Document:

exv10w16

 

Exhibit 10.16

AMENDED AND RESTATED CREDIT AGREEMENT

Dated

December 13, 2004

among

ARCHSTONE-SMITH OPERATING TRUST,

as Borrower

and

ARCHSTONE-SMITH TRUST,

as Parent

and

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and

BANK OF AMERICA, N.A., and

WELLS FARGO BANK, N.A.

as Syndication Agents

and

SUNTRUST BANK and

COMMERZBANK AG, NEW YORK AND

GRAND CAYMAN BRANCHES

as Documentation Agents

and

the Lenders Party Hereto

J. P. MORGAN SECURITIES INC.,

as Lead Arranger and Sole Bookrunner

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Definitions
	 	 	1	 
	 
	 	 	 	 
	2. The Loans
	 	 	17	 
	2.1 Advances
	 	 	17	 
	2.2 Letters of Credit
	 	 	19	 
	2.3 Payments
	 	 	23	 
	2.4 Pro Rata Treatment
	 	 	25	 
	2.5 Non-Receipt of Funds by the Agent
	 	 	25	 
	2.6 Sharing of Payments, Etc
	 	 	26	 
	2.7 Fees
	 	 	26	 
	2.8 Money Market Borrowings
	 	 	28	 
	2.9 Reduction of Commitment
	 	 	32	 
	2.10 Additional Guarantees
	 	 	32	 
	 
	 	 	 	 
	3. Conditions
	 	 	32	 
	3.1 All Loans
	 	 	32	 
	3.2 First Loan
	 	 	33	 
	3.3 Options Available
	 	 	33	 
	3.4 Designation and Conversion
	 	 	34	 
	3.5 Special Provisions Applicable to Eurodollar Rate Borrowings
and Money Market Loans
	 	 	34	 
	3.6 Funding Offices; Adjustments Automatic
	 	 	37	 
	3.7 Funding Sources, Payment Obligations
	 	 	37	 
	3.8 Mitigation, Non-Discrimination
	 	 	37	 
	 
	 	 	 	 
	4. Representations and Warranties
	 	 	38	 
	4.1 Organization
	 	 	38	 
	4.2 Financial Statements
	 	 	38	 
	4.3 Enforceable Obligations; Authorization
	 	 	39	 
	4.4 Other Debt
	 	 	39	 
	4.5 Litigation
	 	 	39	 
	4.6 Taxes
	 	 	39	 
	4.7 Regulation U
	 	 	39	 
	4.8 Securities Act of 1933
	 	 	39	 
	4.9 No Contractual or Corporate Restrictions
	 	 	40	 
	4.10 Investment Company Act Not Applicable
	 	 	40	 
	4.11 Public Utility Holding Company Act Not Applicable
	 	 	40	 
	4.12 ERISA Not Applicable
	 	 	40	 
	 
	 	 	 	 
	5. Affirmative Covenants
	 	 	40	 
	5.1 Taxes, Insurance, Existence, Regulations, Property, etc
	 	 	40	 
	5.2 Financial Statements and Information
	 	 	40	 

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	5.3 Financial Tests
	 	 	41	 
	5.4 Inspection
	 	 	41	 
	5.5 Further Assurances
	 	 	42	 
	5.6 Books and Records
	 	 	42	 
	5.7 Insurance
	 	 	42	 
	5.8 Notice of Certain Matters
	 	 	42	 
	5.9 Use of Proceeds
	 	 	42	 
	5.10 Expenses of and Claims Against the Agent and the Lenders
	 	 	42	 
	5.11 Legal Compliance; Indemnification
	 	 	43	 
	5.12 Borrower’s Performance
	 	 	44	 
	5.13 Professional Services
	 	 	44	 
	5.14 Capital Adequacy
	 	 	44	 
	5.15 Property Pool
	 	 	45	 
	5.16 DC Holdings
	 	 	46	 
	 
	 	 	 	 
	6. Negative Covenants
	 	 	46	 
	6.1 Mergers, Consolidations and Acquisitions of Assets
	 	 	47	 
	6.2 Redemption
	 	 	47	 
	6.3 Nature of Business
	 	 	47	 
	6.4 Transactions with Related Parties
	 	 	48	 
	6.5 Limiting Agreements
	 	 	48	 
	6.6 Parent Negative Covenants
	 	 	48	 
	 
	 	 	 	 
	7. Events of Default and Remedies
	 	 	48	 
	7.1 Events of Default
	 	 	48	 
	7.2 Remedies Cumulative
	 	 	50	 
	7.3 Guaranty Proceeds
	 	 	50	 
	 
