Document:

Exhibit 10.12

 

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

 

Dated as of March 29, 2005

 

by and among

 

HERITAGE PROPERTY INVESTMENT TRUST, INC.,

as
Borrower,

 

WACHOVIA CAPITAL MARKETS,
LLC,

as
Arranger,

 

WACHOVIA BANK, NATIONAL
ASSOCIATION,

as
Administrative Agent,

 

Each of

DEUTSCHE BANK TRUST COMPANY AMERICAS

and

KEYBANK NATIONAL
ASSOCIATION,

as
Syndication Agents,

 

Each of

BANK OF AMERICA, NATIONAL ASSOCIATION

and

COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH,

as
Documentation Agents,

 

and

 

THE FINANCIAL INSTITUTIONS INITIALLY SIGNATORY HERETO

AND THEIR ASSIGNEES PURSUANT TO SECTION 12.5.,

as
Lenders

 

 

 

 

TABLE OF CONTENTS

 

	
  Article I. Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1. Definitions.

  	
  1

  
	
   

  	
  Section 1.2.  General;
  References to Times.

  	
  26

  
	
   

  	
  Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries.

  	
  26

  
	
   

  	
   

  	
   

  
	
  Article II. Credit Facility

  	
  27

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1. Revolving Loans

  	
  27

  
	
   

  	
  Section 2.2. Bid Rate Loans.

  	
  27

  
	
   

  	
  Section 2.3. Swingline Loans.

  	
  31

  
	
   

  	
  Section 2.4. Letters of Credit.

  	
  33

  
	
   

  	
  Section 2.5. Rates and Payment of Interest on Loans.

  	
  37

  
	
   

  	
  Section 2.6. Number of Interest Periods.

  	
  38

  
	
   

  	
  Section 2.7. Repayment of Loans.

  	
  38

  
	
   

  	
  Section 2.8. Prepayments.

  	
  38

  
	
   

  	
  Section 2.9. Continuation.

  	
  39

  
	
   

  	
  Section 2.10. Conversion.

  	
  39

  
	
   

  	
  Section 2.11. Notes.

  	
  40

  
	
   

  	
  Section 2.12. Voluntary Reductions of the Commitment.

  	
  40

  
	
   

  	
  Section 2.13. Extension of Termination Date.

  	
  41

  
	
   

  	
  Section 2.14. Expiration or Maturity Date of Letters of Credit Past
  Termination Date.

  	
  41

  
	
   

  	
  Section 2.15. Amount Limitations.

  	
  41

  
	
   

  	
  Section 2.16. Increase of Commitments.

  	
  42

  
	
   

  	
   

  	
   

  
	
  Article III. Payments, Fees
  and Other General Provisions

  	
  42

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1. Payments.

  	
  42

  
	
   

  	
  Section 3.2. Pro Rata Treatment.

  	
  43

  
	
   

  	
  Section 3.3. Sharing of Payments, Etc.

  	
  44

  
	
   

  	
  Section 3.4. Several Obligations.

  	
  44

  
	
   

  	
  Section 3.5. Minimum Amounts.

  	
  44

  
	
   

  	
  Section 3.6. Fees.

  	
  45

  
	
   

  	
  Section 3.7. Computations.

  	
  46

  
	
   

  	
  Section 3.8. Usury.

  	
  46

  
	
   

  	
  Section 3.9. Agreement Regarding Interest and Charges.

  	
  46

  
	
   

  	
  Section 3.10. Statements of Account.

  	
  46

  
	
   

  	
  Section 3.11. Defaulting Lenders.

  	
  47

  
	
   

  	
  Section 3.12. Taxes.

  	
  48

  
	
   

  	
   

  	
   

  
	
  Article IV. Yield Protection,
  Etc.

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1. Additional Costs; Capital Adequacy.

  	
  50

  
	
   

  	
  Section 4.2. Suspension of LIBOR Loans.

  	
  51

  
	
   

  	
  Section 4.3. Illegality.

  	
  52

  
	
   

  	
  Section 4.4. Compensation.

  	
  52

  
	
   

  	
  Section 4.5. Affected Lenders.

  	
  52

  

 

O-i

 

	
   

  	
  Section 4.6. Treatment of Affected Loans.

  	
  53

  
	
   

  	
  Section 4.7. Change of Lending Office.

  	
  53

  
	
   

  	
  Section 4.8. Assumptions Concerning Funding of LIBOR Loans.

  	
  54

  
	
   

  	
   

  	
   

  
	
  Article V. Conditions
  Precedent

  	
  54

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1. Initial Conditions Precedent.

  	
  54

  
	
   

  	
  Section 5.2. Conditions Precedent to All Loans and Letters of
  Credit.

  	
  56

  
	
   

  	
   

  	
   

  
	
  Article VI. Representations
  and Warranties

  	
  57

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1. Representations and Warranties.

  	
  57

  
	
   

  	
  Section 6.2. Survival of Representations and Warranties, Etc.

  	
  62

  
	
   

  	
   

  	
   

  
	
  Article VII. Affirmative
  Covenants

  	
  63

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1. Preservation of Existence and Similar Matters.

  	
  63

  
	
   

  	
  Section 7.2. Compliance with Applicable Law.

  	
  63

  
	
   

  	
  Section 7.3. Maintenance of Property.

  	
  63

  
	
   

  	
  Section 7.4. Conduct of Business.

  	
  63

  
	
   

  	
  Section 7.5. Insurance.

  	
  63

  
	
   

  	
  Section 7.6. Payment of Taxes and Claims.

  	
  64

  
	
   

  	
  Section 7.7. Visits and Inspections.

  	
  64

  
	
   

  	
  Section 7.8. Use of Proceeds; Letters of Credit.

  	
  64

  
	
   

  	
  Section 7.9. Environmental Matters.

  	
  65

  
	
   

  	
  Section 7.10. Books and Records.

  	
  65

  
	
   

  	
  Section 7.11. Further Assurances.

  	
  65

  
	
   

  	
  Section 7.12. New Subsidiaries/Guarantors.

  	
  65

  
	
   

  	
  Section 7.13. REIT Status.

  	
  66

  
	
   

  	
  Section 7.14. Exchange Listing.

  	
  66

  
	
   

  	
   

  	
   

  
	
  Article VIII. Information

  	
  66

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1. Quarterly Financial Statements.

  	
  67

  
	
   

  	
  Section 8.2. Year-End Statements.

  	
  67

  
	
   

  	
  Section 8.3. Compliance Certificate.

  	
  67

  
	
   

  	
  Section 8.4. Other Information.

  	
  68

  
	
   

  	
  Section 8.5. Delivery of Documents.

  	
  70

  
	
   

  	
   

  	
   

  
	
  Article IX. Negative Covenants

  	
  70

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1. Financial Covenants.

  	
  70

  
	
   

  	
  Section 9.2. Restricted Payments.

  	
  71

  
	
   

  	
  Section 9.3. Certain Permitted Investments.

  	
  72

  
	
   

  	
  Section 9.4. Liens; Negative Pledges; Other Matters.

  	
  73

  
	
   

  	
  Section 9.5. Merger, Consolidation, Sales of Assets and Other
  Arrangements.

  	
  73

  
	
   

  	
  Section 9.6. Fiscal Year.

  	
  74

  
	
   

  	
  Section 9.7. Modifications to PMCC Documents; Limitations on
  Modifications to Loan Documents.

  	
  74

  
	
   

  	
  Section 9.8. Modifications of Organizational Documents.

  	
  75

  
	
   

  	
  Section 9.9. Transactions with Affiliates.

  	
  75

  

 

O-ii

 

	
   

  	
  Section 9.10. ERISA Exemptions.

  	
  75

  
	
   

  	
   

  	
   

  
	
  Article X. Default

  	
  75

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1. Events of Default.

  	
  75

  
	
   

  	
  Section 10.2. Remedies Upon Event of Default.

  	
  79

  
	
   

  	
  Section 10.3. Remedies Upon Default.

  	
  80

  
	
   

  	
  Section 10.4. Allocation of Payments.

  	
  80

  
	
   

  	
  Section 10.5. Collateral Account.

  	
  81

  
	
   

  	
  Section 10.6. Performance by Agent.

  	
  82

  
	
   

  	
  Section 10.7. Rights Cumulative.

  	
  82

  
	
   

  	
   

  	
   

  
	
  Article XI. The Agent

  	
  82

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 11.1. Authorization and Action.

  	
  82

  
	
   

  	
  Section 11.2. Agent’s Reliance, Etc.

  	
  83

  
	
   

  	
  Section 11.3. Notice of Defaults.

  	
  84

  
	
   

  	
  Section 11.4. Wachovia as Lender.

  	
  84

  
	
   

  	
  Section 11.5. Approvals of Lenders.

  	
  84

  
	
   

  	
  Section 11.6. Lender Credit Decision, Etc.

  	
  85

  
	
   

  	
  Section 11.7. Indemnification of Agent.

  	
  85

  
	
   

  	
  Section 11.8. Successor Agent.

  	
  86

  
	
   

  	
  Section 11.9. Titled Agents.

  	
  87

  
	
   

  	
   

  	
   

  
	
  Article XII. Miscellaneous

  	
  87

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 12.1. Notices.

  	
  87

  
	
   

  	
  Section 12.2. Expenses.

  	
  88

  
	
   

  	
  Section 12.3. Setoff.

  	
  89

  
	
   

  	
  Section 12.4. Litigation; Jurisdiction; Other Matters; Waivers.

  	
  89

  
	
   

  	
  Section 12.5. Successors and Assigns.

  	
  90

  
	
   

  	
  Section 12.6. Amendments.

  	
  93

  
	
   

  	
  Section 12.7. Nonliability of Agent and Lenders.

  	
  95

  
	
   

  	
  Section 12.8. Confidentiality.

  	
  95

  
	
   

  	
  Section 12.9. Indemnification.

  	
  96

  
	
   

  	
  Section 12.10. Termination; Survival.

  	
  98

  
	
   

  	
  Section 12.11. Severability of Provisions.

  	
  98

  
	
   

  	
  Section 12.12. GOVERNING LAW.

  	
  98

  
	
   

  	
  Section 12.13. Patriot Act.

  	
  99

  
	
   

  	
  Section 12.14. Counterparts.

  	
  99

  
	
   

  	
  Section 12.15. Obligations with Respect to Loan Parties.

  	
  99

  
	
   

  	
  Section 12.16. Limitation of Liability.

  	
  99

  
	
   

  	
  Section 12.17. Entire Agreement.

  	
  99

  
	
   

  	
  Section 12.18. Construction.

  	
  100

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1.1(A)

  	
  List of Loan
  Parties

  	
   

  
	
  SCHEDULE 6.1.(b)

  	
  Ownership
  Structure

  	
   

  
	
  SCHEDULE 6.1.(f)

  	
  Title to
  Properties; Liens

  	
   

  
	
  SCHEDULE 6.1.(g)

  	
  Indebtedness and
  Guaranties

  	
   

  
				

 

O-iii

 

	
  SCHEDULE 6.1.(h)

  	
  Litigation

  	
   

  
	
  SCHEDULE 6.1.(w)

  	
  Eligible
  Properties

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of
  Assignment and Acceptance Agreement

  	
   

  
	
  EXHIBIT B

  	
  Form of
  Designation Agreement

  	
   

  
	
  EXHIBIT C

  	
  Form of Notice
  of Borrowing

  	
   

  
	
  EXHIBIT D

  	
  Form of Notice
  of Continuation

  	
   

  
	
  EXHIBIT E

  	
  Form of Notice
  of Conversion

  	
   

  
	
  EXHIBIT F

  	
  Form of Notice
  of Swingline Borrowing

  	
   

  
	
  EXHIBIT G

  	
  Form of
  Swingline Note

  	
   

  
	
  EXHIBIT H

  	
  Form of Bid Rate
  Quote Request

  	
   

  
	
  EXHIBIT I

  	
  Form of Bid Rate
  Quote

  	
   

  
	
  EXHIBIT J

  	
  Form of Bid Rate
  Quote Acceptance

  	
   

  
	
  EXHIBIT K

  	
  Form of
  Revolving Note

  	
   

  
	
  EXHIBIT L

  	
  Form of Bid Rate
  Note

  	
   

  
	
  EXHIBIT M

  	
  Form of Opinion
  of Counsel

  	
   

  
	
  EXHIBIT N

  	
  Form of
  Compliance Certificate

  	
   

  
	
  EXHIBIT O

  	
  Form of Guaranty

  	
   

  

 

O-iv

 

THIS
CREDIT AGREEMENT (this “Agreement”) dated as of March 29, 2005 by and
among HERITAGE PROPERTY INVESTMENT TRUST, INC., a corporation formed under the
laws of the State of Maryland (the “Borrower”), WACHOVIA CAPITAL MARKETS, LLC,
as Arranger (the “Arranger”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent,
each of DEUTSCHE BANK TRUST COMPANY AMERICAS and KEYBANK NATIONAL ASSOCIATION,
as Syndication Agents (each a “Syndication Agent”), each of BANK OF AMERICA,
NATIONAL ASSOCIATION and COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK BRANCH, as
Documentation Agents (each a “Documentation Agent”), and each of the financial
institutions initially a signatory hereto together with their assignees
pursuant to Section 12.5.(d).

 

WHEREAS,
the Agent and the Lenders desire to make available to the Borrower a revolving
credit facility in the initial amount of $400,000,000, which will include a
$50,000,000 letter of credit subfacility and a $50,000,000
swingline subfacility, on the terms and conditions contained herein.

 

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

 

ARTICLE I.
DEFINITIONS

 

Section 1.1.  Definitions.

 

In
addition to terms defined elsewhere herein, the following terms shall have the
following meanings for the purposes of this Agreement:

 

“Absolute Rate” has the meaning given that term in Section 2.2.(c)(ii)(C).

 

“Absolute Rate Auction” means a solicitation
of Bid Rate Quotes setting forth Absolute Rates pursuant to Section 2.2.

 

“Absolute Rate Loan” means a Bid Rate Loan,
the interest rate on which is determined on the basis of an Absolute Rate
pursuant to an Absolute Rate Auction.

 

“Accession Agreement” means an Accession Agreement
substantially in the form of Annex I to the Guaranty.

 

“Additional Costs” has the meaning given that term in Section 4.1.

 

“Adjusted LIBOR” means, with respect to each Interest Period
for any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such
Interest Period by (b) a percentage equal to 1 minus the stated maximum
rate (stated as a decimal) of all reserves, if any, required to be maintained
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”) as specified in Regulation D of the Board of Governors of
the Federal Reserve System (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Loans is
determined or any applicable category of extensions of credit or other assets
which includes loans by an office of any Lender outside of the United

 

 

States of America to
residents of the United States of America). Any change in such maximum rate
shall result in a change in Adjusted LIBOR on the date on which such change in
such maximum rate becomes effective.

 

“Adjusted Combined Total Asset Value” means Combined Total Asset Value determined exclusive of assets
that are owned by Excluded Subsidiaries or Unconsolidated Affiliates.

 

“Affiliate” means any Person (other than the Agent or any
Lender): (a) directly or indirectly controlling, controlled by, or under
common control with, the Borrower; (b) directly or indirectly owning or
holding ten percent (10.0%) or more of any Equity Interest in the Borrower; or
(c) ten percent (10.0%) or more of whose voting stock or other Equity
Interest is directly or indirectly owned or held by the Borrower.  For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling”, “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 and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise.  The Affiliates of a Person
shall include any officer or director of such Person.  In no event shall the Agent or any Lender be
deemed to be an Affiliate of the Borrower.

 

“Agent” means Wachovia Bank, National Association, as
contractual representative for the Lenders under the terms of this Agreement,
and any of its successors.

 

“Agreement Date” means the date as of which this Agreement is
dated.

 

“Applicable Law” means all applicable provisions of
constitutions, statutes, laws, rules, regulations and orders of all
governmental bodies and all orders and decrees of all courts, tribunals and
arbitrators.

 

“Applicable Margin” means the percentage per annum
determined, at any time, based on the range into which the Borrower’s Credit
Rating then falls, in accordance with the levels in  the table set forth below (each a “Level”).  Any change in the Borrower’s Credit Rating
which would cause it to move to a different Level in such table shall effect a
change in the Applicable Margin on the Business Day on which such change
occurs.  During any period that the
Borrower has received Credit Ratings that are not equivalent, the Applicable
Margin shall be determined by the higher of such two Credit Ratings.  During any period for which the Borrower has
received a Credit Rating from only one Rating Agency, then the Applicable
Margin shall be determined based on such Credit Rating.  During any period for which the Borrower has
received a Credit Rating from neither Rating Agency, then the Applicable Margin
shall be determined based on Level 5. 
As of the Agreement Date, and thereafter until changed as provided
above, the Applicable Margin is determined based on Level 4.

 

	
  Level

  	
   

  	
  Borrower’s Credit Rating

  (S&P/Moody’s)

  	
   

  	
  Applicable Margin for

  LIBOR Loans

  	
   

  	
  Applicable Margin for

  Base Rate Loans

  	
   

  
	
  1

  	
   

  	
  A-/A3

  	
   

  	
  0.55

  	
  %

  	
  0.0

  	
  %

  
	
  2

  	
   

  	
  BBB+/Baa1

  	
   

  	
  0.60

  	
  %

  	
  0.0

  	
  %

  
	
  3

  	
   

  	
  BBB/Baa2

  	
   

  	
  0.70

  	
  %

  	
  0.0

  	
  %

  
	
  4

  	
   

  	
  BBB-/Baa3

  	
   

  	
  0.80

  	
  %

  	
  0.0

  	
  %

  
	
  5

  	
   

  	
  < BBB-/Baa3

  	
   

  	
  1.15

  	
  %

  	
  0.25

  	
  %

  

 

2

 

“Arranger” means Wachovia Capital Markets,
LLC, together with its successors and permitted assigns.

 

“Assignee” has the meaning given that term in Section 12.5.(d).

 

“Assignment and Acceptance Agreement” means an Assignment and
Acceptance Agreement among a Lender, an Assignee and the Agent, substantially
in the form of Exhibit A or such other form reasonably acceptable to the
Agent, such Lender and such Assignee.

 

“Base Rate” means the per annum rate of interest equal to the
greater of (a) the Prime Rate or (b) the Federal Funds Rate plus one-half
of one percent (0.5%). Any change in the Base Rate resulting from a change in
the Prime Rate or the Federal Funds Rate shall become effective as of 12:01
a.m. on the Business Day on which each such change occurs.  The Base Rate is a reference rate used by the
Lender acting as the Agent in determining interest rates on certain loans and
is not intended to be the lowest rate of interest charged by the Lender acting
as the Agent or any other Lender on any extension of credit to any debtor.

 

“Base Rate Loan” means a Revolving Loan bearing interest at a
rate based on the Base Rate.

 

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

 

“Bid Rate Borrowing” has the meaning given that term in Section 2.2.(b).

 

“Bid Rate Loan” means a loan made by a Lender under Section 2.2.

 

“Bid Rate Note” has the meaning given that term in Section 2.11.(b).

 

“Bid Rate Quote” means an offer in accordance with Section 2.2.(c)
by a Lender to make a Bid Rate Loan with one single specified interest rate.

 

“Bid Rate Quote Request” has the meaning given that term in Section 2.2.(b).

 

“Borrower” has the meaning set forth in the introductory
paragraph hereof and shall include the Borrower’s successors and permitted
assigns.

 

“Bradley OP” means Bradley Operating Limited Partnership, a
Delaware limited partnership.

 

“Bradley OP Note Indenture” means, collectively, the
Indenture dated as of November 24, 1997 between the Bradley OP and LaSalle
National Bank, as Trustee (the “Trustee”), together with the Supplemental
Indenture No. 1 dated as of November 24, 1997

 

3

 

pursuant to which the
Bradley OP issued $100,000,000 7.0% Notes due 2004, the Supplemental Indenture
No. 2 dated as of January 28, 1998 pursuant to which the Bradley OP issued
$100,000,000 7.2% Notes due 2008 and the Supplemental Indenture No. 3 dated as
of March 10, 2000 pursuant to which the Bradley OP issued $75,000,000
8.875% Notes due 2006.

 

“Business Day” means (a) any day other than a Saturday,
Sunday or other day on which banks in Charlotte, North Carolina or New York,
New York are authorized or required to close and (b) with reference to a
LIBOR Loan, any such day that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.

 

“Capital Reserves” means, for any period and with
respect to a Property, an amount equal to (a) $0.15 per square foot times
(b) a fraction, the numerator of which is the number of days in such
period and the denominator of which is 365. Any portion of a Property leased
under a ground lease to a third party that owns the improvements on such
portion of such Property shall not be included in determinations of Capital
Reserves. If the term Capital Reserves is used without reference to any
specific Property, then the amount shall be determined on an aggregate basis
with respect to all Properties of the Borrower and its Subsidiaries and a
proportionate share of all Properties of all Unconsolidated Affiliates.

 

“Capitalization Rate” means 8.50%.

 

“Capitalized Lease Obligation” means an obligation under a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP.  The amount of a
Capitalized Lease Obligation is the capitalized amount of such obligation as
would be required to be reflected on a balance sheet of the applicable Person
prepared in accordance with GAAP as of the applicable date.

 

“Cash Equivalents” means: (a) securities issued,
guaranteed or insured by the United States of America or any of its agencies
with maturities of not more than one year from the date acquired;
(b) certificates of deposit with maturities of not more than one year from
the date acquired issued by a United States federal or state chartered
commercial bank of recognized standing, or a commercial bank organized under
the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, acting through a branch or agency, which bank has capital and
unimpaired surplus in excess of $500,000,000 and which bank or its holding
company has a short-term commercial paper rating of at least A-2 or the
equivalent by S&P or at least P-2 or the equivalent by Moody’s;
(c) reverse repurchase agreements with terms of not more than seven days
from the date acquired, for securities of the type described in clause (a)
above and entered into only with commercial banks having the qualifications
described in clause (b) above; (d) commercial paper issued by any
Person incorporated under the laws of the United  States of America or any State thereof and
rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the
equivalent thereof by Moody’s, in each case with maturities of not more than
one year from the date acquired; and (e) investments in money market funds
registered under the Investment Company Act of 1940, as amended, which have net
assets of at least $500,000,000 and at least 85% of whose assets consist of
securities and other obligations of the type described in clauses (a)
through (d) above.

 

4

 

“Collateral Account” means a special non-interest bearing
deposit account or securities account maintained by, or on behalf of, the Agent
and under its sole dominion and control.

 

“Combined” means
with reference to any term defined or used herein, that term as applied to the
accounts of all or a portion of the Combined Group combined in accordance with
GAAP.

 

“Combined Adjusted EBITDA” means, for any given period, (a) the
EBITDA of the Combined Group determined on a Combined basis for such period, minus
(b) Capital Reserves for such period.

 

“Combined Group” means the Borrower, the Operating
Partnerships and each other Subsidiary of the Borrower or either of the
Operating Partnerships, from time to time in existence, and shall include, as
the context requires, Unconsolidated Affiliates of the Borrower.

 

“Combined Secured Indebtedness” means, with respect to a
Person as of any given date, the aggregate principal amount of all Indebtedness
of such Person outstanding at such date and that is secured in any manner by
any Lien, and in the case of the Borrower, shall include (without duplication)
the Borrower’s pro rata share of the Combined Secured Indebtedness of its
Unconsolidated Affiliates.

 

“Combined Secured Recourse Indebtedness” means all Combined Secured
Indebtedness that is not Nonrecourse Indebtedness.

 

“Combined Tangible Net
Worth” means, as of a
given date, (a) the stockholders’ equity of the Combined Group, plus
(b) accumulated depreciation and amortization, minus (c) the
following (to the extent reflected in determining stockholders’ equity of the
Combined Group): (i) the amount of any write-up in the book value of any
assets contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (ii) all
amounts appearing on the assets side of any such balance sheet for assets which
would be classified as intangible assets under GAAP, all determined on a
Combined basis.

 

“Combined Total Asset Value” means the sum of all of the following of
the Combined Group determined on a Combined basis in accordance with GAAP
applied on a consistent basis: (a) cash, cash equivalents and marketable
securities, plus (b) with respect to each Property owned by the Borrower
or any Subsidiary for two or more fiscal quarters (other than a Development
Property or Unimproved Land), the quotient of (i) Net Operating Income attributable
to such Property for the period of two consecutive prior fiscal quarters most
recently ended times 2, divided by (ii) the Capitalization Rate, plus
(c) the GAAP book value of Properties acquired during the most recent
period of two consecutive fiscal quarters, plus
(d) Construction-in-Process until the earlier of the (i) one year
anniversary date of project completion or (ii) the fiscal quarter after a
Property achieves an Occupancy Rate of 80%, plus (e) the GAAP book value of
Unimproved Land, Mortgage Receivables and other promissory notes.  The Borrower’s pro rata share of assets held
by Unconsolidated Affiliates (excluding assets of the type described in the
immediately preceding clause (a)) will be included in

 

5

 

Combined
Total Asset Value calculations consistent with the above described treatment
for wholly owned assets.  For purposes of
determining Combined Total Asset Value, Net Operating Income from Properties
acquired or disposed of by the Borrower, any Subsidiary or any Unconsolidated
Affiliate during the immediately preceding period of two consecutive fiscal
quarters of the Borrower shall be excluded.

 

“Combined Total
Indebtedness” means all Indebtedness of the Combined Group determined on a
Combined basis and in the case
of the Borrower, shall include (without duplication) the Borrower’s pro rata
share of the Indebtedness of its Unconsolidated Affiliates.

 

“Combined Unsecured Indebtedness” means Indebtedness which is not Combined Secured Indebtedness.

 

“Commitment”
means, as to each Lender (other than the Swingline Lender), such Lender’s
obligation (a) to make Revolving Loans pursuant to Section 2.1.,
(b) to issue (in the case of the Lender then acting as Agent) or
participate in (in the case of the other Lenders) Letters of Credit pursuant to
Section 2.4.(a) and 2.4.(i), respectively (but in the case of the Lender
acting as the Agent excluding the aggregate amount of participations in the
Letters of Credit held by the other Lenders), and (c) to participate in
Swingline Loans pursuant to Section 2.3.(e), in each case, in an amount up
to, but not exceeding, the amount set forth for such Lender on its signature
page hereto as such Lender’s “Commitment Amount” or as set forth in the
applicable Assignment and Acceptance Agreement, as the same may be reduced from
time to time pursuant to Section 2.12. or increased or reduced as
appropriate to reflect any assignments to or by such Lender effected in
accordance with Section 12.5.

 

“Commitment Percentage” means, as to each Lender, the ratio,
expressed as a percentage, of (a) the amount of such Lender’s Commitment
to (b) the aggregate amount of the Commitments of all Lenders; provided,
however, that if at the time of determination the Commitments have terminated
or been reduced to zero, the “Commitment Percentage” of each Lender shall be
the Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.

 

“Compliance Certificate” has the meaning given that term in Section 8.3.

 

“Construction-in-Process” means cash expenditures for land and
improvements (including indirect costs internally allocated and development
costs) determined in accordance with GAAP on all Properties that are under
development or are scheduled to commence development within twelve months from
any date of determination.

 

“Construction Budget” means the fully-budgeted
costs for the acquisition and construction of a given parcel of real property
(including, without limitation, the cost of acquiring such parcel of real
property, reserves for construction interest and operating deficits, tenant
improvements, leasing commissions, and infrastructure costs (but exclusive of
improvements to be paid by tenants or parties other than the Borrower or its
Subsidiaries)), as reasonably determined by the Borrower in good faith.

 

6

 

“Continue”, “Continuation”
and “Continued” each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest Period
pursuant to Section 2.9.

 

“Convert”, “Conversion” and
“Converted” each refers to the
conversion of a Revolving Loan of one Type into a Revolving Loan of another
Type pursuant to Section 2.10.

 

“Credit Event” means any of the following: (a) the
making (or deemed making) of any Loan, (b) the Conversion or Continuation
of a Loan and (c) the issuance of a Letter of Credit.

 

“Credit Rating” means the rating assigned by a Rating Agency
to the senior unsecured long term Indebtedness of a Person.

 

“Default” means any of the events specified in Section 10.1.,
whether or not there has been satisfied any requirement for the giving of
notice, the lapse of time, or both.

 

“Defaulting Lender” has the meaning given that term in Section 3.11.

 

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

 

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

 

“Designated Lender” means a special purpose corporation which
is sponsored by a Lender, that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and that
issues (or the parent of which issues) commercial paper rated at least P-1 (or
the then equivalent grade) by Moody’s or A-1 (or the then equivalent grade)

 

7

 

by S&P that, in
either case, (a) is organized under the laws of the United States of America or
any state thereof, (b) shall have become a party to this Agreement pursuant to Section 12.5.(e)
and (c) is not otherwise a Lender.

 

“Designated Lender Note” means a Bid Rate Note of the
Borrower evidencing the obligation of the Borrower to repay Bid Rate Loans made
by a Designated Lender.

 

“Designating Lender” has the meaning given that term in Section 12.5.(e).

 

“Designation Agreement” means a Designation Agreement between
a Lender and a Designated Lender and accepted by the Agent, substantially in
the form of Exhibit B or such other form as may be agreed to by such
Lender, such Designated Lender and the Agent.

 

“Development Property”
means a Property under development at the date of determination that has not
achieved an Occupancy Rate of at least 80%, or on which the improvements (other
than tenant improvements on unoccupied space) related to the development of
such Property have not been completed. A Development Property on which all
improvements (other than tenant improvements on unoccupied space) related to
the development of such Property have been completed for at least 12 months
shall cease to constitute a Development Property notwithstanding the fact that
such Property has not achieved an Occupancy Rate of at least 80%.

 

“Dollars” or “$” means the
lawful currency of the United States of America.

 

“EBITDA”
means, with respect to a Person for any period (without duplication):
(a) net income (loss) of such Person for such period determined on a
consolidated basis, in accordance with GAAP, exclusive of the following (but
only to the extent included in the determination of such net income (loss)):
(i) depreciation and amortization; (ii) Interest Expense;
(iii) income tax expense; and (iv) extraordinary or non-recurring
gains and losses; plus (b) such Person’s pro rata share of
EBITDA of its Unconsolidated Affiliates. 
EBITDA shall be
adjusted to remove any impact from amortization of intangibles pursuant
to Statement of Financial Accounting Standards number 141.

 

“Effective Date” means the later of: (a) the Agreement
Date and (b) the date on which all of the conditions precedent set forth
in Section 5.1. shall have been fulfilled or waived in writing by the
Requisite Lenders.

 

“Eligible Assignee” means any Person who is, at the time of
determination: (i)  a Lender or an affiliate of a Lender; (ii) a
commercial bank, trust, trust company, insurance company, investment bank or
pension fund organized under the laws of the United States of America, or any
state thereof, and having total assets in excess of $5,000,000,000;
(iii) a savings and loan association or savings bank organized under the
laws of the United States of America, or any state thereof, and having a
tangible net worth of at least $500,000,000; or (iv) a commercial bank
organized under the laws of any other country which is a member of the Organization
for Economic Cooperation and Development, or a political subdivision of any
such country, and having total assets in excess of $10,000,000,000, provided
that such bank is acting through a

 

8

 

branch or agency located
in the United States of America. 
Notwithstanding the foregoing, while an Event of Default under subsection (a),
(b), (e), (f) or (g) of Section 10.1.
exists, “Eligible Assignee” shall mean any Person that is not an individual.

 

“Eligible Property” means a Property which satisfies all
of the following requirements: (a) such Property is fully developed as (i)
a retail property or (ii) an office property; (b) such Property is owned,
or leased under a Ground Lease, by the Borrower and/or a Guarantor; (c) neither
such Property, nor any interest of the Borrower or any Subsidiary therein, is
subject to any Lien (other than Permitted Liens of the types referred to in
clauses (a) through (e) of the definition of Permitted Liens) or a Negative
Pledge; (d) if such Property is owned or leased by a Guarantor
(i) none of the Borrower’s direct or indirect ownership interest in such
Guarantor is subject to any Lien (other than Permitted Liens of the types
referred to in clauses (a) through (e) of the definition of Permitted Liens) or
to a Negative Pledge; and (ii) the Borrower directly, or indirectly
through a Subsidiary, has the right to take the following actions without the
need to obtain the consent of any Person: (x) to sell, transfer or
otherwise dispose of such Property and (y) to create a Lien on such
Property as security for Indebtedness of the Borrower or such Guarantor, as
applicable; and (e) such Property is free of all structural defects or
major architectural deficiencies, title defects, environmental conditions or
other adverse matters except for defects, deficiencies, conditions or other
matters individually or collectively which are not material to the profitable
operation of such Property.

 

“Environmental Laws” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or clean-up of
Hazardous Materials including, without limitation, the following: Clean Air
Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33
U.S.C. § 1251 et seq.; Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.;
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321
et seq.; regulations of the Environmental Protection Agency and any applicable
rule of common law and any judicial interpretation thereof relating primarily
to the environment or Hazardous Materials.

 

“Equity Interest” means, with respect to any Person, any
share of capital stock of (or other ownership or profit interests in) such
Person, any warrant, option or other right for the purchase or other
acquisition from such Person of any share of capital stock of (or other
ownership or profit interests in) such Person, any security convertible into or
exchangeable for any share of capital stock of (or other ownership or profit
interests in) such Person or warrant, right or option for the purchase or other
acquisition from such Person of such shares (or such other interests), and any
other ownership or profit interest in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such share, warrant, option, right or other interest
is authorized or otherwise existing on any date of determination.

 

“Equity Issuance” means any issuance by a Person of any
Equity Interest in such Person and shall in any event include the issuance of
any Equity Interest upon the conversion or exchange of any security
constituting Indebtedness that is convertible or exchangeable, or is being
converted or exchanged, for Equity Interests.

 

9

 

“ERISA” means the Employee Retirement Income Security Act of
1974, as in effect from time to time.

 

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

 

“Event of Default” means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any other
condition has been satisfied.

 

“Excluded Subsidiary” means any Subsidiary (a) holding
title to assets which are or are to become collateral for any Combined Secured
Indebtedness of such Subsidiary and (b) which is prohibited from
Guarantying the Indebtedness of any other Person pursuant to (i) any
document, instrument or agreement evidencing such Combined Secured Indebtedness
or (ii) a provision of such Subsidiary’s organizational documents which
provision was included in such Subsidiary’s organizational documents as a
condition to the extension of such Combined Secured Indebtedness.

