitment is reduced to $25,000,000 or less
through assignments, Borrower may replace JPMC as Syndication Agent with a
lending institution selected by Borrower. In

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making such selection, Borrower will consider in good faith Fleet, Morgan
Stanley Bank, Wells Fargo Bank, National Association and Deutsche Bank Trust
Company Americas.

     Section 10.15 Pro Rata Treatment. Except to the extent otherwise
provided, (1) each advance of proceeds of the Ratable Loans shall be made by
the Banks; (2) each reduction of the amount of the Total Loan Commitment under
Section 2.10 shall be applied to the Loan Commitments of the Banks; and (3)
each payment of the fee accruing under paragraph (b) of Section 2.07 and clause
(1) of Section 2.16(f) shall be made for the account of the Banks, ratably
according to the amounts of their respective Loan Commitments. Except as
otherwise expressly provided in this Agreement, each payment in respect of
principal or interest under the Loans shall be applied to such obligations
owing to the Banks pro rata according to the respective amounts then due and
owing to the Banks.

     Section 10.16 Sharing of Payments Among Banks. If a Bank shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker’s lien, counterclaim, or by any
other means (including direct payment), and such payment results in such Bank
receiving a greater payment than it would have been entitled to had such
payment been paid directly to Administrative Agent for disbursement to the
Banks, then such Bank shall promptly purchase for cash from the other Banks
Participations in the Loans made by the other Banks in such amounts, and make
such other adjustments from time to time as shall be equitable to the end that
all the Banks shall share ratably the benefit of such payment. To such end the
Banks shall make appropriate adjustments among themselves (by the resale of
Participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. Borrower agrees that any Bank so purchasing a
Participation in the Loans made by other Banks may exercise all rights of
setoff, banker’s lien, counterclaim or similar rights with respect to such
Participation. Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
of Borrower.

     Section 10.17 Possession of Documents. Each Bank shall keep
possession of its own Ratable Loan Note and the Swing Lender shall keep
possession of its Swing Loan Note. Administrative Agent shall hold all the
other Loan Documents and related documents in its possession and maintain
separate records and accounts with respect thereto, and shall permit the Banks
and their representatives access at all reasonable times to inspect such Loan
Documents, related documents, records and accounts.

ARTICLE XI

NATURE OF OBLIGATIONS

     Section 11.01 Absolute and Unconditional Obligations. Borrower
acknowledges and agrees that its obligations and liabilities under this
Agreement and under the other Loan Documents shall be absolute and
unconditional irrespective of (1) any lack of validity or enforceability of any
of the Obligations, any Loan Documents, or any agreement or instrument relating
thereto; (2) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Obligations, or any other amendment
or waiver of or consent to any departure from any Loan Documents or any other
documents or instruments executed in connection with or related to the

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Obligations; (3) any exchange or release of any collateral, if any, or of
any other Person from all or any of the Obligations; or (4) any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, Borrower or any other Person in respect of the Obligations.

     The obligations and liabilities of Borrower under this Agreement and other
Loan Documents shall not be conditioned or contingent upon the pursuit by any
Bank or any other Person at any time of any right or remedy against Borrower or
any other Person which may be or become liable in respect of all or any part of
the Obligations or against any collateral or security or guarantee therefor or
right of setoff with respect thereto.

     Section 11.02 Non-Recourse to Borrower’s Principals.
Notwithstanding anything to the contrary contained herein, in any of the other
Loan Documents, or in any other instruments, certificates, documents or
agreements executed in connection with the Loans (all of the foregoing, for
purposes of this Section, hereinafter referred to, individually and
collectively, as the “Relevant Documents”), no recourse under or upon any
Obligation, representation, warranty, promise or other matter whatsoever shall
be had against any of Borrower’s Principals and each Bank expressly waives and
releases, on behalf of itself and its successors and assigns, all right to
assert any liability whatsoever under or with respect to the Relevant Documents
against, or to satisfy any claim or obligation arising thereunder against, any
of Borrower’s Principals or out of any assets of Borrower’s Principals,
provided, however, that nothing in this Section shall be deemed to (1) release
Borrower from any personal liability pursuant to, or from any of its respective
obligations under, the Relevant Documents, or from personal liability for its
fraudulent actions or fraudulent omissions; (2) release any of Borrower’s
Principals from personal liability for its or his own fraudulent actions or
fraudulent omissions; (3) constitute a waiver of any obligation evidenced or
secured by, or contained in, the Relevant Documents or affect in any way the
validity or enforceability of the Relevant Documents; or (4) limit the right of
Administrative Agent and/or the Banks to proceed against or realize upon any
collateral hereafter given for the Loans or any and all of the assets of
Borrower (notwithstanding the fact that any or all of Borrower’s Principals
have an ownership interest in Borrower and, thereby, an interest in the assets
of Borrower) or to name Borrower (or, to the extent that the same are required
by applicable Law or are determined by a court to be necessary parties in
connection with an action or suit against Borrower or any collateral hereafter
given for the Loans, any of Borrower’s Principals) as a party defendant in, and
to enforce against any collateral hereafter given for the Loans and/or assets
of Borrower any judgment obtained by Administrative Agent and/or the Banks with
respect to, any action or suit under the Relevant Documents so long as no
judgment shall be taken (except to the extent taking a judgment is required by
applicable Law or determined by a court to be necessary to preserve
Administrative Agent’s and/or Banks’ rights against any collateral hereafter
given for the Loans or Borrower, but not otherwise) or shall be enforced
against Borrower’s Principals or their assets.

ARTICLE XII

MISCELLANEOUS

     Section 12.01 Binding Effect of Request for Advance. Borrower
agrees that, by its acceptance of any advance of proceeds of the Loans under
this Agreement, it shall be bound in all respects by the request for advance
submitted on its behalf in connection therewith with the same

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force and effect as if Borrower had itself executed and submitted the
request for advance and whether or not the request for advance is executed
and/or submitted by an authorized person.

     Section 12.02 Amendments and Waivers. No amendment or waiver of
any provision of this Agreement or any other Loan Document nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Banks and, solely for
purposes of its acknowledgment thereof, Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given, provided, however, that no amendment, waiver
or consent shall, unless in writing and signed or consented to by (A) the
Super-Majority Banks modify any provision of Section 7.02, Article VIII or
clause (11) or (12) of Section 9.01, or any other provision requiring the
consent of the Super-Majority Banks; and (B) all the Banks do any of the
following: (1) reduce the principal of, or interest on, the Notes or any fees
due hereunder or any other amount due hereunder or under any Loan Document; (2)
except as provided in Section 2.18, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees due hereunder or under any
Loan Document; (3) change the definition of “Majority Banks” or “Super-Majority
Banks”; (4) amend this Section or any other provision requiring the consent of
all the Banks; or (5) waive any default under paragraph (5) of Section 9.01.
Any advance of proceeds of the Loans made, or any Letter of Credit issued,
prior to or without the fulfillment by Borrower of all of the conditions
precedent thereto, whether or not known to Administrative Agent and the Banks,
shall not constitute a waiver of the requirement that all conditions, including
the non-performed conditions, shall be required with respect to all future
advances and issuances of Letters of Credit. No failure on the part of
Administrative Agent or any Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. 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 thing as to which such determination, approval,
consent or disapproval is requested and (iii) shall include Administrative
Agent’s recommended course of action or determination in respect thereof. Each
Bank shall reply promptly, but in any event within ten (10) Banking Days (or
five (5) Banking Days with respect to any decision to accelerate or stop
acceleration of the Loan) after receipt of the request therefor by
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 (together with a written explanation of
the reasons behind such objection) within the Bank Reply Period, such Bank
shall be deemed to have approved or consented to such recommendation or
determination.

     Section 12.03 Usury. Anything herein to the contrary
notwithstanding, the obligations of Borrower under this Agreement and the Notes
shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
Law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.