	 	 	 	 
	8. The Agent
	 	 	51	 
	8.1 Appointment, Powers and Immunities
	 	 	51	 
	8.2 Reliance
	 	 	53	 
	8.3 Defaults
	 	 	53	 
	8.4 Rights as a Lender
	 	 	54	 
	8.5 Indemnification
	 	 	54	 
	8.6 Non-Reliance on Agent and Other Lenders
	 	 	54	 
	8.7 Failure to Act
	 	 	55	 
	8.8 Resignation of Agent
	 	 	55	 
	8.9 No Partnership
	 	 	55	 
	 
	 	 	 	 
	9. Renewal and Extension
	 	 	56	 
	9.1 Procedure for Renewal and Extension
	 	 	56	 
	9.2 Conditions to Renewal and Extension
	 	 	56	 
	 
	 	 	 	 
	10. Miscellaneous
	 	 	56	 
	10.1 No Waiver, Amendments
	 	 	56	 
	10.2 Notices
	 	 	56	 
	10.3 Venue
	 	 	57	 

ii

 

	 	 	 	 	 	 	 
	

	 	10.4 Choice of Law	 	 	57	 
	

	 	10.5 Survival; Parties Bound; Successors and Assigns	 	 	58	 
	

	 	10.6 Counterparts	 	 	61	 
	

	 	10.7 Usury Not Intended; Refund of Any Excess Payments	 	 	61	 
	

	 	10.8 Captions	 	 	62	 
	

	 	10.9 Severability	 	 	62	 
	

	 	10.10 Disclosures	 	 	62	 
	

	 	10.11 No Novation	 	 	62	 
	

	 	10.12 Limitation of Liability	 	 	62	 
	

	 	10.13 Entire Agreement	 	 	62	 
	 
	 	 	 	 	 	 
	SCHEDULE I: Guarantor	 	 	 	 
	 
	 	 	 	 	 	 
	EXHIBITS:	 	 	 	 
	A -

	 	Officer’s Certificate	 	 	 	 
	B -

	 	Request for Loan	 	 	 	 
	C -

	 	Note	 	 	 	 
	C-1-

	 	Swing Loan Note	 	 	 	 
	C-2-

	 	Master Note	 	 	 	 
	D -

	 	Legal Opinion	 	 	 	 
	E -

	 	Money Market Quote Request	 	 	 	 
	F -

	 	Invitation for Money Market Quotes	 	 	 	 
	G -

	 	Money Market Quote	 	 	 	 
	H -

	 	Designation Agreement	 	 	 	 
	I -

	 	Form of Guaranty	 	 	 	 
	J -

	 	Assignment and Assumption Agreement	 	 	 	 
	K -

	 	Form of Additional Guaranty	 	 	 	 

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AMENDED AND RESTATED

CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT (the “Agreement”) is made and entered into as of
December 13, 2004, by and among ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment
trust (the “Borrower”), ARCHSTONE-SMITH TRUST, a Maryland real estate investment trust, and the
parent of the Borrower (the “Parent”), the financial institutions (including JPMC, the Syndication
Agents and the Documentation Agents, the “Lenders”) which are now or may hereafter become
signatories hereto, JPMORGAN CHASE BANK, N.A., a national banking association (formerly known as
JPMorgan Chase Bank) (“JPMC”), as administrative agent for Lenders (in such capacity, “Agent”),
BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., and as syndication agents for Lenders (in such
capacity, “Syndication Agents”), and SUNTRUST BANK and COMMERZBANK AG, NEW YORK and GRAND CAYMAN
BRANCHES, as documentation agents for Lenders (in such capacity, “Documentation Agents”).

     WHEREAS, the Borrower, the Agent and certain of the Lenders entered into an Amended and
Restated Credit Agreement dated as of October 30, 2003 (as amended to the date hereof, the
“Original Credit Agreement”); and

     WHEREAS, the Borrower has requested that the Agent and the Lenders amend and restate the
Original Credit Agreement and the Agent and the Lenders have agreed to do so pursuant to the terms
of this Agreement; and

     WHEREAS, the Borrower desires to obtain Loans and obtain Letters of Credit (as such terms are
hereinafter defined) from the Lenders; and

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

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

1. Definitions.

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

     Absolute Rate Auction shall mean a solicitation of Money Market Quotes setting forth
Money Market Absolute Rates pursuant to Section 2.8.

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

     Accounts, Equipment and Inventory shall have the respective meanings assigned to them in the
Texas Business and Commerce Code in force on the date the document using such term was executed.

     Administrative Questionnaire means an Administrative Questionnaire in a form supplied
by the Agent.