 

“Existing Credit Agreement” means that certain Revolving
Credit Agreement and Guaranty dated as of April 29, 2002 among the
Operating Partnerships, each of the financial institutions party thereto as “Lenders”,
Fleet National Bank, as Administrative Agent, and the other parties thereto.

 

“Facility Fee” means the per annum percentage set forth in
the table below corresponding to the Level at which the “Applicable Margin” is
determined in accordance with the definition thereof:

 

	
  Level

  	
   

  	
  Borrower’s Credit Rating

  (S&P/Moody’s)

  	
   

  	
  Facility Fee

  	
   

  
	
  1

  	
   

  	
  A-/A3

  	
   

  	
  0.125

  	
  %

  
	
  2

  	
   

  	
  BBB+/Baa1

  	
   

  	
  0.150

  	
  %

  
	
  3

  	
   

  	
  BBB/Baa2

  	
   

  	
  0.150

  	
  %

  
	
  4

  	
   

  	
  BBB-/Baa3

  	
   

  	
  0.200

  	
  %

  
	
  5

  	
   

  	
  < BBB-/Baa3

  	
   

  	
  0.250

  	
  %

  

 

As of the Agreement Date, and
thereafter until any change in the Level as provided in the definition of “Applicable
Margin”, the Facility Fee equals 0.200%.

 

“Fair Market Value” means, with respect to (a) a
security listed on a national securities exchange or the NASDAQ National
Market, the price of such security as reported on such exchange or the NASDAQ
National Market by any widely recognized reporting method customarily relied
upon by financial institutions and (b) with respect to any other property,
the price which could be negotiated in an arm’s-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of which is
under pressure or compulsion to complete

 

10

 

the transaction.

 

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

 

“Fees” means the fees and commissions provided for or
referred to in Section 3.6. and any other fees payable by the Borrower
hereunder or under any other Loan Document.

 

“Fixed Charges” means, for any period, the sum of
(a) Interest Expense of the Combined Group determined on a Combined basis
for such period, (b) all regularly scheduled principal payments made with
respect to Combined Total Indebtedness during such period, other than any
balloon, bullet or similar principal payment which repays such Indebtedness in
full, and (c) all Preferred Dividends paid during such period.  The Borrower’s pro rata share of the Fixed
Charges of Unconsolidated Affiliates of the Borrower shall be included in
determinations of Fixed Charges.

 

“Foreign
Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

 

“Funds From Operations” means, with respect to a Person and
for a given period, (a) net income (loss) of such Person determined on a
consolidated basis for such period minus (or plus) (b) gains
(or losses) from debt restructuring and sales of property during such period plus
(c) depreciation with respect to such Person’s real estate assets and
amortization (other than amortization of deferred financing costs) of such
Person for such period, all after adjustment for unconsolidated partnerships
and joint ventures.  Adjustments for
unconsolidated entities will be calculated to reflect funds from operations on
the same basis.

 

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

 

“Governmental Approvals” means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.

 

“Governmental Authority” means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental,

 

11

 

quasi-governmental,
judicial, public or statutory instrumentality, authority, body, agency, bureau,
commission, board, department or other entity (including, without limitation,
the Federal Deposit Insurance Corporation, the Comptroller of the Currency or
the Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.

 

“Ground Lease” means a ground
lease containing the following terms and conditions: (a) a remaining term
(exclusive of any unexercised extension options) of 40 years or more from the
Agreement Date; (b) the right of the lessee to mortgage and encumber its
interest in the leased property without the consent of the lessor; (c) the
obligation of the lessor to give the holder of any mortgage Lien on such leased
property written notice of any defaults on the part of the lessee and agreement
of such lessor that such lease will not be terminated until such holder has had
a reasonable opportunity to cure or complete foreclosures, and fails to do so;
(d) reasonable transferability of the lessee’s interest under such lease,
including ability to sublease; and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder of
the leasehold estate demised pursuant to a ground lease.

 

“Guarantor” means the Operating Partnerships and any other
Person that is a party to the Guaranty as a “Guarantor” and in any event shall
include each Material Subsidiary (unless an Excluded Subsidiary) and each other
Subsidiary (unless an Excluded Subsidiary) obligated in respect of any
Indebtedness other than Nonrecourse Indebtedness.

 

“Guaranty”, “Guaranteed”, “Guarantying” or to “Guarantee”
as applied to any obligation means and includes:  (a) a guaranty (other than by
endorsement of negotiable instruments for collection or deposit in the ordinary
course of business), directly or indirectly, in any manner, of any part or all
of such obligation, or (b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation whether by:
(i) the purchase of securities or obligations, (ii) the purchase,
sale or lease (as lessee or lessor) of property or the purchase or sale of
services primarily for the purpose of enabling the obligor with respect to such
obligation to make any payment or performance (or payment of damages in the
event of nonperformance) of or on account of any part or all of such
obligation, or to assure the owner of such obligation against loss,
(iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn
down by beneficiaries of letters of credit (including Letters of Credit), or
(v) the supplying of funds to or investing in a Person on account of all
or any part of such Person’s obligation under a Guaranty of any obligation or
indemnifying or holding harmless, in any way, such Person against any part or
all of such obligation.  As the context
requires, “Guaranty” shall also mean the Guaranty to which the Guarantors are
parties substantially in the form of Exhibit O.

 

“Hazardous Materials” means all or any of the following:
(a) substances that are defined or listed in, or otherwise classified
pursuant to, any applicable Environmental Laws as “hazardous substances”, “hazardous
materials”, “hazardous wastes”, “toxic substances” or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, “TCLP” toxicity or “EP toxicity”; (b) oil,
petroleum or petroleum derived substances, natural

 

12

 

gas, natural gas liquids
or synthetic gas and drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil,
natural gas or geothermal resources; (c) any flammable substances or
explosives or any radioactive materials; (d) asbestos in any form;
(e) toxic mold; and (f) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.

 

“Heritage OP” means Heritage Property Investment Limited
Partnership, a Delaware limited partnership.

 

“Indebtedness” means, with respect to a Person, at
the time of computation thereof, all of the following (without duplication):
(a) all obligations of such Person in respect of money borrowed (other
than trade debt incurred in the ordinary course of business which is not more
than 60 days past due); (b) all obligations of such Person, whether or not
for money borrowed (i) represented by notes payable, or drafts accepted,
in each case representing extensions of credit, (ii) evidenced by bonds,
debentures, notes or similar instruments, or (iii) constituting purchase
money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property or services rendered; (c) Capitalized Lease Obligations of such
Person; (d) all reimbursement obligations (contingent or otherwise) of
such Person in respect of any letters of credit or acceptances (whether or not
the same have been presented for payment); (e) all Off-Balance Sheet
Obligations of such Person; (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any Mandatorily Redeemable Stock issued by such Person or any other Person,
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; (g) all obligations of such Person in
respect of any purchase obligation, repurchase obligation, takeout commitment
or forward equity commitment, in each case evidenced by a binding agreement
(excluding any such obligation to the extent the obligation can be satisfied by
the issuance of Equity Interests (other than Mandatorily Redeemable Stock) at
the option of such Person); (h) net obligations under any Derivatives
Contract not entered into as a hedge against existing Indebtedness, in an
amount equal to the Derivatives Termination Value thereof; (i) all
Indebtedness of other Persons which such Person has Guaranteed or is otherwise
recourse to such Person (except for guaranties of customary exceptions for
fraud, misapplication of funds, environmental indemnities and other similar
exceptions to recourse liability (but not exceptions relating to bankruptcy,
insolvency, receivership or other similar events)); (j) all Indebtedness
of another Person secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien on
property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness or other payment
obligation; and (k) such Person’s pro rata share of the Indebtedness of
any Unconsolidated Affiliate of such Person. 
Indebtedness of any Person shall include Indebtedness of any partnership
or joint venture in which such Person is a general partner or joint venturer to
the extent of such Person’s pro rata share of the ownership of such partnership
or joint venture (except if such Indebtedness, or portion thereof, is recourse
to such Person, in which case the greater of such Person’s pro rata portion of
such Indebtedness or the amount of the recourse portion of the Indebtedness,
shall be included as Indebtedness of such Person).  All Loans and Letter of Credit Liabilities
shall constitute Indebtedness of the Borrower.

 

13

 

“Intellectual Property” has the meaning given that term in Section 6.1.(r).

 

“Interest Expense” means, for any period, without
duplication, (a) total interest expense of the Combined Group, including
capitalized interest not funded under a construction loan interest reserve
account, determined on a Combined basis in accordance with GAAP for such
period, plus (b) the Borrower’s pro rata share of Interest Expense of
Unconsolidated Affiliates for such period.

 

“Interest Period” means:

 

(a)                                  with
respect to any LIBOR Loan, each period commencing on the date such LIBOR Loan
is made or the last day of the next preceding Interest Period for such Loan and
ending 1, 2, 3 or 6 months thereafter, as the Borrower may select in a Notice
of Borrowing, Notice of Continuation or Notice of Conversion, as the case may
be, except that each Interest Period that commences on the last Business Day of
a calendar month, or on a day for which there is no corresponding day in the
appropriate subsequent calendar month, shall end on the last Business Day of
the appropriate subsequent calendar month; and

 

(b)                                 with
respect to any Bid Rate Loan, the period commencing on the date such Bid Rate
Loan is made and ending on any Business Day not less than 7 nor more than 180
days thereafter, as the Borrower may select as provided in Section 2.2.(b).

 

Notwithstanding the
foregoing: (i) if any Interest Period would otherwise end after the
Termination Date, such Interest Period shall end on the Termination Date; and
(ii) each Interest Period that would otherwise end on a day which is not a
Business Day shall end on the immediately following Business Day (or, if such
immediately following Business Day falls in the next calendar month, on the
immediately preceding Business Day).

 

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

 

“Investment” means, with respect to any Person, any
acquisition or investment (whether or not of a controlling interest) by such
Person, by means of any of the following: 
(a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, Guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture interest in such other Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute the business or a division or operating unit of another
Person.  Any binding commitment to make
an Investment in any other Person, as well as any option of another Person to
require an Investment in such Person, shall constitute an Investment.  Except as expressly provided otherwise, for
purposes of determining compliance with any covenant contained in a Loan
Document, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Investment Grade Rating” means a Credit Rating of BBB-/Baa3
(or equivalent) or higher from either Rating Agency.

 

14

 

“L/C Commitment Amount” equals $50,000,000.

 

“Lender” means each financial institution from time to time
party hereto as a “Lender” or a “Designated Lender,” together with its
respective successors and permitted assigns, and as the context requires,
includes the Swingline Lender; provided, however, that the term “Lender” shall
exclude each Designated Lender when used in reference to any Loan other than a
Bid Rate Loan, the Commitments or terms relating to any Loan other than a Bid
Rate Loan and shall further exclude each Designated Lender for all other
purposes under the Loan Documents except that any Designated Lender which funds
a Bid Rate Loan shall, subject to Section 12.5.(e), have the rights
(including the rights given to a Lender contained in Sections 12.2. and
12.9.) and obligations of a Lender associated with holding such Bid Rate Loan.

 

“Lending Office” means, for each Lender and for each Type of
Loan, the office of such Lender specified as such on its signature page hereto
or in the applicable Assignment and Acceptance Agreement, or such other office
of such Lender of which such Lender may notify the Agent in writing from time
to time.

 

“Letter of Credit” has the meaning given that term in Section 2.4.(a).

 

“Letter of Credit Documents” means, with respect to any
Letter of Credit, collectively, any application therefor, any certificate or
other document presented in connection with a drawing under such Letter of
Credit and any other agreement, instrument or other document governing or
providing for (a) the rights and obligations of the parties concerned or
at risk with respect to such Letter of Credit or (b) any collateral
security for any of such obligations.

 

“Letter of Credit Liabilities” means, without duplication, at
any time and in respect of any Letter of Credit, the sum of (a) the Stated
Amount of such Letter of Credit plus (b) the aggregate unpaid principal amount
of all Reimbursement Obligations of the Borrower at such time due and payable
in respect of all drawings made under such Letter of Credit.  For purposes of this Agreement, a Lender
(other than the Lender acting as the Agent) shall be deemed to hold a Letter of
Credit Liability in an amount equal to its participation interest in the
related Letter of Credit under Section 2.4.(i), and the Lender acting as
the Agent shall be deemed to hold a Letter of Credit Liability in an amount
equal to its retained interest in the related Letter of Credit after giving
effect to the acquisition by the Lenders other than the Lender acting as the
Agent of their participation interests under such Section.

 

“Level” has the meaning given that term in
the definition of the term “Applicable Margin.”

 

“LIBOR”
means, for any LIBOR Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period.  If for any reason
such rate is not available, the term “LIBOR” shall mean, for any LIBOR Loan for
any Interest Period therefor, the rate per

 

15

 

annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on the Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on the Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates. If for any reason none of the foregoing rates is available, LIBOR
shall be, for any Interest Period, the rate per annum reasonably determined by
the Agent as the rate of interest at which Dollar deposits in the approximate
amount of the LIBOR Loan would be offered by the Lender then acting as the
Agent to major banks in the London interbank Eurodollar market at their request
at or about 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period.

 

“LIBOR Auction” means a solicitation of Bid
Rate Quotes setting forth LIBOR Margin Loans based on LIBOR pursuant to Section 2.2.

 

“LIBOR Index Rate” means at any time the rate (rounded to the
next higher 1/100 of 1%) of interest for one month U.S. dollar deposits as
reported on Telerate page 3750 as of 11:00 a.m. London time for such day,
provided, if such day is not a Business Day, the immediately preceding Business
Day, or if not so reported, then as determined by the Agent from another
recognized source or interbank quotation.

 

“LIBOR Loan” means a Revolving Loan bearing interest at a
rate based on LIBOR.

 

“LIBOR Margin” has the meaning given that
term in Section 2.2.(c)(ii)(D).

 

“LIBOR Margin Loan” means a Bid Rate Loan
the interest rate on which is determined on the basis of LIBOR pursuant to a
LIBOR Auction.

 

“Lien” as applied to the property of any Person means:  (a) any security interest, encumbrance,
mortgage, deed to secure debt, deed of trust, assignment of leases and rents,
pledge, lien, charge or lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income, rents or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to the payment
of the general, unsecured creditors of such Person; (c) the filing of any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction, other than any precautionary filing not otherwise constituting or
giving rise to a Lien, including a financing statement filed (i) in respect of
a lease not constituting a Capitalized Lease Obligation pursuant to Section 9-505
(or a successor provision) of the Uniform Commercial Code or its equivalent as
in effect in an applicable jurisdiction or (ii) in connection with a sale or
other disposition of accounts or other assets not prohibited by this Agreement
in a transaction not otherwise constituting or giving rise to a Lien; and
(d) any agreement by such Person to grant, give or otherwise convey any of
the foregoing.

 

“Loan” means a Revolving Loan, a Bid Rate Loan or a Swingline
Loan.

 

16

 

“Loan Documents” means this Agreement, each Note, each Letter
of Credit Document, the Guaranty and each other document or instrument now or
hereafter executed and delivered by a Loan Party in connection with, pursuant
to or relating to this Agreement.

 

“Loan Party” means the Borrower, each Guarantor and each
other Person who pledges any collateral security to secure all or a portion of
the Obligations.  Schedule 1.1.(A)
sets forth the Loan Parties in addition to the Borrower as of the Agreement
Date.

 

“Mandatorily Redeemable
Stock” means, with respect to any Person, any Equity Interest of
such Person which by the terms of such Equity Interest (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise, (a) matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than an Equity Interest to the extent redeemable in exchange for common
stock or other equivalent common Equity Interests), (b) is convertible
into or exchangeable or exercisable for Indebtedness or Mandatorily Redeemable
Stock, or (c) is redeemable at the option of the holder thereof, in whole
or in part (other than an Equity Interest which is redeemable solely in
exchange for common stock or other equivalent common Equity Interests), in each
case on or prior to the date on which all Revolving Loans are scheduled to be
due and payable in full.

 

“Material Adverse Effect” means a materially adverse effect
on (a) the business, assets, liabilities, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries taken
as a whole, (b) the ability of the Borrower or any other Loan Party to
perform its obligations under any Loan Document to which it is a party,
(c) the validity or enforceability of any of the Loan Documents or
(d) the rights and remedies of the Lenders and the Agent under any of the
Loan Documents.

 

“Material Subsidiary” means any Subsidiary to which more than
5.0% of Adjusted Combined Total Asset Value is attributable on an individual
basis.

 

“Moody’s” means Moody’s Investors Service, Inc., and its
successors.

 

“Mortgage” means a mortgage, deed of trust, deed to secure
debt or similar security instrument made by a Person owning an interest in real
property granting a Lien on such interest in real property as security for the
payment of Indebtedness of such Person or another Person.

 

“Mortgage Receivable” means a promissory note secured by a
Mortgage of which the Borrower, a Guarantor or one of their respective
Subsidiaries is the holder and retains the rights of collection of all payments
thereunder.

 

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

 

17

 

“Negative Pledge” means, with respect to a given asset, any
provision of a document, instrument or agreement (other than any Loan Document)
which prohibits or purports to prohibit the creation or assumption of any Lien
on such asset as security for Indebtedness of the Person owning such asset or
any other Person; provided, however, that an agreement that conditions a Person’s
ability to encumber its assets upon the maintenance of one or more specified
ratios that limit such Person’s ability to encumber its assets but that do not
generally prohibit the encumbrance of its assets, or the encumbrance of
specific assets, shall not constitute a Negative Pledge.

 

“Net Operating Income” or “NOI” means,
for any Property and for a given period, an amount equal to (a) the sum of
the gross revenues for such Property for such fiscal period received in the
ordinary course of business (excluding pre-paid rents and revenues and security
deposits except to the extent applied in satisfaction of tenants’ obligations
for rent) minus (b) all operating expenses incurred with respect to
such Property for such fiscal period (including an appropriate accrual for
property taxes and insurance); provided that there shall be deducted from such
amount (to the extent not duplicative of a deduction already taken in the
calculation of Net Operating Income), on a pro rata basis for such period,
management expenses computed at an annual rate equal to the greater of
(i) an imputed management fee in the amount of 3% of the annualized gross
revenue of such Property or (ii) the annualized amount of management fees
actually incurred with respect to such Property.  The Borrower may perform the preceding
calculation on an aggregate basis for all such Properties wherever the context
would appropriately permit or warrant the use of an aggregate calculation.

 

“Net Proceeds” means with respect to any Equity Issuance by a
Person, the aggregate amount of all cash and the Fair Market Value of all other
property (other than securities of such Person being converted or exchanged in
connection with such Equity Issuance) received by such Person in respect of
such Equity Issuance net of investment banking fees, legal fees, accountants’
fees, underwriting discounts and commissions and other customary fees and
expenses actually incurred by such Person in connection with such Equity
Issuance.

 

“Nonrecourse Indebtedness”
means, with respect to a Person, (a) Indebtedness for borrowed money in respect
of which recourse for payment (except for customary exceptions for fraud,
fraudulent conveyance, intentional misrepresentation, misappropriation of funds
or other property, misapplication of funds (including without limitation rents,
profits, tenant deposits or insurance or condemnation proceeds), mismanagement
or waste, tax, ERISA, environmental and other regulatory law indemnities,
nonpayment of utilities, operations and maintenance expenses and obligations
secured by statutory liens, failure to comply with legal requirements necessary
to maintain the tax-exemption on the interest on such Indebtedness (if
applicable), failure to insure or failure to pay transfer fees and charges due
the lender in connection with any sale or other transfer of the Property
subject to such Indebtedness and any fees and expenses (and interest thereon)
of the holder of such Indebtedness in connection with the enforcement of such
recourse obligations (but not exceptions
relating to bankruptcy, insolvency, receivership or other similar events))
is contractually limited to specific assets of such Person encumbered by a Lien
securing such Indebtedness or (b) if such Person is a Single Asset Entity, any
Indebtedness for borrowed

 

18

 

money
of such Person.  Indebtedness of the
Borrower and the Operating Partnerships under the PMCC Loan Agreement and the
PMCC Indemnity shall constitute Nonrecourse Indebtedness.

 

“Note” means a Revolving
Note, a Bid Rate Note or a Swingline Note.

 

“Notice of Borrowing” means a notice in the form of
Exhibit C to be delivered to the Agent pursuant to Section 2.1.(b)
evidencing the Borrower’s request for a borrowing of Revolving Loans.

 

“Notice of Continuation” means a notice in the form of
Exhibit D to be delivered to the Agent pursuant to Section 2.9.
evidencing the Borrower’s request for the Continuation of a LIBOR Loan.

 

“Notice of Conversion” means a notice in the form of
Exhibit E to be delivered to the Agent pursuant to Section 2.10.
evidencing the Borrower’s request for the Conversion of a Loan from one Type to
another Type.

 

“Notice of Swingline Borrowing” means a notice in the form of
Exhibit F to be delivered to the Agent pursuant to Section 2.3.
evidencing the Borrower’s request for a Swingline Loan.

 

“Obligations” means, individually and collectively:
(a) the aggregate principal balance of, and all accrued and unpaid
interest on, all Loans; (b) all Reimbursement Obligations and all other
Letter of Credit Liabilities; and (c) all other indebtedness, liabilities,
obligations, covenants and duties of the Borrower and the other Loan Parties
owing to the Agent or any Lender of every kind, nature and description, under
or in respect of this Agreement or any of the other Loan Documents, including,
without limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory
note.

 

“Occupancy Rate” means, with respect to a Property at any
time, the ratio, expressed as a percentage, of (a) the net rentable square
footage of such Property actually occupied by tenants that are not Affiliates
paying rent at rates not materially less than rates generally prevailing at the
time the applicable lease was entered into (subject to concessions offered in
connection with the management of such Property) pursuant to binding leases as
to which no monetary default has occurred and has continued unremedied for 30
or more days to (b) the aggregate net rentable square footage units of
such Property.  For purposes of the
definition of “Occupancy Rate”, a tenant shall be deemed to actually occupy a
Property notwithstanding a temporary cessation of operations for renovation,
repairs or other temporary reason, or for the purpose of completing tenant
build-out or that is otherwise scheduled to be open for business within 90 days
of such date.

 

“OFAC” means U.S. Department of the Treasury’s Office of
Foreign Assets Control and any successor Governmental Authority.

 

19

 

“Off-Balance Sheet
Obligations” means
liabilities and obligations of the Borrower, any Subsidiary or any other Person
in respect of “off-balance sheet arrangements” (as defined in the SEC
Off-Balance Sheet Rules) which the Borrower would be required to disclose in
the “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section of the Borrower’s report on Form 10-Q or Form 10-K (or
their equivalents) which the Borrower is required to file with the Securities
and Exchange Commission (or any Governmental Authority substituted
therefor).  As used in this definition,
the term “SEC Off-Balance Sheet Rules” means the Disclosure in Management’s
Discussion and Analysis About Off-Balance Sheet Arrangements, Securities Act
Release No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR pts.
228, 229 and 249).

 

“Operating Partnership” means the Bradley OP or the Heritage
OP.

 

“Participant” has the meaning given that term in Section 12.5.(c).

 

“PBGC” means the Pension Benefit Guaranty Corporation and any
successor agency.

 

“Permitted Liens” means, as to any Person: (a) Liens
securing taxes, assessments and other charges or levies imposed by any
Governmental Authority (excluding any Lien imposed pursuant to any of the
provisions of ERISA or pursuant to any Environmental Laws) or the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business,
which are not at the time required to be paid or discharged under Section 7.6.;
(b) Liens consisting of deposits or pledges made, in the ordinary course
of business, in connection with, or to secure payment of, obligations under
workers’ compensation, unemployment insurance or similar Applicable Laws;
(c) Liens consisting of encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property,
which do not materially detract from the value of such property or impair the
intended use thereof in the business of such Person; (d) the rights of
tenants under leases or subleases not interfering with the ordinary conduct of
business of such Person; (e) Liens in favor of the Agent for the benefit
of the Lenders; (f) Liens in favor of the Borrower or a Guarantor securing
obligations owing by a Subsidiary to the Borrower or such Guarantor; (g) Liens
in existence as of the Agreement Date and set forth in Part II of Schedule 6.1.(f);
and (h) Liens
securing judgments that do not otherwise give rise to a Default or Event of
Default.

 

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

 

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

 

20

 

“PMCC Indemnity” means the Indemnity and Guaranty Agreement
dated as of September 18, 2000 by the Borrower in favor of Prudential
Mortgage Capital Company, LLC.

 

“PMCC Loan Agreement” means the Loan Agreement dated as of September 18,
2000 between Heritage SPE LLC and Prudential Mortgage Capital Company, LLC.

 

“Post-Default Rate” means, in respect of any principal of any
Loan or any other Obligation that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment or otherwise), a
rate per annum equal to the Base Rate as in effect from time to time plus
the Applicable Margin for Base Rate Loans plus two percent (2.0%).

 

“Preferred Dividends” means, for any period and without
duplication, all Restricted Payments paid during such period on Preferred
Equity Interests issued by the Borrower or a Subsidiary.  Preferred Dividends shall not include
dividends or distributions (a) paid or payable solely in Equity Interests
(other than Mandatorily Redeemable Stock) payable to holders of such class of
Equity Interests, (b) paid or payable to the Borrower or a Subsidiary, or
(c) constituting or resulting in the redemption of Preferred Equity
Interests, other than scheduled redemptions not constituting balloon, bullet or
similar redemptions in full.

 

“Preferred Equity Interests” means, with respect to any
Person, Equity Interests in such Person which are entitled to preference or
priority over any other Equity Interest in such Person in respect of the
payment of dividends or distribution of assets upon liquidation or both.

 

“Prime Rate” means the rate of interest per annum announced
publicly by the Lender then acting as the Agent as its prime rate from time to
time.  The Prime Rate is not necessarily
the best or the lowest rate of interest offered by the Lender acting as the
Agent or any other Lender.

 

“Principal Office” means the office of the Agent located at
One Wachovia Center, Charlotte, North Carolina, or such other office of the
Agent as the Agent may designate from time to time.

 

“Property” means any parcel of real property owned or leased
(in whole or in part) or operated by the Borrower, any Subsidiary or any
Unconsolidated Affiliate of the Borrower and which is located (i) in a state of
the United States of America or the District of Columbia or (ii) outside the
United States of America and the District of Columbia but only to the extent
that the value of all such Properties does not exceed 10% of Combined Total
Asset Value at any time.

 

“Rating Agencies” means S&P and Moody’s.

 

“Register” has the meaning given that term in Section 12.5.(f).

 

“Regulatory Change” means, with respect to any Lender, any
change effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any

 

21

 

interpretation, directive
or request applying to a class of banks, including such Lender, of or under any
Applicable Law (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any Governmental Authority or
monetary authority charged with the interpretation or administration thereof or
compliance by any Lender with any request or directive regarding capital
adequacy.

 

“Reimbursement Obligation” means the absolute, unconditional
and irrevocable obligation of the Borrower to reimburse the Agent for any
drawing honored by the Agent under a Letter of Credit.

 

“REIT” means a Person qualifying for treatment as a “real
estate investment trust” under the Internal Revenue Code.

 

“REIT Note Indentures” means, collectively, (a) the
Indenture dated as of April 1, 2004 between the Borrower and the Trustee,
pursuant to which the Borrower issued $200,000,000 5.125% Notes due 2014 and
(b) the Indenture dated as of October 15, 2004 between the Borrower
and the Trustee, pursuant to which the Borrower issued $150,000,000 4.5% Notes
due 2009.

 

“Requisite Lenders” means, as of any date, Lenders having at
least 66-2/3% of the aggregate amount of the Commitments (not held by
Defaulting Lenders who are not entitled to vote), or, if the Commitments have
been terminated or reduced to zero, Lenders holding at least 66-2/3% of the
principal amount of the aggregate outstanding Loans and Letter of Credit
Liabilities (not held by Defaulting Lenders who are not entitled to vote).  Commitments, Revolving Loans and Letter of
Credit Liabilities held by Defaulting Lenders shall be disregarded when
determining the Requisite Lenders.  For
purposes of this definition, a Lender (other than the Swingline Lender) shall
be deemed to hold a Swingline Loan or a Letter of Credit Liability to the
extent such Lender has acquired a participation therein under the terms of this
Agreement and has not failed to perform its obligations in respect of such
participation.

 

“Responsible Officer” means with respect to the Borrower or
any Subsidiary, the chief executive officer, the chief financial officer or
senior finance officer of the Borrower or such Subsidiary.

 

“Restricted Payment” means: (a) any dividend or other
distribution, direct or indirect, on account of any Equity Interest of the
Borrower or any Subsidiary now or hereafter outstanding, except a dividend
payable solely in Equity Interests of
an identical or junior class to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interest of the Borrower or any Subsidiary now or hereafter outstanding; and
(c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any Equity Interests
of the Borrower or any Subsidiary now or hereafter outstanding.

 

“Revolving Loan” means a loan made by a Lender to the
Borrower pursuant to Section 2.1.(a).

 

22

 

“Revolving
Note” has the meaning given that term in Section 2.11.(a).

 

“Sanctioned
Entity” means (a) an agency of the government of, (b) an
organization directly or indirectly controlled by, or (c) a Person
resident in, in each case, a country that is subject to a sanctions program
identified on the list maintained by the OFAC and published from time to time,
as such program may be applicable to such agency, organization or Person.

 

“Sanctioned
Person” means a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by the OFAC as published from time to
time.

 

“Securities
Act” means the Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.

 

“Security
Filing” has the meaning given that term in Section 8.4.(b).

 

“Senior Note
Indentures” means, collectively, (a) each of the REIT Note
Indentures and (b) the Bradley OP Note Indenture.

 

“Single Asset Entity” means a Person (other
than an individual) that (a) only owns a single Property; (b) is engaged only
in the business of owning, developing and/or leasing such Property; and (c)
receives substantially all of its gross revenues from such Property.  In addition, if the assets of a Person
consist solely of (i) Equity Interests in one other Single Asset Entity and
(ii) cash and other assets of nominal value incidental to such Person’s
ownership of the other Single Asset Entity, such Person shall also be deemed to
be a Single Asset Entity for purposes of this Agreement.

 

“Significant Subsidiary” means a Subsidiary
to which more than $25,000,000 of Combined Total Asset Value is attributable.

 

“Solvent”
means, when used with respect to any Person, that (a) the fair value and
the fair salable value of its assets (excluding any Indebtedness due from any
affiliate of such Person) are each in excess of the fair valuation of its total
liabilities (including all contingent liabilities computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that could reasonably be expected to become an actual and matured
liability); (b) such Person is able to pay its debts or other obligations
in the ordinary course as they mature; and (c) such Person has capital not
unreasonably small to carry on its business and all business in which it
proposes to be engaged.

 

“S&P”
means Standard & Poor’s Rating Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

 

“Stabilized Property” means a completed
Property that has at any time achieved an Occupancy Rate of at least 80%.

 

23

 

“Stated
Amount” means the amount available to be drawn by a beneficiary
under a Letter of Credit from time to time, as such amount may be increased or
reduced from time to time in accordance with the terms of such Letter of
Credit.

 

“Subsidiary”
means, for any Person, any corporation, partnership or other entity of which at
least a majority of the Equity Interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other individuals
performing similar functions of such corporation, partnership or other entity
(without regard to the occurrence of any contingency) is at the time directly
or indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and shall include all Persons the accounts
of which are consolidated with those of such Person pursuant to GAAP.

 

“Swingline
Commitment” means the Swingline Lender’s obligation to make
Swingline Loans pursuant to Section 2.3. in an amount up to, but not
exceeding, $50,000,000, as such amount
may be reduced from time to time in accordance with the terms hereof.

 

“Swingline
Lender” means Wachovia Bank, National Association, together with its
respective successors and assigns.

 

“Swingline
Loan” means a loan made by the Swingline Lender to the Borrower
pursuant to Section 2.3.(a).

 

“Swingline
Note” means the promissory note of the Borrower payable to the order
of the Swingline Lender in a principal amount equal to the amount of the
Swingline Commitment as originally in effect and otherwise duly completed,
substantially in the form of Exhibit G.

 

“Taxes”
has the meaning given that term in Section 3.12.

 

“Termination
Date” means March 28, 2008, or such later date to which the
Termination Date may be extended pursuant to Section 2.13.

 

“Titled
Agents” means each of the Arranger, the Syndication Agents, and the
Documentation Agents and their respective successors and permitted assigns.

 

“Trustee”
has the meaning given that term in the definition of “Bradley OP Note Indenture”.

 

“Type”
with respect to any Revolving Loan, refers to whether such Loan is a LIBOR Loan
or Base Rate Loan.

 

“Unconsolidated
Affiliate” means, with respect to any Person, any other Person in
whom such Person holds an Investment, which Investment is accounted for in the
financial statements of such Person on an equity basis of accounting and whose
financial results would not be consolidated under GAAP with the financial
results of such Person on the consolidated financial statements of such Person.

 

24

 

“Unencumbered Adjusted NOI” means, for any period, (a) Unencumbered NOI
for such period, minus (b) Capital Reserves for all Eligible Properties
for such period.

 

“Unencumbered NOI” means, for any period, NOI from all
Eligible Properties.  For purposes of
this definition, to the extent the NOI attributable to Eligible Properties that
are developed as office properties would exceed 5.0% of Unencumbered NOI, such
excess shall be excluded.

 

“Unencumbered Asset Value” means
(a) the Unencumbered NOI (excluding NOI attributable to Development
Properties) for the period of two consecutive fiscal quarters most recently
ended times 2 divided by the Capitalization Rate, plus (b) the GAAP book
value of all Properties acquired during the period of two consecutive fiscal
quarters most recently ended which Properties are not subject to any Lien (other
than Permitted Liens of the types referred to in clauses (a) through (e) of the
definition of Permitted Liens) or any Negative Pledge, plus (c) the GAAP
book value of Development Properties not subject to any Lien (other than
Permitted Liens of the types referred to in clauses (a) through (e) of the
definition of Permitted Liens) or any Negative Pledge, until the earlier of (i)
the one year anniversary date of project completion or (ii) the second quarter
after the project achieves an Occupancy Rate of 80%.  For purposes of this definition, to the extent the Unencumbered
Asset Value attributable to (a) Construction-In-Process would exceed 10% of the
Unencumbered Asset Value, such excess shall be excluded, and (b) Properties
owned by Subsidiaries that are not Wholly Owned Subsidiaries (other than the
Bradley OP (and Wholly Owned Subsidiaries of the Bradley OP) so long as the
Borrower owns at least 66-2/3% of the Equity Interests issued by the Bradley
OP) would exceed 10% of the Unencumbered Asset Value, such excess shall be
excluded.