     Section 12.04 Expenses; Indemnification. Borrower agrees (i) to
reimburse Administrative Agent on demand for all costs, expenses, and charges
(including, without limitation, all reasonable fees and charges of engineers,
appraisers and legal counsel) incurred by it in

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connection with the Loans and the preparation, execution, delivery and
administration of the Loan Documents and any amendment or waiver with respect
thereto, and (ii) to reimburse each of the Banks for reasonable legal costs,
expenses and charges incurred by each of the Banks in connection with the
performance or enforcement of this Agreement, the Notes, or any other Loan
Documents; provided, however, that Borrower is not responsible for costs,
expenses and charges incurred by the Bank Parties in connection with the
administration or syndication of the Loans (other than the fees required by the
Supplemental Fee Letter). Borrower agrees to indemnify Administrative Agent
and each Bank and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them arising out of or by reason
of (x) any claims by brokers due to acts or omissions by Borrower, (y) this
Agreement or the transactions contemplated hereby or (z) any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or proposed use by
Borrower of the proceeds of the Loans, including without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation or litigation or other proceedings (but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified).

     The obligations of Borrower under this Section and under Article III shall
survive the repayment of all amounts due under or in connection with any of the
Loan Documents and the termination of the Loans, provided, however, that in the
case of Article III, such obligations shall survive only for a period of ninety
(90) days after such repayment and termination.

     Section 12.05 Assignment; Participation. This Agreement shall be
binding upon, and shall inure to the benefit of, Borrower, Administrative
Agent, the Banks and their respective successors and permitted assigns.
Borrower may not assign or transfer its rights or obligations hereunder.

     Any Bank may at any time grant to one or more banks or other institutions
(each a “Participant”) participating interests in its Loan (each a
"Participation”). In the event of any such grant by a Bank of a Participation
to a Participant, whether or not Borrower or Administrative Agent was given
notice, such Bank shall remain responsible for the performance of its
obligations hereunder, and Borrower and Administrative Agent shall continue to
deal solely and directly with such Bank in connection with such Bank’s rights
and obligations hereunder. 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 Borrower hereunder
and under any other Loan Document including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this
Agreement or any other Loan Document; 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 (B)(1) through (B)(5)
of Section 12.02 without the consent of the Participant. Any Participant
hereunder shall have the same benefits as any Bank with respect to the yield
protection and increased cost provisions of Article III.

     Any Bank may at any time assign to any bank or other institution with the
consent of Administrative Agent and the Issuing Bank and, provided there exists
no Event of Default, Borrower, which consents shall not be unreasonably
withheld or delayed (such assignee, an “Assignee”), all, or a proportionate
part of all, of its rights and obligations under this Agreement

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and its Note, and such Assignee shall assume rights and obligations, pursuant
to an Assignment and Acceptance executed by such Assignee and the assigning
Bank, provided that, in each case, after giving effect to such assignment the
Assignee’s Loan Commitment, and, in the case of a partial assignment, the
assigning Bank’s Loan Commitment, each will be equal to or greater than
$5,000,000, provided, further, however, that the assigning Bank shall not be
required to maintain a Loan Commitment in the minimum amount aforesaid in the
event it assigns all of its rights and obligations under this Agreement and its
Note. Notwithstanding the provisions of the immediately preceding sentence,
the consent of Borrower shall not be required in the case of assignments by any
Bank provided that the Assignee thereunder (or a guarantor of such Assignee’s
obligations under this Agreement) has a credit rating of AA (or its equivalent)
or higher from a nationally recognized rating agency. Upon (i) execution and
delivery of such instrument, (ii) payment by such Assignee to the Bank of an
amount equal to the purchase price agreed between the Bank and such Assignee
and (iii) payment by such Assignee to Administrative Agent of a fee, for
Administrative Agent’s own account, in the amount of $3,500, such Assignee
shall be a Bank Party to this Agreement and shall have all the rights and
obligations of a Bank as set forth in such Assignment and Acceptance, and the
assigning Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this paragraph,
substitute Ratable Loan Notes (and, if applicable, Swing Loan Note) shall be
issued to the assigning Bank and Assignee by Borrower, in exchange for the
return of the original Ratable Loan Note (and, if applicable, Swing Loan Note).
The obligations evidenced by such substitute notes shall constitute
“Obligations” for all purposes of this Agreement and the other Loan Documents.
In connection with Borrower’s execution of substitute notes as aforesaid,
Borrower shall deliver to Administrative Agent evidence, satisfactory to
Administrative Agent, of all requisite corporate action to authorize Borrower’s
execution and delivery of the substitute notes and any related documents. If
the Assignee is not incorporated under the Laws of the United States of America
or a state thereof, it shall, prior to the first date on which interest or fees
are payable hereunder for its account, deliver to Borrower and Administrative
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 10.13. Each Assignee
shall be deemed to have made the representations contained in, and shall be
bound by the provisions of, Section 10.13. Notwithstanding the foregoing, any
Designated Lender may assign at any time to its Designating Lender, without the
consents required by or other limitations set forth in the first sentence of
this paragraph, any or all of the Loans it may have funded hereunder and
pursuant to its Designation Agreement.

     Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.

     Borrower recognizes that in connection with a Bank’s selling of
Participations or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower
or the Loans may be exhibited to and retained by any such Participant or
assignee or prospective Participant or assignee. In connection with a Bank’s
delivery of any financial statements and appraisals to any such Participant or
assignee or prospective Participant or assignee, such Bank shall also indicate
that the same are delivered on a confidential basis. Borrower agrees to
provide all assistance reasonably requested by a Bank to enable such Bank to
sell Participations or make assignments of its Loan as permitted by this
Section. Each Bank agrees

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to provide Borrower with notice of all Participations sold by such Bank to
other than its Affiliates. Any Bank or Participant may pledge its Loans or
Participations as collateral in accordance with applicable law.

     Section 12.06 Documentation Satisfactory. All documentation
required from or to be submitted on behalf of Borrower in connection with this
Agreement and the documents relating hereto shall be subject to the prior
approval of, and be satisfactory in form and substance to, Administrative
Agent, its counsel and, where specifically provided herein, the Banks. In
addition, the persons or parties responsible for the execution and delivery of,
and signatories to, all of such documentation, shall be acceptable to, and
subject to the approval of, Administrative Agent and its counsel and the Banks.

     Section 12.07 Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to Administrative
Agent by telephone, confirmed by writing, and to the Banks and to Borrower by
ordinary mail or overnight courier, receipt confirmed, addressed to such party
at its address on the signature page of this Agreement. Notices shall be
effective (1) if by telephone, at the time of such telephone conversation, (2)
if given by mail, three (3) days after mailing; and (3) if given by overnight
courier, upon receipt.

     Section 12.08 Setoff. Borrower agrees that, in addition to (and
without limitation of) any right of setoff, bankers’ lien or counterclaim a
Bank may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of Borrower at any of such Bank’s offices, in Dollars or in any
other currency, against any amount payable by Borrower to such Bank under this
Agreement or such Bank’s Note, or any other Loan Document which is not paid
when due (regardless of whether such balances are then due to Borrower), in
which case it shall promptly notify Borrower and Administrative Agent thereof;
provided that such Bank’s failure to give such notice shall not affect the
validity thereof. Payments by Borrower hereunder or under the other Loan
Documents shall be made without setoff or counterclaim.

     Section 12.09 Table of Contents; Headings. Any table of contents
and the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.

     Section 12.10 Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.

     Section 12.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.

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     Section 12.12 Integration. The Loan Documents and Supplemental Fee
Letter set forth the entire agreement among the parties hereto relating to the
transactions contemplated thereby and supersede any prior oral or written
statements or agreements with respect to such transactions.

     Section 12.13 Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the Laws of the State of New
York (without giving effect to New York’s principles of conflicts of Laws).