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

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

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

2

 

APPLICABLE MARGIN

	 	 	 	 	 
	APPLICABLE	 	EURODOLLAR RATE	 	BASE RATE
	CREDIT RATING 	 	BORROWING	 	BORROWING
	A/A2 or better
	 	0.425%	 	0
	A-/A3
	 	0.450%	 	0
	BBB+/Baa1
	 	0.500%	 	0
	BBB/Baa2
	 	0.600%	 	0
	BBB-/Baa3
	 	0.800%	 	0
	Worse than BBB-/Baa3
	 	1.250%	 	.25%
	or no Credit Rating
	 	 	 	 

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

     Assignment and Assumption means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section 10.5),
and accepted by the Agent, in the form of Exhibit J or any other form approved by the
Agent.

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

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

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

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

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

     Ceiling Rate shall mean, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or Texas laws permits the higher interest
rate, stated as a rate per annum. On each day, if any, that Texas law establishes the

3

 

Ceiling Rate, the Ceiling Rate shall be the “weekly ceiling” (as defined in Chapter 303 of the
Texas Finance Code, as amended (the “Texas Finance Code”)) for that day. The Agent may from time
to time, as to current and future balances, implement any other ceiling under the Texas Finance
Code by notice to the Borrower, if and to the extent permitted by the Texas Finance Code. Without
notice to the Borrower or any other person or entity, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum nonusurious rate of
interest permitted by applicable law fluctuates.

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

     Commitment shall mean the commitment of the Lenders to lend funds under Section
2.1 of this Agreement, other than Swing Loans. The aggregate Commitment on the date hereof is
$600,000,000.00.

     Committed Loan shall mean Loans other than Money Market Loans.

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

     Coverage Ratio shall mean the ratio of (a) the Borrower’s EBITDA (calculated by adding
the Parent’s Interest Expense) for the immediately preceding four (4) calendar quarters, to (b)
dividends or other distributions of any kind or character paid or payable with respect to any
Disqualified Stock plus all of the Borrower’s and the Parent’s Interest Expense, in each case for
the period used to calculate EBITDA.

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

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

     DC Holdings Entities shall mean Metropolitan Acquisition Finance LP, Smith Property
Holdings Cronin’s Landing LP, Smith Property Holdings Crystal towers LP, Smith Property Holdings
One LP, Smith Property Holdings Two LP, Smith Property Holdings Three LP, Smith Property Holdings
Four LP, Smith Property Holdings Five LP, Smith Property Holdings Six LP, Smith Property Holdings
Seven LP, Smith Property Holdings Alban Towers LLC, First Herndon Associates LP, Smith Property
Holdings One (DC) LP, Smith Property Holdings Two (DC) LP, Smith Property Holdings Three (DC) LP,
Smith Property Holdings Kenmore LP, Smith Property Holdings Five (DC) LP, Smith Property Holdings
Six (DC) LP, Smith Property Holdings Van Ness LP, Smith Property Holdings Consulate LLC and Smith
Property Holdings Columbia Road LP, Smith Property

4

 

Holdings 4411 Connecticut Avenue LLC, ASN Dupont LLC, and any Person formed solely for the
purpose of owning Real Property in the District of Columbia.

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

     Designated Lender shall mean a special purpose corporation that (a) shall have become
a party to this Agreement pursuant to Section 10.5(f), and (b) is not otherwise a
Lender.

     Designated Lender Notes shall mean promissory notes of the Borrower, substantially in
the form of Exhibit C hereto, evidencing the obligation of the Borrower to repay Money
Market Loans made by Designated Lenders, and Designated Lender Note means any one of such
promissory notes issued under Section 10.5(f).

     Designating Lender shall have the meaning set forth in Section 10.5(f).

     Designation Agreement shall mean a designation agreement in substantially the form of
Exhibit H attached hereto, entered into by a Lender and a Designated Lender and accepted by
the Agent.

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

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

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

5

 

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

     Eurodollar Interbank Rate shall mean, for each Interest Period, the rate of interest
per annum, rounded, if necessary, to the next highest whole multiple of one-sixteenth percent
(1/16%), quoted by Agent at or before 11:00 a.m., London time (or as soon thereafter as
practicable), on the date two (2) Eurodollar Business Days before the first day of such Interest
Period, to be the arithmetic average of the prevailing rates per annum at the time of determination
and in accordance with the then existing practice in the London interbank dollar market, for the
offering to Agent by one or more prime banks selected by Agent in its sole discretion, in the
London interbank dollar market, of deposits in United States dollars for delivery on the first day
of such Interest Period and having a maturity equal to the length of such Interest Period and in an
amount equal (or as nearly equal as may be) to the Eurodollar Rate Borrowing to which such Interest
Period relates. Each determination by Agent of the Eurodollar Interbank Rate shall be prima facie
evidence thereof.

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

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

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

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

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

6

 

     Fee shall mean, collectively, the fee described in Section 2.7.

     Fitch shall mean Fitch, Inc.

     Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower’s EBITDA
(calculated by adding the Parent’s Interest Expense) for the immediately preceding four (4)
calendar quarters, less Unit Capital Expenditures, to (b) dividends of any kind or character or
other proceeds paid or payable with respect to any Disqualified Stock, plus all of the Borrower’s
and the Parent’s Interest Expense, plus all of the principal payable and principal paid on the
Borrower’s and the Parent’s Indebtedness (but not including prepayment penalties and make-whole
costs not included in the calculation of EBITDA) other than (i) any final scheduled principal
payment on any Indebtedness which pays such Indebtedness in full, to the extent the amount of such
scheduled principal payment is greater than the scheduled principal payment immediately preceding
such final scheduled principal payment and (ii) scheduled principal payments on the Borrower’s and
the Parent’s Indebtedness incurred prior to December 13, 2004 which has a rating from Standard &
Poor’s Rating Services, Moody’s Investor Service, Inc. or Fitch which is the equivalent of
BBB-/Baa3 or better at the time of issuance, in each case for the period used to calculate EBITDA.

     Funding Loss shall mean, with respect to (a) Borrower’s payment or prepayment of
principal of a Eurodollar Rate Borrowing or a Money Market Loan on a day other than the last day of
the applicable Interest Period; (b) Borrower’s failure to borrow a Eurodollar Rate Borrowing or a
Money Market Loan on the date specified by Borrower; (c) Borrower’s failure to make any prepayment
of the Loans (other than Base Rate Borrowings) on the date specified by Borrower, or (d) any
cessation of a Eurodollar Rate to apply to the Loans or any part thereof pursuant to Section
3.5, in each case whether voluntary or involuntary, any direct loss, expense, penalty, premium
or liability incurred by any Lender (including but not limited to any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by a Lender to fund
or maintain a Loan).

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

7

 

than thirty (30) days with a view to amending this Agreement so that the financial measures of
the Borrower’s operating performance and financial condition are substantially the same after such
change as they were immediately before such change.

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

     Guarantor shall mean each Subsidiary of Borrower that executes a Guaranty as required
by Section 5.15 hereof. Guarantor as of the date hereof is the Persons listed on
Schedule I attached hereto.

     Guaranty (whether one or more) shall mean a Guaranty in the form of Exhibit I
attached hereto and made a part hereof.

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

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

     Indebtedness shall mean and include, without duplication (1) all obligations for
borrowed money, (2) all obligations evidenced by bonds, debentures, notes or other similar
agreements, (3) all obligations to pay the deferred purchase price of Property or services, except
accrued expenses and trade accounts payable arising in the ordinary course of business (unless
included in (6) below), (4) all guaranties and endorsements and other contingent obligations in
respect of, or any obligations to purchase or otherwise acquire, Indebtedness of others (provided
that, where the guarantor is not the sole owner of the Person whose Indebtedness is guaranteed, and
where the guaranty is of that portion of the Indebtedness remaining unpaid after the collection of
the collateral for the Indebtedness, the amount guaranteed that is less than twenty-five percent
(25%) of the Historical Value of said related collateral will not be included in the calculation of
Indebtedness), (5) all Indebtedness secured by any Lien existing on any interest of the Person with
respect to which Indebtedness is being determined in Property owned subject to such Lien whether or
not the Indebtedness secured thereby shall have been assumed, (6) accounts payable, dividends of
any kind or character or other proceeds payable with respect to any stock and accrued expenses
which in the aggregate are in excess of five percent (5%) of the undepreciated value of the assets
of the Borrower, (7) payments received in consideration for sale of Borrower’s stock when the
amount of the stock so sold is determined, and the

8

 

date of delivery is, more than one (1) month after receipt of such payment and only to the
extent that the obligation to deliver stock is not payable solely in stock of the Borrower, (8) all
obligations under Hedging Agreements (calculated on a mark-to-market basis as of the reporting
date) other than Hedging Agreements related to interest rates on identified outstanding borrowed
money Indebtedness, and (9) all Capital Lease Obligations of such Person. Indebtedness shall be
calculated on a consolidated basis in accordance with Generally Accepted Accounting Principles,
including (without duplication) the Equity Percentage of Indebtedness for the Borrower’s
Unconsolidated Affiliates.

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

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

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

     Interest Period shall mean:

          (1) For each Eurodollar Rate Borrowing, a period commencing on the date such
Eurodollar Rate Borrowing was made and ending on the numerically corresponding day which
is, subject to availability, (a) one (1), two (2), three (3) or six (6) months thereafter,
or (b) seven (7), fourteen (14) or twenty-one (21) days thereafter for no more than four
(4) time periods (provided that the first Eurodollar Rate Borrowing under this Agreement
with an Interest Period of seven (7) days shall not count against the four time maximum)
each calendar year in connection with payments of the Loans because of debt and/or equity
sales by the Borrower, changes in the Lender Commitments, sales of major assets by the
Borrower, or other similar reasons specifically approved by the Agent; provided that, (v)
any Interest Period which would otherwise end on a day which is not a Eurodollar Business
Day shall be extended to the next succeeding Eurodollar Business Day, unless such
Eurodollar Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurodollar Business Day; (w) any Interest Period which
begins on the last Eurodollar Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Eurodollar Business Day of the appropriate calendar month;
(x) no Interest Period shall ever extend beyond the Maturity Date; and (y) Interest Periods
shall be selected by Borrower in such a manner that the Interest Period with respect to any
portion of the Loans which shall become due shall not extend beyond such due date .