 

“Unfunded
Liabilities” means, with respect to any Plan at any time, the amount
(if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed
by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

 

“Unimproved Land”
means land on which no development (other than improvements that are not
material and are temporary in nature) has occurred and for which no development
is scheduled in the following 12 months.

 

“Unsecured
Interest Expense”
means, for a given period, all Interest Expense of the Combined Group
attributable to Combined Unsecured Indebtedness of the Combined Group for such
period.

 

“Wachovia”
means Wachovia Bank, National Association, together with its successors and
assigns.

 

25

 

“Wholly Owned
Subsidiary” means any Subsidiary of a Person in respect of which all
of the voting equity securities (other than, in the case of a corporation,
directors’ qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such Person or
by such Person and one or more other Subsidiaries of such Person.

 

Section 1.2. 
General; References to Times.

 

Unless otherwise
indicated, all accounting terms, ratios and measurements shall be interpreted
or determined in accordance with GAAP; provided that, if at any time any change
in GAAP would affect the computation of any financial ratio or requirement set
forth in any Loan Document, and either the Borrower or the Requisite Lenders
shall so request, the Agent, the Lenders and the Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Requisite Lenders); provided further that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP.  References in
this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules” are to
sections, articles, exhibits and schedules herein and hereto unless otherwise
indicated.  References in this Agreement
to any document, instrument or agreement (a) shall include all exhibits,
schedules and other attachments thereto, (b) shall include all documents,
instruments or agreements issued or executed in replacement thereof, to the
extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified as of the date of this Agreement and from time
to time thereafter to the extent not prohibited hereby and in effect at any
given time.  Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.  Unless explicitly set forth to the contrary,
a reference to “Subsidiary” means a Subsidiary of the Borrower or a Subsidiary
of such Subsidiary and a reference to an “Affiliate” means a reference to an
Affiliate of the Borrower.  Titles and
captions of Articles, Sections, subsections and clauses in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.  Unless otherwise indicated,
all references to time are references to Charlotte, North Carolina time.

 

Section 1.3. 
Financial Attributes of Non-Wholly Owned Subsidiaries.

 

When determining the
Borrower’s compliance with any financial covenant contained in any of the Loan
Documents, only the Borrower’s pro rata share of the financial attributes of a
Subsidiary that is not a Wholly Owned Subsidiary (other than the Bradley OP (and Wholly Owned
Subsidiaries of the Bradley OP) so long as the Borrower owns at least 66-2/3%
of the Equity Interests issued by the Bradley OP) shall be included.

 

26

 

ARTICLE II. CREDIT FACILITY

 

Section 2.1. 
Revolving Loans.

 

(a)           Generally.  Subject to the terms and conditions hereof
(including, without limitation, Section 2.15.), during the period from the
Effective Date to but excluding the Termination Date, each Lender severally and
not jointly agrees to make Revolving Loans to the Borrower in an aggregate
principal amount at any one time outstanding up to, but not exceeding, the
amount of such Lender’s Commitment. 
Subject to the terms and conditions of this Agreement, during the period
from the Effective Date to but excluding the Termination Date, the Borrower may
borrow, repay and reborrow Revolving Loans hereunder.

 

(b)           Requesting Revolving Loans.  The Borrower shall give the Agent notice
pursuant to a Notice of Borrowing or telephonic notice of each borrowing of
Revolving Loans.  Each Notice of
Borrowing shall be delivered to the Agent before 11:00 a.m. (i) in
the case of LIBOR Loans, on the date three Business Days prior to the proposed
date of such borrowing and (ii) in the case of Base Rate Loans, on the
date one Business Day prior to the proposed date of such borrowing.  Any such telephonic notice shall include all
information to be specified in a written Notice of Borrowing and shall be
promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing
sent to the Agent by telecopy on the same day of the giving of such telephonic
notice.  The Agent will transmit by
telecopy the Notice of Borrowing (or the information contained in such Notice
of Borrowing) to each Lender promptly upon receipt by the Agent.  Each Notice of Borrowing or telephonic notice
of each borrowing shall be irrevocable once given and binding on the Borrower.

 

(c)           Disbursements of Revolving Loan
Proceeds.  No later than 1:00 p.m. on
the date specified in the applicable Notice of Borrowing, each Lender will make
available for the account of its applicable Lending Office to the Agent at the
Principal Office, in immediately available funds, the proceeds of the Revolving
Loan to be made by such Lender.  With
respect to Revolving Loans to be made after the Effective Date, unless the
Agent shall have been notified by any Lender prior to the specified date of
borrowing that such Lender does not intend to make available to the Agent the
Revolving Loan to be made by such Lender on such date, the Agent may assume
that such Lender will make the proceeds of such Revolving Loan available to the
Agent on the date of the requested borrowing as set forth in the related Notice
of Borrowing and the Agent may (but shall not be obligated to), in reliance
upon such assumption, make available to the Borrower the amount of such
Revolving Loan to be provided by such Lender. 
Subject to satisfaction of the applicable conditions set forth in
Article V. for such borrowing, the Agent will make the proceeds of such
borrowing available to the Borrower no later than 2:00 p.m. on the date and at
the account specified by the Borrower in such Notice of Borrowing.

 

Section 2.2. 
Bid Rate Loans.

 

(a)           Bid Rate Loans.  So long as the Borrower maintains an
Investment Grade Rating, in addition to borrowings of Revolving Loans, at any
time during the period from the Effective Date to but excluding the Termination
Date, the Borrower may request the Lenders to make offers to make Bid Rate
Loans to the Borrower in Dollars.  The
Lenders may, but shall have no

 

27

 

obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.

 

(b)           Requests for Bid Rate Loans.  When the Borrower wishes to request from the
Lenders offers to make Bid Rate Loans, it shall give the Agent notice (a “Bid
Rate Quote Request”) so as to be received no later than 1:00 p.m. on (x) the
Business Day immediately preceding the date of borrowing proposed therein, in
the case of an Absolute Rate Auction and (y) the date four Business Days prior
to the proposed date of borrowing, in the case of a LIBOR Auction.  The Agent shall deliver to each Lender a copy
of each Bid Rate Quote Request promptly upon receipt thereof by the Agent.  The Borrower may request offers to make Bid
Rate Loans for up to three (3) different Interest Periods in each Bid Rate
Quote Request; provided that the request for each separate Interest Period shall
be deemed to be a separate Bid Rate Quote Request for a separate borrowing (a “Bid
Rate Borrowing”).  Each Bid Rate Quote
Request shall be substantially in the form of Exhibit H and shall specify
as to each Bid Rate Borrowing:

 

(i)            the proposed date of such Bid Rate
Borrowing, which shall be a Business Day;

 

(ii)           the aggregate amount of such Bid Rate
Borrowing, which (x) shall be in the minimum amount of $2,000,000 and
integral multiples of $500,000 and (y) shall not cause any of the limits
specified in Section 2.15. to be violated;

 

(iii)          whether the Bid Rate Quote Request is
for LIBOR Margin Loans or Absolute Rate Loans; and

 

(iv)          the duration of the Interest Period
applicable thereto, which shall not extend beyond the Termination Date.

 

Except as otherwise
provided in this subsection (b), no Bid Rate Quote Request shall be given
within five Business Days (or such other number of days as the Borrower and the
Agent, with the consent of the Requisite Lenders, may agree) of the giving of
any other Bid Rate Quote Request.

 

(c)           Bid Rate Quotes.

 

(i)            Each Lender may, but has no
obligation to, submit one or more Bid Rate Quotes, each containing an offer to
make a Bid Rate Loan in response to any Bid Rate Quote Request; provided that,
if the Borrower’s request under Section 2.2.(b) specified more than one
Interest Period, such Lender may make a single submission containing one or
more Bid Rate Quotes for each such Interest Period.  Each Bid Rate Quote must be submitted to the
Agent not later than 10:00 a.m. (x) on the proposed date of
borrowing, in the case of an Absolute Rate Auction and (y) on the date
three Business Days prior to the proposed date of borrowing, in the case of a
LIBOR Auction; provided that the Lender then acting as Agent may submit a Bid
Rate Quote only if it notifies the Borrower of the terms of the offer contained
therein not later than 9:00 a.m. (x) on the proposed date of such
borrowing, in the case of an Absolute Rate Auction and (y) on the date three
Business Days prior to the proposed date of borrowing, in the case of a LIBOR
Auction.

 

28

 

Subject to Articles V.
and X., any Bid Rate Quote so made shall be irrevocable except with the consent
of the Agent given at the request of the Borrower.  Any Bid Rate Loan may be funded by a Lender’s
Designated Lender (if any) as provided in Section 12.5.(e), however such
Lender shall not be required to specify in its Bid Rate Quote whether such Bid
Rate Loan will be funded by such Designated Lender.

 

(ii)           Each Bid Rate Quote shall be
substantially in the form of Exhibit I and shall specify:

 

(A)          the proposed date of borrowing and the
Interest Period therefor;

 

(B)           the principal amount of the Bid Rate
Loan for which each such offer is being made; provided that the aggregate
principal amount of all Bid Rate Loans for which a Lender submits Bid Rate
Quotes (x) may be greater or less than the Commitment of such Lender but (y)
shall not exceed the principal amount of the Bid Rate Borrowing for a
particular Interest Period for which offers were requested;

 

(C)           in the case of an Absolute Rate
Auction, the rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/10,000th of 1%) offered for each such Bid Rate Loan (the “Absolute
Rate”);

 

(D)          in the case of a LIBOR Auction, the
margin above or below applicable LIBOR (the “LIBOR Margin”) offered for each
such LIBOR Margin Loan, expressed as a percentage (rounded upwards, if
necessary, to the nearest 1/1,000th of 1%) to be added to (or subtracted from)
the applicable LIBOR; and

 

(E)           the identity of the quoting Lender.

 

Unless otherwise agreed
by the Agent and the Borrower, no Bid Rate Quote shall contain qualifying,
conditional or similar language or propose terms other than or in addition to
those set forth in the applicable Bid Rate Quote Request and, in particular, no
Bid Rate Quote may be conditioned upon acceptance by the Borrower of all (or
some specified minimum) of the principal amount of the Bid Rate Loan for which
such Bid Rate Quote is being made; provided, however, that a Lender may, in any
submission that sets forth Absolute Rates or LIBOR Margins for more than one
Bid Rate Loan (as contemplated by the proviso to the first sentence of Section
2.2.(c)), limit the maximum aggregate principal amount of Bid Rate Loans which
may be accepted.

 

(d)           Notification by Agent.  The Agent shall, as promptly as practicable
after the Bid Rate Quotes are submitted (but in any event not later than 10:30
a.m. on the proposed date of borrowing), notify the Borrower of the terms (i)
of any Bid Rate Quote submitted by a Lender that is in accordance with
Section 2.2.(c) and (ii) of any Bid Rate Quote that amends, modifies or is
otherwise inconsistent with a previous Bid Rate Quote submitted by such Lender
with respect to the same Bid Rate Quote Request.  Any such subsequent Bid Rate Quote shall be
disregarded by the Agent unless such subsequent Bid Rate Quote is submitted
solely to correct a manifest

 

29

 

error in such former Bid Rate Quote. 
The Agent’s notice to the Borrower shall specify (A) the aggregate
principal amount of the Bid Rate Borrowing for which offers have been received
and (B) the principal amounts and Absolute Rates or LIBOR Margins, as
applicable, so offered by each Lender (identifying the Lender that made each
Bid Rate Quote).

 

(e)           Acceptance by Borrower.

 

(i)            Not later than 12:00 noon (x) on the
proposed date of borrowing, in the case of an Absolute Rate Auction and (y) on
the date three Business Days prior to the proposed date of borrowing, in the
case of a LIBOR Auction, the Borrower shall notify the Agent of its acceptance
or nonacceptance of the Bid Rate Quotes so notified to it pursuant to
Section 2.2.(d) which notice shall be in the form of Exhibit J.  In the case of acceptance, such notice shall
specify the aggregate principal amount of Bid Rate Quotes for each Interest
Period that are accepted.  The failure of
the Borrower to give such notice by such time shall constitute nonacceptance.  The Agent shall promptly notify each affected
Lender.  The Borrower may accept any Bid
Rate Quote in whole or in part; provided that:

 

(A)          the aggregate principal amount of each
Bid Rate Borrowing may not exceed the applicable amount set forth in the
related Bid Rate Quote Request;

 

(B)           the aggregate principal amount of
each Bid Rate Borrowing shall comply with the provisions of Section 3.5.,
and with all other Bid Rate Loans accepted in such Auction shall not cause the
limits specified in Section 2.15. to be violated;

 

(C)           acceptance of Bid Rate Quotes may be
made only in ascending order of Absolute Rates or LIBOR Margins, as applicable,
in each case beginning with the lowest rate so offered;

 

(D)          the Borrower may not accept any Bid
Rate Quote that fails to comply with Section 2.2.(c) or otherwise fails to
comply with the requirements of this Agreement); and

 

(E)           any acceptance in part shall be in a
minimum amount of $1,000,000 and integral multiples of $500,000 in excess
thereof.

 

(ii)           If Bid Rate Quotes are made by two or
more Lenders with the same Absolute Rates or LIBOR Margins, as applicable, for
a greater aggregate principal amount than the amount in respect of which Bid
Rate Quotes have been or are permitted to be accepted for the related Interest
Period, the principal amount of Bid Rate Loans in respect of which such Bid
Rate Quotes are accepted shall be allocated by the Agent among such Lenders in
proportion to the aggregate principal amount of such Bid Rate Quotes.  Determinations by the Agent of the amounts of
Bid Rate Loans shall be conclusive in the absence of manifest error.

 

30

 

(f)            Obligation to Make Bid Rate Loans.  The Agent shall promptly (and in any event
not later than (x) 1:00 p.m. on the proposed date of borrowing of Absolute
Rate Loans and (y) on the date three Business Days prior to the proposed
date of borrowing of LIBOR Margin Loans) notify each Lender whose Bid Rate
Quote has been accepted and the amount and rate thereof.  A Lender who is notified that it has been
selected to make a Bid Rate Loan may designate its Designated Lender (if any)
to fund such Bid Rate Loan on its behalf, as described in
Section 12.5.(e).  Any Designated
Lender which funds a Bid Rate Loan shall on and after the time of such funding
become the obligee in respect of such Bid Rate Loan and be entitled to receive
payment thereof when due.  No Lender
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.  Any Lender whose offer
to make any Bid Rate Loan has been accepted shall, not later than 2:30 p.m. on
the date specified for the making of such Loan, make the amount of such Loan
available to the Agent at its Principal Office in immediately available funds,
for the account of the Borrower.  The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower no later than 3:30 p.m.
on such date by depositing the same, in immediately available funds, in an
account of the Borrower designated by the Borrower.

 

(g)           No Effect on Commitment.  Except for the purpose and to the extent
expressly stated in Sections 2.12. and 2.15., the amount of any Bid Rate
Loan made by any Lender shall not constitute a utilization of such Lender’s
Commitment.

 

Section 2.3. 
Swingline Loans.

 

(a)           Swingline Loans.  Subject to the terms and conditions hereof
(including, without limitation, Section 2.15.), during the period from the
Effective Date to but excluding the Termination Date, the Swingline Lender
agrees to make Swingline Loans to the Borrower in an aggregate principal amount
at any one time outstanding up to, but not exceeding, the amount of the
Swingline Commitment.  If at any time the
aggregate principal amount of the Swingline Loans outstanding at such time
exceeds the Swingline Commitment in effect at such time, the Borrower shall
immediately pay the Agent for the account of the Swingline Lender the amount of
such excess.  Subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow
Swingline Loans hereunder.

 

(b)           Procedure for Borrowing Swingline
Loans.  The Borrower shall give the
Agent and the Swingline Lender notice pursuant to a Notice of Swingline
Borrowing or telephonic notice of each borrowing of a Swingline Loan.  Each Notice of Swingline Borrowing shall be
delivered to the Swingline Lender no later than 3:00 p.m. on the proposed date
of such borrowing.  Any such notice given
telephonically shall include all information to be specified in a written
Notice of Swingline Borrowing and shall be promptly confirmed in writing by the
Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline
Lender by telecopy on the same day of the giving of such telephonic
notice.  On the date of the requested
Swingline Loan and subject to satisfaction of the applicable conditions set
forth in Article V. for such borrowing, the Swingline Lender will make the
proceeds of such Swingline Loan available to the Borrower in Dollars, in
immediately available funds, at the account specified by the Borrower in the
related Notice of Swingline Borrowing not later than 4:00 p.m. on such date.

 

31

 

(c)           Interest.  Swingline Loans shall bear interest at a per
annum rate equal to the LIBOR Index Rate plus the Applicable Margin for
LIBOR Loans.  Interest payable on
Swingline Loans is solely for the account of the Swingline Lender.  All accrued and unpaid interest on Swingline
Loans shall be payable on the dates and in the manner provided in
Section 2.5. with respect to interest on Base Rate Loans (except as the
Swingline Lender and the Borrower may otherwise agree in writing in connection
with any particular Swingline Loan).

 

(d)           Swingline Loan Amounts, Etc.  Each Swingline Loan shall be in the minimum
amount of $500,000 and integral multiples of $100,000 or such other minimum
amounts agreed to by the Swingline Lender and the Borrower.  Any voluntary prepayment of a Swingline Loan
must be in integral multiples of $100,000 or the aggregate principal amount of
all outstanding Swingline Loans (or such other minimum amounts upon which the
Swingline Lender and the Borrower may agree) and in connection with any such
prepayment, the Borrower must give the Swingline Lender prior written notice
thereof no later than 10:00 a.m. on the date of such prepayment.  The Swingline Loans shall, in addition to
this Agreement, be evidenced by the Swingline Note.

 

(e)           Repayment and Participations of
Swingline Loans.  The Borrower agrees
to repay each Swingline Loan within one Business Day of demand therefor by the
Swingline Lender and in any event, within 5 Business Days after the date such
Swingline Loan was made.  Notwithstanding
the foregoing, the Borrower shall repay the entire outstanding principal amount
of, and all accrued but unpaid interest on, the Swingline Loans on the
Termination Date (or such earlier date as the Swingline Lender and the Borrower
may agree in writing).  In lieu of
demanding repayment of any outstanding Swingline Loan from the Borrower, the
Swingline Lender may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf for such purpose), request a
borrowing of Base Rate Loans from the Lenders in an amount equal to the
principal balance of such Swingline Loan. 
The amount limitations of Section 3.5.(a) shall not apply to any
borrowing of Base Rate Loans made pursuant to this subsection.  The Swingline Lender shall give notice to the
Agent of any such borrowing of Base Rate Loans not later than 12:00 noon on the
proposed date of such borrowing and the Agent shall give prompt notice of such
borrowing to the Lenders.  No later than
2:00 p.m. on such date, each Lender will make available to the Agent at
the Principal Office for the account of Swingline Lender, in immediately
available funds, the proceeds of the Base Rate Loan to be made by such Lender
and, to the extent of such Base Rate Loan, such Lender’s participation in the
Swingline Loan so repaid shall be deemed to be funded by such Base Rate
Loan.  The Agent shall pay the proceeds
of such Base Rate Loans to the Swingline Lender, which shall apply such
proceeds to repay such Swingline Loan. 
At the time each Swingline Loan is made, each Lender shall automatically
(and without any further notice or action) be deemed to have purchased from the
Swingline Lender, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage in such
Swingline Loan.  If the Lenders are
prohibited from making Loans required to be made under this subsection for any
reason, including without limitation, the occurrence of any Default or Event of
Default described in Section 10.1.(f) or 10.1.(g), upon notice from the
Agent or the Swingline Lender, each Lender severally agrees to pay to the Agent
for the account of the Swingline Lender in respect of such participation the
amount of such Lender’s Commitment Percentage of each outstanding Swingline
Loan.  If such amount is not in fact made
available to the Agent by any Lender, the

 

32

 

Swingline Lender shall be entitled to recover such amount on demand
from such Lender, together with accrued interest thereon for each day from the
date of demand thereof, at the Federal Funds Rate.  If such Lender does not pay such amount
forthwith upon demand therefor by the Agent or the Swingline Lender, and until
such time as such Lender makes the required payment, the Swingline Lender shall
be deemed to continue to have outstanding Swingline Loans in the amount of such
unpaid participation obligation for all purposes of the Loan Documents (other
than those provisions requiring the other Lenders to purchase a participation
therein).  Further, such Lender shall be
deemed to have assigned any and all payments made of principal and interest on
its Loans, and any other amounts due such Lender hereunder, to the Swingline
Lender to fund Swingline Loans in the amount of the participation in Swingline
Loans that such Lender failed to purchase pursuant to this Section until such
amount has been purchased (as a result of such assignment or otherwise).  A Lender’s obligation to make payments in
respect of a participation in a Swingline Loan shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including without limitation, (i) any claim of setoff, counterclaim,
recoupment, defense or other right which such Lender or any other Person may
have or claim against the Agent, the Swingline Lender or any other Person
whatsoever, (ii) the occurrence or continuation of a Default or Event of
Default (including without limitation, any of the Defaults or Events of Default
described in Section 10.1.(f) or 10.1.(g)) or the termination of any
Lender’s Commitment, (iii) the existence (or alleged existence) of an
event or condition which has had or could have a Material Adverse Effect,
(iv) any breach of any Loan Document by the Agent, any Lender or the
Borrower or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

 

Section 2.4. 
Letters of Credit.

 

(a)           Letters of Credit.  Subject to the terms and conditions of this
Agreement (including, without limitation, Section 2.15.), the Agent, on behalf
of the Lenders, agrees to issue for the account of the Borrower during the
period from and including the Effective Date to, but excluding, the date 30
days prior to the Termination Date one or more letters of credit (each a “Letter
of Credit”) up to a maximum aggregate Stated Amount at any one time outstanding
not to exceed the L/C Commitment Amount.

 

(b)           Terms of Letters of Credit.  At the time of issuance, the amount, form,
terms and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Agent and the Borrower.  Notwithstanding the foregoing, in no event
may the expiration date of any Letter of Credit extend beyond the earlier of
(i) the date one year from its date of issuance or (ii) the Termination Date;
provided, however, a Letter of Credit may contain a provision providing for the
automatic extension of the expiration date in the absence of a notice of
non-renewal from the Agent but in no event shall any such provision permit the
extension of the expiration date of such Letter of Credit beyond the
Termination Date; provided, further, that one or more Letters of Credit up to a
maximum aggregate Stated Amount of $10,000,000 may contain an expiration date
that extends no more than one year beyond the Termination Date so long as the
Borrower provides the Agent with (A) cash collateral for such Letters of
Credit on terms acceptable to the Agent and (B) a reimbursement agreement
in form and substance acceptable to the Agent and such other documents
requested by the Agent evidencing the

 

33

 

Borrower’s reimbursement obligations in respect of such Letters of
Credit, in each such case, no later than 20 days prior to the Termination Date.

 

(c)           Requests for Issuance of Letters
of Credit.  The Borrower shall give
the Agent written notice (or telephonic notice promptly confirmed in writing)
at least 5 Business Days prior to the requested date of issuance of a Letter of
Credit, such notice to describe in reasonable detail the proposed terms of such
Letter of Credit and the nature of the transactions or obligations proposed to
be supported by such Letter of Credit, and in any event shall set forth with
respect to such Letter of Credit the proposed (i) Stated Amount,
(ii) beneficiary, and (iii) expiration date.  The Borrower shall also execute and deliver
such customary letter of credit application forms as requested from time to
time by the Agent.  Provided the Borrower
has given the notice prescribed by the first sentence of this subsection and
subject to the other terms and conditions of this Agreement, including the
satisfaction of any applicable conditions precedent set forth in
Article V., the Agent shall issue the requested Letter of Credit on the requested
date of issuance for the benefit of the stipulated beneficiary.  Upon the written request of the Borrower, the
Agent shall deliver to the Borrower a copy of each issued Letter of Credit
within a reasonable time after the date of issuance thereof.  To the extent any term of a Letter of Credit
Document is inconsistent with a term of any other Loan Document, the term of
such other Loan Document shall control.

 

(d)           Reimbursement Obligations.  Upon receipt by the Agent from the
beneficiary of a Letter of Credit of any demand for payment under such Letter
of Credit, the Agent shall promptly notify the Borrower of the amount to be
paid by the Agent as a result of such demand and the date on which payment is
to be made by the Agent to such beneficiary in respect of such demand;
provided, however, the Agent’s failure to give, or delay in giving, such notice
shall not discharge the Borrower in any respect from the applicable
Reimbursement Obligation.  The Borrower
hereby unconditionally and irrevocably agrees to pay and reimburse the Agent
for the amount of each demand for payment under such Letter of Credit on or
prior to the date on which payment is to be made by the Agent to the
beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind (other than notice as provided in this
subsection).  Upon receipt by the Agent
of any payment in respect of any Reimbursement Obligation, the Agent shall
promptly pay to each Lender that has acquired a participation therein under the
second sentence of Section 2.4.(i) such Lender’s Commitment Percentage of
such payment.

 

(e)           Manner of Reimbursement.  Upon its receipt of a notice referred to in
the immediately preceding subsection (d), the Borrower shall advise the
Agent whether or not the Borrower intends to borrow hereunder to finance its
obligation to reimburse the Agent for the amount of the related demand for
payment and, if it does, the Borrower shall submit a timely request for such
borrowing as provided in the applicable provisions of this Agreement.  If the Borrower fails to so advise the Agent,
or if the Borrower fails to reimburse the Agent for a demand for payment under
a Letter of Credit by the date of such payment, then (i) if the applicable
conditions contained in Article V. would permit the making of Revolving
Loans, the Borrower shall be deemed to have requested a borrowing of Revolving
Loans (which shall be Base Rate Loans) in an amount equal to the unpaid
Reimbursement Obligation and the Agent shall give each Lender prompt notice of
the amount of the Revolving Loan to be made available to the Agent not later
than 1:00 p.m. and (ii) if such conditions would not permit the making of

 

34

 

Revolving Loans, the provisions of subsection (j) of this Section
shall apply.  The limitations of Section
3.5.(a) shall not apply to any borrowing of Base Rate Loans under this
subsection.

 

(f)            Effect of Letters of Credit on
Commitments.  Upon the issuance by
the Agent of any Letter of Credit and until such Letter of Credit shall have
expired or been terminated, the Commitment of each Lender shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to the product
of (i) such Lender’s Commitment Percentage and (ii) the sum of (A) the
Stated Amount of such Letter of Credit plus (B) any related Reimbursement
Obligations then outstanding.

 

(g)           Agent’s Duties Regarding Letters
of Credit; Unconditional Nature of Reimbursement Obligations.  In examining documents presented in
connection with drawings under Letters of Credit and making payments under
Letters of Credit against such documents, the Agent shall only be required to
use the same standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it has
not sold participations and making payments under such letters of credit.  The Borrower assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. 
In furtherance and not in limitation of the foregoing, neither the Agent
nor any of the Lenders shall be responsible for, and the Borrower’s obligations
in respect of the Letters of Credit shall not be affected in any manner by,
(i) the form, validity, sufficiency, accuracy, genuineness or legal
effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under any Letter of
Credit even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit, or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) failure of the beneficiary of any Letter
of Credit to comply fully with conditions required in order to draw upon such
Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telex, telecopy or
otherwise, whether or not they be in cipher; (v) errors in interpretation
of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit, or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any Letter of Credit of the proceeds of any drawing under any
Letter of Credit; or (viii) any consequences arising from causes beyond
the control of the Agent or the Lenders. 
None of the above shall affect, impair or prevent the vesting of any of
the Agent’s or any Lender’s rights or powers hereunder.  Any action taken or omitted to be taken by
the Agent under or in connection with any Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final, non-appealable judgment), shall not
create against the Agent or any Lender any liability to the Borrower or any
Lender.  In this regard, the obligation
of the Borrower to reimburse the Agent for any drawing made under any Letter of
Credit, and to repay any Revolving Loan made pursuant to Section 2.4.(e), shall
be absolute, unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and any other applicable Letter of
Credit Document under all circumstances whatsoever, including without
limitation, the following circumstances: (A) any lack of validity or
enforceability of any Letter of Credit Document or any term or provisions
therein; (B) any amendment or waiver of or any consent to departure from
all

 

35

 

or any of the Letter of Credit Documents; (C) the existence of any
claim, setoff, defense or other right which the Borrower may have at any time
against the Agent, any Lender, any beneficiary of a Letter of Credit or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or in the Letter of Credit Documents or any unrelated
transaction; (D) any breach of contract or dispute between the Borrower,
the Agent, any Lender or any other Person; (E) any demand, statement or
any other document presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein or
made in connection therewith being untrue or inaccurate in any respect
whatsoever; (F) any non-application or misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such Letter of
Credit; (G) payment by the Agent under any Letter of Credit against
presentation of a draft or certificate which does not strictly comply with the
terms of such Letter of Credit; and (H) any other act, omission to act,
delay or circumstance whatsoever that might, but for the provisions of this
Section, constitute a legal or equitable defense to or discharge of the
Borrower’s Reimbursement Obligations.  Notwithstanding
anything to the contrary contained in this Section or Section 12.9., but
not in limitation of the Borrower’s unconditional obligation to reimburse the
Agent for any drawing made under a Letter of Credit as provided in this
Section, and to repay any Revolving Loan made pursuant to Section 2.4.(e), the
Borrower shall have no obligation to indemnify the Agent or any Lender in
respect of any liability incurred by the Agent or such Lender arising solely
out of the gross negligence or willful misconduct of the Agent or such Lender
in respect of a Letter of Credit as determined by a court of competent
jurisdiction in a final, non-appealable judgment.  Except as otherwise provided in this Section,
nothing in this Section shall affect any rights the Borrower may have with
respect to the gross negligence or willful misconduct of the Agent or any
Lender with respect to any Letter of Credit.

 

(h)           Amendments, Etc.  The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject to
the same conditions applicable under this Agreement to the issuance of new
Letters of Credit (including, without limitation, that the request therefor be
made through the Agent), and no such amendment, supplement or other
modification shall be issued unless either (i) the respective Letter of
Credit affected thereby would have complied with such conditions had it
originally been issued hereunder in such amended, supplemented or modified form
or (ii) the Requisite Lenders (or, if required by Section 12.6., all
of  the Lenders) shall have consented
thereto.  In connection with any such
amendment, supplement or other modification, the Borrower shall pay the Fees,
if any, payable under the last sentence of Section 3.6.(b).

 

(i)            Lenders’ Participation in Letters
of Credit.  Immediately upon the
issuance by the Agent of any Letter of Credit each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender’s Commitment Percentage of the liability of the Agent
with respect to such Letter of Credit, and each Lender thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Agent to pay and
discharge when due, such Lender’s Commitment Percentage of the Agent’s
liability under such Letter of Credit. 
In addition, upon the making of each payment by a Lender to the Agent in
respect of any Letter of Credit pursuant to the immediately following
subsection (j), such Lender shall, automatically and without any

 

36

 

further action on the part of the Agent or such Lender, acquire
(i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Agent by the Borrower in respect of such
Letter of Credit and (ii) a participation in a percentage equal to such
Lender’s Commitment Percentage in any interest or other amounts payable by the
Borrower in respect of such Reimbursement Obligation (other than the Fees
payable to the Agent pursuant to the third and last sentences of
Section 3.6.(b)).

 

(j)            Payment Obligation of Lenders.  Each Lender severally agrees to pay to the
Agent on demand in immediately available funds in Dollars the amount of such
Lender’s Commitment Percentage of each drawing paid by the Agent under each
Letter of Credit to the extent such amount is not reimbursed by the Borrower
pursuant to Section 2.4.(d) and so long as such drawing does not occur
after the Termination Date; provided, however, that in respect of any drawing
under any Letter of Credit, the maximum amount that any Lender shall be
required to fund, whether as a Revolving Loan or as a participation, shall not
exceed such Lender’s Commitment Percentage of such drawing.  If the notice referenced in the second
sentence of Section 2.4.(e) is received by a Lender not later than 11:00 a.m.,
then such Lender shall make such payment available to the Agent not later than
2:00 p.m. on the date of demand therefor; otherwise, such payment shall be made
available to the Agent not later than 1:00 p.m. on the next succeeding Business
Day.  Each Lender’s obligation to make
such payments to the Agent under this subsection, and the Agent’s right to
receive the same, shall be absolute, irrevocable and unconditional and shall
not be affected in any way by any circumstance whatsoever, including without
limitation, (i) the failure of any other Lender to make its payment under
this subsection, (ii) the financial condition of the Borrower or any other
Loan Party, (iii) the existence of any Default or Event of Default,
including any Event of Default described in Section 10.1.(f) or 10.1.(g)
or (iv) the termination of the Commitments.  Each such payment to the Agent shall be made
without any offset, abatement, withholding or deduction whatsoever.

 

(k)           Information to Lenders. The
Agent shall deliver to the Lenders on a quarterly basis information setting
forth the Stated Amount of all outstanding Letters of Credit.  The Agent shall promptly notify each Lender
of (a) the issuance of a Letter of Credit and (b) the reduction of
the stated amount of a Letter of Credit. 
Other than as set forth in this subsection, the Agent shall have no duty
to notify the Lenders regarding the issuance or other matters regarding Letters
of Credit issued hereunder.  The failure
of the Agent to perform its requirements under this subsection shall not relieve
any Lender from its obligations under Section 2.4.(j).

 

Section 2.5. 
Rates and Payment of Interest on Loans.

 

(a)           Rates.  The Borrower promises to pay to the Agent for
the account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period from and including the date of the making of
such Loan to but excluding the date such Loan shall be paid in full, at the
following per annum rates:

 

(i)            during such periods as such Loan is
a Base Rate Loan, at the Base Rate (as in effect from time to time) plus the
Applicable Margin;

 

(ii)           during such periods as such Loan is a
LIBOR Loan, at Adjusted LIBOR for such Loan for the Interest Period therefor
plus the Applicable Margin;

 

37

 

(iii)          if such Loan is an Absolute Rate Loan,
at the Absolute Rate for such Loan, as applicable, for the Interest Period
therefor quoted by the Lender making such Loan in accordance with
Section 2.2.; and

 

(iv)          if such Loan is a LIBOR Margin Loan,
at LIBOR for such Loan for the Interest Period therefor, plus (or minus) the
LIBOR Margin quoted by the Lender making such Loan in accordance with
Section 2.2.