     Section 12.14 Waivers. In connection with the obligations and
liabilities as aforesaid, Borrower hereby waives (1) promptness and diligence;
(2) notice of any actions taken by any Bank Party under this Agreement, any
other Loan Document or any other agreement or instrument relating thereto
except to the extent otherwise provided herein; (3) all other notices, demands
and protests, and all other formalities of every kind in connection with the
enforcement of the Obligations, the omission of or delay in which, but for the
provisions of this Section, might constitute grounds for relieving Borrower of
its obligations hereunder; (4) any requirement that any Bank Party protect,
secure, perfect or insure any Lien on any collateral or exhaust any right or
take any action against Borrower or any other Person or any collateral; (5) any
right or claim of right to cause a marshalling of the assets of Borrower; and
(6) all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code) or otherwise by reason of payment by Borrower,
either jointly or severally, pursuant to this Agreement or other Loan
Documents.

     Section 12.15 Jurisdiction; Immunities. Borrower, Administrative
Agent and each Bank hereby irrevocably submit to the jurisdiction of any New
York State or United States Federal court sitting in New York City over any
action or proceeding arising out of or relating to this Agreement, the Notes or
any other Loan Document. Borrower, Administrative Agent, and each Bank
irrevocably agree that all claims in respect of such action or proceeding may
be heard and determined in such New York State or United States Federal court.
Borrower, Administrative Agent, and each Bank irrevocably consent to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to Borrower, Administrative Agent or each Bank, as
the case may be, at the addresses specified herein. Borrower, Administrative
Agent and each Bank agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Borrower,
Administrative Agent and each Bank further waive any objection to venue in the
State of New York and any objection to an action or proceeding in the State of
New York on the basis of forum non conveniens. Borrower, Administrative Agent
and each Bank agree that any action or proceeding brought against Borrower,
Administrative Agent or any Bank, as the case may be, shall be brought only in
a New York State court sitting in New York City or a United States Federal
court sitting in New York City, to the extent permitted or not expressly
prohibited by applicable Law.

     Nothing in this Section shall affect the right of Borrower, Administrative
Agent or any Bank to serve legal process in any other manner permitted by Law.

     To the extent that Borrower, Administrative Agent or any Bank have or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or

-61-

 

otherwise) with respect to itself or its property, Borrower, Administrative
Agent and each Bank hereby irrevocably waive such immunity in respect of its
obligations under this Agreement, the Notes and any other Loan Document.
BORROWER, ADMINISTRATIVE AGENT AND EACH BANK WAIVE ANY RIGHT EACH SUCH PARTY
MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
BROUGHT WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE LOANS.

     Section 12.16 Designated Lender. Any Bank (other than a Bank who
is such solely because it is a Designated Lender) (each, a “Designating
Lender”) may at any time designate one (1) Designated Lender to fund Bid Rate
Loans on behalf of such Designating Lender subject to the terms of this Section
and the provisions in Section 12.05 shall not apply to such designation. No
Bank may designate more than one (1) Designated Lender. The parties to each
such designation shall execute and deliver to Administrative Agent for its
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, Administrative Agent will accept
such Designation Agreement and give prompt notice thereto to Borrower,
whereupon, (i) from and after the “Effective Date” specified in the Designation
Agreement, the Designated Lender shall become a party to this Agreement with a
right to make Bid Rate Loans on behalf of its Designating Lender pursuant to
Section 2.02 after Borrower has accepted the Bid Rate Quote of the Designating
Lender and (ii) 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
Borrower, Administrative Agent and the Banks for each and every of the
obligations of the Designating Lender and its related Designated Lender with
respect to this Agreement, including, without limitation, any indemnification
obligations under Section 10.05. Each Designating Lender shall serve as the
administrative agent of its 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 and consents under or relating to this
Agreement and the other Loan Documents. Any such notice, communication, vote,
approval, waiver or consent 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, but shall be binding on the Designated
Lender to the same extent as if actually signed by the Designated Lender.
Borrower, 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
Designating Lender which originally designated such Designated Lender.

     Section 12.17 No Bankruptcy Proceedings. Each of Borrower, the
Banks and 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,
for one (1) year and one (1) day after the payment in full of the latest
maturing commercial paper note issued by such Designated Lender.

-62-

 

     Section 12.18 USA Patriot Act. Each Bank hereby notifies 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 Borrower, which
information includes the name and address of Borrower and other information
that will allow such Bank to identify Borrower in accordance with the Act.

     Section 12.19 Transitional Arrangements.

     (a) 2001 Credit Agreement Superseded. This Agreement shall supersede the
2001 Credit Agreement in its entirety, except as provided in this Section
12.19. On the Closing Date, the rights and obligations of the parties under
the 2001 Credit Agreement and the “Notes” defined therein shall be subsumed
within and be governed by this Agreement and the Notes; provided however, that
any of the “Obligations” (as defined in the 2001 Credit Agreement) outstanding
under the 2001 Credit Agreement shall, for purposes of this Agreement, be
Obligations hereunder. The Banks’ interests in such Obligations, and
participations in such Letters of Credit shall be reallocated on the Closing
Date in accordance with each Bank’s applicable Pro Rata Share.

     (b) Return and Cancellation of Notes. Upon its receipt of the Notes to be
delivered hereunder on the Closing Date, each Bank will promptly return to
Borrower, marked “Cancelled” or “Replaced”, the notes of Borrower held by such
Bank pursuant to the 2001 Credit Agreement.

     (c) Interest and Fees Under Original Agreement. All interest and all
commitment, facility and other fees and expenses owing or accruing under or in
respect of the 2001 Credit Agreement shall be calculated as of the Closing Date
(prorated in the case of any fractional periods), and shall be paid on the
Closing Date in accordance with the method specified in the 2001 Credit
Agreement as if such agreement were still in effect.

-63-

 

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

AVALONBAY COMMUNITIES, INC.

By: /s/ Joanne M. Lockridge 

     Name: Joanne M. Lockridge

     Title: Senior Vice President - Finance

Address for Notices:

220 Elm Street

Suite 200

New Canaan, CT 06840

Attention: Joanne M. Lockridge

Telephone: (203) 801-3331

Telecopy: (203) 801-3335

Address of principal place of business:

2900 Eisenhower Ave.

Suite 300

Alexandria, VA 22314

Taxpayer Identification Number: 77-0404318

 

 

FLEET NATIONAL BANK (as Bank and

Administrative Agent)

By: /s/ Lisa Sanders 

     Name: Lisa Sanders

     Title: Senior Vice President

Address for Notices and

Applicable Lending Office:

Fleet National Bank

One Landmark Square

Stamford, CT 06904

Attention: Lisa Sanders

Telephone: (203) 973-1984

Telecopy: (301) 438-7696

 

 

JPMORGAN CHASE BANK (as Bank

and Syndication Agent)

By: /s/ Marc E. Costantino 

     Name: Marc E. Costantino

     Title: Vice President

Address for Notices and

Applicable Lending Office:

JPMorgan Chase Bank

270 Park Avenue, 4th Floor

New York, NY 10017

Attention: Marc Costantino

Telephone: (212) 270-9554

Telecopy: (212) 270-0213

 

 

WACHOVIA BANK, NATIONAL

ASSOCIATION (as Bank and

Syndication Agent)

By:  /s/ David Hoagland 

     Name: David Hoagland

     Title: Director

Address for Notices and

Applicable Lending Office:

Wachovia Bank, National Association

301 South College Street

Charlotte NC 28288-0172

Attention: David Hoagland

Telephone: (704) 374-4809

Telecopy: (704) 383-6205

 

 

DEUTSCHE BANK TRUST COMPANY

AMERICAS (as Bank and

Documentation Agent)

By:  /s/ Linda Wang 

     Name: Linda Wang

     Title: Vice President

Address for Notices and

Applicable Lending Office:

Deutsche Bank Trust Company Americas

60 Wall Street, 10th Floor

New York, NY 10005

Attention: Linda Wang

Telephone: (212) 250-2368

Telecopy: (212) 797-4496

 

 

MORGAN STANLEY BANK (as Bank

and Documentation Agent)