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          (2) For each Money Market LIBOR Loan, the period commencing on the date such Money
Market LIBOR Loan was made and ending one (1), two (2), three (3) or six (6) months
thereafter, as the Borrower may elect in the applicable Notice of Money Market Borrowing in
accordance with Section 2.8; provided that such Interest Period shall be limited as
provided in clauses (1)(v) through (y) above.

          (3) With respect to each Money Market Absolute Rate Loan, the period commencing on the
date such Money Market Absolute Rate was made and ending such number of days thereafter
(but not less than 14 days) as the Borrower may elect in accordance with Section
2.8; provided that such Interest Period shall be limited as provided in clauses
(1)(x) and (y) above.

     Issuing Bank (whether one or more) means JPMorgan Chase Bank, N.A. and up to five (5)
other Lenders, in their capacity as the issuer of Letters of Credit hereunder, and their successors
in such capacity as provided in Section 2.2(i). The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.

     LC Disbursement means a payment made by the Issuing Bank pursuant to a Letter of
Credit.

     LC Exposure means, at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Percentage of the total LC Exposure at such time.

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

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

     Letter of Credit means any letter of credit issued pursuant to this Agreement.

     LIBOR Auction shall mean a solicitation of Money Market Quotes setting forth Money
Market Margins based on the Eurodollar Interbank Rate pursuant to Section 2.8.

     Lien shall mean any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment, negative pledge or other lien or restriction of any kind, whether based on
common law, constitutional provision, statute or contract, and shall include

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reservations, exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions.

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

     Loans shall mean the Loans described in Sections 2.1, 2.2 and
2.8 hereof. Loan shall mean any such Loan.

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

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

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

     Maturity Date shall mean three (3) years after the date hereof, unless extended
pursuant to Section 9.

     Money Market Absolute Rate has the meaning set forth in Section 2.8.

     Money Market Absolute Rate Loan shall mean a loan to be made by a Lender pursuant to
an Absolute Rate Auction.

     Money Market LIBOR Loan shall mean a loan to be made by a Lender pursuant to a LIBOR
Auction.

     Money Market Loan shall mean a Money Market LIBOR Loan or a Money Market Absolute Rate
Loan, as the context may require or allow.

     Money Market Margin has the meaning set forth in Section 2.8.

     Money Market Quote shall mean an offer by a Lender to make a Money Market Loan in
accordance with Section 2.8.

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

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

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

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

     Obligations shall mean, as at any date of determination thereof, the sum of (a) the
aggregate Revolving Credit Exposures plus (b) all other liabilities, obligations and Indebtedness
of any Parties under any Credit Document.

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

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

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

     Parties shall mean all Persons other than the Agent, the Syndication Agents, the
Documentation Agents or any Lender executing any Credit Document.

     Past Due Rate shall mean, on any day, a rate per annum equal to the Base Rate plus an
additional three percent (3%) per annum, but in any event not to exceed the Ceiling Rate.

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     Percentage shall mean the amount, expressed as a percentage, of each Lender Commitment
as compared to the Commitment, set forth opposite the Lender’s name on its signature page of this
Agreement, or as may hereafter become signatory hereto, as adjusted or amended in accordance with
this Agreement. If the Commitment has terminated or expired, the Percentage shall be determined
based on the Revolving Credit Exposure most recently in effect, giving effect to any assignments.

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

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

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

     Pool Value shall mean the Value of the Pool.

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

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

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

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

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

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

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

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

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

     Revolving Credit Exposure means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Loans, the Swing Loans, and its LC Exposure at
such time.

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

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

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

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

     Stated Rate shall, on any day, mean whichever of the Base Rate, the Eurodollar Rate,
or a rate applicable to Money Market Loans has been designated and provided pursuant to this
Agreement; provided that, if on any day such rate shall exceed the Ceiling Rate for that day, the
Stated Rate shall be fixed at the Ceiling Rate on that day and on each day thereafter until the
total amount of interest accrued at the Stated Rate on the unpaid principal balance of the Notes
equals the total amount of interest which would have accrued if there had been no Ceiling Rate. If
the Notes mature (or are prepaid) before such equality is achieved, then, in addition to the unpaid
principal and accrued interest then owing pursuant to the other provisions of the Credit Documents,
Borrower promises to pay on demand to the order of the holders of the Notes interest in an amount
equal to the excess (if any) of (a) the lesser of (i) the total interest which would have accrued
on the Notes if the Stated Rate had been defined as equal to the Ceiling Rate from time to time in
effect and (ii) the total interest which would have accrued on the Notes if the Stated Rate were
not so prohibited from exceeding the Ceiling Rate, over (b) the total interest actually accrued on
the Notes to such maturity (or prepayment) date.