 

Notwithstanding the
forgoing, overdue principal, Reimbursement Obligations and (to the extent
permitted by Applicable Law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest at a rate per annum equal to the Post-Default Rate until such amount
shall be paid in full (after as well as before judgment).

 

(b)           Payment of Interest.  Accrued and unpaid interest on each Loan
shall be payable (i) in the case of a Base Rate Loan, monthly in arrears
on the first day of each calendar month, (ii) in the case of a LIBOR Loan
or a Bid Rate Loan, in arrears on the last day of each Interest Period
therefor, and, if such Interest Period is longer than three months, at
three-month intervals following the first day of such Interest Period, and
(iii) in the case of any Loan, in arrears upon the payment, prepayment or
Continuation thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid, Continued or
Converted).  Interest payable pursuant to
Section 2.5.(a) at the
Post-Default Rate shall be payable from time to time on demand.  Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall give
notice thereof to the Lenders to which such interest is payable and to the
Borrower.  All determinations by the
Agent of an interest rate hereunder shall be conclusive and binding on the
Lenders and the Borrower for all purposes, absent manifest error.

 

Section 2.6. 
Number of Interest Periods.

 

There may be no more than
8 different Interest Periods for LIBOR Loans and Bid Rate Loans, collectively,
outstanding at the same time.

 

Section 2.7. 
Repayment of Loans.

 

(a)           Revolving Loans.  The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, the
Revolving Loans on the Termination Date.

 

(b)           Bid Rate Loans.  The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, each
Bid Rate Loan on the last day of the Interest Period of such Bid Rate Loan.

 

Section 2.8. 
Prepayments.

 

(a)           Optional.  Subject to Section 4.4., the Borrower
may prepay any Loan (other than a Bid Rate Loan) at any time without premium or
penalty.  Bid Rate Loans may not be
prepaid at the option of the Borrower without the prior written consent of the
Lender to whom such Bid

 

38

 

Rate Loan is owed.  The Borrower
shall give the Agent at least one Business Day’s prior written notice of the
prepayment of any Revolving Loan.

 

(b)           Mandatory.  If at any time the aggregate principal amount
of all outstanding Revolving Loans, together with the aggregate amount of all
Letter of Credit Liabilities, the aggregate principal amount of all outstanding
Bid Rate Loans and the aggregate principal amount of all outstanding Swingline
Loans, exceeds the aggregate amount of the Commitments in effect at such time,
the Borrower shall immediately pay to the Agent for the accounts of the Lenders
the amount of such excess.  Such payment
shall be applied to pay all amounts of principal outstanding on the Loans and
any Reimbursement Obligations pro rata in accordance with Section 3.2. and
if any Letters of Credit are outstanding at such time the remainder, if any,
shall be deposited into the Collateral Account for application to any
Reimbursement Obligations.  If the
Borrower is required to pay any outstanding LIBOR Loans or Bid Rate Loans by
reason of this Section prior to the end of the applicable Interest Period
therefor, the Borrower shall pay all amounts due under Section 4.4.

 

Section 2.9. 
Continuation.

 

So long as no Default or
Event of Default shall exist, the Borrower may on any Business Day, with
respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion
thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan.  Each new Interest Period selected under this
Section shall commence on the last day of the immediately preceding Interest
Period.  Each selection of a new Interest
Period shall be made by the Borrower giving to the Agent a Notice of
Continuation not later than 11:00 a.m. on the third Business Day prior to the
date of any such Continuation.  Such
notice by the Borrower of a Continuation shall be by telephone or telecopy,
confirmed immediately in writing if by telephone, in the form of a Notice of
Continuation, specifying (a) the proposed date of such Continuation,
(b) the LIBOR Loans and portions thereof subject to such Continuation and
(c) the duration of the selected Interest Period, all of which shall be
specified in such manner as is necessary to comply with all limitations on
Loans outstanding hereunder.  Each Notice
of Continuation shall be irrevocable by and binding on the Borrower once
given.  Promptly after receipt of a
Notice of Continuation, the Agent shall notify each Lender by telecopy, or
other similar form of transmission, of the proposed Continuation.  If the Borrower shall fail to select in a
timely manner a new Interest Period for any LIBOR Loan in accordance with this
Section, or if a Default or Event of Default shall exist, such Loan will automatically,
on the last day of the current Interest Period therefor, Convert into a Base
Rate Loan notwithstanding the first sentence of Section 2.10. or the
Borrower’s failure to comply with any of the terms of such Section.

 

Section 2.10. 
Conversion.

 

The Borrower may on any Business Day, upon the
Borrower’s giving of a Notice of Conversion to the Agent, Convert all or a
portion of a Loan of one Type into a Loan of another Type; provided, however, a
Base Rate Loan may not be Converted to a LIBOR Loan if a Default or Event of
Default shall exist.  Any Conversion of a
LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of
an Interest Period for such LIBOR Loan and, upon Conversion of a Base Rate Loan
into a LIBOR Loan, the Borrower shall pay accrued interest to the date of
Conversion on the principal amount so Converted.  Each such Notice of Conversion

 

39

 

shall be given not later than 11:00 a.m. on the Business Day prior to
the date of any proposed Conversion into Base Rate Loans and on the third
Business Day prior to the date of any proposed Conversion into LIBOR
Loans.  Promptly after receipt of a
Notice of Conversion, the Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed Conversion.  Subject to the restrictions specified above,
each Notice of Conversion shall be by telephone (confirmed immediately in
writing) or telecopy in the form of a Notice of Conversion specifying
(a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted,
(d) the Type of Loan such Loan is to be Converted into and (e) if
such Conversion is into a LIBOR Loan, the requested duration of the Interest
Period of such Loan.  Each Notice of
Conversion shall be irrevocable by and binding on the Borrower once given.

 

Section 2.11. 
Notes.

 

(a)           Revolving Note.  The Revolving Loans made by each Lender
shall, in addition to this Agreement, also be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit K (each a “Revolving
Note”), payable to the order of such Lender in a principal amount equal to the
amount of its Commitment without giving effect to any reduction pursuant to
Section 2.12. and otherwise duly completed.

 

(b)           Bid Rate Notes.  The Bid Rate Loans made by any Lender shall,
in addition to this Agreement, also be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit L (each a “Bid Rate Note”),
payable to the order of such Lender and otherwise duly completed.

 

(c)           Records.  The date, amount, interest rate, Type and
duration of Interest Periods (if applicable) of each Loan made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and such entries shall be binding
on the Borrower, absent manifest error; provided, however, that the failure of
a Lender to make any such record shall not affect the obligations of the Borrower
under any of the Loan Documents.

 

(d)           Lost, Stolen, Destroyed or
Mutilated Notes. Upon receipt by the Borrower of (i) written notice
from a Lender that a Note of such Lender has been lost, stolen, destroyed or
mutilated, and (ii) (A) in the case of loss, theft or destruction, an
unsecured agreement of indemnity from such Lender in form reasonably
satisfactory to the Borrower, or (B) in the case of mutilation, upon
surrender and cancellation of such Note, the Borrower shall at its own expense execute
and deliver to such Lender a new Note dated the date of such lost, stolen,
destroyed or mutilated Note.

 

Section 2.12. 
Voluntary Reductions of the Commitment.

 

The Borrower shall have
the right to terminate or reduce the aggregate unused amount of the Commitments
(for which purpose use of the Commitments shall be deemed to include the
aggregate amount of Letter of Credit Liabilities and the aggregate principal
amount of all outstanding Swingline Loans and Bid Rate Loans) at any time and
from time to time without penalty or premium upon not less than 5 Business Days
prior written notice to the Agent of each

 

40

 

such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction and shall be irrevocable once
given and effective only upon receipt by the Agent; provided, however, if the
Borrower seeks to reduce the aggregate amount of the Commitments below
$50,000,000, then the Commitments shall all automatically and permanently be
reduced to zero.  The Agent will promptly
transmit such notice to each Lender.  The
Commitments, once terminated or reduced may not be increased or reinstated.

 

Section 2.13. 
Extension of Termination Date.

 

The Borrower shall have the
right, exercisable one time, to extend the Termination Date by one year.  The Borrower may exercise such right only by
executing and delivering to the Agent at least 90 days but not more than 180
days prior to the current Termination Date, a written request for such
extension (an “Extension Request”).  The
Agent shall forward to each Lender a copy of the Extension Request delivered to
the Agent promptly upon receipt thereof. 
Subject to satisfaction of the following conditions, the Termination
Date shall be extended for one year effective upon receipt of the Extension
Request and payment of the fee referred to in the following clause (b):
(a) immediately prior to such extension and immediately after giving
effect thereto, (i) no Default or Event of Default shall exist and
(ii) the representations and warranties made or deemed made by the
Borrower and each other Loan Party in the Loan Documents to which any of them
is a party, shall be true and correct in all material respects on and as of the
date of such extension with the same force and effect as if made on and as of
such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents and (b) the Borrower shall have paid the Fees payable under
Section 3.6.(c).

 

Section 2.14. 
Expiration or Maturity Date of Letters of Credit Past Termination Date.

 

If on the date the
Commitments are terminated or reduced to zero (whether voluntarily, by reason
of the occurrence of an Event of Default or otherwise), there are any Letters
of Credit outstanding hereunder, the Borrower shall, on such date, pay to the
Agent an amount of money equal to the Stated Amount of such Letter(s) of Credit
for deposit into the Collateral Account.

 

Section 2.15. 
Amount Limitations.

 

Notwithstanding any other
term of this Agreement or any other Loan Document, no Lender shall be required
to make a Loan, no Lender shall make any Bid Rate Loan, the Agent shall not
issue a Letter of Credit and no reduction of the Commitments pursuant to
Section 2.12. shall take effect, if immediately after the making of such
Loan, the issuance of such Letter of Credit or such reduction in the
Commitments:

 

(a)           the
aggregate principal amount of all outstanding Revolving Loans, together with
the aggregate principal amount of all outstanding Bid Rate Loans, the aggregate
principal amount of all outstanding Swingline Loans and the aggregate amount of
all Letter of Credit Liabilities, would exceed the aggregate amount of the
Commitments at such time; or

 

41

 

(b)           the
aggregate principal amount of all outstanding Bid Rate Loans would exceed 50%
of the aggregate amount of the Commitments at such time.

 

Section 2.16. 
Increase of Commitments.

 

With the prior consent of
the Agent, the Borrower shall have the right to request increases in the
aggregate amount of the Commitments (provided that after giving effect to any
increases in the Commitments pursuant to this Section, the aggregate amount of
the Commitments may not exceed $500,000,000) by providing written notice to the
Agent, which notice shall be irrevocable once given.  Each such increase in the Commitments must be
in an aggregate minimum amount of $20,000,000 and integral multiples of
$5,000,000 in excess thereof.  No Lender
shall be required to increase its Commitment and any new Lender becoming a
party to this Agreement in connection with any such requested increase must be
an Eligible Assignee.  If a new Lender
becomes a party to this Agreement, or if any existing Lender agrees to increase
its Commitment, such Lender shall on the date it becomes a Lender hereunder (or
increases its Commitment, in the case of an existing Lender) (and as a
condition thereto) purchase from the other Lenders its Commitment Percentage
(or the increase in its Commitment Percentage, in the case of an existing
Lender) (as determined after giving effect to the increase of Commitments) of
any outstanding Revolving Loans, by making available to the Agent for the
account of such other Lenders at the Principal Office, in same day funds, an
amount equal to the sum of (A) the portion of the outstanding principal
amount of such Revolving Loans to be purchased by such Lender plus (B) the
aggregate amount of payments previously made by the other Lenders under
Section 2.4.(j) which have not been repaid plus (C) interest accrued
and unpaid to and as of such date on such portion of the outstanding principal
amount of such Revolving Loans.  The
Borrower shall pay to the Lenders amounts payable, if any, to such Lenders
under Section 4.4. as a result of the prepayment of any such Revolving
Loans.  No increase of the Commitments
may be effected under this Section if (x) a Default or Event of Default
shall be in existence on the effective date of such increase or (y) any representation
or warranty made or deemed made by the Borrower or any other Loan Party in any
Loan Document to which any such Loan Party is a party is not (or would not be)
true or correct in any material respect on the effective date of such increase
(except for representations or warranties which expressly relate solely to an
earlier date).  In connection with any
increase in the aggregate amount of the Commitments pursuant to this
subsection, (a) any Lender becoming a party hereto shall execute such documents
and agreements as the Agent may reasonably request and (b) the Borrower shall
make appropriate arrangements so that each new Lender, and any existing Lender
increasing its Commitment, receives a new or replacement Note, as appropriate,
in the amount of such Lender’s Commitment within 2 Business Days of the
effectiveness of the applicable increase in the aggregate amount of
Commitments.

 

ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL
PROVISIONS

 

Section 3.1. 
Payments.

 

Except to the extent
otherwise provided herein, all payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or any other Loan
Document shall be made in Dollars, in immediately available funds, without
deduction, set-off or

 

42

 

counterclaim, to the Agent at its Principal Office, not later than
2:00 p.m. on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). 
Subject to Section 10.4., the Borrower may, at the time of making
each payment under this Agreement or any Note, specify to the Agent the amounts
payable by the Borrower hereunder to which such payment is to be applied.  Each payment received by the Agent for the
account of a Lender under this Agreement or any Note shall be paid to such
Lender at the applicable Lending Office of such Lender no later than 5:00 p.m.
on the date of receipt.  If the Agent
fails to pay such amount to a Lender as provided in the previous sentence, the
Agent shall pay interest on such amount until paid at a rate per annum equal to
the Federal Funds Rate from time to time in effect.  If the due date of any payment under this
Agreement or any other Loan Document would otherwise fall on a day which is not
a Business Day such date shall be extended to the next succeeding Business Day
and interest shall be payable for the period of such extension.

 

Section 3.2. 
Pro Rata Treatment.

 

Except to the extent
otherwise provided herein: (a) each borrowing from the Lenders under
Section 2.1.(a), 2.3.(e) and 2.4.(e) shall be made from the Lenders, each
payment of the Fees under Section 3.6.(a), the first sentence of
Section 3.6.(b) and Section 3.6.(c) shall be made for the account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.12. shall be applied to the respective Commitments of the
Lenders, pro rata according to the amounts of their respective Commitments;
(b) each payment or prepayment of principal of Revolving Loans by the
Borrower shall be made for the account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Revolving Loans held by
them, provided that if immediately prior to giving effect to any such payment
in respect of any Revolving Loans the outstanding principal amount of the
Revolving Loans shall not be held by the Lenders pro rata in accordance with
their respective Commitments in effect at the time such Loans were made, then
such payment shall be applied to the Revolving Loans in such manner as shall
result, as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment of interest on Revolving Loans by
the Borrower shall be made for the account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; (d) the making, Conversion and Continuation of
Revolving Loans of a particular Type (other than Conversions provided for by
Section 4.6.) shall be made pro rata among the Lenders according to the
amounts of their respective Commitments (in the case of making of Revolving
Loans) or their respective Revolving Loans (in the case of Conversions and
Continuations of Revolving Loans) and the then current Interest Period for each
Lender’s portion of each Revolving Loan of such Type shall be coterminous; (e)
the Lenders’ participation in, and payment obligations in respect of, Letters
of Credit under Section 2.4. shall be pro rata in accordance with their
respective Commitments; (f) the Lenders’ participation in, and payment
obligations in respect of, Swingline Loans under Section 2.3. shall be pro
rata in accordance with their respective Commitments; and (g) each
mandatory prepayment of principal of Bid Rate Loans by the Borrower pursuant to
Section 2.8.(b) shall be made for account of the Lenders then owed Bid
Rate Loans pro rata in accordance with the respective unpaid principal amounts
of the Bid Rate Loans then owing to each such Lender.  All payments of principal, interest, fees and
other amounts in respect of the Swingline Loans shall be for the account of the
Swingline Lender only (except to the extent any Lender shall have acquired and
funded a

 

43

 

participating interest in any such Swingline Loan pursuant to
Section 2.3.(e), in which case such payments shall be pro rata in
accordance with such participating interests).

 

Section 3.3. 
Sharing of Payments, Etc.

 

If a Lender shall obtain
payment of any principal of, or interest on, any Loan made by it to the
Borrower under this Agreement, or shall obtain payment on any other Obligation
owing by the Borrower or a Loan Party through the exercise of any right of set-off,
banker’s lien or counterclaim or similar right or otherwise or through
voluntary prepayments directly to a Lender or other payments made by the
Borrower to a Lender not in accordance with the terms of this Agreement and
such payment should be distributed to the Lenders pro rata in accordance with
Section 3.2. or Section 10.4., as applicable, such Lender shall
promptly purchase from the other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans made by the
other Lenders or other Obligations owed to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such payment (net of any
reasonable expenses which may be incurred by such Lender in obtaining or
preserving such benefit) pro rata in accordance with Section 3.2. or
Section 10.4., as applicable.  To
such end, all the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such payment is
rescinded or must otherwise be restored. 
The Borrower agrees that any Lender so purchasing a participation (or
direct interest) in the Loans or other Obligations owed to such other Lenders
may exercise all rights of set-off, banker’s lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans in the amount of such participation.  Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of the Borrower.

 

Section 3.4. 
Several Obligations.

 

No Lender shall be
responsible for the failure of any other Lender to make a Loan or to perform
any other obligation to be made or performed by such other Lender hereunder,
and the failure of any Lender to make a Loan or to perform any other obligation
to be made or performed by it hereunder shall not relieve the obligation of any
other Lender to make any Loan or to perform any other obligation to be made or
performed by such other Lender.

 

Section 3.5. 
Minimum Amounts.

 

(a)           Borrowings and Conversions.  Except as otherwise provided in
Sections 2.3.(e) and 2.4.(e), each borrowing of Base Rate Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000
in excess thereof.  Each borrowing and
Continuation of and each Conversion to LIBOR Loans shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount.

 

(b)           Prepayments.  Each voluntary prepayment of Revolving Loans
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$100,000 in excess thereof (or, if less, the aggregate principal amount of
Revolving Loans then outstanding).

 

44

 

(c)           Reductions of Commitments.  Each reduction of the Commitments under
Section 2.12. shall be in an aggregate minimum amount of $10,000,000 and
integral multiples of $5,000,000 in excess thereof.

 

(d)           Letters of Credit.  The initial Stated Amount of each Letter of
Credit shall be at least $50,000.

 

Section 3.6. 
Fees.

 

(a)           Facility Fees.  The Borrower agrees to pay to the Agent for
the account of each Lender a facility fee equal to the average daily amount of
the Commitment of such Lender (whether or not utilized) times the Facility Fee
for the period from and including the Agreement Date to but excluding the date
such Commitment is terminated or reduced to zero or the Termination Date, such
fee to be paid in arrears on (i) the last day of March, June, September
and December in each year, (ii) the date of each reduction in the
Commitments (but only on the amount of the reduction) and (iii) on the
Termination Date.

 

(b)           Letter of Credit Fees.  The Borrower agrees to pay to the Agent for
the account of each Lender a letter of credit fee at a rate per annum equal to
the Applicable Margin for LIBOR Loans times the daily average Stated Amount of
each Letter of Credit for the period from and including the date of issuance of
such Letter of Credit (x) through and including the date such Letter of
Credit expires or is terminated or (y) to but excluding the date such
Letter of Credit is drawn in full and is not subject to reinstatement, as the
case may be.  The fees provided for in
the immediately preceding sentence shall be nonrefundable and payable in
arrears on (i) the last day of March, June, September and December in each
year, (ii) the Termination Date, (iii) the date the Commitments are
terminated or reduced to zero and (iv) thereafter from time to time on
demand of the Agent.  In addition, the
Borrower shall pay to the Agent for its own account and not the account of any
Lender, an issuance fee in respect of each Letter of Credit equal to the
greater of (i) $500 or (ii) one-eighth of one percent (0.125%) per
annum on the initial Stated Amount of such Letter of Credit upon issuance.  The fees provided for in the immediately
preceding sentence shall be nonrefundable and payable upon issuance.  The Borrower shall pay directly to the Agent
from time to time on demand all commissions, charges, costs and expenses in the
amounts customarily charged by the Agent from time to time in like
circumstances with respect to the issuance of each Letter of Credit, drawings,
amendments and other transactions relating thereto.

 

(c)           Extension Fee.  If the Borrower exercises its right to extend
the Termination Date in accordance with Section 2.13., the Borrower agrees
to pay to the Agent for the account of each Lender a fee equal to one-fifth of
one percent (0.20%) of the amount of such Lender’s Commitment (whether or not
utilized) at the time of such extension. 
Such fee shall be due and payable in full on the effective date of such
extension.

 

(d)           Bid Fee.  The Borrower agrees to pay to the Agent for
its own account and not the account of any Lender, a bid fee in respect of each
Bid Rate Quote Request given by the Borrower to the Agent pursuant to Section
2.2.(b) equal to $1,500; provided, that the Borrower shall not be obligated to
pay such bid fee in respect of the first Bid Rate Quote Request given by the
Borrower to the Agent in any given calendar month.  The fees provided for in the

 

45

 

immediately preceding sentence shall be nonrefundable and payable in
full on the date the Agent receives such Bid Rate Quote Request from the
Borrower.

 

(e)           Administrative and Other Fees.  The Borrower agrees to pay the administrative
and other fees of the Agent as may be agreed to in writing by the Borrower and
the Agent from time to time.

 

Section 3.7. 
Computations.

 

Unless otherwise
expressly set forth herein, any accrued interest on any Loan or any other
Obligations due hereunder shall be computed on the basis of a year of 365 or
366 days (as applicable) and the actual number of days elapsed; provided, however, any accrued interest
on any LIBOR Loan or Swingline Loan shall be computed on the basis of a year of
360 days and the actual number of days elapsed.

 

Section 3.8. 
Usury.

 

In no event shall the
amount of interest due or payable on the Loans or other Obligations exceed the
maximum rate of interest allowed by Applicable Law and, if any such payment is
paid by the Borrower or any other Loan Party or received by any Lender, then
such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the respective Lender in writing that the Borrower elects
to have such excess sum returned to it forthwith.  It is the express intent of the parties
hereto that the Borrower not pay and the Lenders not receive, directly or
indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the Borrower under Applicable Law.

 

Section 3.9. 
Agreement Regarding Interest and Charges.

 

The parties hereto hereby
agree and stipulate that the only charge imposed upon the Borrower for the use
of money in connection with this Agreement is and shall be the interest
specifically described in Sections 2.5.(a)(i) through (iv) and in Section
2.3.(c).  Notwithstanding the foregoing,
the parties hereto further agree and stipulate that all agency fees,
syndication fees, facility fees, closing fees, letter of credit fees,
underwriting fees, default charges, late charges, funding or “breakage”
charges, increased cost charges, attorneys’ fees and reimbursement for costs
and expenses paid by the Agent or any Lender to third parties or for damages
incurred by the Agent or any Lender, in each case in connection with the
transactions contemplated by this Agreement and the other Loan Documents, are
charges made to compensate the Agent or any such Lender for underwriting or
administrative services and costs or losses performed or incurred, and to be
performed or incurred, by the Agent and the Lenders in connection with this
Agreement and shall under no circumstances be deemed to be charges for the use
of money.  All charges other than charges
for the use of money shall be fully earned and nonrefundable when due.

 

Section 3.10. 
Statements of Account.

 

The Agent will account to
the Borrower monthly with a statement of Loans, Letters of Credit, accrued
interest and Fees, charges and payments made pursuant to this Agreement and

 

46

 

the other Loan Documents, and such account rendered by the Agent shall
be deemed conclusive upon Borrower absent manifest error.  The failure of the Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.

 

Section 3.11. 
Defaulting Lenders.

 

(a)           Generally.  If for any reason any Lender (a “Defaulting
Lender”) shall fail or refuse to perform any of its obligations under this
Agreement or any other Loan Document to which it is a party within the time
period specified for performance of such obligation or, if no time period is
specified, if such failure or refusal continues for a period of two Business
Days after notice from the Agent, then, in addition to the rights and remedies
that may be available to the Agent or the Borrower under this Agreement or
Applicable Law, such Defaulting Lender’s right to participate in the
administration of the Loans, this Agreement and the other Loan Documents,
including without limitation, any right to vote in respect of, to consent to or
to direct any action or inaction of the Agent or to be taken into account in
the calculation of the Requisite Lenders, shall be suspended during the
pendency of such failure or refusal.  If
a Lender is a Defaulting Lender because it has failed to make timely payment to
the Agent of any amount required to be paid to the Agent hereunder (without
giving effect to any notice or cure periods), in addition to other rights and
remedies which the Agent or the Borrower may have under the immediately
preceding provisions or otherwise, the Agent shall be entitled (i) to
collect interest from such Defaulting Lender on such delinquent payment for the
period from the date on which the payment was due until the date on which the
payment is made at the Federal Funds Rate, (ii) to withhold or setoff and
to apply in satisfaction of the defaulted payment and any related interest, any
amounts otherwise payable to such Defaulting Lender under this Agreement or any
other Loan Document and (iii) to bring an action or suit against such
Defaulting Lender in a court of competent jurisdiction to recover the defaulted
amount and any related interest.  Any
amounts received by the Agent in respect of a Defaulting Lender’s Loans shall
not be paid to such Defaulting Lender and shall be held uninvested by the Agent
and either applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon such Defaulting
Lender’s curing of its default.

 

(b)           Purchase or Cancellation of
Defaulting Lender’s Commitment.  Any
Lender who is not a Defaulting Lender may, but shall not be obligated to, in
its sole discretion, acquire all or a portion of a Defaulting Lender’s
Commitment.  Any Lender desiring to
exercise such right shall give written notice thereof to the Agent and the
Borrower no sooner than 2 Business Days and not later than 5 Business Days
after such Defaulting Lender became a Defaulting Lender.  If more than one Lender exercises such right,
each such Lender shall have the right to acquire an amount of such Defaulting
Lender’s Commitment in proportion to the Commitments of the other Lenders
exercising such right.  If after such 5th
Business Day, the Lenders have not elected to purchase all of the Commitment of
such Defaulting Lender, then the Borrower may, by giving written notice thereof
to the Agent, such Defaulting Lender and the other Lenders, either
(i) demand that such Defaulting Lender assign its Commitment to an
Eligible Assignee subject to and in accordance with the provisions of
Section 12.5.(d) for the purchase price provided for below or
(ii) terminate the Commitment of such Defaulting Lender, whereupon such
Defaulting Lender shall no longer be a party hereto or have any rights or
obligations hereunder or under any of the other Loan Documents.  No party hereto shall have any obligation
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee.  Upon any such purchase or

 

47

 

assignment, the Defaulting Lender’s interest in the Loans and its
rights hereunder (but not its liability in respect thereof or under the Loan
Documents or this Agreement to the extent the same relate to the period prior
to the effective date of the purchase except to the extent assigned pursuant to
such purchase) shall terminate on the date of purchase, and the Defaulting
Lender shall promptly execute all documents reasonably requested to surrender
and transfer such interest to the purchaser or assignee thereof, including an
appropriate Assignment and Acceptance Agreement and, notwithstanding
Section 12.5.(d), shall pay to the Agent an assignment fee in the amount
of $7,000.  The purchase price for the
Commitment of a Defaulting Lender shall be equal to the amount of the principal
balance of the Loans outstanding and owed by the Borrower to the Defaulting
Lender.  Prior to payment of such purchase
price to a Defaulting Lender, the Agent shall apply against such purchase price
any amounts retained by the Agent pursuant to the last sentence of the
immediately preceding subsection (a). 
The Defaulting Lender shall be entitled to receive amounts owed to it by
the Borrower under the Loan Documents which accrued prior to the date of the
default by the Defaulting Lender, to the extent the same are received by the
Agent from or on behalf of the Borrower. 
There shall be no recourse against any Lender or the Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.

 

Section 3.12. 
Taxes.

 

(a)           Taxes Generally.  All payments by the Borrower of principal of,
and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding (i) franchise taxes, (ii) any taxes imposed on or measured
by any Lender’s assets, net income, receipts or branch profits, (iii) any
taxes (other than withholding taxes) with respect to the Agent or a Lender that
would not be imposed but for a connection between the Agent or such Lender and
the jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of the Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), and (iv) any taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other charges to
the extent imposed as a result of the failure of the Agent or a Lender, as
applicable, to provide and keep current (to the extent legally able) any
certificates, documents or other evidence required to qualify for an exemption
from, or reduced rate of, any such taxes fees, duties, levies, imposts,
charges, deductions, withholdings or other charges or required by the
immediately following subsection (c) to be furnished by the Agent or such
Lender, as applicable (such non-excluded items being collectively called “Taxes”).  If any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any Applicable Law, then the Borrower will:

 

(i)            pay directly to the relevant
Governmental Authority the full amount required to be so withheld or deducted;

 

(ii)           promptly forward to the Agent an
official receipt or other documentation satisfactory to the Agent evidencing
such payment to such Governmental Authority; and

 

(iii)          pay to the Agent for its account or
the account of the applicable Lender, as the case may be, such additional
amount or amounts as is necessary to ensure that the net

 

48

 

amount actually received
by the Agent or such Lender will equal the full amount that the Agent or such
Lender would have received had no such withholding or deduction been required.

 

(b)           Tax Indemnification.  If the Borrower fails to pay any Taxes when
due to the appropriate Governmental Authority or fails to remit to the Agent,
for its account or the account of the respective Lender, as the case may be,
the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the Lenders for any incremental Taxes, interest
or penalties that may become payable by the Agent or any Lender as a result of
any such failure.  For purposes of this
Section, a distribution hereunder by the Agent or any Lender to or for the account
of any Lender shall be deemed a payment by the Borrower.

 

(c)           Tax Forms.  Prior to the date that any Foreign Lender
becomes a party hereto, such Foreign Lender shall deliver to the Borrower and
the Agent such certificates, documents or other evidence, as required by the
Internal Revenue Code or Treasury Regulations issued pursuant thereto
(including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms),
properly completed, currently effective and duly executed by such Foreign
Lender establishing that payments to it hereunder and under the Notes are
(i) not subject to United States Federal backup withholding tax and
(ii) not subject to United States Federal withholding tax imposed under
the Internal Revenue Code.  Each such
Foreign Lender shall, to the extent it may lawfully do so, (x) deliver further
copies of such forms or other appropriate certifications on or before the date
that any such forms expire or become obsolete and after the occurrence of any
event requiring a change in the most recent form delivered to the Borrower or
the Agent and (y) obtain such extensions of the time for filing, and renew such
forms and certifications thereof, as may be reasonably requested by the
Borrower or the Agent.  The Borrower
shall not be required to pay any amount pursuant to the last sentence of
subsection (a) above to any Foreign Lender or the Agent, if it is
organized under the laws of a jurisdiction outside of the United States of
America, if such Foreign Lender or the Agent, as applicable, fails to comply
with the requirements of this subsection. 
If any such Foreign Lender, to the extent it may lawfully do so, fails
to deliver the above forms or other documentation, then the Agent may withhold
from any payments to be made to such Foreign Lender under any of the Loan
Documents such amounts as are required by the Internal Revenue Code. If any
Governmental Authority asserts that the Agent did not properly withhold or
backup withhold, as the case may be, any tax or other amount from payments made
to or for the account of any Lender, such Lender shall indemnify the Agent
therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, and costs and
expenses (including all reasonable fees and disbursements of any law firm or
other external counsel and the allocated cost of internal legal services and
all disbursements of internal counsel) of the Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Commitments, repayment of all
Obligations and the resignation or replacement of the Agent.

 

49

 

ARTICLE IV. YIELD PROTECTION, ETC.

 

Section 4.1. 
Additional Costs; Capital Adequacy.

 

(a)           Additional Costs.  The Borrower shall promptly pay to the Agent
for the account of each affected Lender from time to time such amounts as such
Lender may reasonably determine to be necessary to compensate such Lender for
any costs incurred by such Lender that it determines are attributable to its
making or maintaining of any LIBOR Loans or its obligation to make any LIBOR
Loans hereunder, any reduction in any amount receivable by such Lender under
this Agreement or any of the other Loan Documents in respect of any of such
Loans or such obligation or the maintenance by such Lender of capital in
respect of its Loans or its Commitment (such increases in costs and reductions
in amounts receivable being herein called “Additional Costs”), to the extent
resulting from any Regulatory Change that: 
(i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or any of the other Loan Documents in respect of
any of such Loans or its Commitment (other than taxes, fees, duties, levies,
imposts, charges, deductions, withholdings or other charges which are excluded
from the definition of Taxes pursuant to the first sentence of
Section 3.12.(a)); or (ii) imposes or modifies any reserve, special
deposit or similar requirements (other than Regulation D of the Board of
Governors of the Federal Reserve System or other reserve requirement to the
extent utilized in the determination of Adjusted LIBOR for such Loan) relating
to any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, or any commitment of such Lender (including,
without limitation, the Commitment of such Lender hereunder); or (iii) has
or would have the effect of reducing the rate of return on capital of such
Lender to a level below that which such Lender could have achieved but for such
Regulatory Change (taking into consideration such Lender’s policies with
respect to capital adequacy).

 

(b)           Lender’s Suspension of LIBOR Loans.  Without limiting the effect of the provisions
of the immediately preceding subsection (a), if, by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on
or measured by the excess above a specified level of the amount of a category
of deposits or other liabilities of such Lender that includes deposits by
reference to which the interest rate on LIBOR Loans is determined as provided
in this Agreement or a category of extensions of credit or other assets of such
Lender that includes LIBOR Loans or (ii) becomes subject to restrictions
on the amount of such a category of liabilities or assets that it may hold,
then, if such Lender so elects by notice to the Borrower (with a copy to the
Agent), the obligation of such Lender to make or Continue, or to Convert any
other Type of Loans into, LIBOR Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 4.6. shall apply).