By:  /s/ Daniel Twenge 

     Name: Daniel Twenge

     Title: Vice President

Address for Notices and

Applicable Lending Office:

Morgan Stanley Bank

1585 Broadway, 2nd Floor

New York, NY 10036

Attention: Elizabeth Frattaroli

Telephone: (212) 761-1285

Telecopy: (212) 507-3505

 

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION (as Bank and

Documentation Agent)

By:  /s/ Stephen Gray 

     Name: Stephen Gray

     Title: Assistant Vice President

Address for Notices and

Applicable Lending Office:

Wells Fargo Bank, National Association

1750 H Street, N.W., Suite 400

Washington, DC 20006

Attention: Stephen Gray

Telephone: (202) 303-3010

Telecopy: (202) 429-2984

 

 

SOUTHTRUST BANK

By:  /s/ Renald Ferrovecchio 

     Name: Renald Ferrovecchio

     Title: Vice President

Address for Notices and

Applicable Lending Office:

SouthTrust Bank

171 17th Street, 6th Floor

Atlanta, GA 30363

Attention: Renald Ferrovecchio

Telephone: (404) 214-5913

Telecopy: (404) 214-3728

 

 

SUNTRUST BANK

By:  /s/ Nancy B. Richards 

     Name: Nancy B. Richards

     Title: Vice President

Address for Notices and

Applicable Lending Office:

SunTrust Bank

8245 Boone Blvd., Suite 820

Vienna, VA 22182

Attention: Nancy B. Richards

Telephone: (703) 902-9039

Telecopy: (703) 902-9245

 

 

	 	 	 
	 
	 	
UBS LOAN FINANCE LLC
	By:   /s/ Joselin Fernandes 	 	
By:   /s/ Doris Mesa 
	
     Name:  Joselin Fernandes

     Title:  Associate Director

          Banking Products Services, US	 	
     Name:  Doris Mesa

     Title:  Associate Director

          Banking Products Services, US
	 
	 	 	
Address for Notices and

Applicable Lending Office:
	 
	 	 	
UBS Loan Finance, LLC

677 Washington Boulevard

Stamford, CT 06901
	 
	 	 	
Attention: Christopher Aitkin
	 
	 	 	
Telephone: (203) 719-3845

Telecopy: (203) 719-3888

 

 

AMSOUTH BANK

By:  /s/ Robert W. Blair 

     Name: Robert W. Blair

     Title: Vice President

Address for Notices and

Applicable Lending Office:

AmSouth Bank

1900 5th Avenue N.

Birmingham, AL 35203

Attention: Robert Blair

Telephone: (205) 326-4071

Telecopy: (205) 326-4075

 

 

BANK OF CHINA, NEW YORK

BRANCH

By: /s/ Bailin Zheng 

     Name: Bailin Zheng

     Title: General Manager

Address for Notices and

Applicable Lending Office:

Bank of China, New York Branch

410 Madison Avenue

New York, NY 10017

Attention: David Hoang

Telephone: (212) 935-3101 ext. 229

Telecopy: (212) 308-4993

 

 

THE BANK OF NEW YORK

By:  /s/ Anthony A. Filorimo 

     Name: Anthony A. Filorimo

     Title: Vice President

Address for Notices and

Applicable Lending Office:

The Bank of New York

One Wall Street

New York, NY 10286

Attention: Anthony Filorimo

Telephone: (212) 635-7519

Telecopy: (212) 809-9526

 

 

KEYBANK NATIONAL

ASSOCIATION

By:  /s/ Jennifer A. Dakin 

     Name: Jennifer A. Dakin

     Title: AVP

Address for Notices and

Applicable Lending Office:

KeyBank, N.A.

1146 19th Street, N.W., Ste. 400

Washington, DC 20036

Attention: John Scott

Telephone: (202) 452-4941

Telecopy: (202) 452-4925

With a copy to:

Attention: Jennifer Dakin

Telephone: (202) 452-4940

Telecopy: (202) 452-4925

 

 

PNC BANK, NATIONAL

ASSOCIATION

By:  /s/ William R. Lynch, III 

     Name: William R. Lynch, III

     Title: Senior Vice President

Address for Notices and

Applicable Lending Office:

PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

P1-POPP-19-2

Pittsburgh, PA 15222

Attention: Real Estate Banking

Telephone: (412) 762-8519

Telecopy: (412) 768-3930

with a copy to:

7200 Wisconsin Avenue, Suite 314

Bethesda, MD 20814

Attention: William Lynch

Telephone: (301) 986-5268

Telecopy: (301) 986-5279

 

 

SCOTIABANC INC.

By:  /s/ William E. Zarrett 

     Name: William E. Zarrett

     Title: Managing Director

Address for Notices and

Applicable Lending Office:

Scotiabanc Inc.

600 Peachtree St. N.E., Suite 2700

Atlanta, GA 30308

Attention: William. E. Zarrett

Telephone: (404) 877-1504

Telecopy: (404) 888-8995

 

 

CHANG HWA COMMERCIAL BANK,

LTD., NEW YORK BRANCH

By:  /s/ Ming-Hsien Lin 

     Name: Ming-Hsien Lin

     Title: SVP & General Manager

Address for Notices and

Applicable Lending Office:

Chang Hwa Commercial Bank, Ltd.,

New York Branch

685 Third Avenue, 29th Floor

New York, NY 10017

Attention: Danielle Tsai

Telephone: (212) 651-9770 ext. 29

Telecopy: (212) 651-9785

 

 

COMERICA BANK

By:  /s/ Jessica L. Kempf 

     Name: Jessica L. Kempf

     Title: Assistant Vice President

Address for Notices and

Applicable Lending Office:

Overnight Mail:

Comerica Bank

500 Woodward Ave., 7th Floor

Detroit, MI 48226-3256

U.S. Mail:

Comerica Bank

P.O. Box 75000

Detroit, MI 48275-3256

Attention: Casey L. Ostrander

Telephone: (313) 222-5286

Telecopy: (313) 222-9295

 

 

FIRST HORIZON BANK, a division of

First Tennessee Bank N.A.

By:  /s/ J. Jordan O’Neill, III 

     Name: J. Jordan O’Neill, III

     Title: Senior Vice President

Address for Notices and

Applicable Lending Office:

First Horizon Bank, a division of

First Tennessee Bank N.A.

1650 Tysons Boulevard, Suite 1150

McLean, VA 22102

Attention: J. Jordan O’Neill, III

Telephone: (703) 394-2518

Telecopy: (703) 734-1834

 

 

US BANK NATIONAL ASSOCIATION

By:  /s/ Sherry Reynolds 

     Name: Sherry Reynolds

     Title: Vice President

Address for Notices and

Applicable Lending Office:

US Bank National Association

800 Nicollet Mall, 3rd Floor

Minneapolis, MN 55402-7020

Attention: Michael Raarup

Telephone: (612) 303-3586

Telecopy: (612) 303-2270

 

 

E.SUN COMMERCIAL BANK, LTD.,

LOS ANGELES BRANCH

By:  /s/ Peter Shih 

     Name: Peter Shih

     Title: Chief Financial Officer

Address for Notices and

Applicable Lending Office:

E.Sun Commercial Bank, Ltd.,

Los Angeles Branch

17700 Castleton Street, Suite 500

City of Industry, CA 91748

Attention: Homer Hou

Telephone: (626) 810-2400 ext. 225

Telecopy: (626) 839-5531

 

 