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

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

     Swing Loan shall mean a Loan made pursuant to Section 2.1(c) hereof.

     Swing Loan Note shall mean that certain promissory note dated of even date herewith in
the original principal amount of $100,000,000.00 executed by the Borrower payable to the order of
JPMC.

     Tangible Net Worth shall mean total assets (without deduction for accumulated
depreciation) less (1) all intangibles and (2) all liabilities (including contingent and indirect
liabilities), all determined in accordance with Generally Accepted Accounting Principles. The term
“intangibles” shall include, without limitation, (i) deferred charges, and (ii) the aggregate of
all amounts appearing on the assets side of any such balance sheet for franchises, licenses,
permits, patents, patent applications, copyrights, trademarks, trade names, goodwill, treasury
stock, experimental or organizational expenses and other like intangibles. The term “liabilities”
shall include, without limitation, (i) Indebtedness

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secured by Liens on Property of the Person with respect to which Tangible Net Worth is being
computed whether or not such Person is liable for the payment thereof, (ii) deferred liabilities,
and (iii) Capital Lease Obligations. Tangible Net Worth shall be calculated on a consolidated
basis in accordance with Generally Accepted Accounting Principles.

     Taxes shall mean any tax, levy, impost, duty, charge or fee.

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

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

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

     Value means the sum of the following:

     (a) for Real Property that has reached the Calculation Date and that the Person has owned for
the full determination period, the result of dividing (i) the aggregate Net Operating Income of the
subject property ((1) beginning with the Calculation Date until the end of the third full calendar
quarter after the Stabilization Date, based on the annualized Net Operating Income from the
Calculation Date until the time of measurement, and (2) beginning with the fourth full calendar
quarter after the Stabilization Date, based on the immediately preceding four (4) calendar quarter
period), by seven and one-half percent (7.5%); plus

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

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

2. The Loans.

     2.1 Advances. (a) Subject to the terms and conditions of this Agreement, each Lender
severally agrees to make Committed Loans (other than Swing Loans) prior to the Maturity Date to the
Borrower not to exceed an amount (in the aggregate, the “Commitment”) at any one time outstanding
equal to the difference between the Lender’s Lender Commitment and the Lender’s Revolving Credit
Exposure. Each such request for a Committed Loan by Borrower shall be deemed a request for a
Committed Loan from each Lender equal to such Lender’s Percentage of the aggregate amount so
requested, and such aggregate amount shall be in an amount at least equal to $1,000,000.00 and
equal to a multiple of $100,000.00, or the difference between the Commitment and the aggregate
Revolving Credit Exposures, whichever is less. Each repayment of the Committed Loans shall be
deemed a repayment of each Lender’s Committed Loan equal to such Lender’s Percentage of the amount
so repaid. The obligations of the Lenders hereunder are several and not joint, and the preceding
two sentences will give rise to certain inappropriate results if special provisions are not made to
accommodate the failure of a Lender to fund a Committed Loan as and when required by this
Agreement; therefore, notwithstanding anything herein to the contrary, (A) no Lender shall be
required to make Committed Loans at any one time outstanding in excess of such Lender’s Percentage
of the Commitment, and (B) if a Lender fails to make a Committed Loan as and when required
hereunder and Borrower subsequently makes a repayment on the Committed Loans, such repayment shall
be split among the non-defaulting Lenders ratably in accordance with their respective Percentages
until each Lender has its Percentage of all of the outstanding Committed Loans, and the balance of
such repayment shall be divided among all of the Lenders in accordance with their respective
Percentages. Notwithstanding the foregoing, borrowings and payments of Swing Loans shall be for
JPMC’s own account. The Loans (other than Swing Loans) shall be evidenced by the Notes
substantially in the form of Exhibit C attached hereto. The Borrower, the Agent and the
Lenders agree that Chapter 346 of the Texas Finance Code shall not apply to this Agreement, the
Notes or any Loan.