 

(c)           Additional Costs in Respect of
Letters of Credit.  Without limiting
the obligations of the Borrower under the preceding subsections of this Section
(but without duplication), if as a result of any Regulatory Change or any
risk-based capital guideline or other requirement heretofore or hereafter
issued by any Governmental Authority there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or similar
requirement against or with respect to or measured by reference to Letters of
Credit and the result shall be to increase the cost to the Agent of issuing (or
any Lender of purchasing participations in) or maintaining its obligation
hereunder to issue (or purchase participations in) any Letter of Credit

 

50

 

or reduce any amount receivable by the Agent or any Lender hereunder in
respect of any Letter of Credit, then, upon demand by the Agent or such Lender,
the Borrower shall pay promptly, and in any event within 3 Business Days of
demand, to the Agent for its account or the account of such Lender, as applicable,
from time to time as specified by the Agent or a Lender, such additional
amounts as shall be sufficient to compensate the Agent or such Lender for such
increased costs or reductions in amount.

 

(d)           Notification and Determination of
Additional Costs.  Each of the Agent
and each Lender agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Agent or such Lender to compensation under any of
the preceding subsections of this Section as promptly as practicable; provided,
however, the failure of the Agent or any Lender to give such notice shall not
release the Borrower from any of its obligations hereunder (and in the case of
a Lender, to the Agent); provided further that no Lender shall be entitled to
claim any additional cost, reduction in amounts, loss, tax or other additional
amount under this Article IV. if such Lender fails to provide such notice
to the Borrower within 180 days of the date such Lender becomes aware of the
occurrence of the event giving rise to the additional cost, reduction in
amounts, loss, tax or other additional amount. 
The Agent or such Lender agrees to furnish to the Borrower (and in the
case of a Lender, to the Agent) a certificate setting forth in reasonable
detail the basis and amount of each request by the Agent or such Lender for
compensation under this Section.  Absent
manifest error, determinations by the Agent or any Lender of the effect of any
Regulatory Change shall be conclusive, provided that such determinations are
made on a reasonable basis and in good faith.

 

Section 4.2. 
Suspension of LIBOR Loans.

 

Anything herein to the contrary notwithstanding, if,
on or prior to the determination of Adjusted LIBOR for any Interest Period:

 

(a)           the Agent reasonably determines
(which determination shall be conclusive) that by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining Adjusted LIBOR for such Interest Period, or

 

(b)           the Agent reasonably determines
(which determination shall be conclusive) that Adjusted LIBOR will not
adequately and fairly reflect the cost to the Lenders of making or maintaining
LIBOR Loans for such Interest Period;

 

then the Agent shall give
the Borrower and each Lender prompt notice thereof and, so long as such
condition remains in effect, the Lenders shall be under no obligation to, and
shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert
Revolving Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either repay such
LIBOR Loan or Convert such LIBOR Loan into a Base Rate Loan.

 

51

 

Section 4.3.  Illegality.

 

Notwithstanding any other provision of this Agreement, if any Lender
shall reasonably determine (which determination shall be conclusive and
binding) that it has become unlawful for such Lender to honor its obligation to
make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify
the Borrower thereof (with a copy to the Agent) and such Lender’s obligation to
make or Continue, or to Convert Revolving Loans of any other Type into, LIBOR
Loans shall be suspended until such time as such Lender may again make and
maintain LIBOR Loans (in which case the provisions of Section 4.6. shall
be applicable).

 

Section 4.4.  Compensation.

 

The Borrower shall pay to the Agent for the account of each Lender,
upon the request of such Lender through the Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender) to compensate it
for any loss, cost or expense (excluding lost profits) that such Lender
reasonably determines is attributable to:

 

(a)           any
payment or prepayment (whether mandatory or optional) of a LIBOR Loan or Bid
Rate Loan, or Conversion of a LIBOR Loan, made by such Lender for any reason
(including, without limitation, acceleration) on a date other than the last day
of the Interest Period for such Loan; or

 

(b)           any
failure by the Borrower for any reason (including, without limitation, the
failure of any of the applicable conditions precedent specified in
Article V. to be satisfied) to borrow a LIBOR Loan or Bid Rate Loan from
such Lender on the requested date for such borrowing, or to Convert a Base Rate
Loan into a LIBOR Loan or Continue a LIBOR Loan on the requested date of such
Conversion or Continuation.

 

Upon the Borrower’s request,  any
Lender  requesting compensation under
this Section shall provide the Borrower with a statement setting forth in
reasonable detail the basis for requesting such compensation and the method for
determining the amount thereof.  Absent
manifest error, determinations by any Lender in any such statement shall be
conclusive, provided that such determinations are made on a reasonable basis
and in good faith.

 

Section 4.5.  Affected Lenders.

 

If (a) a Lender requests compensation pursuant to Section 3.12. or
4.1., and the Requisite Lenders are not also doing the same, or (b) the
obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b) or 4.3. but the obligation of the Requisite Lenders shall
not have been suspended under such Sections, or (c) a Lender does not vote
in favor of any amendment, modification or waiver to this Agreement which,
pursuant to Section 12.6. requires the vote of all of the Lenders, and the
Requisite Lenders shall have voted in favor of such amendment, modification or
waiver, then, so long as there does not then exist any Default or Event of
Default, the Borrower may demand that such Lender (the “Affected Lender”), and
upon such demand the Affected Lender shall promptly, assign its Commitment to
an Eligible Assignee subject to and in accordance with the provisions of
Section 12.5.(d) for a purchase price equal to 

 

52

 

the aggregate principal balance of all Loans then owing to the Affected
Lender plus any accrued but unpaid interest thereon and accrued but unpaid fees
owing to the Affected Lender, or any other amount as may be mutually agreed
upon by such Affected Lender and Eligible Assignee.  Each of the Agent and the Affected Lender
shall reasonably cooperate in effectuating the replacement of such Affected
Lender under this Section, but at no time shall the Agent, such Affected Lender
or any other Lender be obligated in any way whatsoever to initiate any such
replacement or to assist in finding an Eligible Assignee.  The exercise by the Borrower of its rights
under this Section shall be at the Borrower’s sole cost and expense and at no
cost or expense to the Agent, the Affected Lender or any of the other
Lenders.  The terms of this Section shall
not in any way limit the Borrower’s obligation to pay to any Affected Lender
compensation owing to such Affected Lender pursuant to this Agreement
(including, without limitation, Section 3.12., 4.1., or 4.4.) with respect
to periods up to the date of replacement.

 

Section 4.6.  Treatment of Affected Loans.

 

If the obligation of any Lender to make LIBOR Loans or to Continue, or
to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 4.1.(b) or 4.3., then such Lender’s LIBOR Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 4.1.(b) or 4.3., on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 4.1. or 4.3. that gave rise to such Conversion no longer exist:

 

(a)           to
the extent that such Lender’s LIBOR Loans have been so Converted, all payments
and prepayments of principal that would otherwise be applied to such Lender’s
LIBOR Loans shall be applied instead to its Base Rate Loans; and

 

(b)           all
Loans that would otherwise be made or Continued by such Lender as LIBOR Loans
shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans
of such Lender that would otherwise be Converted into LIBOR Loans shall remain
as Base Rate Loans.

 

If such Lender gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 4.1. or 4.3. that gave rise to
the Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding,
then such Lender’s Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
LIBOR Loans, to the extent necessary so that, after giving effect thereto, all
Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro
rata (as to principal amounts, Types and Interest Periods) in accordance with
their respective Commitments.

 

Section 4.7.  Change of Lending Office.

 

Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Section 3.12., 4.1. or 4.3. to
reduce the liability of the Borrower or avoid the results provided 

 

53

 

thereunder, so long as such designation is not disadvantageous to such
Lender as determined by such Lender in its sole discretion, except that such
Lender shall have no obligation to designate a Lending Office located in the
United States of America.

 

Section 4.8.  Assumptions Concerning Funding of LIBOR
Loans.

 

Calculation of all amounts payable to a Lender under this
Article IV. shall be made as though such Lender had actually funded  LIBOR Loans through the purchase of deposits
in the relevant market bearing interest at the rate applicable to such LIBOR
Loans in an amount equal to the amount of the LIBOR Loans and having a maturity
comparable to the relevant Interest Period; provided, however, that each Lender
may fund each of its LIBOR Loans in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
Article IV.

 

ARTICLE V. CONDITIONS PRECEDENT

 

Section 5.1.  Initial Conditions Precedent.

 

The obligation of the Lenders to effect or permit the occurrence of the
first Credit Event hereunder, whether as the making of a Loan or the issuance
of a Letter of Credit, is subject to the following conditions precedent:

 

(a)           The Agent shall have
received each of the following, in form and substance satisfactory to the
Agent:

 

(i)            Counterparts
of this Agreement executed by each of the parties hereto;

 

(ii)           Revolving
Notes and Bid Rate Notes executed by the Borrower, payable to each Lender (or
Designated Lender, if applicable) and complying with the applicable provisions
of Section 2.11., and the Swingline Note executed by the Borrower;

 

(iii)          The
Guaranty executed by each Guarantor existing as of the Effective Date;

 

(iv)          An
opinion of counsel to the Loan Parties, addressed to the Agent, the Lenders and
the Swingline Lender, addressing the matters set forth in Exhibit M;

 

(v)           The
articles of incorporation, articles of organization, certificate of limited
partnership or other comparable organizational instrument (if any) of the
Borrower and each other Loan Party certified as of a recent date by the
Secretary of State of the state of formation of such Loan Party;

 

(vi)          A
certificate of good standing or certificate of similar meaning with respect to
each Loan Party issued as of a recent date by the Secretary of State of the
state of formation of such Loan Party;

 

54

 

(vii)         A
certificate of incumbency signed by the Secretary or Assistant Secretary (or
other individual performing similar functions) of each Loan Party with respect
to each of the officers of such Loan Party authorized to execute and deliver
the Loan Documents to which such Loan Party is a party, and, in the case of the
Borrower, the officers of the Borrower then authorized to deliver Notices of
Borrowing, Notices of Swingline Borrowings, Bid Rate Quote Requests, Bid Rate
Quote Acceptances, Notices of Continuation and Notices of Conversion and to
request the issuance of Letters of Credit;

 

(viii)        Copies
certified by the Secretary or Assistant Secretary (or other individual
performing similar functions) of each Loan Party of (i) the by-laws of
such Loan Party, if a corporation, the operating agreement of such Loan Party,
if a limited liability company, the partnership agreement of such Loan Party,
if a limited or general partnership, or other comparable document of such Loan
Party in the case of any other form of legal entity and (ii) all
corporate, partnership, member or other necessary action taken by such Loan
Party to authorize the execution, delivery and performance of the Loan
Documents to which it is a party;

 

(ix)           The
Fees then due and payable under Section 3.6., and any other Fees payable
to the Agent, the Titled Agents and the Lenders on or prior to the Effective
Date;

 

(x)            A
Compliance Certificate calculated as of December 31, 2004 (giving pro forma
effect to the financing contemplated by this Agreement and the use of the
proceeds of the Loans to be funded on the Closing Date), and calculations
demonstrating that all Indebtedness proposed to be incurred by the Borrower on
the Effective Date is permitted under each of the Senior Note Indentures and
that no default under any of the Senior Note Indentures will exist as of such
date;

 

(xi)           A
copy of each of the documents, instruments and agreements evidencing any of the
Indebtedness described on Schedule 6.1.(g), in each case certified as
true, correct and complete by the chief executive officer or chief financial
officer of the Borrower, but only if any such documents, instruments and
agreements are not otherwise publicly available;

 

(xii)          A
letter from the agent under the Existing Credit Agreement providing information
regarding the payment in full of amounts outstanding thereunder and providing
for the termination thereof; and

 

(xiii)         Such
other documents, agreements and instruments as the Agent on behalf of the
Lenders may reasonably request; and

 

(b)           In the good faith
judgment of the Agent and the
Lenders:

 

(i)            There
shall not have occurred or become known to the Agent or any of the Lenders any event, condition, situation or
status since the date of the information contained in the financial and
business projections, budgets and pro forma data concerning the Borrower and its
Subsidiaries delivered to the Agent and the Lenders

 

55

 

prior to the Agreement Date that has had or could reasonably be
expected to result in a Material Adverse Effect;

 

(ii)           No
litigation, action, suit, investigation or other arbitral, administrative or
judicial proceeding shall be pending or threatened which could reasonably be
expected to (1) result in a Material Adverse Effect or (2) restrain or enjoin,
impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Borrower or any other Loan Party to fulfill
its obligations under the Loan Documents to which it is a party;

 

(iii)          The
Borrower and its Subsidiaries shall have received all approvals, consents and waivers,
and shall have made or given all necessary filings and notices, as shall be
required to consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of (1) any
Applicable Law or (2) any agreement, document or instrument to which the
Borrower or any other Loan Party is a party or by which any of them or their
respective properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not reasonably
be likely to (A) have a Material Adverse Effect, or (B) restrain or
enjoin, impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of the Borrower or any other Loan Party to fulfill
its obligations under the Loan Documents to which it is a party; and

 

(iv)          There
shall not have occurred or exist any other material disruption of financial or
capital markets that could reasonably be expected to materially and adversely
affect the transactions contemplated by the Loan Documents.

 

Section 5.2.  Conditions Precedent to All Loans and Letters
of Credit.

 

The obligations of the Lenders to make any Loans, of the Agent to issue
Letters of Credit, and of the Swingline Lender to make any Swingline Loan are
all subject to the further condition precedent that: (a) no Default or
Event of Default shall exist as of the date of the making of such Loan or date
of issuance of such Letter of Credit or would exist immediately after giving
effect thereto; and (b) the representations and warranties made or deemed
made by the Borrower and each other Loan Party in the Loan Documents to which
any of them is a party, shall be true and correct in all material respects on
and as of the date of the making of such Loan or date of issuance of such
Letter of Credit with the same force and effect as if made on and as of such
date except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and warranties
shall have been true and correct on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents.  Each Credit Event shall constitute a
certification by the Borrower to the effect set forth in the preceding sentence
(both as of the date of the giving of notice relating to such Credit Event and,
unless the Borrower otherwise notifies the Agent prior to the date of such
Credit Event, as of the date of the occurrence of such Credit Event).  In addition, if such Credit Event is the
making of a Loan or the issuance of a Letter of Credit, the Borrower shall be
deemed to have represented to the Agent and the Lenders at the time such Loan
is made or Letter of Credit issued that all conditions to the occurrence of
such Credit Event contained in this 

 

56

 

Section 5.2. (and, in the
case of the first Credit Event hereunder, Section 5.1.) have been satisfied.

 

ARTICLE VI. REPRESENTATIONS AND WARRANTIES

 

Section 6.1.  Representations and Warranties.

 

In order to induce the Agent and each Lender to enter into this
Agreement and to make Loans and issue Letters of Credit, the Borrower
represents and warrants to the Agent and each Lender as follows:

 

(a)           Organization; Power;
Qualification.  Each of the Borrower,
its Subsidiaries and the other Loan Parties is a corporation, partnership or
other legal entity, duly organized or formed, validly existing and in good
standing under the jurisdiction of its incorporation or formation, has the
power and authority to own or lease its respective properties and to carry on
its respective business as now being and hereafter proposed to be conducted and
is duly qualified and is in good standing as a foreign corporation, partnership
or other legal entity, and authorized to do business, in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification or authorization and where the failure to be so qualified or
authorized could reasonably be expected to have, in each instance, a Material
Adverse Effect.

 

(b)           Ownership
Structure.  As of the Agreement Date,
Part I of Schedule 6.1.(b) is a complete and correct list of all
Subsidiaries of the Borrower setting forth for each such Subsidiary,
(i) the jurisdiction of organization of such Subsidiary, (ii) each
Person holding any Equity Interests in such Subsidiary (but only a general
reference to any Person that is not an Affiliate of the Borrower),
(iii) the nature of the Equity Interests held by each such Person,
(iv) the percentage of ownership of such Subsidiary represented by such
Equity Interests and (v) whether such Subsidiary is a Material Subsidiary,
a Significant Subsidiary and/or an Excluded Subsidiary. Except as disclosed in
such Schedule, as of the Agreement Date (i) each of the Borrower and its
Subsidiaries owns, free and clear of all Liens (other than Permitted Liens),
and has the unencumbered right to vote, all outstanding Equity Interests in
each Person shown to be held by it on such Schedule, (ii) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and
(iii) there are no outstanding subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including, without
limitation, any stockholders’ or voting trust agreements) for the issuance,
sale, registration or voting of, or outstanding securities convertible into,
any additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, any such Person.  As of the Agreement Date Part II of
Schedule 6.1.(b) correctly sets forth all Unconsolidated Affiliates of the
Borrower, including the correct legal name of such Person, the type of legal
entity which each such Person is, and all Equity Interests in such Person held
directly or indirectly by the Borrower.

 

(c)           Authorization of
Agreement, Etc.  The Borrower has the
right and power, and has taken all necessary action to authorize it, to borrow
and obtain other extensions of credit hereunder.  The Borrower and each other Loan Party has
the right and power, and has taken all necessary action to authorize it, to
execute, deliver and perform each of the Loan Documents to which it is a party
in accordance with their respective terms and to consummate the transactions 

 

57

 

contemplated hereby and thereby. 
The Loan Documents to which the Borrower or any other Loan Party is a
party have been duly executed and delivered by the duly authorized officers of
such Person and each is a legal, valid and binding obligation of such Person
enforceable against such Person in accordance with its respective terms except
as the same may be limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally and the availability of equitable
remedies for the enforcement of certain obligations (other than the payment of
principal) contained herein or therein and as may be limited by equitable
principles generally.

 

(d)           Compliance of
Loan Documents with Laws, Etc.  The
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which the Borrower or any other Loan Party is a party in
accordance with their respective terms and the borrowings and other extensions
of credit hereunder do not and will not, by the passage of time, the giving of
notice, or both:  (i) require any
Governmental Approval or violate any Applicable Law (including all Environmental
Laws) relating to the Borrower or any other Loan Party; (ii) conflict
with, result in a breach of or constitute a default under the organizational
documents of the Borrower or any other Loan Party, or any material indenture,
agreement or other instrument to which the Borrower or any other Loan Party is
a party or by which it or any of its respective properties may be bound
(including, without limitation, each of the Senior Note Indentures and each of
the documents, instruments and agreements evidencing any of the Indebtedness
described on Schedule 6.1.(g)); or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by the Borrower or any other Loan Party.

 

(e)           Compliance with
Law; Governmental Approvals.  Each of
the Borrower, each Subsidiary and each other Loan Party is in compliance with
each Governmental Approval applicable to it and in compliance with all other
Applicable Laws (including without limitation, Environmental Laws) relating to
the Borrower, a Subsidiary or such other Loan Party except for noncompliances
which, and Governmental Approvals the failure to possess which, could not,
individually or in the aggregate, reasonably be expected to cause a Default or
Event of Default or have a Material Adverse Effect.

 

(f)            Title to
Properties; Liens.  As of the
Agreement Date, Part I of Schedule 6.1.(f) is a complete and correct
listing of all of the real property owned or leased by the Borrower, each other
Loan Party and each other Subsidiary. 
Each such Person has good, marketable and legal title to, or a valid
leasehold interest in, its respective assets. 
As of the Agreement Date, there are no Liens against any assets of the
Borrower, any Subsidiary or any other Loan Party except for Permitted Liens.

 

(g)           Existing
Indebtedness.  Schedule 6.1.(g)
is, as of the Agreement Date, a complete and correct listing of all
Indebtedness of the Borrower and its Subsidiaries, including without
limitation, Guarantees of the Borrower and its Subsidiaries, and indicating
whether such Indebtedness is Combined Secured Indebtedness or Combined
Unsecured Indebtedness.

 

(h)           Litigation.  Except as set forth on Schedule 6.1.(h),
there are no actions, suits, investigations or proceedings pending (nor, to the
knowledge of the Borrower, are there any 

 

58

 

actions, suits or proceedings threatened) against or in any other way
relating adversely to or affecting the Borrower, any Subsidiary or any other Loan
Party or any of its respective property in any court or before any arbitrator
of any kind or before or by any other Governmental Authority which could
reasonably be expected to have a Material Adverse Effect.  There are no strikes, slow downs, work stoppages
or walkouts or other labor disputes in progress or threatened relating to the
Borrower, any Subsidiary or any other Loan Party which could reasonably be
expected to have a Material Adverse Effect.

 

(i)            Taxes.  All federal, state and other tax returns of
the Borrower, any Subsidiary or any other Loan Party required by Applicable Law
to be filed have been duly filed, and all federal, state and other taxes,
assessments and other governmental charges or levies upon the Borrower, any
Subsidiary and each other Loan Party and its respective properties, income,
profits and assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under Section 7.6.  As of the Agreement Date, none of the
Borrower, its Subsidiaries or any other Loan Party has received notice that any
of its United States income tax returns are under audit.  All charges, accruals and reserves on the
books of the Borrower and each of its Subsidiaries and each other Loan Party in
respect of any taxes or other governmental charges are in accordance with GAAP.

 

(j)            Financial
Statements.  The Borrower has
furnished to each Lender copies of the audited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries for the fiscal year ended December
31, 2004, and the related audited consolidated statements of operations, cash
flows and shareholders’ equity for the fiscal year ended on such date, with the
opinion thereon of KPMG LLP.  Such
financial statements (including in each case related schedules and notes)
present fairly, in all material respects and in accordance with GAAP
consistently applied throughout the period involved, the consolidated financial
position of the Borrower and its consolidated Subsidiaries as at such date and
the results of operations and the cash flow for such period.

 

(k)           No Material
Adverse Change.  Since December 31,
2004, there has been no material adverse change in the business, assets,
liabilities, financial condition, results of operations or business of the Borrower
and its Subsidiaries taken as a whole. 
Each of the Borrower, its Subsidiaries and the other Loan Parties is
Solvent.

 

(l)            ERISA.  Each member of the ERISA Group is in
compliance with its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in compliance
with the presently applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan, except in each case for noncompliances which could
not reasonably be expected to have a Material Adverse Effect.  As of the Agreement Date, no member of the
ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any Plan,
(ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under
Section 4007 of ERISA.

 

59

 

(m)          Not Plan Assets;
No Prohibited Transaction.  None of
the assets of the Borrower, any Subsidiary or any other Loan Party constitute “plan
assets” within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder. 
The execution, delivery and performance of this Agreement and the other
Loan Documents, and the borrowing and other credit extensions and repayment of
amounts hereunder, do not and will not constitute “prohibited transactions”
under ERISA or the Internal Revenue Code.

 

(n)           Absence of Defaults.  Neither the Borrower, any Subsidiary nor any
other Loan Party is in default under its articles of incorporation, bylaws,
partnership agreement or other similar organizational documents, and no event
has occurred, which has not been remedied, cured or waived, which, in any such
case:  (i) constitutes a Default or
an Event of Default; or (ii) constitutes, or which with the passage of
time, the giving of notice, or both, would constitute, a default or event of
default by the Borrower, any Subsidiary or any other Loan Party under any
agreement (other than this Agreement) or judgment, decree or order to which the
Borrower or any Subsidiary or other Loan Party is a party or by which the
Borrower or any Subsidiary or other Loan Party or any of their respective
properties may be bound where such default or event of default could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(o)           Environmental
Laws.  Each of the Borrower, its
Subsidiaries and the other Loan Parties has obtained all Governmental Approvals
which are required under Environmental Laws and is in compliance with all terms
and conditions of such Governmental Approvals which the failure to obtain or to
comply with could reasonably be expected to have a Material Adverse
Effect.  Except for any of the following
matters that could not be reasonably expected to have a Material Adverse
Effect, (i) the Borrower is not aware of, and has not received notice of,
any past, present, or future events, conditions, circumstances, activities,
practices, incidents, actions, or plans which, with respect to the Borrower,
its Subsidiaries and each other Loan Party, may interfere with or prevent
compliance or continued compliance with Environmental Laws, or may give rise to
any common-law or legal liability, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, study, or investigation, based on or
related to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling or the emission, discharge, release or
threatened release into the environment, of any Hazardous Material; and (ii)
there is no civil, criminal, or administrative action, suit, demand, claim,
hearing, notice, or demand letter, notice of violation, investigation, or
proceeding pending or, to the Borrower’s knowledge after due inquiry,
threatened, against the Borrower, any of its Subsidiaries or any other Loan
Party relating in any way to Environmental Laws.

 

(p)           Investment
Company; Public Utility Holding Company. 
Neither the Borrower nor any Subsidiary nor any other Loan Party is
(i) an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
(ii) a “holding company” or a “subsidiary company” of a “holding company”,
or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other Applicable Law which purports to
regulate or restrict its ability to 

 

60

 

borrow money or to consummate the transactions contemplated by this
Agreement or to perform its obligations under any Loan Document to which it is
a party.

 

(q)           Margin Stock.  Neither the Borrower, any Subsidiary nor any
other Loan Party is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying “margin stock” within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System.

 

(r)            Intellectual
Property.  Each of the Borrower, each
other Loan Party and each other Subsidiary owns or has the right to use, under
valid license agreements or otherwise, all material patents, licenses,
franchises, trademarks, trademark rights, service marks, service mark rights,
trade names, trade name rights, trade secrets and copyrights (collectively, “Intellectual
Property”) necessary to the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, without known conflict with any patent,
license, franchise, trademark, trademark right, service mark, service mark
right, trade secret, trade name, copyright, or other proprietary right of any
other Person.  The Borrower, each other
Loan Party and each other Subsidiary have taken all such steps as they deem
reasonably necessary to protect their respective rights under and with respect
to such Intellectual Property.  No
material claim has been asserted by any Person with respect to the use of any
such Intellectual Property by the Borrower, any other Loan Party or any other
Subsidiary, or challenging or questioning the validity or effectiveness of any
such Intellectual Property.  The use of
such Intellectual Property by the Borrower, its Subsidiaries and the other Loan
Parties, does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, give rise to any liabilities on
the part of the Borrower, any other Loan Party or any other Subsidiary that
could reasonably be expected to have a Material Adverse Effect.

 

(s)           Business.  As of the Agreement Date, the Borrower and
its Subsidiaries are engaged in the business of acquiring, developing, owning
and managing neighborhood and community shopping centers, together with other
business activities incidental thereto.

 

(t)            Broker’s Fees.  No broker’s or finder’s fee, commission or
similar compensation will be payable with respect to the transactions
contemplated hereby.  No other similar
fees or commissions will be payable by any Loan Party for any other services
rendered to the Borrower or any of its Subsidiaries ancillary to the
transactions contemplated hereby.

 

(u)           Accuracy and
Completeness of Information.  No
written information, report or other papers or data (excluding financial
projections and other forward looking statements) furnished to the Agent or any
Lender by, on behalf of, or at the direction of, the Borrower, any Subsidiary
or any other Loan Party in connection with, pursuant to or relating in any way
to this Agreement, contained any untrue statement of a fact material to the
creditworthiness of the Borrower, any Subsidiary or any other Loan Party or
omitted to state a material fact necessary in order to make such statements
contained therein, in light of the circumstances under which they were made,
not misleading.  All financial statements
(including in each case all related schedules and notes) furnished to the Agent
or any Lender by, on behalf of, or at the direction of, the Borrower, any
Subsidiary or any other Loan Party in connection with, pursuant to or relating
in any way to this Agreement, present fairly, in all material respects and in
accordance with GAAP 

 

61

 

consistently applied throughout the periods involved, the financial
position of the Persons involved as at the date thereof and the results of
operations for such periods (subject, as to interim statements, to changes
resulting from normal year-end audit adjustments).  All financial projections and other forward
looking statements prepared by or on behalf of the Borrower, any Subsidiary or
any other Loan Party that have been or may hereafter be made available to the
Agent or any Lender were or will be prepared in good faith based on reasonable
assumptions but with it being understood that such projections and statements
are not a guarantee of future performance. 
As of the Effective Date, no fact is known to the Borrower which has
had, or may in the future have (so far as the Borrower can reasonably foresee),
a Material Adverse Effect which has not been set forth in the financial
statements referred to in Section 6.1.(j) or in such information, reports
or other papers or data or otherwise disclosed in writing to the Agent and the
Lenders.

 

(v)           REIT Status.  The Borrower qualifies as a REIT and is in
compliance with all requirements and conditions imposed under the Internal
Revenue Code sufficient to allow the Borrower to maintain its status as a REIT.

 

(w)          Eligible
Properties.  As of the Agreement
Date, Schedule 6.1.(w) is a correct and complete list of all Eligible
Properties.

 

(x)            Foreign Assets
Control.  None of the Borrower, any
Subsidiary or any Affiliate of the Borrower: (i) is a Sanctioned Person,
(ii) has more than 10% of its assets in Sanctioned Entities, or
(iii) derives more than 10% of its operating income from investments in,
or transactions with, Sanctioned Persons or Sanctioned Entities.

 

Section 6.2.  Survival of Representations and Warranties,
Etc.

 

All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Borrower, any Subsidiary or
any other Loan Party to the Agent or any Lender pursuant to or in connection
with this Agreement or any of the other Loan Documents (including, but not
limited to, any such statement made in or in connection with any amendment
hereto or thereto or any statement contained in any certificate, financial
statement or other instrument delivered by or on behalf of the Borrower prior
to the Agreement Date and delivered to the Agent or any Lender in connection
with the underwriting or closing of the transactions contemplated hereby) shall
constitute representations and warranties made by the Borrower in favor of the
Agent or any of the Lenders under this Agreement.  All representations and warranties made under
this Agreement and the other Loan Documents shall be deemed to be made at and
as of the Agreement Date, the Effective Date, the date on which any extension
of the Termination Date is effectuated pursuant to Section 2.13. and the date
of the occurrence of any Credit Event, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date) and except for changes
in factual circumstances not prohibited under the Loan Documents.  All such representations and warranties shall
survive the effectiveness of this Agreement, the execution and delivery of the
Loan Documents and the making of the Loans and the issuance of the Letters of
Credit.

 

62

 

ARTICLE VII. AFFIRMATIVE COVENANTS

 

For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders)
shall otherwise consent in the manner provided for in Section 12.6., the
Borrower shall comply with the following covenants:

 

Section 7.1.  Preservation of Existence and Similar
Matters.

 

Except as otherwise permitted under Section 9.5., the Borrower
shall, and shall cause each Subsidiary and each other Loan Party to, preserve
and maintain its respective existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation or formation and qualify
and remain qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification and authorization and where the failure to maintain such
existence or to be so authorized and qualified could reasonably be expected to
have a Material Adverse Effect.

 

Section 7.2.  Compliance with Applicable Law.

 

The Borrower shall, and shall cause each Subsidiary and each other Loan
Party to, comply with all Applicable Laws, including the obtaining of all
Governmental Approvals, the failure with which to comply could reasonably be
expected to have a Material Adverse Effect.

 

Section 7.3.  Maintenance of Property.

 

In addition to the requirements of any of the other Loan Documents, the
Borrower shall, and shall cause each Subsidiary and other Loan Party to, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect, (a) protect and preserve all of its respective properties,
including, but not limited to, all Intellectual Property, and maintain in good
repair, working order and condition all tangible properties, ordinary wear and
tear excepted, and (b)  make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such properties,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times.

 

Section 7.4.  Conduct of Business.

 

The Borrower shall, and shall cause its Subsidiaries and the other Loan
Parties to, carry on, their respective businesses as described in
Section 6.1.(s).

 

Section 7.5.  Insurance.

 

In addition to the requirements of any of the other Loan Documents, the
Borrower shall, and shall cause each Subsidiary and other Loan Party to,
maintain insurance (on a replacement cost basis) with financially sound and
reputable insurance companies against such risks and in such amounts as is
customarily maintained by Persons engaged in similar businesses or as may be
required by Applicable Law, and from time to time deliver to the Agent upon its
request a detailed list, together with copies of all policies of the insurance
then in effect, stating the names 

 

63

 

of the insurance companies, the amounts and rates of the insurance, the
dates of the expiration thereof and the properties and risks covered thereby.

 

Section 7.6.  Payment of Taxes and Claims.

 

The Borrower shall, and shall cause each Subsidiary and other Loan
Party to, pay and discharge when due (a) all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, and (b) all lawful claims of
materialmen, mechanics, carriers, warehousemen and landlords for labor,
materials, supplies and rentals which, if unpaid, might become a Lien on any
properties of such Person; provided, however, that this Section shall not
require the payment or discharge of any such tax, assessment, charge, levy or
claim which is being contested in good faith by appropriate proceedings which
operate to suspend the collection thereof and for which adequate reserves have
been established on the books of the Borrower, such Subsidiary or such other
Loan Party, as applicable, in accordance with GAAP.

 

Section 7.7.  Visits and Inspections.

 

The Borrower shall, and shall cause each Subsidiary and other Loan
Party to, permit representatives or agents of any Lender or the Agent, from
time to time after reasonable prior notice if no Event of Default shall be in
existence, as often as may be reasonably requested, but only during normal
business hours and at the expense of such Lender or the Agent (provided that
the exercise by the Agent of its rights under this Section shall be at the
expense of the Borrower two times in any given fiscal year unless a Default or
Event of Default shall exist, in which case the exercise by the Agent or such
Lender of its rights under this Section shall be at the expense of the
Borrower), as the case may be, to: (a) visit and inspect all properties of
the Borrower or such Subsidiary or other Loan Party to the extent any such right
to visit or inspect is within the control of such Person; (b) inspect and
make extracts from their respective books and records, including but not
limited to management letters prepared by independent accountants; and
(c) discuss with its officers and employees, and its independent
accountants (where accompanied by the Borrower unless a Default or Event of
Default shall exist), its business, properties, condition (financial or
otherwise), results of operations and performance.  If requested by the Agent, the Borrower shall
execute an authorization letter addressed to its accountants authorizing the
Agent or any Lender to discuss the financial affairs of the Borrower and any
Subsidiary or any other Loan Party with its accountants.

 

Section 7.8.  Use of Proceeds; Letters of Credit.

 

The Borrower shall use the proceeds of the Loans and the Letters of
Credit to refinance existing Indebtedness under the Existing Credit Agreement
on the Closing Date, to pay fees, costs and expenses in respect of the
transactions under this Agreement, and thereafter for general corporate
purposes only.  No part of the proceeds
of any Loan or Letter of Credit will be used (a) for the purpose of buying
or carrying “margin stock” within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System or to extend credit to others for
the purpose of purchasing or carrying any such margin stock if, in any such
case, such use might result in any of the Loans or any of the Letters of Credit
being consider to be “purpose credit” directly or indirectly secured by margin
stock within the meaning of Regulation U or Regulation 

 

64

 

X of the Board of Governors of the Federal Reserve System, (b) to
finance any operations, investments or activities in, or make any payments to,
any country, agency, organization, or Person described in clause (ii) of
Section 6.1.(x) or (c) to fund any operations in, finance any investments
or activities in, or make any payments to, a Sanctioned Person or Sanctioned
Entity.