EXHIBITS

	 	 	 	 	 
	EXHIBIT A

	 	-
	 	Authorization Letter
	 
	 	 	 	 
	EXHIBIT B

	 	-
	 	Ratable Loan Note
	 
	 	 	 	 
	EXHIBIT B-1

	 	-
	 	Bid Rate Loan Note
	 
	 	 	 	 
	EXHIBIT B-2

	 	-
	 	Swing Loan Note
	 
	 	 	 	 
	EXHIBIT C

	 	-
	 	Information Regarding Material Affiliates
	 
	 	 	 	 
	EXHIBIT D

	 	-
	 	Solvency Certificate
	 
	 	 	 	 
	EXHIBIT E

	 	-
	 	Assignment and Acceptance
	 
	 	 	 	 
	EXHIBIT F

	 	-
	 	Designation Agreement
	 
	 	 	 	 
	EXHIBIT G-1

	 	-
	 	Bid Rate Quote Request
	 
	 	 	 	 
	EXHIBIT G-2

	 	-
	 	Invitation for Bid Rate Quotes
	 
	 	 	 	 
	EXHIBIT G-3

	 	-
	 	Bid Rate Quote
	 
	 	 	 	 
	EXHIBIT G-4

	 	-
	 	Borrower’s Acceptance of Bid Rate Quote
	 
	 	 	 	 
	EXHIBIT H

	 	-
	 	Acceptance Letter
	 
	 	 	 	 
	SCHEDULES
	 
	 	 	 	 
	SCHEDULE 1

	 	-
	 	Loan Commitments

 

 

EXHIBIT A

AUTHORIZATION LETTER

________ ___, 2004

Fleet National Bank

		
	Re: 	Amended and Restated Revolving Loan Agreement dated as of May
______, 2004 (the “Loan Agreement”; capitalized terms not otherwise
defined herein shall have the meanings ascribed to such terms in the
Loan Agreement) among us, as Borrower, the Banks named therein, and
you, as Administrative Agent for said Banks

Ladies/Gentlemen:

     In connection with the captioned Loan Agreement, we hereby designate any
of the following persons to give to you instructions, including notices
required pursuant to the Loan Agreement, orally, by telephone or teleprocess,
or in writing:

     [NAMES]

     Instructions may be honored on the oral, telephonic, teleprocess or
written instructions of anyone purporting to be any one of the above designated
persons even if the instructions are for the benefit of the person delivering
them. We will furnish you with written confirmation of each such instruction
signed by any person designated above (including any telecopy which appears to
bear the signature of any person designated above) on the same day that the
instruction is provided to you, but your responsibility with respect to any
instruction shall not be affected by your failure to receive such confirmation
or by its contents.

     Without limiting the foregoing, we hereby unconditionally authorize any
one of the above-designated persons to execute and submit requests for advances
of proceeds of the Loans (including the Initial Advance) and notices of
Elections, Conversions and Continuations to you under the Loan Agreement with
the identical force and effect in all respects as if executed and submitted by
us.

     You and the Banks shall be fully protected in, and shall incur no
liability to us for, acting upon any instructions which you in good faith
believe to have been given by any person designated above, and in no event
shall you or the Banks be liable for special, consequential or punitive
damages. In addition, we agree to hold you and the Banks and your and their
respective agents harmless from any and all liability, loss and expense arising
directly or indirectly out of instructions that we provide to you in connection
with the Loan Agreement except for liability, loss or expense occasioned by
your gross negligence or willful misconduct.

     Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such

A-1

 

refusal if you in good faith believe that the person delivering the
instruction is not one of the persons designated above or if the instruction is
not accompanied by an authentication method that we have agreed to in writing.

     We will promptly notify you in writing of any change in the persons
designated above and, until you have actually received such written notice and
have had a reasonable opportunity to act upon it, you are authorized to act
upon instructions, even though the person delivering them may no longer be
authorized.

	 	 	 	 	 
	 	Very truly yours, 

AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A-2

 

	 	 	 	 	 

EXHIBIT B

RATABLE LOAN NOTE

			
	$__________
	 	New York, New York

______________, 200_

     For value received, AvalonBay Communities, Inc., a Maryland corporation
(“Borrower”), hereby promises to pay to the
order of _______ or its
successors or assigns (collectively, the “Bank”), at the principal office of
Fleet National Bank (“Administrative Agent”)
located at __________ for
the account of the Applicable Lending Office of the Bank, the principal sum of
______ Dollars ($_____), or if less, the amount loaned by the Bank
under its Ratable Loan to Borrower pursuant to the Loan Agreement (as defined
below) and actually outstanding, in lawful money of the United States and in
immediately available funds, in accordance with the terms set forth in the Loan
Agreement. Borrower also promises to pay interest on the unpaid principal
balance hereof, for the period such balance is outstanding, in like money, at
said office for the account of said Applicable Lending Office, at the time and
at a rate per annum as provided in the Loan Agreement. Any amount of principal
hereof which is not paid when due, whether at stated maturity, by acceleration,
or otherwise, shall bear interest from the date when due until said principal
amount is paid in full, payable on demand, at the rate set forth in the Loan
Agreement.

     The date and amount of each advance of the Ratable Loan made by the Bank
to Borrower under the Loan Agreement referred to below, and each payment of
said Ratable Loan, shall be recorded by the Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Bank, at any other time),
may be endorsed by the Bank on the schedule attached hereto and any
continuation thereof.

     This Note is one of the Ratable Loan Notes referred to in the Amended and
Restated Revolving Loan Agreement dated as of May 24, 2004 (as the same may be
amended from time to time, the “Loan Agreement”) among Borrower, the Banks
named therein (including the Bank) and Administrative Agent, as administrative
agent for the Banks. All of the terms, conditions and provisions of the Loan
Agreement are hereby incorporated by reference. All capitalized terms used
herein and not defined herein shall have the meanings given to them in the Loan
Agreement.

     The Loan Agreement contains, among other things, provisions for the
prepayment of and acceleration of this Note upon the happening of certain
stated events.

     No recourse shall be had under this Note against Borrower’s Principals
except as and to the extent set forth in Section 11.02 of the Loan Agreement.

     All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor. This Note shall be governed by, and construed
and enforced in accordance with, the Laws of the State of New York, provided
that, as to the maximum lawful rate of interest which may be charged or
collected,

B-1

 

if the Laws applicable to the Bank permit it to charge or collect a higher
rate than the Laws of the State of New York, then such Law applicable to the
Bank shall apply to the Bank under this Note.

	 	 	 	 	 
	 	AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2

 

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Date	 	 	Amount of	 	 	Amount of	 	 	Balance of	 	 	Notation Made	 
	 	 	 	 	Loan	 	 	Principal Paid or	 	 	Principal	 	 	By:	 
	 	 	 	 	 	 	 	Prepaid	 	 	Unpaid	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

B-3

 

EXHIBIT B-1

BID RATE LOAN NOTE

			
	$250,000,000
	 	New York, New York

________, 2004

     For value received, AvalonBay Communities, Inc., a Maryland corporation
(“Borrower”), hereby promises to pay to the order of Fleet National Bank
(“Administrative Agent”) or its successors or assigns for the account of the
respective Banks making Bid Rate Loans or their respective successors or
assigns (for the further account of their respective Applicable Lending
Offices), at the principal office of Administrative Agent located at
__________________, the principal sum of Two
Hundred Fifty Million Dollars ($250,000,000), or if less, the amount loaned by
one or more of said Banks under their respective Bid Rate Loans to Borrower
pursuant to the Loan Agreement (as defined below) and actually outstanding, in
lawful money of the United States and in immediately available funds, in
accordance with the terms set forth in the Loan Agreement. Borrower also
promises to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, in like money, at said office for the account of
said Banks for the further account of their respective Applicable Lending
Offices, at the times and at the rates per annum as provided in the Loan
Agreement. Any amount of principal hereof which is not paid when due, whether
at stated maturity, by acceleration, or otherwise, shall bear interest from the
date when due until said principal amount is paid in full, payable on demand,
at the rate set forth in the Loan Agreement.

     The date and amount of each Bid Rate Loan to Borrower under the Loan
Agreement referred to below, the name of the Bank making the same, the interest
rate applicable thereto and the maturity date thereof (i.e., the end of the
Interest Period Applicable thereto) shall be recorded by Administrative Agent
on its records and may be endorsed by Administrative Agent on the schedule
attached hereto and any continuation thereof.