     (b) The Borrower shall give the Agent notice of each borrowing of a Committed Loan to be made
hereunder as provided in Section 3.1, and the Agent shall deliver same to each Lender
promptly thereafter. Not later than 12:00 noon, New York, New York time, on the date specified for
each such borrowing of a Committed Loan hereunder other than Swing Loans, each Lender shall make
available the amount of the Loan, if any, to be made by it on such date to the Agent at the Agent’s
principal office in New York, New York, in immediately available funds, for the account of the
Borrower. Such amounts received by the Agent will be held in Agent’s general ledger account. The
amounts so received by the Agent shall, subject to the terms and conditions of this Agreement, be
made available to the Borrower by wiring or otherwise transferring, in

17

 

immediately available funds not later than 1:00 p.m., New York, New York time, such amount to
an account designated by the Borrower and maintained with JPMC or any other account or accounts
which the Borrower may from time to time designate to the Agent by a written notice as the account
or accounts to which borrowings hereunder are to be wired or otherwise transferred. JPMC shall
make available the amount of each Swing Loan by depositing the same in immediately available funds,
in the foregoing account by 3:00 p.m., New York, New York time, on the date of the borrowing.

     (c) Subject to the terms and conditions hereof, if necessary to meet the Borrower’s funding
deadlines, JPMC agrees to make Swing Loans to the Borrower at any time on or prior to the Maturity
Date, not to exceed an amount at any one time outstanding equal to the lesser of (i)
$100,000,000.00, or (ii) the difference between the Commitment and the aggregate Revolving Credit
Exposures. Swing Loans shall constitute “Loans” for all purposes hereunder. Notwithstanding the
foregoing, the aggregate amount of all Loans (including, without limitation, all Swing Loans) shall
not at any time exceed the difference between the Commitment and the LC Exposure. Each request for
a Swing Loan shall be in an amount at least equal to $1,000,000.00 and equal to a multiple of
$100,000.00. If necessary to meet the Borrower’s funding deadlines, the Agent may treat any
Request for Loan as a request for a Swing Loan from JPMC and JPMC may fund it as a Swing Loan.
Within two (2) Business Days after each Swing Loan is funded, JPMC shall request that each Lender,
and each Lender shall, on the first Business Day after such request is made, purchase a portion of
any one or more Swing Loans in an amount equal to that Lender’s Percentage of such Swing Loans by
funding under such Lender’s Note, such purchase to be made in accordance with the terms of
Section 2.1(b) just as if the Lender were funding directly to the Borrower under its Note
(such that all Lenders other than JPMC shall fund only under their respective Note and not under
the Swing Loan Note). Unless the Agent knew or should have known when JPMC funded a Swing Loan
that the Borrower had not satisfied the conditions in this Agreement to obtain a Loan, each
Lender’s obligation to purchase an interest in the Swing Loans shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender or any other Person may have
against JPMC or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or Event of Default or the termination of any Lender Commitment; (iii) any adverse change
in the condition (financial or otherwise) of the Borrower or any of its Subsidiaries; (iv) any
breach of this Agreement or any other Credit Documents by the Borrower, any of its Subsidiaries,
the Agent or any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. Any portion of a Swing Loan not so purchased and
converted may be treated by JPMC as a Committed Loan which was not funded by the non-purchasing
Lenders as contemplated in Section 2.1(a), and as a funding by JPMC under the Commitment in
excess of JPMC’s Percentage. Each Swing Loan, once so sold, shall cease to be a Swing Loan for the
purposes of this Agreement, but shall be a Committed Loan made under the Commitment and each
Lender’s Lender Commitment. The Swing Loans shall be evidenced by the Swing Loan Note
substantially in the form of Exhibit C-1 attached hereto.

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     (d) So long as the Borrower is not then in Default and so long as the Borrower has not reduced
the Commitment pursuant to Section 2.9, the Borrower may on two (2) occasions prior to
December 13, 2007, request that the aggregate Commitment be increased, so long as (i) the aggregate
Commitment does not exceed Nine Hundred Million Dollars ($900,000,000.00) (the “Maximum
Commitment”), and (ii) each increase is a minimum of $50,000,000. If the Borrower requests that
the aggregate Commitment be increased, the Agent shall use its best efforts to obtain increased or
additional commitments up to the Maximum Commitment, and to do so the Agent may obtain additional
lenders of its choice (and approved by Borrower, such approval not to be unreasonably withheld or
delayed), and without the necessity of approval from any of the Lenders. The Borrower and each
Guarantor shall execute an amendment to this Agreement, additional Notes and other documents as the
Agent may reasonably require to evidence the increase of the Commitment, and the admission of
additional Persons as Lenders, if necessary.

     2.2 Letters of Credit.

          (a) Subject to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Agent and
the Issuing Bank, at any time and from time to time before the Maturity Date. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms and conditions of
any form of letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.