 

Section 7.9.  Environmental Matters.

 

The Borrower shall, and shall cause all of its Subsidiaries and the
other Loan Parties to, comply with all Environmental Laws the failure with
which to comply could reasonably be expected to have a Material Adverse
Effect.  If the Borrower, any Subsidiary
or any other Loan Party shall (a) receive notice that any violation of any
Environmental Law may have been committed or is about to be committed by such
Person, (b) receive notice that any administrative or judicial complaint
or order has been filed or is about to be filed against the Borrower, any
Subsidiary or any other Loan Party alleging violations of any Environmental Law
or requiring the Borrower, any Subsidiary or any other Loan Party to take any
action in connection with the release of Hazardous Materials or
(c) receive any notice from a Governmental Authority or private party
alleging that the Borrower, any Subsidiary or any other Loan Party may be
liable or responsible for costs associated with a response to or cleanup of a
release of Hazardous Materials or any damages caused thereby, and the matters
referred to in such notices, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, the Borrower shall provide the
Agent with a copy of such notice promptly, and in any event within 10 Business
Days, after the receipt thereof by the Borrower, any Subsidiary or any other
Loan Party.  The Borrower shall, and shall
cause its Subsidiaries and the other Loan Parties to, take promptly all actions
necessary to prevent the imposition of any Liens that could reasonably be
expected to have a Material Adverse Effect on any of their respective
properties arising out of or related to any Environmental Laws.

 

Section 7.10.  Books and Records.

 

The Borrower shall, and shall cause each of its Subsidiaries and the
other Loan Parties to, maintain books and records pertaining to its respective
business operations in such detail, form and scope as is consistent with good
business practice and in accordance with GAAP.

 

Section 7.11.  Further Assurances.

 

The Borrower shall, at the Borrower’s cost and expense and upon request
of the Agent, execute and deliver or cause to be executed and delivered, to the
Agent such further instruments, documents and certificates, and do and cause to
be done such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions
and purposes of this Agreement and the other Loan Documents.

 

Section 7.12.  New Subsidiaries/Guarantors.

 

(a)           Requirement to
Become Guarantor.  Within 10 days of
(x) any Person (other than an Excluded Subsidiary) becoming a Material
Subsidiary after the Effective Date or (y) any Subsidiary becoming
obligated in respect of any Indebtedness other than Nonrecourse Indebtedness,
the Borrower shall deliver to the Agent each of the following items, each in
form 

 

65

 

and substance satisfactory to the Agent: (i) an Accession
Agreement executed by such Subsidiary and (ii) the items that would have
been delivered under Sections 5.1.(a)(iv) through (viii) and (xiii) if
such Subsidiary had been required to be a Guarantor on the Effective Date;
provided, however, promptly (and in any event within 10 days) upon any Excluded
Subsidiary ceasing to be subject to the restriction which prevented it from
becoming a Guarantor on the Effective Date or delivering an Accession Agreement
pursuant to this Section, as the case may be, such Subsidiary shall comply with
the provisions of this Section.  The
Borrower shall send to each Lender copies of each of the foregoing items once
the Agent has received all such items with respect to a Material Subsidiary.

 

(b)           Release of a Guarantor.  The Borrower may request in writing that the
Agent release, and upon receipt of such request the Agent shall release, a
Guarantor from the Guaranty so long as: (i) such Guarantor (x) qualifies, or
will qualify simultaneously with its release from the Guaranty, as an Excluded
Subsidiary, (y) in the case of a Material Subsidiary, has ceased to be, or
simultaneously with its release from the Guaranty will cease to be, a Material
Subsidiary or (z) in the case of a Subsidiary obligated in respect of any
Indebtedness other than Nonrecourse Indebtedness, such Subsidiary has ceased to
be, or simultaneously with its release from the Guaranty will cease to be,
obligated in respect of such Indebtedness; (ii) such Guarantor is not otherwise
required to be a party to the Guaranty under the immediately preceding
subsection (a); (iii) no Default or Event of Default shall then be in existence
or would occur as a result of such release, including without limitation, a
Default or Event of Default resulting from a violation of any of the covenants
contained in Section 9.1.; and (iv) the Agent shall have received such written
request at least 10 Business Days prior to the requested date of release.  Delivery by the Borrower to the Agent of any
such request shall constitute a representation by the Borrower that the matters
set forth in the preceding sentence (both as of the date of the giving of such
request and as of the date of the effectiveness of such request) are true and
correct with respect to such request.

 

Section
7.13.  REIT Status.

 

The Borrower shall at all times maintain its status as a REIT.

 

Section 7.14.  Exchange Listing.

 

The Borrower shall maintain at least one class of
common shares of the Borrower having trading privileges on the New York Stock
Exchange or the American Stock Exchange or which is the subject of price
quotations in the over-the-counter market as reported by the National
Association of Securities Dealers Automated Quotation System.

 

ARTICLE VIII. INFORMATION

 

For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders)
shall otherwise consent in the manner set forth in Section 12.6., the
Borrower shall furnish to each Lender (or to the Agent if so provided below) at
its Lending Office:

 

66

 

Section 8.1.  Quarterly Financial Statements.

 

As soon as available and in any event within 5 days
after the same is filed with the Securities and Exchange Commission (but in no
event later than 45 days after the end of each of the first, second and third
fiscal quarters of the Borrower), the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such period and the related
unaudited consolidated statements of income, shareholders’ equity and cash
flows of the Borrower and its Subsidiaries for such period, setting forth in
each case in comparative form the figures as of the end of and for the
corresponding periods of the previous fiscal year, all of which shall be
certified by the chief executive officer, chief financial officer, or other
financial officer of the Borrower who is a vice president or more senior
officer, in his or her opinion, to present fairly, in accordance with GAAP
consistently applied, and in all material respects, the consolidated financial
position of the Borrower and its Subsidiaries as at the date thereof and the
results of operations for such period (subject to normal year-end audit
adjustments).

 

Section 8.2.  Year-End Statements.

 

As soon as available and in any event within 5 days after the same is
filed with the Securities and Exchange Commission (but in no event later than
90 days after the end of each fiscal year of the Borrower) (including without
limitation, the fiscal year ended December 31, 2004), the audited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related audited consolidated statements of income, shareholders’
equity and cash flows of the Borrower and its Subsidiaries for such fiscal
year, setting forth in comparative form the figures as at the end of and for
the previous fiscal year, all of which shall be (a) certified by the chief
executive officer, chief financial officer, or other financial officer of the
Borrower who is a vice president or more senior officer, in his or her opinion,
to present fairly, in accordance with GAAP consistently applied, the
consolidated financial position of the Borrower and its Subsidiaries as at the
date thereof and the results of operations for such period and
(b) accompanied by the report thereon of KPMG LLP or other independent
certified public accountants of recognized national standing acceptable to the
Agent, whose certificate shall be unqualified or in scope and substance
satisfactory to the Requisite Lenders.

 

Section 8.3.  Compliance Certificate.

 

At the time financial statements are furnished pursuant to
Sections 8.1. and 8.2., and within 5 Business Days of the Agent’s request
with respect to any other fiscal period, a certificate substantially in the
form of Exhibit N (a “Compliance Certificate”) executed by the chief
financial officer or any senior financial officer of the Borrower with a title
of “Vice President” or a title more senior thereto of the Borrower:
(a) setting forth in reasonable detail as at the end of such quarterly
accounting period, fiscal year, or other fiscal period, as the case may be, the
calculations required to establish whether or not the Borrower was in
compliance with the covenants contained in Sections 9.1., 9.2. and 9.3.
(including without limitation, for the fiscal year ended December 31, 2004) and
(b) stating that, to the best of his or her knowledge, information and
belief after due inquiry, no Default or Event of Default exists, or, if such is
not the case, specifying such Default or Event of Default and its nature, when
it occurred, whether it is continuing and the steps being taken by the Borrower
with respect to such event, condition or failure.  Together with the delivery of each Compliance
Certificate, the Borrower shall deliver a 

 

67

 

report, in form and detail reasonably satisfactory to the Agent,
setting forth a list of all Properties acquired by the Borrower, its
Subsidiaries, and its Unconsolidated Affiliates since the date of the delivery
of the previous Compliance Certificate, such list to identify such Property’s
name, location, year built or acquired, anchor tenants, amount of related
mortgage Indebtedness, if any,
and the maturity of such mortgage Indebtedness,
and the Occupancy Rate and Net Operating Income for such Property.

 

Section 8.4.  Other Information.

 

(a)           Management
Reports.  Promptly upon receipt
thereof, copies of all management reports, if any, submitted to the Borrower or
its Board of Directors by its independent public accountants;

 

(b)           Securities
Filings.  Prompt notice of the filing
of all registration statements (excluding the exhibits thereto (unless
requested by the Agent) and any registration statements on Form S-8 or its
equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all
other periodic reports which the Borrower, any Subsidiary or any other Loan
Party shall file with the Securities and Exchange Commission (or any Governmental
Authority substituted therefor) or any national securities exchange (such
registration statements, reports and other periodic reports collectively
referred to a “Security Filing”), and copies of any of the foregoing that is
not publicly available to the Agent and the Lenders or at a Lender’s request
therefor;

 

(c)           Shareholder
Information; Press Releases. 
Promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed and promptly upon the issuance thereof copies of all press releases
issued by the Borrower, any Subsidiary or any other Loan Party (but only to the
extent that such financial statements, reports and proxy statements are not
publicly available to the Agent and the Lenders);

 

(d)           ERISA.  If and when any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of any “reportable
event” (as defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC;
(ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer, any Plan, a copy of such notice;
(iv) applies for a waiver of the minimum funding standard under Section
412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy
of such notice and other information filed with the PBGC; (vi) gives
notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement, and of which there has
resulted or could reasonably be expected to result in the imposition of a Lien
or the posting of a bond or other security, a certificate of the chief
executive 

 

68

 

officer or chief financial officer of the Borrower setting forth
details as to such occurrence and the action, if any, which the Borrower or
applicable member of the ERISA Group is required or proposes to take;

 

(e)           Litigation.  To the extent the Borrower or any Subsidiary
is aware of the same, prompt notice of the commencement of any proceeding or
investigation by or before any Governmental Authority and any action or
proceeding in any court or other tribunal or before any arbitrator against or
in any other way relating adversely to, or adversely affecting, the Borrower or
any Subsidiary or any of their respective properties, assets or businesses
which could reasonably be expected to have a Material Adverse Effect;

 

(f)            Modification of
Organizational Documents.  Promptly
upon the Agent’s request therefor, a copy of any amendment to the articles of
incorporation, bylaws, partnership agreement, operating agreement or other
similar organizational documents of the Borrower, any Subsidiary or any other
Loan Party;

 

(g)           Change of Financial
Condition.  To the extent not
otherwise publicly available to the Agent and the Lenders in a Security Filing,
prompt notice of any change in the business, assets, liabilities, financial
condition or results of operations of the Borrower, any Subsidiary or any other
Loan Party which has had or, in the Borrower’s reasonable judgment, could be
expected to have a Material Adverse Effect;

 

(h)           Default.
Notice of the occurrence of any Default or Event of Default promptly upon a
Responsible Officer of the Borrower obtaining knowledge thereof;

 

(i)            Judgments.  To the extent not otherwise publicly
available to the Agent and the Lenders in a Security Filing, prompt notice of
any order, judgment or decree in excess of $20,000,000 having been entered
against the Borrower, any Subsidiary or any other Loan Party or any of their
respective properties or assets;

 

(j)            Notice of
Violations of Law.  To the extent not
otherwise publicly available to the Agent and the Lenders in a Security Filing,
prompt notice if the Borrower, any Subsidiary or any other Loan Party shall
receive any notification from any Governmental Authority alleging a violation
of any Applicable Law or any inquiry which, in either case, could reasonably be
expected to have a Material Adverse Effect;

 

(k)           Material
Asset Sales.  To the extent not
otherwise publicly available to the Agent and the Lenders in a Security Filing,
prompt notice of the sale, transfer or other disposition of any assets (which
have a value equal to or greater than $30,000,000) of the Borrower, any
Subsidiary or any other Loan Party to any Person other than the Borrower, any
Subsidiary or any other Loan Party;

 

(l)            Patriot
Act Information.  From time to time
and promptly upon each request, information identifying the Borrower as a Lender
may request in order to comply with the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001));

 

69

 

(m)          Senior
Note Indentures.  Contemporaneously
with their delivery to the holders of Indebtedness issued pursuant to the
Senior Note Indentures, copies of all financial information and reports
provided under the Senior Note Indentures (including, without limitation, the
compliance certificates required to be delivered under Section 4.11 of each of
the REIT Note Indentures and Section 1008 of the Bradley OP Note Indenture);
and

 

(n)           Other
Information.  From time to time and
promptly upon each request, such data, certificates, reports, statements,
opinions of counsel, documents or further information regarding the business,
assets, liabilities, financial condition, results of operations or business
prospects of the Borrower or any of its Subsidiaries as the Agent or any Lender
may reasonably request.

 

Section 8.5.  Delivery of Documents.

 

Documents required to be delivered by the Borrower pursuant to
Article VIII. (to the extent any such documents are not otherwise included
in a Security Filing) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which such documents are
posted by the Agent on the Borrower’s behalf on an internet or intranet
website, if any, to which each Lender and the Agent has access (whether a
commercial, third-party website (such as IntraLinks or SyndTraks) or a website
sponsored by the Agent); provided that the Borrower shall deliver paper copies
of such documents to the Agent or any Lender that requests the Borrower to
deliver such paper copies until a written request to cease delivering paper
copies is given by the Agent or such Lender. Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper
copies of the Compliance Certificate required by Section 8.3. to the
Agent.  The Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

 

ARTICLE IX. NEGATIVE COVENANTS

 

For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders)
shall otherwise consent in the manner set forth in Section 12.6., the
Borrower shall comply with the following covenants:

 

Section 9.1.  Financial Covenants.

 

The Borrower shall not permit:

 

(a)           Maximum Leverage
Ratio.  The ratio (the “Maximum
Leverage Ratio”) of (i) Combined Total Indebtedness to (ii) Combined
Total Asset Value, to exceed 0.60 to 1.00 at any time; provided, however, that
if the Maximum Leverage Ratio is greater than 0.60 to 1.00 but is less than
0.65 to 1.00, then such failure to comply with the foregoing covenant shall not
constitute a Default or an Event of Default so long as (1) the Borrower’s
failure to comply with the foregoing covenant is a direct result of the
Borrower’s (or any Subsidiary’s) acquisition of a portfolio of Properties, (2)
such acquisition is otherwise permitted hereunder, and (3) the 

 

70

 

Maximum Leverage Ratio ceases to exceed 0.60 to 1.00 within 180 days
following the date the Maximum Leverage Ratio first exceeded 0.60 to 1.00.

 

(b)           Minimum Fixed Charge
Coverage Ratio.  The ratio of
(i) Combined Adjusted EBITDA for the period of two consecutive fiscal
quarters of the Borrower most recently ending to (ii) Fixed Charges for
such period, to be less than 1.70 to 1.00 at any time.

 

(c)           Maximum Combined Secured
Indebtedness Ratio.  The ratio of
(i) Combined Secured Indebtedness of the Combined Group to
(ii) Combined Total Asset Value, to exceed 0.40 to 1.00 at any time.

 

(d)           Maximum Combined
Secured Recourse Indebtedness Ratio. 
The ratio of (i) Combined Secured Recourse Indebtedness of the
Combined Group to (ii) Combined Total Asset Value, to exceed 0.10 to 1.00
at any time.

 

(e)           Minimum
Unencumbered Leverage Ratio.  The
ratio of (i) Unencumbered Asset Value to (ii) Combined Unsecured
Indebtedness of the Combined Group, to be less than 1.67 to 1.00 at any time.

 

(f)            Minimum
Unencumbered Interest Coverage Ratio. 
The ratio of (i) Unencumbered Adjusted NOI for the period of two
consecutive fiscal quarters of the Borrower most recently ending to
(ii) Unsecured Interest Expense for such period, to be less than 2.00 to
1.00 at any time.

 

(g)           Minimum Combined
Tangible Net Worth.  Combined
Tangible Net Worth at any time to be less than (i) $750,000,000 plus
(ii) 85% of the Net Proceeds of all Equity Issuances effected by the
Borrower or any Subsidiary after December 31, 2004 (other than (A) Equity
Issuances to the Borrower or any Subsidiary and (B) any increase in Combined
Tangible Net Worth to the extent attributable to employee stock option
exercises and employee compensation in an aggregate amount not to exceed
$5,000,000).

 

Section 9.2.  Restricted Payments.

 

The Borrower shall not, and shall not permit any of its Subsidiaries
to, declare or make any Restricted Payment; provided, however, that the
Borrower and its Subsidiaries may declare and make the following Restricted
Payments so long as no Default or Event of Default would result therefrom:

 

(a)           the Borrower may
declare or make cash distributions to its shareholders (together with cash
distributions of the Heritage OP and the Bradley OP to its limited partners
other than the Borrower) during any period of four consecutive fiscal quarters
ending during the term of this Agreement in an aggregate amount not to exceed
the greater of (i) 95% of Funds From Operations of the Combined Group for
such period or (ii) the amount required to be distributed for the Borrower
to remain in compliance with Section 7.13.; provided, however, that in no
event shall such cash distributions made during any period of two consecutive fiscal
quarters exceed in an aggregate amount 100% of Funds From Operations of the
Combined Group for such period;

 

71

 

(b)           the Borrower may
make cash distributions to its shareholders of capital gains resulting from
gains from certain asset sales to the extent necessary to avoid payment of
taxes on such asset sales imposed under Sections 857(b)(3) and 4981 of the
Internal Revenue Code;

 

(c)           a Subsidiary that is
not a Wholly Owned Subsidiary may make cash distributions to holders of Equity
Interests issued by such Subsidiary;

 

(d)           the Bradley OP may
repurchase, redeem or otherwise acquire Equity Interests issued by the Bradley
OP;

 

(e)           Subsidiaries may pay
Restricted Payments to the Borrower or any other Subsidiary; and

 

(f)            the Borrower may
make cash payments to repurchase outstanding shares of any of its Equity
Interests.

 

If an Event of Default shall exist, the Borrower shall not, and shall
not permit any Subsidiary to, make any Restricted Payments to any Person other
than (i) to the Borrower or any Subsidiary and (ii) cash
distributions by the Borrower to its shareholders during any fiscal year in an
aggregate amount not to exceed the minimum amount necessary for the Borrower to
remain in compliance with Section 7.13.

 

Section 9.3.
Certain Permitted Investments.

 

The Borrower shall not, and shall not permit any Subsidiary to, make
any Investment in or otherwise own the following items which would cause the
aggregate value of such holdings of the Borrower and such other Subsidiaries to
exceed the applicable limits set forth below:

 

(a)           Investments in
Unconsolidated Affiliates and other Persons that are not Wholly Owned
Subsidiaries (other than Subsidiaries that are Guarantors and the Bradley OP
(and Wholly Owned Subsidiaries of the Bradley OP) so long as the Borrower owns
at least 66-2/3% of the Equity Interests issued by the Bradley OP), such that
the aggregate value of such Investments (determined in a manner consistent with
the definition of Combined Total Asset Value or, if not contemplated under the
definition of Combined Total Asset Value, as determined in accordance with
GAAP) exceeds 20.0% of Combined Total Asset Value at any time;

 

(b)           Mortgage
Receivables, such that the aggregate book value of all such Mortgage
Receivables exceeds 10.0% of Combined Total Asset Value at any time;

 

(c)           real property under
construction such that the aggregate Construction Budget for all such real
property exceeds 15.0% of Combined Total Asset Value at any time; and

 

(d)           Unimproved Land,
such that the current book value of all Unimproved Land exceeds 5.0% of
Combined Total Asset Value at any time.

 

72

 

In addition to the foregoing limitations, the aggregate value of all of
the items subject to the limitations in the preceding clauses (a) through
(d) shall not exceed 35.0% of Combined Total Asset Value at any time.

 

Section 9.4.  Liens; Negative Pledges; Other Matters.

 

(a)           The Borrower shall
not, and shall not permit any Subsidiary or other Loan Party to, create,
assume, or incur any Lien (other than Permitted Liens) upon any of its
properties, assets, income or profits of any character whether now owned or
hereafter acquired if immediately prior to the creation, assumption or incurring
of such Lien, or immediately thereafter, an Event of Default is or would be in
existence, including without limitation, an Event of Default resulting from a
violation of any of the covenants contained in Section 9.1.

 

(b)           The Borrower shall
not, and shall not permit any Subsidiary or other Loan Party to, enter into,
assume or otherwise be bound by any Negative Pledge except for a Negative
Pledge contained in (i) an agreement (x) evidencing Indebtedness
which the Borrower or such Subsidiary may create, incur, assume, or permit or
suffer to exist hereunder; (y) which Indebtedness is secured by a Lien
permitted to exist under the Loan Documents; and (z) which prohibits the
creation of any other Lien on only the property securing such Indebtedness as
of the date such agreement was entered into; or (ii) an agreement relating
to the sale of a Subsidiary or assets pending such sale, provided that in any
such case the Negative Pledge applies only to the Subsidiary or the assets that
are the subject of such sale.

 

(c)           The
Borrower shall not, and shall not permit any Subsidiary or other Loan Party to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary (other
than an Excluded Subsidiary) to: (i) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity
interests owned by the Borrower or any Subsidiary; (ii) pay any
Indebtedness owed to the Borrower or any Subsidiary; (iii) make loans or
advances to the Borrower or any Subsidiary; or (iv) transfer any of its
property or assets to the Borrower or any Subsidiary.

 

Section 9.5.  Merger, Consolidation, Sales of Assets and
Other Arrangements.

 

The Borrower shall not, and shall not permit any Subsidiary or other
Loan Party to: (i) enter into any transaction of merger or consolidation;
(ii) liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); or (iii) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business or assets, whether now owned or hereafter
acquired; provided, however, that:

 

(a)           any of the actions
described in the immediately preceding clauses (i) through (iii) may be
taken with respect to any Subsidiary or any other Loan Party (other than the
Borrower) so long as immediately prior to the taking of such action, and
immediately thereafter and after giving effect thereto, no Event of Default is
or would be in existence; notwithstanding the foregoing, any such Loan Party
(other than the Borrower) may enter into a transaction of merger pursuant to
which such Loan Party is not the survivor of such merger only if (i) the
Borrower shall have given the Agent and the Lenders at least 10 Business Days’
prior written notice of such merger, such
notice to include a certification to the effect that immediately after
and after 

 

73

 

giving effect to such action, no Event of Default is or would be in
existence; (ii) if the survivor entity is a Material Subsidiary (and not
an Excluded Subsidiary) within 5 Business Days of consummation of such merger,
the survivor entity (if not already a Guarantor) shall have executed and delivered
an assumption agreement in form and substance satisfactory to the Agent
pursuant to which such survivor entity shall expressly assume all of such Loan
Party’s Obligations under the Loan Documents to which it is a party;
(iii) within 10 days of consummation of such merger, the survivor entity
delivers to the Agent the following: (A) items of the type referred to in
Sections 5.1.(a)(iv) through (viii) and (xiii) with respect to the survivor
entity as in effect after consummation of such merger (if not previously
delivered to the Agent and still in effect), (B) copies of all documents
entered into by such Loan Party or the survivor entity to effectuate the
consummation of such merger, including, but not limited to, articles of merger
and the plan of merger, (C) copies, certified by the Secretary or
Assistant Secretary (or other individual performing similar functions) of such
Loan Party or the survivor entity, of all corporate and shareholder action
authorizing such merger and (D) copies of any filings with the Securities
and Exchange Commission in connection with such merger; and (iv) such Loan
Party and the survivor entity each takes such other action and delivers such
other documents, instruments, opinions and agreements as the Agent may reasonably
request;

 

(b)           a Person may merge
with and into the Borrower so long as (i) the Borrower is the survivor of
such merger, (ii) immediately prior to such merger, and immediately
thereafter and after giving effect thereto, no Event of Default is or would be
in existence, and (iii) the Borrower shall have given the Agent and the
Lenders at least 10 Business Days’ prior written notice of such merger, such notice to include a certification as to the
matters described in the immediately preceding clause (ii) (except that
such prior notice shall not be required in the case of the merger of a
Subsidiary with and into the Borrower);

 

(c)           the Borrower, its
Subsidiaries and the other Loan Parties may lease and sublease their respective
assets, as lessor or sublessor (as the case may be), in the ordinary course of
their business; and

 

(d)           the Borrower and
each Subsidiary may sell, transfer or dispose of assets among themselves.

 

Section 9.6.  Fiscal Year.

 

The Borrower shall not change its fiscal year from that in effect as of
the Agreement Date.

 

Section 9.7.  Modifications to PMCC Documents; Limitations
on Modifications to Loan Documents.

 

The Borrower shall not, and shall not permit
any Subsidiary or other Loan Party to, enter into any amendment, waiver or
modification to the PMCC Loan Agreement or PMCC Indemnity which could
reasonably be expected to have in any material respect an adverse effect on the
interests of the Agent or the Lenders. 
None of the Borrower and its Subsidiaries shall maintain or enter into
any agreement containing any provision which restricts the ability of any Loan
Party to amend or modify this Agreement or any other Loan Document.

 

74

 

Section 9.8.  Modifications of Organizational Documents.

 

The Borrower shall not, and shall not permit any Loan Party or other
Subsidiary to, amend, supplement, restate or otherwise modify its articles or
certificate of incorporation, by-laws, operating agreement, declaration of
trust, partnership agreement or other applicable organizational document if
such amendment, supplement, restatement or other modification could reasonably
be expected to have a materially adverse effect on (a) the ability of the
Borrower or any other Loan Party to perform its obligations under any Loan
Document to which it is a party, (b) the validity or enforceability of any
of the Loan Documents, (c) the rights and remedies of the Lenders and the
Agent under any of the Loan Documents or (d) the timely payment of the
principal of or interest on the Loans or other amounts payable in connection
therewith or the timely payment of all Reimbursement Obligations.

 

Section 9.9.  Transactions with Affiliates.

 

The Borrower shall not, and shall not permit any of its Subsidiaries or
any other Loan Party to, permit to exist or enter into, any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate (other than a Loan Party), except
(i) transactions which are no less favorable to the Borrower or such
Subsidiary than would be obtained in a comparable arm’s length transaction with
a Person that is not an Affiliate and (ii) transactions with
Unconsolidated Affiliates to the extent such transactions relate to property
management, leasing services, financing services, legal services or
construction management.

 

Section 9.10.  ERISA Exemptions.

 

The Borrower shall not, and shall not permit any Subsidiary to, permit
any of its respective assets to become or be deemed to be “plan assets” within
the meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder.

 

ARTICLE X. DEFAULT

 

Section 10.1.  Events of Default.

 

Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or
be effected by operation of Applicable Law or pursuant to any judgment or order
of any Governmental Authority:

 

(a)           Default in
Payment of Principal.  The Borrower
shall fail to pay when due (whether upon demand, at maturity, by reason of
acceleration or otherwise) the principal of any of the Loans, or any
Reimbursement Obligation.

 

(b)           Default in
Payment of Interest and Other Obligations. 
The Borrower shall fail to pay when due any interest on any of the Loans
or any of the other payment Obligations owing by the Borrower under this
Agreement or any other Loan Document, or any other Loan Party shall fail to pay
when due any payment Obligation owing by such other Loan Party under any Loan 

 

75

 

Document to which it is a party, and such failure shall continue for a
period of three Business Days.

 

(c)           Default in
Performance.  (i) The Borrower
shall fail to perform or observe any term, covenant, condition or agreement
contained in Section 8.4.(h) or in Article IX. or (ii) the
Borrower or any other Loan Party shall fail to perform or observe any term,
covenant, condition or agreement contained in this Agreement or any other Loan
Document to which it is a party and not otherwise mentioned in this Section and
in the case of this clause (ii) only such failure shall continue for a
period of 30 days after the earlier of (x) the date upon which a
Responsible Officer of the Borrower or such other Loan Party obtains knowledge
of such failure or (y) the date upon which the Borrower has received
written notice of such failure from the Agent.

 

(d)           Misrepresentations.  Any written statement, representation or
warranty made or deemed made by or on behalf of the Borrower or any other Loan
Party under this Agreement or under any other Loan Document, or any amendment
hereto or thereto, or in any other writing or statement at any time furnished
or made or deemed made by or on behalf of the Borrower or any other Loan Party
to the Agent or any Lender, shall at any time prove to have been incorrect or
misleading, in light of the circumstances in which made or deemed made, in any
material respect when furnished or made or deemed made; provided that this
clause (d) shall not serve as the basis for an Event of Default to the extent
that (A) the Borrower’s violation of this clause (d) results solely from its
certification under Section 5.2.(a) that no Default or Event of Default existed
as of the date of the making of a Loan or the date of issuance of a Letter of
Credit or would exist immediately after giving effect thereto and (B) in the
case of a Default, the Default that existed at such time has been cured and, in
the case of an Event of Default, the Event of Default that existed at such time
has been waived pursuant to Section 12.6.

 

(e)           Indebtedness
Cross-Default; Derivatives Contracts.

 

(i)            The
Borrower, any Subsidiary or any other Loan Party shall fail to pay when due and
payable, within any applicable grace or cure period, the principal of, or interest
on, any Indebtedness (other than the Loans and the Reimbursement Obligations)
having an aggregate outstanding principal amount of $25,000,000 or more (or
$50,000,000 or more in the case of Nonrecourse Indebtedness) (“Material
Indebtedness”); or

 

(ii)           (x) the
maturity of any Material Indebtedness shall have been accelerated in accordance
with the provisions of any indenture, contract or instrument evidencing,
providing for the creation of or otherwise concerning such Material
Indebtedness or (y) any Material Indebtedness shall have been required to
be prepaid or repurchased prior to the stated maturity thereof;

 

(iii)          any
other event shall have occurred and be continuing which permits any holder or
holders of Material Indebtedness, any trustee or agent acting on behalf of such
holder or holders or any other Person, to accelerate the maturity of any such
Material Indebtedness or require any such Material Indebtedness to be prepaid
or repurchased prior to its stated maturity; or

 

76

 

(iv)          any
Loan Party shall fail to pay when due and payable amounts in excess of
$25,000,000 in the aggregate owing in respect of any Derivatives Contracts.

 

(f)            Voluntary
Bankruptcy Proceeding.  The Borrower,
any other Loan Party or any Significant Subsidiary shall:  (i) commence a voluntary case under the
Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now
or hereafter in effect); (ii) file a petition seeking to take advantage of
any other Applicable Laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts;
(iii) consent to, or fail to contest in a timely and appropriate manner,
any petition filed against it in an involuntary case under such bankruptcy laws
or other Applicable Laws or consent to any proceeding or action described in
the immediately following subsection; (iv) apply for or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or liquidator of
itself or of a substantial part of its property, domestic or foreign;
(v) admit in writing its inability to pay its debts as they become due;
(vi) make a general assignment for the benefit of creditors;
(vii) make a conveyance fraudulent as to creditors under any Applicable
Law; or (viii) take any corporate or partnership action for the purpose of
effecting any of the foregoing.

 

(g)           Involuntary
Bankruptcy Proceeding.  A case or
other proceeding shall be commenced against the Borrower, any other Loan Party
or any Significant Subsidiary in any court of competent jurisdiction
seeking:  (i) relief under the
Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now
or hereafter in effect) or under any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Person, or of all or any
substantial part of the assets, domestic or foreign, of such Person, and such
case or proceeding shall continue undismissed or unstayed for a period of
60 consecutive calendar days, or an order granting the remedy or other relief
requested in such case or proceeding against the Borrower, such Significant
Subsidiary or such other Loan Party (including, but not limited to, an order
for relief under such Bankruptcy Code or such other federal bankruptcy laws)
shall be entered.

 

(h)           Litigation;
Enforceability.  The Borrower or any
other Loan Party shall disavow, revoke or terminate (or attempt to terminate)
any Loan Document to which it is a party or shall otherwise challenge or
contest in any action, suit or proceeding in any court or before any
Governmental Authority the validity or enforceability of this Agreement, any
Note or any other Loan Document or this Agreement, any Note, the Guaranty or
any other Loan Document shall cease to be in full force and effect (except as a
result of the express terms thereof).

 

(i)            Judgment.  A judgment or order for the payment of money
or for an injunction shall be entered against the Borrower, any Significant
Subsidiary or any other Loan Party, by any court or other tribunal and
(i) such judgment or order shall continue for a period of 30 days without
being paid, stayed or dismissed through appropriate appellate proceedings and
(ii) either (A) the amount of such judgment or order for which
insurance has not been acknowledged in writing by the applicable insurance
carrier (or the amount as to which the insurer has denied liability) exceeds,
individually or together with all other such outstanding judgments or orders 

 

77

 

entered against the Borrower, such Subsidiaries and such other Loan
Parties, $25,000,000 or (B) in the case of an injunction or other
non-monetary judgment, such judgment could reasonably be expected to have a
Material Adverse Effect.

 

(j)            Attachment.  A warrant, writ of attachment, execution or
similar process shall be issued against any property of the Borrower, any
Significant Subsidiary or any other Loan Party which exceeds, individually or
together with all other such warrants, writs, executions and processes,
$25,000,000 in amount and such warrant, writ, execution or process shall not be
discharged, vacated, stayed or bonded for a period of 30 days; provided,
however, that if a bond has been issued in favor of the claimant or other
Person obtaining such warrant, writ, execution or process, the issuer of such
bond shall execute a waiver or subordination agreement in form and substance
satisfactory to the Agent pursuant to which the issuer of such bond
subordinates its right of reimbursement, contribution or subrogation to the Obligations
and waives or subordinates any Lien it may have on the assets of any Loan
Party.

 

(k)           ERISA.  Any member of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess of $5,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans having aggregate Unfunded Liabilities in excess of
$5,000,000 shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer, any Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $5,000,000.

 

(l)            Loan Documents.  An Event of Default (as defined therein)
shall occur under any of the other Loan Documents.

 

(m)          Change of
Control/Change in Management.