     This Note is the Bid Rate Loan Note referred to in the Amended and
Restated Revolving Loan Agreement dated as of May 24, 2004 (as the same may be
amended from time to time, the “Loan Agreement”) among Borrower, the Banks
named therein and Administrative Agent, as administrative agent for the Banks.
All of the terms, conditions and provisions of the Loan Agreement are hereby
incorporated by reference. All capitalized terms used herein and not defined
herein shall have the meanings given to them in the Loan Agreement.

     The Loan Agreement contains, among other things, provisions for the
prepayment of and acceleration of this Note upon the happening of certain
stated events.

     No recourse shall be had under this Note against the Borrower’s Principals
except as and to the extent set forth in Section 11.02 of the Loan Agreement.

     All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.

B-1-1

 

      This Note shall be governed by, and construed and enforced in accordance
with, the Laws of the State of New York, provided that, as to the maximum
lawful rate of interest which may be charged or collected, if the Laws
applicable to a particular Bank permit it to charge or collect a higher rate
than the Laws of the State of New York, then such Law applicable to such Bank
shall apply to such Bank under this Note.

	 	 	 	 	 
	 	AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-1-2

 

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Bid Rate	 	 	Date	 	 	Amount of Bid	 	 	Interest Rate	 	 	Expiration of	 	 	Notation Made	 
	 	Loan	 	 	 	 	 	 	 	Rate Loan	 	 	 	 	 	 	 	Interest Period	 	 	By:	 
	 	Number	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

B-1-3

 

EXHIBIT B-2

SWING LOAN NOTE

New York, New York

__________, 200_

     For value received, AvalonBay Communities, Inc., a Maryland corporation
(“Borrower”), hereby promises to pay to the
order of ________ or its
successors or assigns (collectively, the “Bank”), at the principal office of
Fleet National Bank (“Administrative Agent”) located at ________ for
the account of the Applicable Lending Office of the Bank, the principal sum
equal to the amount loaned by the Bank under its Swing Loan to Borrower
pursuant to the Loan Agreement (as defined below) and actually outstanding, in
lawful money of the United States and in immediately available funds, in
accordance with the terms set forth in the Loan Agreement. Borrower also
promises to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, in like money, at said office for the account of
said Applicable Lending Office, at the time and at a rate per annum as provided
in the Loan Agreement. Any amount of principal hereof which is not paid when
due, whether at stated maturity, by acceleration, or otherwise, shall bear
interest from the date when due until said principal amount is paid in full,
payable on demand, at the rate set forth in the Loan Agreement.

     The date and amount of each advance of the Swing Loan made by the Bank to
Borrower under the Loan Agreement referred to below, and each payment of said
Swing Loan, shall be recorded by the Bank on its books and, prior to any
transfer of this Note (or, at the discretion of the Bank, at any other time),
may be endorsed by the Bank on the schedule attached hereto and any
continuation thereof.

     This Note is one of the Swing Loan Notes referred to in the Amended and
Restated Revolving Loan Agreement dated as of May 24, 2004 (as the same may be
amended from time to time, the “Loan Agreement”) among Borrower, the Banks
named therein (including the Bank) and Administrative Agent, as administrative
agent for the Banks. All of the terms, conditions and provisions of the Loan
Agreement are hereby incorporated by reference. All capitalized terms used
herein and not defined herein shall have the meanings given to them in the Loan
Agreement.

     The Loan Agreement contains, among other things, provisions for the
prepayment of and acceleration of this Note upon the happening of certain
stated events.

     No recourse shall be had under this Note against Borrower’s Principals
except as and to the extent set forth in Section 11.02 of the Loan Agreement.

     All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.

     This Note shall be governed by, and construed and enforced in accordance
with, the Laws of the State of New York, provided that, as to the maximum
lawful rate of interest which may be charged or collected, if the Laws
applicable to the Bank permit it to charge or collect a higher rate than the
Laws of the State of New York, then such Law applicable to the Bank shall apply
to the Bank under this Note.

B-2-1

 

	 	 	 	 	 
	 	AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2-2

 

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Amount of	 	 	Balance of	 	 	 	 
	 	 	 	 	Amount of	 	 	Principal Paid or	 	 	Principal	 	 	Notation Made	 
	 	Date	 	 	Loan	 	 	Prepaid	 	 	Unpaid	 	 	By:	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

B-2-3

 

EXHIBIT C

INFORMATION REGARDING MATERIAL AFFILIATES

[Omitted —
Lists all AvalonBay subsidiaries without regard to size or materiality]

C-1

 

EXHIBIT D

SOLVENCY CERTIFICATE

     The person executing this certificate is the _________ of
AvalonBay Communities, Inc., a Maryland corporation (“Borrower”), and is
familiar with its properties, assets and businesses, and is duly authorized to
execute this certificate on behalf of Borrower pursuant to Section 4.01(7) of
the Amended and Restated Revolving Loan Agreement dated the date hereof (the
“Loan Agreement”) among Borrower, the banks party thereto (each a “Bank” and
collectively, the “Banks”) and Fleet National Bank, as administrative agent for
the Banks (in such capacity, together with its successors in such capacity,
“Administrative Agent”). In executing this Certificate, such person is acting
solely in his or her capacity as the _________ of Borrower, and not in
his or her individual capacity. Unless otherwise defined herein, terms defined
in the Loan Agreement are used herein as therein defined.

     The undersigned further certifies that he or she has carefully reviewed
the Loan Agreement and the other Loan Documents and the contents of this
Certificate and, in connection herewith, has made such investigation and
inquiries as he or she deems reasonably necessary and prudent therefor. The
undersigned further certifies that the financial information and assumptions
which underlie and form the basis for the representations made in this
Certificate were reasonable when made and were made in good faith and continue
to be reasonable as of the date hereof.

     The undersigned understands that Administrative Agent and the Banks are
relying on the truth and accuracy of this Certificate in connection with the
transactions contemplated by the Loan Agreement.

     The undersigned certifies that Borrower is Solvent.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate on May
_____, 2004.

	 	 	 	 	 
	 
	 		 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

D-1

 

EXHIBIT E

ASSIGNMENT AND ACCEPTANCE

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

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (a) all of the Assignor’s rights and
obligations in its capacity as a Bank under the Loan Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to
the amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (b) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Bank)
against any Person, whether known or unknown, arising under or in connection
with the Loan Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (a) above (the rights and obligations sold and assigned
pursuant to clauses (a) and (b) above being referred to herein collectively as,
the “Assigned Interest”). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Acceptance,
without representation or warranty by the Assignor.

	 	 	 	 	 
	1.

	 	Assignor:
	 	____________________
	

	 	 	 	 
	2.

	 	Assignee:
	 	____________________

[and is an Affiliate of _________________1]
	

	 	 	 	 
	3.

	 	Borrower:
	 	AvalonBay Communities, Inc.
	

	 	 	 	 
	4.

	 	Administrative Agent:
	 	[Fleet National Bank],

as the Administrative Agent under the Loan Agreement
	

	 	 	 	 
	5.

	 	Loan Agreement:
	 	The Amended and Restated Revolving Loan Agreement dated as of May 24, 2004, among AvalonBay
Communities, Inc., as borrower, the Banks parties thereto, JPMorgan Chase Bank, and Fleet National
Bank or any successor thereto, individually and as Administrative Agent, Swing Lender and Issuing
Bank.
	

	 	 	 	 
	6.

	 	Assigned Interest:	 	 

1Select Bank as applicable.

E-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Aggregate Amount of	 	 	Amount of	 	 	Percentage Assigned	 
	 	 	 	 	Commitment/Loans	 	 	Commitment/Loans	 	 	of	 
	 	Facility Assigned	 	 	for all Lenders*	 	 	Assigned*	 	 	Commitment/Loans2	 
	 	Commitment
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	Revolving Loans
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	Bid Rate Loans
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	Participations in
Letters of Credit
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	[Swing Loans]
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 

[7.     Trade Date: ________]3

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

[Remainder of Page Intentionally Left Blank]

*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.

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

3To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

E-2

 

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

	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Consented to and Accepted:

[FLEET NATIONAL BANK],

acting in its capacity as Administrative

Agent and as Issuing Bank

	 	 	 	 	 
	 	 
	 	By:  	 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Consented to:

AVALONBAY COMMUNITIES, Inc.,

a Maryland corporation

	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	 	 	Name:  	 	 
	 	 	Title: ]4 	 	 
	 

4Borrower consent is required when no Event of Default exists; provided that
no Borrower consent is required in the event that the Assignee (or a guarantor
of Assignee's obligations) has a credit rating of AA (or its equivalent) or
higher from a nationally recognized rating agency.

E-3

 

ANNEX 1

     The Amended and Restated Revolving Loan Agreement dated as of May 24,
2004, among AvalonBay Communities, Inc., as borrower, the Banks parties
thereto, JPMorgan Chase Bank, Fleet National Bank and any successors thereto,
individually and as Administrative Agent, Swing Lender and Issuing Bank (the
"Loan Agreement”). Capitalized terms used but not defined herein shall have
the meanings given to them in the Assignment and Acceptance to which this annex
is attached and if not defined therein, shall have the meanings given to them
in the Loan Agreement.

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

        1.   Representations and Warranties.

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

        1.2.  Assignee. The Assignee (a) represents and warrants that (i)
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and to become a Bank under the Loan Agreement, (ii) it
meets all requirements of an Assignee under the Loan Agreement (subject to
receipt of such consents as may be required under the Loan Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Loan Agreement as a Bank thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Bank thereunder, and (iv) it has
received a copy of the Loan Agreement, together with copies of the most recent
financial statements delivered pursuant to §4.01(3) and §6.09 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Bank, and (v) if it is a non-U.S.
Bank, attached to the Assignment and Acceptance is any documentation required
to be delivered by it pursuant to the terms of the Loan Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other 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 action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Bank.

E-4

 

        2.   Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee
whether such amounts have accrued prior to, on or after the Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.

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

E-5

 

EXHIBIT F

DESIGNATION AGREEMENT

     Reference is made to that certain Amended and Restated Revolving Loan
Agreement dated as of May 24, 2004 (as amended, supplemented or otherwise
modified from time to time, the “Loan Agreement”) among AvalonBay Communities,
Inc., a Maryland corporation, the banks parties thereto, and Fleet National
Bank, as administrative agent for said banks. Terms defined in the Loan
Agreement not otherwise defined herein are used herein with the same meaning.

     [BANK] (“Designor”) and _____________, a
_____________(“
Designee”) agree as follows:

     1.    Designor hereby designates Designee, and Designee hereby accepts such
designation, to have a right to make Bid Rate Loans pursuant to Section 2.02 of
the Loan Agreement. Any assignment by Designor to Designee of its rights to
make a Bid Rate Loan pursuant to such Section shall be effective at the time of
the funding of such Bid Rate Loan and not before such time.

     2.    Except as set forth in Section 6 below, Designor makes no representation
or warranty and assumes no responsibility pursuant to this Designation
Agreement with respect to (a) any statements, warranties or representations
made in or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan
Document or any other instrument and document furnished pursuant thereto and
(b) the financial condition of Borrower or the performance or observance by
Borrower of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto.

     3.    Designee (a) confirms that it has received a copy of each Loan Document,
together with copies of such financial statements and other documents and
information as it has med appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon Administrative Agent, Designor 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 action under any Loan Document; (c) represents that it is a
Designated Lender; (d) appoints and authorizes Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under any Loan Document as are delegated to Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; and (e) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of any Loan Document are required to be
performed by it as a Bank.

     4.    Designee hereby appoints Designor as Designee’s agent and
attorney-in-fact, and grants to Designor an irrevocable power of attorney, to
receive payments made for the benefit of Designee under the Loan Agreement, to
deliver and receive all communications and notices under the Loan Agreement and
other Loan Documents and to exercise on Designee’s behalf all rights to vote
and to grant and make approvals, waivers, consents or amendments to or under
the

F-1

 

Loan Agreement or other Loan Documents. Any document executed by Designor
on Designee’s behalf in connection with the Loan Agreement or other Loan
Documents shall be binding on Designee. Borrower, Administrative Agent and
each of the Banks may rely on and are beneficiaries of this Designation
Agreement.

     5.    Following the execution of this Designation Agreement by Designor and
Designee, it will be delivered to Administrative Agent for acceptance by
Administrative Agent. The effective date for this Designation Agreement (the
"Effective Date”) shall be the date of acceptance hereof by Administrative
Agent.

     6.    Designor unconditionally agrees to pay or reimburse Designee and save
Designee harmless against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against Designee, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Designee hereunder or thereunder,
provided that Designor shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements if the same results from Designee’s
gross negligence or willful misconduct.

     7.    As of the Effective Date, Designee shall be a party to the Loan Agreement
with a right to make Bid Rate Loans as a Bank pursuant to Section 2.02 of the
Loan Agreement and the rights and obligations of a Bank related thereto;
provided, however, that Designee shall not be required to make
payments with respect to such obligations except to the extent of excess cash
flow of such Designee which is not otherwise required to repay obligations of
such Designated Lender which are then due and payable. Notwithstanding the
foregoing, Designor, as administrative agent for Designee, shall be and remain
obligated to Borrower, Administrative Agent and the Banks for each and every of
the obligations of Designee and its Designor with respect to the Loan
Agreement, including, without limitation, any indemnification obligations under
Section 10.05 of the Loan Agreement.

     8.    This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

     9.    This Designation Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

     IN WITNESS WHEREOF, Designor and Designee have executed and delivered this
Designation Agreement as of the date first set forth above.

[DESIGNOR]

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

F-2

 

	 	 	 	 	 
	 	[DESIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Applicable Lending Office and Address for Notices:	 
	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	Attention:__________________

Telephone: (___) ____________

Telecopy: (___) _____________	 
	 
	 	ACCEPTED AS OF THE ______DAY OF _____,200_.	 
	 
	 	[ADMINISTRATIVE AGENT], as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

F-3

 

EXHIBIT G-1

BID RATE QUOTE REQUEST

[Date]

	 	 	 
	To:

	 	[Administrative Agent], as Administrative Agent (the “Administrative Agent”)
	 
	 	 
	From:

	 	AvalonBay Communities, Inc.
	 
	 	 
	Re:

	 	Amended and Restated Revolving Loan Agreement (the “Loan Agreement”) dated as of May 24, 2004 among AvalonBay Communities,
Inc., the Banks parties thereto and the Administrative Agent

           We hereby give notice pursuant to Section 2.02 of the Loan Agreement that
we request Bid Rate Quotes for the following proposed Bid Rate Loans:

Date of Borrowing: __________

Principal Amount*                 Interest Period**

$   

           Such Bid Rate Quotes should offer a(n) [LIBOR Bid Margin] [Absolute Bid
Rate].

           Terms used herein have the meanings assigned to them in the Loan
Agreement.

	 	 	 	 	 
	 	AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  5	 	 
	 

	*	 	Subject to the minimum amount and other requirements set forth in Section
2.02(a) of the Loan Agreement.
	 
	**	 	Subject to the provisions regarding #Interest Period# in the Loan Agreement.

G-1-1

 

EXHIBIT G-2 

INVITATION FOR BID RATE QUOTES

	 	 	 
	To:

	 	[Bank]
	

	 	 
	Re:

	 	Invitation for Bid Rate Quotes to AvalonBay Communities, Inc. (“Borrower”)

        Pursuant to Section 2.02 of the Amended and Restated Revolving Loan
Agreement dated as of May 24, 2004 among Borrower, the Banks parties thereto
and the undersigned, as Administrative Agent, we are pleased on behalf of
Borrower to invite you to submit Bid Rate Quotes to Borrower for the following
proposed Bid Rate Loans:

Date of Borrowing: _____________

	 	 	 
	Principal Amount

	 	Interest Period
	 
	 	 
	$   
	 	 

     Such Bid Rate Quotes should offer a(n) [LIBOR Bid Margin] [Absolute Bid
Rate].