 

(i)            Any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
the New England Teamsters and Trucking Industry Pension Fund, is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person will be deemed to have “beneficial ownership” of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 33% of the total voting power of the then outstanding
voting stock of the Borrower;

 

(ii)           During
any period of 12 consecutive months ending after the Agreement Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of the Borrower (together with any new directors whose
election by 

 

78

 

such Board or whose nomination for election by the shareholders of the
Borrower was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Borrower then
in office; or

 

(iii)          The
Borrower or a Wholly Owned Subsidiary of the Borrower shall cease to be the
sole general partner of either Operating Partnership.

 

Section 10.2.  Remedies Upon Event of Default.

 

Upon the occurrence of an Event of Default the following provisions
shall apply:

 

(a)           Acceleration;
Termination of Facilities.

 

(i)            Automatic.  Upon the occurrence of an Event of Default
specified in Section 10.1.(f) or 10.1.(g), (A)(i) the principal of, and
all accrued interest on, the Loans and the Notes at the time outstanding,
(ii) an amount equal to the Stated Amount of all Letters of Credit
outstanding as of the date of the occurrence of such Event of Default for
deposit into the Collateral Account pursuant to Section 10.5. and
(iii) all of the other Obligations of the Borrower, including, but not
limited to, the other amounts owed to the Lenders, the Swingline Lender and the
Agent under this Agreement, the Notes or any of the other Loan Documents shall
become immediately and automatically due and payable by the Borrower without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived by the Borrower and (B) all of the Commitments, the
obligation of the Lenders to make Revolving Loans, the Swingline Commitment,
the obligation of the Swingline Lender to make Swingline Loans, and the
obligation of the Agent to issue Letters of Credit hereunder, shall all
immediately and automatically terminate.

 

(ii)           Optional.  If any other Event of Default shall exist,
the Agent shall, at the direction of the Requisite Lenders:  (A) declare (1) the principal of,
and accrued interest on, the Loans and the Notes at the time outstanding,
(2) an amount equal to the Stated Amount of all Letters of Credit
outstanding as of the date of the occurrence of such other Event of Default for
deposit into the Collateral Account pursuant to Section 10.5. and
(3) all of the other Obligations, including, but not limited to, the other
amounts owed to the Lenders and the Agent under this Agreement, the Notes or
any of the other Loan Documents to be forthwith due and payable, whereupon the
same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived by the
Borrower and (B) terminate the Commitments, the Swingline Commitment, the
obligation of the Lenders to make Loans hereunder and the obligation of the
Agent to issue Letters of Credit hereunder.

 

(b)           Loan Documents.  The Requisite Lenders may direct the Agent
to, and the Agent if so directed shall, exercise any and all of its rights under
any and all of the other Loan Documents.

 

79

 

(c)           Applicable Law.  The Requisite Lenders may direct the Agent
to, and the Agent if so directed shall, exercise all other rights and remedies
it may have under any Applicable Law.

 

(d)           Appointment of Receiver.  To the extent permitted by Applicable Law, the
Agent and the Lenders shall be entitled to the appointment of a receiver for
the assets and properties of the Borrower and its Subsidiaries, without notice
of any kind whatsoever and without regard to the adequacy of any security for
the Obligations or the solvency of any party bound for its payment, to take
possession of all or any portion of the business operations of the Borrower and
its Subsidiaries and to exercise such power as the court shall confer upon such
receiver.

 

Section 10.3. 
Remedies Upon Default.

 

Upon the occurrence of a
Default specified in Section 10.1.(g), the Commitments shall immediately
and automatically terminate.

 

Section 10.4. 
Allocation of Payments.

 

If an Event of Default
shall exist and maturity of any of the Obligations has been accelerated, all
payments received by the Agent under any of the Loan Documents, in respect of
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder or thereunder, shall be applied in the following order
and priority:

 

(a)           amounts due the Agent in respect of
fees and expenses due under Section 12.2.;

 

(b)           amounts due the Lenders in respect of
fees and expenses due under Section 12.2., pro rata in the amount then due
each Lender;

 

(c)           payments of interest on Swingline
Loans;

 

(d)           payments of interest on all other
Loans and Reimbursement Obligations, to be applied for the ratable benefit of
the Lenders;

 

(e)           payments of principal of Swingline
Loans;

 

(f)            payments of principal of all other
Loans, Reimbursement Obligations and other Letter of Credit Liabilities, to be
applied for the ratable benefit of the Lenders; provided, however, to the
extent that any amounts available for distribution pursuant to this subsection
are attributable to the issued but undrawn amount of an outstanding Letters of
Credit, such amounts shall be paid to the Agent for deposit into the Collateral
Account);

 

(g)           amounts due the Agent and the Lenders
pursuant to Sections 11.7. and 12.9.;

 

80

 

(h)           payment of all other Obligations and
other amounts due and owing by the Borrower and the other Loan Parties under
any of the Loan Documents, if any, to be applied for the ratable benefit of the
Lenders; and

 

(i)            any amount remaining after application
as provided above, shall be paid to the Borrower or whomever else may be
legally entitled thereto.

 

Section 10.5. 
Collateral Account.

 

(a)           As collateral security for the prompt
payment in full when due of all Letter of Credit Liabilities and the other
Obligations, the Borrower hereby pledges and grants to the Agent, for the
ratable benefit of the Agent and the Lenders as provided herein, a security
interest in all of its right, title and interest in and to the Collateral
Account and the balances from time to time in the Collateral Account (including
the investments and reinvestments therein provided for below).  The balances from time to time in the
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the Agent as provided herein.  Anything in this Agreement to the contrary
notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in this Section.

 

(b)           Amounts on deposit in the Collateral
Account shall be invested and reinvested by the Agent in such Cash Equivalents
as the Agent shall determine in its sole discretion.  All such investments and reinvestments shall
be held in the name of and be under the sole dominion and control of the Agent
for the ratable benefit of the Lenders. 
The Agent shall exercise reasonable care in the custody and preservation
of any funds held in the Collateral Account and shall be deemed to have
exercised such care if such funds are accorded treatment substantially
equivalent to that which the Agent accords other funds deposited with the
Agent, it being understood that the Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Collateral Account.

 

(c)           If a drawing pursuant to any Letter
of Credit occurs on or prior to the expiration date of such Letter of Credit,
the Borrower and the Lenders authorize the Agent to use the monies deposited in
the Collateral Account and proceeds thereof to make payment to the beneficiary
with respect to such drawing or the payee with respect to such presentment.

 

(d)           If an Event of Default exists, the
Requisite Lenders may, in their discretion, at any time and from time to time,
instruct the Agent to liquidate any such investments and reinvestments and
apply proceeds thereof to the Obligations in accordance with Section 10.4.

 

(e)           So long as no Default or Event of
Default exists, and to the extent amounts on deposit in or credited to the
Collateral Account exceed the aggregate amount of the Letter of Credit
Liabilities then due and owing, the Agent shall, from time to time, at the
request of the Borrower, deliver to the Borrower within 10 Business Days
after the Agent’s receipt of such request from the Borrower, against receipt
but without any recourse, warranty or representation whatsoever, such amount of
the credit balances in the Collateral Account as exceeds the aggregate amount
of the Letter of Credit Liabilities at such time.

 

81

 

(f)            The Borrower shall pay to the Agent
from time to time such fees as the Agent normally charges for similar services
in connection with the Agent’s administration of the Collateral Account and
investments and reinvestments of funds therein.

 

Section 10.6. 
Performance by Agent.

 

If the Borrower shall
fail to perform any covenant, duty or agreement contained in any of the Loan
Documents, the Agent may, after notice to the Borrower, perform or attempt to
perform such covenant, duty or agreement on behalf of the Borrower after the
expiration of any cure or grace periods set forth herein.  In such event, the Borrower shall, at the
request of the Agent, promptly pay any amount reasonably expended by the Agent
in such performance or attempted performance to the Agent, together with
interest thereon at the applicable Post-Default Rate from the date of such
expenditure until paid.  Notwithstanding
the foregoing, neither the Agent nor any Lender shall have any liability or
responsibility whatsoever for the performance of any obligation of the Borrower
under this Agreement or any other Loan Document.

 

Section 10.7. 
Rights Cumulative.

 

The rights and remedies
of the Agent and the Lenders under this Agreement and each of the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
any of them may otherwise have under Applicable Law.  In exercising their respective rights and
remedies the Agent and the Lenders may be selective and no failure or delay by
the Agent or any of the Lenders in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.

 

ARTICLE XI. THE AGENT

 

Section 11.1. 
Authorization and Action.

 

Each
Lender hereby appoints and authorizes the Agent to take such action as
contractual representative on such Lender’s behalf and to exercise such powers
under this Agreement and the other Loan Documents as are specifically delegated
to the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto.  Not in
limitation of the foregoing, each Lender authorizes and directs the Agent to
enter into the Loan Documents for the benefit of the Lenders.  Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Requisite Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Requisite Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. 
Nothing herein shall be construed to deem the Agent a trustee or
fiduciary for any Lender or to impose on the Agent duties or obligations other
than those expressly provided for herein. 
At the request of a Lender, the Agent will forward to such Lender copies
or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents.  The Agent will also furnish to any Lender,
upon the request of such Lender, a copy of any certificate or notice furnished
to the Agent by the Borrower, any other Loan Party or any other Affiliate of
the Borrower, pursuant to this

 

82

 

Agreement or any other Loan Document not already delivered to such
Lender pursuant to the terms of this Agreement or any such other Loan
Document.  As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of any of the Obligations), the Agent shall not be
required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders (or all
of the Lenders if explicitly required under any other provision of this
Agreement), and such instructions shall be binding upon all Lenders and all
holders of any of the Obligations; provided, however, that, notwithstanding
anything in this Agreement to the contrary, the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or Applicable Law.  Not in limitation of the foregoing, the Agent
shall not exercise any right or remedy it or the Lenders may have under any
Loan Document upon the occurrence of a Default or an Event of Default unless
the Requisite Lenders (or all of the Lenders if explicitly required under any
provision of this Agreement) have so directed the Agent to exercise such right
or remedy.

 

Section 11.2. 
Agent’s Reliance, Etc.

 

Notwithstanding any other
provisions of this Agreement or any other Loan Documents, neither the Agent nor
any of its directors, officers, agents, employees or counsel shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Document, except for its or
their own gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable judgment.  Without limiting the generality of the
foregoing, the Agent: (a) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Agent;
(b) may consult with legal counsel (including its own counsel or counsel
for the Borrower or any other Loan Party), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation
to any Lender or any other Person and shall not be responsible to any Lender or
any other Person for any statements, warranties or representations made by any
Person in or in connection with this Agreement or any other Loan Document; (d)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of any of this
Agreement or any other Loan Document or the satisfaction of any conditions
precedent under this Agreement or any Loan Document on the part of the Borrower
or other Persons (except for the delivery to it of any certificate or document
specifically required to be delivered to it pursuant to Section 5.1.) or
inspect the property, books or records of the Borrower or any other Person;
(e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Loan Document, any other instrument or document
furnished pursuant thereto or any collateral covered thereby or the perfection
or priority of any Lien in favor of the Agent on behalf of the Lenders in any
such collateral; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone or
telecopy) believed by it to be genuine and signed, sent or given by the proper
party or parties.  Unless set forth in writing to the contrary,
the making of its initial Loan by a Lender shall constitute a certification by
such Lender to the Agent and the other Lenders that the

 

83

 

Borrower has satisfied the conditions precedent for initial Loans set
forth in Sections 5.1. and 5.2. that have not previously been waived by
the Requisite Lenders.

 

Section 11.3. 
Notice of Defaults.

 

The Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default or Event of
Default unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing with reasonable specificity such
Default or Event of Default and stating that such notice is a “notice of
default.”  If any Lender (excluding the
Lender which is also serving as the Agent) becomes aware of any Default or
Event of Default, it shall promptly send to the Agent such a “notice of default”;
provided, that no Lender shall have any liability for any failure to do
so.  Further, if the Agent receives such
a “notice of default”, the Agent shall give prompt notice thereof to the
Lenders.

 

Section 11.4. 
Wachovia as Lender.

 

Wachovia, as a Lender,
shall have the same rights and powers under this Agreement and any other Loan
Document as any other Lender and may exercise the same as though it were not
the Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include Wachovia in each case in its individual capacity.  Wachovia and its affiliates may each accept
deposits from, maintain deposits or credit balances for, invest in, lend money
to, act as trustee under indentures of, serve as financial advisor to, and
generally engage in any kind of business with, the Borrower, any other Loan
Party or any other affiliate thereof as if it were any other bank and without
any duty to account therefor to the other Lenders.  Further, the Agent and any affiliate may
accept fees and other consideration from the Borrower for services in
connection with this Agreement and otherwise without having to account for the
same to the other Lenders.  The Lenders
acknowledge that, pursuant to such activities, Wachovia or its affiliates may
receive information regarding the Borrower, other Loan Parties, other
Subsidiaries and other Affiliates (including information that may be subject to
confidentiality obligations in favor of such Person) and acknowledge that the
Agent shall be under no obligation to provide such information to them.

 

Section 11.5. 
Approvals of Lenders.

 

All communications from
the Agent to any Lender requesting such Lender’s determination, consent,
approval or disapproval (a) shall be given in the form of a written notice
to such Lender, (b) shall be accompanied by a description of the matter or
issue as to which such determination, approval, consent or disapproval is
requested, or shall advise such Lender where information, if any, regarding
such matter or issue may be inspected, or shall otherwise describe the matter
or issue to be resolved, (c) shall include, if reasonably requested by
such Lender and to the extent not previously provided to such Lender, written
materials and a summary of all oral information provided to the Agent by the
Borrower in respect of the matter or issue to be resolved, and (d) shall
include the Agent’s recommended course of action or determination in respect
thereof.  Each Lender shall reply
promptly, but in any event within 10 Business Days (or such lesser or greater
period as may be specifically required under the Loan Documents) of receipt of
such communication.  Except as otherwise
provided in this Agreement, unless a Lender shall give written notice to the
Agent that it specifically objects to the recommendation or

 

84

 

determination of the Agent (together with a written explanation of the
reasons behind such objection) within the applicable time period for reply,
such Lender shall be deemed to have conclusively approved of or consented to
such recommendation or determination.

 

Section 11.6. 
Lender Credit Decision, Etc.

 

Each Lender expressly
acknowledges and agrees that neither the Agent nor any of its officers,
directors, employees, agents, counsel, attorneys-in-fact or other affiliates
has made any representations or warranties as to the financial condition,
operations, creditworthiness, solvency or other information concerning the
business or affairs of the Borrower, any other Loan Party, any Subsidiary or
any other Person to such Lender and that no act by the Agent hereafter taken,
including any review of the affairs of the Borrower, any other Loan Party or
any other Subsidiary, shall be deemed to constitute any such representation or
warranty by the Agent to any Lender. 
Each Lender acknowledges that it has made its own credit and legal
analysis and decision to enter into this Agreement and the transactions
contemplated hereby, independently and without reliance upon the Agent, any
other Lender or counsel to the Agent, or any of their respective officers,
directors, employees and agents, and based on the financial statements of the
Borrower, the Subsidiaries or any other Affiliate thereof, and inquiries of
such Persons, its independent due diligence of the business and affairs of the
Borrower, the other Loan Parties, the Subsidiaries and other Persons, its
review of the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, any other Lender or counsel to the Agent or any of
their respective officers, directors, employees and agents, and based on such
review, advice, documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
the Loan Documents.  Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent under this Agreement or any of the other Loan
Documents, the Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower,
any other Loan Party or any other Affiliate thereof which may come into
possession of the Agent, or any of its officers, directors, employees, agents,
attorneys-in-fact or other affiliates. 
Each Lender acknowledges that the Agent’s legal counsel in connection
with the transactions contemplated by this Agreement is only acting as counsel
to the Agent and is not acting as counsel to such Lender.

 

Section 11.7. 
Indemnification of Agent.

 

Each Lender agrees to
indemnify the Agent (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) pro rata in accordance with
such Lender’s respective Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, reasonable out-of-pocket costs and expenses, or disbursements of any
kind or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Agent (in its capacity as Agent but not as a Lender) in
any way relating to or arising out of the Loan Documents, any transaction
contemplated hereby or thereby or any action taken or omitted by the Agent
under the Loan Documents (collectively, “Indemnifiable Amounts”); provided,
however, that no Lender shall be

 

85

 

liable for any portion of such Indemnifiable Amounts to the extent
resulting from the Agent’s gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final, non-appealable judgment or if
the Agent fails to follow the written direction of the Requisite Lenders (or
all of the Lenders if expressly required hereunder) unless such failure results
from the Agent following the advice of counsel to the Agent of which advice the
Lenders have received notice.  Without
limiting the generality of the foregoing but subject to the preceding proviso,
each Lender agrees to reimburse the Agent (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so),
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees of the counsel(s) of the Agent’s own choosing) incurred
by the Agent in connection with the preparation, negotiation, execution, or
enforcement of, or legal advice with respect to the rights or responsibilities
of the parties under, the Loan Documents, any suit or action brought by the
Agent to enforce the terms of the Loan Documents and/or collect any
Obligations, any “lender liability” suit or claim brought against the Agent
and/or the Lenders, and any claim or suit brought against the Agent, and/or the
Lenders arising under any Environmental Laws. 
Such out-of-pocket expenses (including counsel fees) shall be advanced
by the Lenders on the request of the Agent notwithstanding any claim or
assertion that the Agent is not entitled to indemnification hereunder upon
receipt of an undertaking by the Agent that the Agent will reimburse the
Lenders if it is actually and finally determined by a court of competent
jurisdiction that the Agent is not so entitled to indemnification.  The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder or under the
other Loan Documents and the termination of this Agreement.  If the Borrower shall reimburse the Agent for
any Indemnifiable Amount following payment by any Lender to the Agent in
respect of such Indemnifiable Amount pursuant to this Section, the Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.

 

Section 11.8. 
Successor Agent.

 

The Agent may resign at
any time as Agent under the Loan Documents by giving written notice thereof to
the Lenders and the Borrower.  The Agent
may be removed as Agent under the Loan Documents for good cause by all of the
Lenders (other than the Lender then acting as Agent) upon 30-days’ prior
written notice to the Agent.  Upon any
such resignation or removal, the Requisite Lenders (other than the Lender then
acting as Agent, in the case of the removal of the Agent under the immediately
preceding sentence) shall have the right to appoint a successor Agent which
appointment shall, provided no Default or Event of Default exists, be subject
to the Borrower’s approval, which approval shall not be unreasonably withheld
or delayed (except that the Borrower shall, in all events, be deemed to have
approved each Lender and its affiliates as a successor Agent).  If no successor Agent shall have been so
appointed in accordance with the immediately preceding sentence, and shall have
accepted such appointment, within 30 days after the resigning Agent’s giving of
notice of resignation or the Lenders’ removal of the Agent, then the resigning
or removed Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be a Lender, if any Lender shall be willing to serve, and otherwise
shall be a commercial bank having total combined assets of at least
$50,000,000,000.  Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent, and the retiring or removed Agent
shall be discharged from its duties and obligations under the Loan
Documents.  Such successor Agent shall
issue letters of credit in

 

86

 

substitution for the Letters of Credit, if any, outstanding at the time
of such succession or shall make other arrangements satisfactory to the current
Agent, in either case, to assume effectively the obligations of the current
Agent with respect to such Letters of Credit. 
After any Agent’s resignation or removal hereunder as Agent, the
provisions of this Article XI. shall continue to inure to its benefit and
apply as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents.

 

Section 11.9. 
Titled Agents.

 

Each of the Titled Agents in each such respective
capacity, assumes no responsibility or obligation hereunder, including, without
limitation, for servicing, enforcement or collection of any of the Loans, or
any duties as an agent hereunder for the Lenders.  The titles of “Arranger”, “Syndication Agent”
and “Documentation Agent” are solely honorific and imply no fiduciary
responsibility on the part of the Titled Agents to the Agent, the Borrower or
any Lender and the use of such titles does not impose on the Titled Agents any
duties or obligations greater than those of any other Lender or entitle the
Titled Agents to any rights other than those to which any other Lender is
entitled.

 

ARTICLE XII. MISCELLANEOUS

 

Section 12.1. 
Notices.

 

Unless otherwise provided
herein, communications provided for hereunder shall be in writing and shall be
mailed, telecopied or delivered as follows:

 

If to the Borrower:

 

Heritage
Property Investment Trust, Inc.

131
Dartmouth Street, 6th Floor

Boston,
Massachusetts 02116

Attn: Patrick O’Sullivan

Telephone:            (617) 247-2200 (ext 2502)

Telecopy:              (617) 266-0885

 

With a copy:

 

Heritage
Property Investment Trust, Inc.

131
Dartmouth Street, 6th Floor

Boston,
Massachusetts 02116

Attn: Stephen Faberman

Telephone:            (617) 406-2503

Telecopy:              (617) 266-0885

 

87

 

If to the Agent:

 

Wachovia Bank, National
Association

191 Peachtree Street NE, Mail Code GA8057

Atlanta, Georgia  30303

Attn: Cathy Casey

Telephone:            (404) 332-5649

Telecopy:              (404) 332-4066

 

If to a Lender:

 

To such Lender’s address
or telecopy number, as applicable, set forth on its signature page hereto or in
the applicable Assignment and Acceptance Agreement;

 

or, as to each party at
such other address as shall be designated by such party in a written notice to
the other parties delivered in compliance with this Section.  All such notices and other communications
shall be effective (i) if mailed, when received; (ii) if telecopied,
when transmitted; or (iii) if hand delivered or sent by overnight courier,
when delivered.  Notwithstanding the
immediately preceding sentence, all notices or communications to the Agent or
any Lender under Article II. shall be effective only when actually
received.  Neither the Agent nor any
Lender shall incur any liability to the Borrower (nor shall the Agent incur any
liability to the Lenders) for acting upon any telephonic notice referred to in
this Agreement which the Agent or such Lender, as the case may be, believes in
good faith to have been given by a Person authorized to deliver such notice or
for otherwise acting in good faith hereunder. The failure of a Person
designated to get a copy of a notice to receive such copy shall not affect the
validity of notice properly given to any other Person.

 

Section 12.2. 
Expenses.

 

The Borrower agrees
(a) to pay or reimburse the Agent for all of its reasonable out-of-pocket
costs and expenses incurred in connection with the preparation, negotiation and
execution of, and any amendment, supplement or modification to, any of the Loan
Documents (including due diligence expenses and travel expenses relating to
closing), and the consummation of the transactions contemplated thereby, including
the reasonable fees and disbursements of counsel to the Agent and costs and
expenses in connection with the use of IntraLinks, Inc. or other similar
information transmission systems in connection with the Loan Documents,
(b) to pay or reimburse the Agent and the Lenders for all their reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under the Loan Documents, including the reasonable fees and
disbursements of their respective counsel (including the allocated fees and
expenses of in-house counsel) and any payments in indemnification or otherwise
payable by the Lenders to the Agent pursuant to the Loan Documents, (c) to
pay, and indemnify and hold harmless the Agent and the Lenders from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any failure to pay or delay in paying, documentary, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of any of the Loan
Documents, or consummation of any amendment, supplement or modification of, or
any waiver

 

88

 

or consent under or in respect of, any Loan Document and (d) to
the extent not already covered by any of the preceding subsections, to pay or
reimburse the Agent and the Lenders for all their costs and expenses incurred
in connection with any bankruptcy or other proceeding of the type described in
Section 10.1.(f) or 10.1.(g), including the reasonable fees and
disbursements of counsel to the Agent and any Lender, whether such fees and
expenses are incurred prior to, during or after the commencement of such
proceeding or the confirmation or conclusion of any such proceeding.  If the Borrower shall fail to pay any amounts
required to be paid by it pursuant to this Section, the Agent and/or the
Lenders may pay such amounts on behalf of the Borrower and either deem the same
to be Loans outstanding hereunder or otherwise Obligations owing hereunder.

 

Section 12.3. 
Setoff.

 

Subject to
Section 3.3. and in addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, the Agent, each
Lender and each Participant is hereby authorized by the Borrower, at any time
or from time to time during the continuance of an Event of Default, without
prior notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, but in the case of a Lender or Participant subject to
receipt of the prior written consent of the Agent exercised in its sole
discretion, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Agent, such Lender or any
affiliate of the Agent or such Lender, to or for the credit or the account of
the Borrower against and on account of any of the Obligations, irrespective of
whether or not any or all of the Loans and all other Obligations have been
declared to be, or have otherwise become, due and payable as permitted by
Section 10.2., and although such obligations shall be contingent or
unmatured.

 

Section 12.4. 
Litigation; Jurisdiction; Other Matters; Waivers.

 

(a)           EACH PARTY HERETO ACKNOWLEDGES THAT
ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF
THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND
WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.  ACCORDINGLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES
ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE
IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY
PARTY HERETO ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN
DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER
BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR
NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.

 

(b)           EACH OF THE BORROWER, THE AGENT AND
EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK AND ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN,
NEW YORK, NEW YORK, SHALL HAVE JURISDICTION TO HEAR AND

 

89

 

DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE BORROWER, THE
AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM.  THE BORROWER AND EACH OF THE LENDERS
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR
DISPUTES.  EACH PARTY FURTHER WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN
AN INCONVENIENT FORUM, AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY
LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED
IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

(c)           THE PROVISIONS OF THIS SECTION HAVE
BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL
UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT
OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN
DOCUMENTS, THE TERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT AND THE
TERMINATION OF THIS AGREEMENT.

 

Section 12.5. 
Successors and Assigns.

 

(a)           The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of all Lenders and any such
assignment or other transfer to which all of the Lenders have not so consented
shall be null and void.

 

(b)           Any Lender may make, carry or
transfer Loans at, to or for the account of any of its branch offices or the
office of an affiliate of such Lender except to the extent such transfer would
result in increased costs to the Borrower.

 

(c)           Any Lender may at any time grant to
one or more banks or other financial institutions (each a “Participant”)
participating interests in its Commitment or the Obligations owing to such
Lender; provided, however, (i) any such participating interest must be for
a constant and not a varying percentage interest and (ii) after giving
effect to any such participation by a Lender, the amount of its Commitment, or
if the Commitments have been terminated, the aggregate outstanding principal
balance of Notes held by it, in which it has not granted any participating
interests must be equal to at least $5,000,000. 
Except as otherwise provided in Section 12.3., no Participant shall
have any rights or benefits under this Agreement or any other Loan
Document.  A Participant shall not be
entitled to receive any greater payment under Section 3.12. than the applicable Lender would have been entitled to
receive with respect

 

90

 

to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.12.
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower and the Agent, to
comply with Section 3.12.(c) as though it were a Lender.  In the event of any such grant by a Lender of
a participating interest to a Participant, such Lender shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which any Lender
may grant such a participating interest shall provide that such Lender shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided,
however, such Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (i) increase, or extend the term
or extend the time or waive any requirement for the reduction or termination
of, such Lender’s Commitment, (ii) extend the date fixed for the payment
of principal of or interest on the Loans or portions thereof owing to such
Lender, (iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon or
(v) release any Guarantor (except as otherwise permitted under
Section 7.12.(c)).  An assignment or
other transfer which is not permitted by subsection (d) or (e) below shall
be given effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (c).  Upon request from the Agent, a Lender shall
notify the Agent of the sale of any participation hereunder and, if requested
by the Agent, certify to the Agent that such participation is permitted
hereunder and that the requirements of Section 3.12.(c) have been
satisfied.

 

(d)           Any
Lender may with the prior written consent of the Agent and, so long as no
Default or Event of Default exists, the Borrower (which consent, in each case,
shall not be unreasonably withheld (it being agreed that the Borrower’s
withholding of consent to an assignment which would result in the Borrower
having to pay amounts under Section 3.12. shall be deemed to be
reasonable)), assign to one or more Eligible Assignees (each an “Assignee”) all
or a portion of its rights and obligations under this Agreement and the Notes
(including all or a portion of its Commitments and the Loans owing to such
Lender); provided, however, (i) no such consent by the Borrower shall be
required in the case of any assignment to another Lender or any affiliate of
such Lender or another Lender and no such consent by the Agent shall be
required in the case of any assignment by a Lender to any affiliate of such
Lender; (ii) unless the Borrower and the Agent otherwise agree, after
giving effect to any partial assignment by a Lender, the Assignee shall hold,
and the assigning Lender shall retain, a Commitment, or if the Commitments have
been terminated, Loans having an outstanding principal balance, of at least
$5,000,000 and integral multiples of $2,500,000 in excess thereof; and
(iii) each such assignment shall be effected by means of an Assignment and
Acceptance Agreement.  Upon execution and
delivery of such instrument and payment by such Assignee to such transferor
Lender of an amount equal to the purchase price agreed between such transferor
Lender and such Assignee, such Assignee shall be a Lender party to this
Agreement with respect to the assigned interest as of the effective date of the
Assignment and Acceptance Agreement and shall have all the rights and
obligations of a Lender with respect to the assigned interest as set forth in
such Assignment and Acceptance Agreement, and the transferor Lender shall be
released from its obligations

 

91

 

hereunder with respect to the assigned interest 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 subsection, the transferor Lender, the Agent and the Borrower
shall make appropriate arrangements so that new Notes are issued to the
Assignee and such transferor Lender, as appropriate.  In connection with any such assignment, the
transferor Lender shall pay to the Agent an administrative fee for processing
such assignment in the amount of $3,500.

 

(e)           Any Lender (each, a “Designating
Lender”) may, but has no obligation to, at any time while the Borrower has been
assigned an Investment Grade Rating from either S&P or Moody’s designate
one Designated Lender to fund Bid Rate Loans on behalf of such Designating
Lender subject to the terms of this subsection, and the provisions in the
immediately preceding subsections (c) and (d) shall not apply to such
designation.  No Lender may designate
more than one Designated Lender.  The
parties to each such designation shall execute and deliver to the 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,
the Agent will accept such Designation Agreement and give prompt notice thereof
to the Borrower, whereupon (i) the Borrower shall execute and deliver to
the Designating Lender a Designated Lender Note payable to the order of the
Designated Lender, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Lender shall become a party to this
Agreement with a right to make Bid Rate Loans on behalf of its Designating
Lender pursuant to Section 2.2. after the Borrower has accepted a Bid Rate
Loan (or portion thereof) of the Designating Lender, and (iii) the Designated
Lender shall not be required to make payments with respect to any obligations in
this Agreement except to the extent of excess cash flow of such Designated
Lender which is not otherwise required to repay obligations of such Designated
Lender which are then due and payable; provided, however, that regardless of
such designation and assumption by the Designated Lender, the Designating
Lender shall be and remain obligated to the Borrower, the Agent and the Lenders
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 11.7. and any
sums otherwise payable to the Borrower by the Designated Lender.  Each Designating Lender shall serve as the
administrative agent of the Designated Lender and shall on behalf of, and to
the exclusion of, the Designated Lender: (i) receive any and all payments made
for the benefit of the Designated Lender and (ii) give and receive all
communications and notices and take all actions hereunder, including, without limitation,
votes, approvals, waivers, consents and amendments under or relating to this
Agreement and the other Loan Documents. 
Any such notice, communication, vote, approval, waiver, consent or
amendment shall be signed by the Designating Lender as administrative agent for
the Designated Lender and shall not be signed by the Designated Lender on its
own behalf and shall be binding on the Designated Lender to the same extent as
if signed by the Designated Lender on its own behalf.  The Borrower, the Agent and the Lenders 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.  The Borrower, the Lenders and the Agent each
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

 

92

 

proceeding under any federal or state bankruptcy or similar law, until
the later to occur of (x) one year and one day after the payment in full
of the latest maturing commercial paper note issued by such Designated Lender
and (y) the Termination Date.

 

(f)            The Agent shall maintain at the
Principal Office a copy of each Assignment and Acceptance Agreement delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of each Lender from time to time
(the “Register”).  The Agent shall give
each Lender and the Borrower notice of the assignment by any Lender of its
rights as contemplated by this Section. 
The Borrower, the Agent and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The Register and copies of
each Assignment and Acceptance Agreement shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. 
Upon its receipt of an Assignment and Acceptance Agreement executed by
an assigning Lender, together with each Note subject to such assignment, the
Agent shall, if such Assignment and Acceptance Agreement has been completed and
if the Agent receives the processing and recording fee described in subsection
(d) above, (i) accept such Assignment and Acceptance Agreement,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.

 

(g)           In addition to the assignments and
participations permitted under the foregoing provisions of this Section, any
Lender may assign and pledge all or any portion of its Loans and its Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank, and such Loans and
Notes shall be fully transferable as provided therein.  No such assignment shall release the
assigning Lender from its obligations hereunder.

 

(h)           A Lender may furnish any information
concerning the Borrower, any other Loan Party or any of their respective
Subsidiaries in the possession of such Lender from time to time to Assignees
and Participants (including prospective Assignees and Participants) subject to
compliance with Section 12.8.

 

(i)            Anything in this Section to the
contrary notwithstanding, no Lender may assign or participate any interest in
any Loan held by it hereunder to the Borrower, any other Loan Party or any of
their respective Affiliates or Subsidiaries.

 

(j)            Each Lender agrees that, without the
prior written consent of the Borrower and the Agent, it will not make any
assignment hereunder in any manner or under any circumstances that would
require registration or qualification of, or filings in respect of, any Loan or
Note under the Securities Act or any other securities laws of the United States
of America or of any other jurisdiction.

 

Section 12.6. 
Amendments.

 

(a)           Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement or any other Loan Document to be given by the Lenders may be
given, and any term of this Agreement or of any other Loan Document may

 

93

 

be amended, and the performance or observance by the Borrower or any
other Loan Party or any Subsidiary of any terms of this Agreement or such other
Loan Document or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Requisite
Lenders (and, in the case of an amendment to any Loan Document, the written
consent of each Loan Party a party thereto).

 

(b)           Notwithstanding the foregoing,
without the prior written consent of each Lender adversely affected thereby, no
amendment, waiver or consent shall do any of the following:

 

(i)            increase the Commitments of the
Lenders (except for any increase in the Commitments effectuated pursuant to
Section 2.16.) or subject the
Lenders to any additional obligations;

 

(ii)           reduce the principal of, or interest
rates that have accrued or that will be charged on the outstanding principal
amount of, any Loans or other Obligations;

 

(iii)          reduce the amount of any Fees payable
hereunder or postpone any date fixed for payment thereof;

 

(iv)          modify the definition of the term “Termination
Date” (except as contemplated under Section 2.13.) or otherwise postpone any
date fixed for any payment of any principal of, or interest on, any Loans or
any other Obligations (including the waiver of any Default or Event of Default
as a result of the nonpayment of any such Obligations as and when due), or
extend the expiration date of any Letter of Credit beyond the Termination Date;

 

(v)           amend or otherwise modify the
provisions of Section 3.2.;

 

(vi)          modify the definition of the term “Requisite
Lenders” or otherwise modify in any other manner the number or percentage of
the Lenders required to make any determinations or waive any rights hereunder
or to modify any provision hereof, including without limitation, any
modification of this Section 12.6. if such modification would have such effect;

 

(vii)         release any Guarantor from its
obligations under the Guaranty (except as otherwise permitted under
Section 7.12.(c)); or

 

(viii)        amend or otherwise modify the provisions
of Section 2.15.(a).