     Please respond to this invitation by no later than 2:00 P.M. (New York
time) on [date].

	 	 	 	 	 
	 	[ADMINISTRATIVE AGENT], as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

G-2-1

 

EXHIBIT G-3

BID RATE QUOTE

	 	 	 
	To:

	 	[Administrative Agent], as Administrative Agent
	

	 	 
	Re:

	 	Bid Rate Quote to AvalonBay Communities, Inc. (“Borrower”) pursuant to
the Amended and Restated Revolving Loan Agreement dated May 24, 2004
among Borrower, the Banks party thereto and you, as Administrative Agent
(the “Loan Agreement”)

        In response to your invitation on behalf of Borrower dated                     200___, we
hereby make the following Bid Rate Quote on the following terms:

     1.   Quoting Bank:

     2.   Person to contact at quoting Bank: _______________

     3.   Date of borrowing: _______________*

     4.   We hereby offer to make Bid Rate Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:

	 	 	 	 	 	 	 
	Principal

	 	Interest
	 	LIBOR Bid
	 	Absolute
	Amount**

	 	Period***
	 	Margin****
	 	Bid Rate
	 
	 	 	 	 	 	 
	$ 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	$ 
	 	 	 	 	 	 

[Provided, that the aggregate principal amount of Bid Rate Loans for which
the above offers may be accepted shall not exceed $ _____________.]

     5.   LIBOR Reserve Requirement, if any: _______________

     6.   Terms used herein have the meanings assigned to them in the Loan Agreement.
           ______________________________

     *As specified in the related Invitation for Bid Rate Quotes.

     **Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Amounts of bids are subject to
the requirements of Section 2.02(c) of the Loan Agreement.

     ***No more than three (3) bids are permitted for each Interest Period.

     ****Margin over or under the LIBOR Interest Rate determined for the applicable
Interest Period. Specify percentage (to the nearest 1/1,000 of 1%) and specify
whether “PLUS” or “MINUS”.

G-3-1

 

     We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Loan Agreement,
irrevocably obligates us to make the Bid Rate Loan(s) for which any offer(s)
are accepted, in whole or in part.

	 	 	 	 	 
	 	Very truly yours, [NAME OF BANK]

 	 
	Date: _________ 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 

G-3-2

 

EXHIBIT G-4

ACCEPTANCE OF BID RATE QUOTE

	 	 	 
	To:

	 	[Administrative Agent], as Administrative Agent (the “Administrative Agent”)
	 
	 	 
	From:

	 	 AvalonBay Communities, Inc.
	 
	 	 
	Re:

	 	Amended and Restated Revolving Loan Agreement (the “Loan Agreement”) dated as of May 24, 2004 among AvalonBay Communities,
Inc., the Banks parties thereto and Administrative Agent

We hereby accept the offers to make Bid Rate Loan(s) set forth in the Bid Rate
Quote(s) identified below:

	 	 	 	 	 	 	 	 	 	 	 
	

	 	Date of Bid
	 	Principal
	 	Interest
	 	LIBOR Bid
	 	Absolute
	Bank

	 	Rate Quote
	 	Amount
	 	Period
	 	Margin
	 	Bid Rate
	 

	 	 	 	 	 
	 	Very truly yours,

 

AVALONBAY COMMUNITIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

G-4-1

 

EXHIBIT H

ACCEPTANCE LETTER

Fleet National Bank,

as Administrative Agent

AvalonBay Communities, Inc.

Gentlemen:

     We refer to the Amended and Restated Revolving Loan Agreement, dated as of
May 24, 2004, among AvalonBay Communities, Inc., as Borrower; JPMorgan Chase
Bank, Fleet National Bank and the other lenders who have become a party to said
Amended and Restated Revolving Loan Agreement as original signatories thereto
or through the execution of Acceptance Letters or Assignment and Assumption
Agreements prior to the date hereof, as Banks; and Fleet National Bank, as
Administrative Agent. Said Amended and Restated Revolving Loan Agreement, as
amended from time to time, is hereinafter referred to as the “Loan Agreement”.
Capitalized terms not otherwise defined herein shall have the respective
definitions given them in the Loan Agreement.

     You and we hereby acknowledge and agree that, pursuant to Section 2.19 of
the Loan Agreement, we are hereby made a party to the Loan Agreement, and for
all purposes of the Loan Agreement shall be, and shall have all the rights and
obligations of, a Bank, with a Loan Commitment in the amount of $                    . We hereby
acknowledge receipt of a Ratable Loan Note from Borrower in said principal
amount. Each of you acknowledges your consent to our becoming a Bank and to
the amount of our Loan Commitment.

     Immediately following the execution hereof by all parties, we shall,
pursuant to paragraph (c) of Section 2.19 of the Loan Agreement, remit to
Administrative Agent the sum of $                   , which shall be deemed the first advance
under our Ratable Loan. Attached hereto as Schedule A is an updated list
setting forth the Total Loan Commitment, each Bank’s Loan Commitment and the
principal balance that will be outstanding under each Bank’s Ratable Loan Note
following our disbursement of funds as aforesaid and the application thereof as
provided in said paragraph (c) of Section 2.19.

     Set forth beneath our signature are the location of our Applicable Lending
Office(s) and our address for notices under the Loan Agreement.

     Kindly indicate your agreement with the foregoing by your execution below.

H-1

 

	 	 	 	 	 
	 	Very truly yours,

[NEW BANK]

 	 
	 
	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	Address for notices:

Applicable Lending Office:

 	 

Agreement acknowledged this day of

______, 200_.

AVALONBAY COMMUNITIES, INC.

	 	 	 	 	 
	 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Agreement acknowledged this day of

______, 200_.

FLEET NATIONAL BANK, as

Administrative Agent

	 	 	 	 	 
	 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Agreement acknowledged this day of

______, 200_.

__________________,
as Syndication
Agent

	 	 	 	 	 
	 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

H-2

 

	 	 	 	 	 

Schedule 1

Loan Commitments

	 	 	 	 	 	 	 	 
	 
	 	Lender	 	 	Commitment	 
	 	Fleet National Bank
	 	 	$	35,000,000	 	 
	 	JPMorgan Chase Bank
	 	 	$	35,000,000	 	 
	 	Wachovia Bank, National Association
	 	 	$	35,000,000	 	 
	 	Deutsche Bank Trust Company Americas
	 	 	$	35,000,000	 	 
	 	Morgan Stanley Bank
	 	 	$	35,000,000	 	 
	 	Wells Fargo Bank, National Association
	 	 	$	35,000,000	 	 
	 	SouthTrust Bank
	 	 	$	30,000,000	 	 
	 	SunTrust Bank
	 	 	$	30,000,000	 	 
	 	UBS Loan Finance LLC
	 	 	$	30,000,000	 	 
	 	AmSouth Bank
	 	 	$	23,000,000	 	 
	 	Bank of China, New York Branch
	 	 	$	23,000,000	 	 
	 	The Bank of New York
	 	 	$	23,000,000	 	 
	 	KeyBank National Association
	 	 	$	23,000,000	 	 
	 	PNC Bank, National Association
	 	 	$	23,000,000	 	 
	 	Scotiabanc Inc.
	 	 	$	23,000,000	 	 
	 	Chang Hwa Commercial Bank, Ltd., New York Branch
	 	 	$	13,000,000	 	 
	 	Comerica Bank
	 	 	$	13,000,000	 	 
	 	First Horizon Bank
	 	 	$	13,000,000	 	 
	 	US Bank National Association
	 	 	$	13,000,000	 	 
	 	E.Sun Commercial Bank, Ltd., Los Angeles
	 	 	$	10,000,000	 	 
	 	Total:                  
	 	 	$	500,000,000

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