 

(c)           No amendment, waiver or consent,
other than under Section 11.8., unless in writing and signed by the Agent, in
such capacity, in addition to the Lenders required hereinabove to take such
action, shall affect the rights or duties of the Agent under this Agreement or
any of the other Loan Documents.  Any
amendment, waiver or consent relating to Section 2.3. or the obligations
of the Swingline Lender under this Agreement or any other Loan

 

94

 

Document shall, in addition to the Lenders required hereinabove to take
such action, require the written consent of the Swingline Lender.

 

(d)           No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon and
any amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose set forth therein.  Except as otherwise provided in
Section 11.5., no course of dealing or delay or omission on the part of
the Agent or any Lender in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. 
Any Event of Default occurring
hereunder shall continue to exist until such time as such Event of Default is
waived in writing in accordance with the terms of this Section, notwithstanding
any attempted cure or other action by the Borrower, any other Loan Party or any
other Person subsequent to the occurrence of such Event of Default.  Except as otherwise explicitly provided for
herein or in any other Loan Document, no notice to or demand upon the Borrower
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.

 

Section 12.7. 
Nonliability of Agent and Lenders.

 

The relationship between
the Borrower and the Lenders and the Agent shall be solely that of borrower and
lender.  Neither the Agent nor any Lender
shall have any fiduciary responsibilities to the Borrower and no provision in
this Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Agent or any Lender to any Lender, the Borrower,
any Subsidiary or any other Loan Party. 
Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower’s business or operations.

 

Section 12.8. 
Confidentiality.

 

The Agent and each Lender shall use reasonable efforts
to assure that information about Borrower, the other Loan Parties and other
Subsidiaries, and the Properties thereof and their operations, affairs and
financial condition, not generally disclosed to the public, which is furnished
to the Agent or any Lender pursuant to the provisions of this Agreement or any
other Loan Document shall not be divulged to any Person other than the Agent,
the Lenders, and their respective agents who are actively and directly
participating in the evaluation, administration or enforcement of the Loan
Documents and other transactions between the Agent or such Lender, as
applicable, and the Borrower, but in any event the Agent and the Lenders may
make disclosure: (a) to any of their respective affiliates (provided they
shall agree to keep such information confidential in accordance with the terms
of this Section 12.8.); (b) as reasonably requested by any potential or
actual Assignee, Participant or other transferee in connection with the
contemplated transfer of any Commitment or participations therein as permitted
hereunder (provided they shall agree to keep such information confidential in
accordance with the terms of this Section); (c) as required or requested
by any Governmental Authority or representative thereof or pursuant to legal
process or in connection with any legal proceedings or as otherwise required by
Applicable Law; (d) to the Agent’s or such Lender’s independent auditors
and other professional advisors (provided they shall be notified of the
confidential nature of the information); (e) after the happening and
during the continuance of an Event of Default, to any other Person, in
connection with the exercise by the Agent or the Lenders of rights hereunder or

 

95

 

under any of the other Loan Documents; (f) upon Borrower’s prior consent
(which consent shall not be unreasonably withheld), to any contractual
counter-parties to any swap or similar hedging agreement or to any rating
agency; and (g) to the extent such information (x) becomes publicly
available other than as a result of a breach of this Section actually known to
such Lender to be such a breach or (y) becomes available to the Agent or
any Lender on a non-confidential basis from a source other than the Borrower or
any Affiliate.

 

Section 12.9. 
Indemnification.

 

(a)           The Borrower shall and hereby agrees
to indemnify, defend and hold harmless the Agent, each of the Lenders, any
affiliate of the Agent or any Lender, and their respective directors, officers,
shareholders, agents, employees and counsel (each referred to herein as an “Indemnified
Party”) from and against any and all of the following (collectively, the “Indemnified
Costs”):  losses, costs, claims, damages,
liabilities, deficiencies, judgments or reasonable expenses of every kind and
nature (including, without limitation, amounts paid in settlement, court costs
and the reasonable fees and disbursements of counsel incurred in connection
with any litigation, investigation, claim or proceeding or any advice rendered
in connection therewith, but excluding losses, costs, claims, damages,
liabilities, deficiencies, judgments or expenses indemnification in respect of
which is specifically covered by Section 3.12. or 4.1. or expressly
excluded from the coverage of Section 3.12. or 4.1.) incurred by an
Indemnified Party in connection with, arising out of, or by reason of, any
suit, cause of action, claim, arbitration, investigation or settlement, consent
decree or other proceeding (the foregoing referred to herein as an “Indemnity
Proceeding”) which is in any way related directly or indirectly to:
(i) this Agreement or any other Loan Document or the transactions
contemplated thereby; (ii) the making of any Loans or issuance of Letters
of Credit hereunder; (iii) any actual or proposed use by the Borrower of
the proceeds of the Loans or Letters of Credit; (iv) the Agent’s or any
Lender’s entering into this Agreement; (v) the fact that the Agent and the
Lenders have established the credit facility evidenced hereby in favor of the
Borrower; (vi) the fact that the Agent and the Lenders are creditors of
the Borrower and have or are alleged to have information regarding the
financial condition, strategic plans or business operations of the Borrower and
the Subsidiaries; (vii) the fact that the Agent and the Lenders are
material creditors of the Borrower and are alleged to influence directly or
indirectly the business decisions or affairs of the Borrower and the
Subsidiaries or their financial condition; (viii) the exercise of any
right or remedy the Agent or the Lenders may have under this Agreement or the
other Loan Documents; (ix) any civil penalty or fine assessed by the OFAC
against, and all reasonable costs and expenses (including counsel fees and
disbursements) incurred in connection with defense thereof, by the Agent or any
Lender as a result of conduct of the Borrower, any other Loan Party or any
Subsidiary that violates a sanction enforced by the OFAC; or (x) any
violation or non-compliance by the Borrower or any Subsidiary of any Applicable
Law (including any Environmental Law) including, but not limited to, any
Indemnity Proceeding commenced by (A) the Internal Revenue Service or
state taxing authority or (B) any Governmental Authority or other Person
under any Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to
cause the Borrower or its Subsidiaries (or its respective properties) (or the
Agent and/or the Lenders as successors to the Borrower) to be in compliance
with such Environmental Laws; provided, however, that the Borrower shall not be
obligated to indemnify any Indemnified Party for (A) any acts or omissions
of such Indemnified Party in connection with matters described in this

 

96

 

subsection to the extent arising from the gross negligence or willful
misconduct of such Indemnified Party, as determined by a court of competent
jurisdiction in a final, non-appealable judgment or (B) Indemnified Costs
to the extent arising directly out of or resulting directly from claims of one
or more Indemnified Parties against another Indemnified Party.

 

(b)           The Borrower’s indemnification
obligations under this Section 12.9. shall apply to all Indemnity Proceedings
arising out of, or related to, the foregoing whether or not an Indemnified
Party is a named party in such Indemnity Proceeding.  In this regard, this indemnification shall
cover all Indemnified Costs of any Indemnified Party in connection with any
deposition of any Indemnified Party or compliance with any subpoena (including
any subpoena requesting the production of documents).  This indemnification shall, among other
things, apply to any Indemnity Proceeding commenced by other creditors of the
Borrower or any Subsidiary, any shareholder of the Borrower or any Subsidiary
(whether such shareholder(s) are prosecuting such Indemnity Proceeding in their
individual capacity or derivatively on behalf of the Borrower), any account
debtor of the Borrower or any Subsidiary or by any Governmental Authority. If indemnification
is to be sought hereunder by an Indemnified Party, then such Indemnified Party
shall notify the Borrower of the commencement of any Indemnity Proceeding;
provided, however, that the failure to so notify the Borrower shall not relieve
the Borrower from any liability that it may have to such Indemnified Party
pursuant to this Section 12.9.

 

(c)           This indemnification shall apply to
any Indemnity Proceeding arising during the pendency of any bankruptcy
proceeding filed by or against the Borrower and/or any Subsidiary.

 

(d)           All out-of-pocket fees and expenses
of, and all amounts paid to third-persons by, an Indemnified Party shall be
advanced by the Borrower at the request of such Indemnified Party
notwithstanding any claim or assertion by the Borrower that such Indemnified
Party is not entitled to indemnification hereunder, upon receipt of an
undertaking by such Indemnified Party that such Indemnified Party will
reimburse the Borrower if it is actually and finally determined by a court of
competent jurisdiction that such Indemnified Party is not so entitled to
indemnification hereunder.

 

(e)           An Indemnified Party may conduct its
own investigation and defense of, and may formulate its own strategy with
respect to, any Indemnity Proceeding covered by this Section and, as provided
above, all Indemnified Costs incurred by such Indemnified Party shall be
reimbursed by the Borrower.  No action
taken by legal counsel chosen by an Indemnified Party in investigating or defending
against any such Indemnity Proceeding shall vitiate or in any way impair the
obligations and duties of the Borrower hereunder to indemnify and hold harmless
each such Indemnified Party; provided, however, that if (i) the Borrower
is required to indemnify an Indemnified Party pursuant hereto and (ii) the
Borrower has provided evidence reasonably satisfactory to such Indemnified
Party that the Borrower has the financial wherewithal to reimburse such
Indemnified Party for any amount paid by such Indemnified Party with respect to
such Indemnity Proceeding, such Indemnified Party shall not settle or
compromise any such Indemnity Proceeding without the prior written consent of
the Borrower (which consent shall not be unreasonably withheld or delayed).
Notwithstanding the foregoing, an Indemnified Party may settle or compromise
any such Indemnity Proceeding without the prior written consent of the Borrower
where (x) no monetary relief is sought against such Indemnified Party in
such

 

97

 

Indemnity Proceeding or (y) there is an allegation of a violation
of law by such Indemnified Party.

 

(f)            If and to the extent that the
obligations of the Borrower under this Section are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
Applicable Law.

 

(g)           The Borrower’s obligations under this
Section shall survive any termination of this Agreement and the other Loan
Documents and the payment in full in cash of the Obligations, and are in
addition to, and not in substitution of, any other of their obligations set
forth in this Agreement or any other Loan Document to which it is a party.

 

Section 12.10.  Termination; Survival.

 

At such time as
(a) all of the Commitments have been terminated, (b) all Letters of Credit
(other than Letters of Credit the expiration dates of which extend beyond the
Termination Date as permitted under Section 2.4.(b)) have terminated,
(c) none of the Lenders or the Swingline Lender is obligated any longer
under this Agreement to make any Loans and (d) all Obligations (other than
obligations which survive as provided in the following two sentences) have been
paid and satisfied in full, this Agreement shall terminate.  The indemnities to which the Agent, the
Lenders and the Swingline Lender are entitled under the provisions of
Sections 3.12., 4.1., 4.4., 11.7., 12.2. and 12.9. and any other provision
of this Agreement and the other Loan Documents, and the provisions of Section 12.4.,
shall continue in full force and effect and shall protect the Agent, the
Lenders and the Swingline Lender (i) notwithstanding any termination of
this Agreement, or of the other Loan Documents, against events arising after
such termination as well as before and (ii) at all times after any such
party ceases to be a party to this Agreement with respect to all matters and
events existing on or prior to the date such party ceased to be a party to this
Agreement.  If any Letter of Credit
contains an expiration date that extends beyond the Termination Date and the
Borrower shall have not have provided the Agent with cash collateral and a
reimbursement agreement in respect of any such Letter of Credit pursuant to the
requirements of Section 2.4.(b), the reimbursement obligations of the Borrower
under Section 2.4. in respect of such Letters of Credit shall continue in full
force and effect notwithstanding any termination of this Agreement or of the
other Loan Documents.

 

Section 12.11.  Severability of Provisions.

 

Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the remaining
provisions or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

Section 12.12.  GOVERNING LAW.

 

THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.

 

98

 

Section 12.13.  Patriot Act.

 

The Lenders and the Agent
each hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Agent, as applicable, to
identify the Borrower in accordance with such Act.

 

Section 12.14.  Counterparts.

 

This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same instrument.

 

Section 12.15.  Obligations with Respect to Loan Parties.

 

The obligations of the
Borrower to direct or prohibit the taking of certain actions by the other Loan
Parties as specified herein shall be absolute and not subject to any defense
the Borrower may have that the Borrower does not control such Loan Parties.

 

Section 12.16.  Limitation of Liability.

 

Neither the Agent nor any
Lender, nor any affiliate, officer, director, employee, attorney, or agent of
the Agent or any Lender shall have any liability with respect to, and the
Borrower hereby waives, releases, and agrees not to sue any of them upon, any
claim for any special, indirect, incidental, or consequential damages suffered
or incurred by the Borrower in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan
Documents.  The Borrower hereby waives,
releases, and agrees not to sue the Agent or any Lender or any of the Agent’s
or any Lender’s affiliates, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection with, arising
out of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or
financed hereby.

 

Section 12.17.  Entire Agreement.

 

This Agreement, the
Notes, and the other Loan Documents referred to herein embody the final, entire
agreement among the parties hereto and supersede any and all prior commitments,
agreements, representations, and understandings, whether written or oral,
relating to the subject matter hereof and thereof and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. 
There are no oral agreements among the parties hereto.

 

99

 

Section 12.18.  Construction.

 

The Agent, the Borrower and each Lender acknowledge
that each of them has had the opportunity to engage legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with legal counsel and that this Agreement and the other
Loan Documents shall be construed as if jointly drafted by the Agent, the
Borrower and each Lender.

 

[Signatures on
Following Pages]

 

100

 

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

 

 

	
   

  	
  HERITAGE PROPERTY INVESTMENT TRUST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Patrick H. O’Sullivan

  	
   

  
	
   

  	
   

  	
  Name: Patrick H. O’Sullivan

  
	
   

  	
   

  	
  Title:Vice President

  

 

 

[Signatures
Continued on Next Page]

 

101

 

[Signature Page to Credit Agreement dated as
of

March      ,
2005 with Heritage Property Investment Trust, Inc.]

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, as Agent, as a Lender and as

  Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cathy Casey

  	
   

  
	
   

  	
   

  	
  Name: Cathy Casey

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $45,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Wachovia Bank, National Association

  
	
   

  	
  191 Peachtree Street NE, Mail Code GA8057

  
	
   

  	
  Atlanta, GA 30303

  
	
   

  	
  Attn: Cathy Casey

  
	
   

  	
  Telephone:

  	
  (404)
  332-5649

  
	
   

  	
  Telecopy:

  	
  (404) 332-4066

  
					

 

[Signatures Continued on Next Page]

 

 

	
   

  	
  BANK OF
  AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Will Bowers

  	
   

  
	
   

  	
   

  	
  Name: Will Bowers

  
	
   

  	
   

  	
  Title:   Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $30,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Bank of America

  
	
   

  	
  901 Main Street, 64th Floor

  
	
   

  	
  Dallas, TX 75202

  
	
   

  	
  Attention: Will Bowers 

  
	
   

  	
  Telephone: (214)
  209-0276

  
	
   

  	
  Telecopy: (214) 209-0995

  

 

 

	
   

  	
  COMMERZBANK
  AG NEW YORK AND

  GRAND CAYMAN BRANCHES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ralph C. Marra, Jr.

  	
   

  
	
   

  	
   

  	
  Name: Ralph C. Marra, Jr.

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kerstin Micke

  	
   

  
	
   

  	
   

  	
  Name: Kerstin Micke

  
	
   

  	
   

  	
  Title: Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $30,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Commerzbank AG New York Branch

  
	
   

  	
  2 World Financial Center

  
	
   

  	
  New York, NY 10281-1050

  
	
   

  	
  Attn: Douglas Traynor

  
	
   

  	
  Telephone:

  	
  (212)
  266-7569

  
	
   

  	
  Telecopy:

  	
  (212) 266-7565

  
								

 

 

	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Reynolds

  	
   

  
	
   

  	
   

  	
  Name: George Reynolds 

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Rolison

  	
   

  
	
   

  	
   

  	
  Name: James Rolison

  
	
   

  	
   

  	
  Title:  Director

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $30,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company Americas

  
	
   

  	
  200 Crescent Court

  
	
   

  	
  Suite 550

  
	
   

  	
  Dallas, TX 75201

  
	
   

  	
  Attn: Scott Speer

  
	
   

  	
  Telephone:

  	
  (214)
  740-7903

  
	
   

  	
  Telecopy:

  	
  (214) 740-7910

  
							

 

 

	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Aycock

  	
   

  
	
   

  	
   

  	
  Name: Jeff Aycock 

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $30,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  KeyBank National Association

  
	
   

  	
  1200 Abernathy Road NE

  
	
   

  	
  Atlanta, GA 30328

  
	
   

  	
  Attn: Jeff Aycock

  
	
   

  	
  Telephone:

  	
  (770)
  510-2105

  
	
   

  	
  Telecopy:

  	
  (770) 510-2195

  
						

 

 

	
   

  	
  THE BANK
  OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rick Laudisi

  	
   

  
	
   

  	
   

  	
  Name: Rick Laudisi 

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $28,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  The Bank of New York

  
	
   

  	
  One Wall Street, 21st Floor

  
	
   

  	
  New York, NY 10286

  
	
   

  	
  Attention: Jamia Jasper

  
	
   

  	
  Telephone: (212)
  635-8245

  
	
   

  	
  Telecopy: (212) 809-9526

  

 

 

	
   

  	
  LASALLE
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brad Feine

  	
   

  
	
   

  	
   

  	
  Name: Brad Feine

  
	
   

  	
   

  	
  Title: Banking Officer

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $28,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  LaSalle Bank National Association

  
	
   

  	
  135 S. LaSalle Street, Suite 1225

  
	
   

  	
  Chicago, IL 60603-3499

  
	
   

  	
  Telecopier: (312)
  904-8509

  
	
   

  	
  Telephone: (312) 904-6691

  

 

 

	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew D. Coler

  	
   

  
	
   

  	
   

  	
  Name: Andrew D. Coler 

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $28,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  PNC Bank, National Association

  
	
   

  	
  1600 Market Street, 30th Floor

  
	
   

  	
  Philadelphia, PA 19103

  
	
   

  	
  Attention: David C. Curran

  
	
   

  	
  Telephone:

  	
  (215)
  585-7707

  
	
   

  	
  Telecopy:

  	
  (215) 585-5806

  
					

 

 

	
   

  	
  SOVEREIGN
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ T. Gregory Donohue

  	
   

  
	
   

  	
   

  	
  Name: T. Gregory Donohue 

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $28,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Sovereign Bank

  
	
   

  	
  75 State Street

  
	
   

  	
  MAI SST 04-11

  
	
   

  	
  Boston, MA 02109

  
	
   

  	
  Attention: T. Gregory Donohue

  
	
   

  	
  Telephone:

  	
  (617)
  757-5578

  
	
   

  	
  Telecopy:

  	
  (617) 757-5652

  
					

 

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew W. Sadler

  	
   

  
	
   

  	
   

  	
  Name: Matthew W. Sadler 

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $22,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association

  
	
   

  	
  209 S. LaSalle Street, Suite 410

  
	
   

  	
  Chicago, IL 60604

  
	
   

  	
  Telephone: (312)
  325-8855

  
	
   

  	
  Telecopy: (312) 325-8852

  

 

 

	
   

  	
  UFJ BANK
  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jesse McDonald

  	
   

  
	
   

  	
   

  	
  Name: Jesse McDonald

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $22,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  UFJ Bank Limited

  
	
   

  	
  55 East 52nd Street

  
	
   

  	
  New York, NY  0055

  
	
   

  	
  Attention: Jesse McDonald

  
	
   

  	
  Telephone: (212) 339-6210

  
	
   

  	
  Telecopy: (212) 754-1304

  

 

 

	
   

  	
  AMSOUTH BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Farnsworth

  	
   

  
	
   

  	
   

  	
  Name: David Farnsworth

  
	
   

  	
   

  	
  Title: Senior Vice President / Credit Officer

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $22,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  AmSouth Bank

  
	
   

  	
  1900 5th Avenue North

  
	
   

  	
  BAC 15th Floor

  
	
   

  	
  Birmingham, AL 35203

  
	
   

  	
  Attn: Lee
  Surtees

  
	
   

  	
  Telephone:

  	
  (205) 801-0621

  
	
   

  	
  Telecopy:

  	
  (205) 326-4075

  
					

 

 

	
   

  	
  BANK OF MONTREAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greg Steele

  	
   

  
	
   

  	
   

  	
  Name: Greg Steele

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $22,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Bank of Montreal

  
	
   

  	
  115 S. LaSalle Street, 10W

  
	
   

  	
  Chicago, IL 60603

  
	
   

  	
  Attn: Greg Steele

  
	
   

  	
  Telephone:

  	
  (312) 293-8351

  
	
   

  	
  Telecopy:

  	
  (312) 293-5852

  
					

 

 

	
   

  	
  CHEVY
  CHASE BANK, F.S.B.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sadhvi K. Subramanian

  	
   

  
	
   

  	
   

  	
  Name: Sadhvi K. Subramanian

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $15,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Chevy Chase Bank, F.S.B.

  
	
   

  	
  7501 Wisconsin Avenue, 12th Floor

  
	
   

  	
  Bethesda, MD 20814

  
	
   

  	
  Attention: Sadhvi K. Subramanian

  
	
   

  	
  Telephone:

  	
  (240) 497-7702

  
	
   

  	
  Telecopy:

  	
  (240) 497-7714

  
					

 

 

	
   

  	
  COMERICA
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Casey Ostrander

  	
   

  
	
   

  	
   

  	
  Name: Casey Ostrander

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $15,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  Comerica Bank

  
	
   

  	
  500 Woodward Avenue

  
	
   

  	
  7th Floor, MC 3256

  
	
   

  	
  Detroit, MI  48226

  
	
   

  	
  Attn: Casey Ostrander

  
	
   

  	
  Telephone:

  	
  (313) 222-5286

  
	
   

  	
  Telecopy:

  	
  (313) 222-9295

  
					

 

 

	
   

  	
  UBS LOAN
  FINANCE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Aitkin

  	
   

  
	
   

  	
   

  	
  Name: Christopher Aitkin

  
	
   

  	
   

  	
  Title: Associate Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward J. Cripps

  	
   

  
	
   

  	
   

  	
  Edward J. Cripps

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Commitment Amount:

  
	
   

  	
   

  
	
   

  	
  $5,000,000.00

  
	
   

  	
   

  
	
   

  	
  Lending Office (all Types of Loans):

  
	
   

  	
   

  
	
   

  	
  UBS Loan Finance LLC

  
	
   

  	
  677 Washington Blvd.

  
	
   

  	
  Stamford, CT 06901

  
	
   

  	
  Attn:    Christopher Aitkin

  
	
   

  	
  Telephone:

  	
  (203) 719-3845

  
	
   

  	
  Telecopy:

  	
  (203) 719-3888Exhibit 10.1

 

UNOVA, INC.

2001 STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

 

As Amended March 23, 2005

 

This Restricted Stock
Agreement (“Agreement”) is made as of the 9th day of July, 2003 (the
“Agreement Date”), between UNOVA, Inc., a
Delaware corporation (the “Company”), and Robert T. Smith (the
“Grantee”).

 

WHEREAS, the UNOVA, Inc. 2001 Stock Incentive
Plan (the “2001 Plan”) was adopted by the Board of Directors of the Company on
March 13, 2001, and was approved by the shareholders of the Company on May 8, 2001;
and

 

WHEREAS, as an inducement to the Grantee to
remain in the employ of the Company or any of its subsidiaries, to increase the
Grantee’s proprietary interest in the business of the Company through ownership
of the Company’s Common Stock, and to reward the Grantee’s contribution to the
Company’s future success, the Company desires to award the Grantee shares of
Restricted Stock (as that term is defined in the 2001 Plan) in accordance with
the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises, the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the Company and the Grantee hereby agree as follows:

 

1.  The Company
hereby grants the Grantee, as a matter of separate inducement and Agreement,
and not in lieu of salary or other compensation for services, an Award in the
form of Restricted Stock comprising 50,000 shares
of the Common Stock, par value $.01 per share, of the Company, on the terms and
conditions hereinafter set forth, such number of shares to be subject to
adjustment as provided in Section 3 of the 2001 Plan.

 

2.  The 2001
Plan, a copy of which is available on the Company’s website at
intranet@unova.com, is incorporated herein by reference and is made part of
this Agreement

 

 

as if fully set forth herein. 
Capitalized terms used in this Agreement which are not defined herein
shall have the meaning assigned to such terms in the 2001 Plan, it being
understood that the term “Restricted Stock” shall mean and refer only to those
shares of Restricted Stock granted pursuant to this Agreement.  This Agreement is subject to, and the Company
and the Grantee agree to be bound by, all of the terms and conditions of the 2001
Plan as the same existed at the time this Agreement became effective.  The 2001 Plan shall control in the event
there is any conflict between the 2001 Plan and the terms hereof and with
respect to such matters as are not expressly covered in this Agreement.  Subsequent amendments to the 2001 Plan shall
not adversely affect the Grantee’s rights under this Agreement without the
Grantee’s written consent, except such an amendment made to cause the 2001 Plan
to qualify for the exemption provided by Rule 16b-3.

 

3.  The
Restricted Stock awarded under this Agreement will not be evidenced by a stock
certificate or certificates.  The
Restricted Stock will be registered on the books of the Company by its transfer
agent in uncertificated (or book-entry) form. 
A restriction on transfer will be placed on these shares and remain
until such time as they vest in accordance with the terms and conditions
(including forfeiture) of this Agreement and the 2001 Plan.

 

4.  By
executing this Agreement, the Grantee agrees and acknowledges that any shares
of Restricted Stock that are forfeited under the terms of this Agreement will
be cancelled.

 

5.  Subject to
the provisions of Paragraph 7 of this Agreement, there shall be a restriction
on shares of Restricted Stock awarded hereunder, until the following
Performance Goal is satisfied.  The
Performance Goal under this Agreement shall be the achievement of a material
improvement to cash flow and cash flow efficiency of the UNOVA Industrial
Automation Systems Group as determined over any consecutive four quarters or as
of each anniversary of the Agreement Date in the reasonable discretion of the
CEO and the CFO of the Company prior to the third anniversary of the date of
this Agreement (the “Expiration

 

2

 

Date”).  All shares still subject
to restriction on the Expiration Date shall be forfeited.  Partial releases of Restricted Stock may be
made following each anniversary of the Agreement Date if and to the extent the
Performance Goal has been partially satisfied. 
Notwithstanding anything to the contrary contained in Section 7(c)(iv) of
the Plan, the Restricted Stock shall not be forfeited upon Grantee’s
Termination of Employment.

 

6.  Until the
vesting of any shares of Restricted Stock in accordance with the provisions of
this Agreement or the 2001 Plan, the Grantee shall not be permitted to sell,
assign, transfer, pledge, or otherwise encumber shares of Restricted Stock;
provided that the foregoing shall not prevent the Grantee from pledging
Restricted Stock as security for a loan, the sole purpose of which is to
provide funds to pay the option price for stock options granted to the Grantee
under the 2001 Plan or any successor plan of the Company.

 

7.  Notwithstanding
any other provision of this Agreement, all shares of Restricted Stock granted
hereunder still subject to restriction shall become fully vested and
transferable and become free of all restrictions and deferral limitations to
the full extent of the original grant upon the occurrence of any of the
following events:  (a) the Termination of
Employment of the Grantee by reason of the Grantee’s death; (b) the Termination
of Employment of the Grantee by reason of the Grantee’s Disability; or (c) the
occurrence of a Change in Control as defined in Section 8(b) of the 2001 Plan.

 

8.  If, as and
when the Performance Goal as to the shares of Restricted Stock awarded
hereunder has been satisfied without a prior forfeiture of the Restricted
Stock, or if and when Restricted Stock vests pursuant to the provisions of Paragraph
7 hereof, and subject to the payment of withholding taxes as provided in
Paragraph 10 hereof, the Company will direct its transfer agent to remove the
restriction on transfer from the number of shares that have vested pursuant to
Paragraph 5 or Paragraph 7 hereof.  The
Company will direct the transfer agent to periodically send statements to the
Grantee indicating the number of shares being held for the Grantee’s account.

 

3

 

9.  Except as
otherwise provided in this Agreement or the 2001 Plan, the Grantee shall have
all rights of a stockholder with respect to the shares of Restricted Stock
awarded hereunder, including the right to vote such shares and the right to
receive any cash dividends which may be declared on the Company’s Common
Stock.  Dividends payable in Common Stock
shall be paid in the form of additional shares of Restricted Stock and shall be
held subject to the same restrictions and vesting provisions applicable to the
shares of Restricted Stock on which such dividends were paid.

 

10.  No later
than the date as of which an amount first becomes includable in the gross
income of the Grantee for federal income tax purposes with respect to any
Restricted Stock granted by this Agreement, the Grantee shall pay to the
Company and/or the Grantee’s employer (the “Employer”), or make arrangements
satisfactory to the Company and the Employer regarding the payment of, any
federal, state, local, or foreign taxes of any kind required by law to be
withheld by the Company or the Employer with respect to such amount.  Unless otherwise determined by the Committee,
withholding obligations (up to the minimum statutory amount required to be
withheld by the Company or the Employer) may be settled with Common Stock,
including shares of the Restricted Stock that give rise to the withholding
requirement or shares of Common Stock already owned by the Grantee for a period
of at least six months.  In this regard,
to meet the withholding obligations for the Withholding Taxes (as defined
below), the Company may sell or arrange for the sale of Common Stock acquired
by the Grantee, or the Company may withhold in Common Stock.  The obligations of the Company under the 2001
Plan shall be conditional on such payment or arrangements, and the Company, and
its subsidiaries and its Affiliates shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment otherwise due to the
Grantee.  Grantee, therefore, hereby
unconditionally and irrevocably elects, notwithstanding anything to the
contrary in this Paragraph 10 or elsewhere in this Agreement, to satisfy any
and all federal, state, local, and foreign taxes of any kind that may

 

4

 

be withheld by the Company in connection with Grantee’s Restricted
Stock (“Withholding Taxes”) by selecting one of the following payment methods;
provided that in all cases, the Company shall have the right to receive not
less than the minimum amount of the Withholding Taxes that the Company is
required by law to withhold (the “Mandatory Withholding Taxes”):

 

OPTION
1:

 

o                                    Authorizing and directing the Company to
deduct from the total number of shares of Company Common Stock issued and
deliverable to Grantee pursuant to this Agreement the number of shares having a
value equal to the Mandatory Withholding Taxes.

 

OPTION
2:

 

o                                    Tendering to the Company the number of
unrestricted shares of Company Common Stock owned by the Grantee for a period
of at least six months prior to the date on which Withholding Taxes are due and
having a value equal to the Mandatory Withholding Taxes.

 

OPTION
3:

 

o                                    Paying to the Company in cash an amount
up to the Withholding Taxes but not less than the Mandatory Withholding Taxes.

 

In the event that none of the
payment options set forth above is specified, the Grantee’s election shall be
deemed to be Option 1, and the Company shall proceed accordingly.

 

11.  Grantee
understands and acknowledges that Grantee is one of a limited number of
employees of the Company and its subsidiaries who have been selected to receive
grants of Restricted Stock and that Grantee’s award is considered Company
confidential information.  Grantee hereby
covenants and agrees not to disclose the award of Restricted Stock pursuant to
this Agreement under which this award was made to any other person except (i)
Grantee’s immediate family and legal or financial advisors, provided that
Grantee shall assure that such individuals maintain the confidentiality of this
Agreement, and (ii) as required in connection with the administration of this
Agreement and the 2001 Plan as it

 

5

 

relates to this award, in each case, until the award contained in this
Agreement is publicly disclosed.

 

12.  The grant
of Restricted Stock to the Grantee in any year shall give the Grantee neither
any right to similar grants in future years nor any right to be retained in the
employ of the Company or its subsidiaries or Affiliates, such employment being
terminable to the same extent as if the 2001 Plan and this Agreement were not
in effect.  The right and power of the
Company, its subsidiaries and Affiliates to dismiss or discharge the Grantee is
specifically and unqualifiedly unimpaired by this Agreement.

 

13.  Each
notice relating to this Agreement shall be in writing and delivered in person
or by mail to the Company at its office, 6001 36th Avenue West,
Everett, Washington  98203-1264, to the
attention of the Company’s Secretary, or at such other address as the Company
may specify in writing to the Grantee by a notice delivered in accordance with
this paragraph.  All notices to the
Grantee shall be delivered to the Grantee at the Grantee’s address specified
below or at such other address as the Grantee may specify in writing to the
Secretary of the Company by a notice delivered in accordance with this
paragraph.

 

14.  This
Agreement, including the provisions of the 2001 Plan incorporated by reference
herein, comprises the whole Agreement between the parties hereto with respect
to the subject matter hereof, and shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflicts of law.  The
Committee may amend the terms of this Agreement at any time, prospectively or
retroactively, but no such amendment shall impair the rights of the Grantee
without the Grantee’s written consent, except such an amendment made to cause
this Agreement and the Restricted Stock granted hereby to qualify for the
exemption provided by Rule 16b-3.  This
Agreement shall become effective when it has been executed by the Company and
the Grantee.

 

6

 

15.  This
Agreement shall inure to the benefit of and be binding upon each successor of
the Company and, to the extent specifically provided herein and in the 2001
Plan, shall inure to the benefit of and shall be binding upon the Grantee’s
heirs, legal representatives, and successors.

 

IN WITNESS WHEREOF, this Agreement is executed by the Grantee
and by the Com­pany through its duly authorized officer or officers as of the
day and year first above written.

 

	
   

  	
  UNOVA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cathy D. Younger

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANTEE:

  
	
   

  	
   

  
	
   

  	
  (One of the boxes under Paragraph 10 should be
  checked)

  
	
   

  	
   

  
	
   

  	
  /s/ Robert T. Smith

  	
   

  
	
   

  	
  Signature

  

 

7

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