          (b) To request the issuance of a Letter of Credit (or the amendment, renewal or extension of
an outstanding Letter of Credit), the Borrower shall hand deliver or facsimile (or transmit by
electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to
the Issuing Bank and the Agent (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the
Letter of Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of
each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$150,000,000.00 and (ii) the total Revolving Credit Exposures shall not exceed the total
Commitment. Copies of all Letters of Credit and amendments, extensions and cancellations related
thereto, must be delivered to the Agent and the other Lenders by the Issuing Bank.

19

 

          (c) Each Letter of Credit shall expire not later than the earlier of (i) three (3) years after
date of issuance of the Letter of Credit (the “Maximum Outside Date”), and (ii) the close of
business on the date that is ten (10) days prior to the Maturity Date (including the extension
period provided in Section 9); provided, however, that Letters of Credit with an aggregate LC
Exposure not exceeding $50,000,000.00 at any time may expire up to the earlier of December 13, 2009
and the Maximum Outside Date.

          (d) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders,
the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Agent, for
the account of the Issuing Bank, such Lender’s Percentage of each LC Disbursement made by the
Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section, or of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction of the Commitment, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

          (e) If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the
Borrower shall reimburse such LC Disbursement by paying to the Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., New York, New York time, on the date that such LC
Disbursement is made if the Borrower shall have received notice of such LC Disbursement prior to
11:00 a.m., New York, New York time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 1:00 p.m., New York, New York time,
on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to
11:00 a.m., New York, New York time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not received prior to
such time on the day of receipt; provided that the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.1 that such payment be
financed with a Base Rate Borrowing in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Base
Rate Borrowing. If the Borrower fails to make such payment when due, the Agent shall notify each
Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof
and such Lender’s Percentage thereof. Promptly following receipt of such notice, each Lender shall
pay to the Agent its Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.1(a) with respect to Loans made by such Lender (and Section
2.1(a) shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Lenders. Promptly following receipt by the Agent of any payment from the Borrower pursuant to
this

20

 

paragraph, the Agent shall distribute such payment to the Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant
to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of
Base Rate Loans as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.

          (f) The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of
this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter
of Credit against presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.
Neither the Agent, the Lenders nor the Issuing Bank shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.

          (g) The Issuing Bank shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall
promptly notify the Agent and the Borrower by telephone

21

 

(confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.

          (h) If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum
then applicable to Base Rate Loans; provided that, if the Borrower fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then the unpaid amount
thereof shall bear interest from the date reimbursement was due until the date payment is made at
the Past Due Rate. Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant
to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.

          (i) The Issuing Bank may be replaced at any time by written agreement among the Borrower, the
Agent, the replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the
Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing
Bank pursuant to Section 2.7(c). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to
any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context
shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.

          (j) If (i) any Event of Default shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Agent or the Majority Lenders demanding the deposit of cash
collateral pursuant to this paragraph, or (ii) any Letter of Credit will expire after the Maturity
Date as allowed by Section 2.2(c) then at least ten (10) days before the Maturity Date, the
Borrower shall deposit in an account with the Agent, in the name of the Agent and for the benefit
of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Section 7.1. Such deposit
shall be held by the Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned on the investment
of such

22

 

deposits, which investments shall be made at the option and sole discretion of the Agent and
at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such account shall be applied
by the Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated, be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default
have been cured or waived.

     2.3 Payments.

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

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

          (c) If the due date of any payment hereunder or under any Note falls on a day which is not a
Business Day or a Eurodollar Business Day, as the case may be, the due date for such payments shall
be extended to the next succeeding Business Day or

23

 

Eurodollar Business Day, respectively, and interest shall be payable for any principal so
extended for the period of such extension; provided, however, that with respect to Eurodollar Rate
Borrowings and Money Market LIBOR Loans if such extension would cause the Eurodollar Business Day
of payment to fall in another calendar month, the payment shall be due on the Eurodollar Business
Day next preceding the due date of the payment.

          (d) The Borrower shall give the Agent at least one (1) Business Day’s prior written notice of
the Borrower’s intent to make any payment of principal or interest under the Credit Documents not
scheduled to be paid under the Credit Documents. Any such notification of payment shall be
irrevocable after it is made by the Borrower. Upon receipt by the Agent of such notification of
payment, it shall deliver same to the other Lenders.

          (e) All payments by the Borrower hereunder or under any other Credit Documents shall be made
free and clear of and without deduction for or on account of any Taxes, including withholding and
other charges of any nature whatsoever imposed by any taxing authority excluding in the case of
each Lender taxes imposed on or measured by its net income or franchise taxes imposed in lieu of
net income taxes by the jurisdiction in which it is organized or through which it acts for purposes
of this Agreement. If any withholding or deduction from any payment to be made to, or for the
account of, a Lender by the Borrower hereunder or under any other Credit Document is required in
respect of any Taxes pursuant to any applicable law, rule, or regulation, then the Borrower will
(i) pay to the relevant authority the full amount required to be so withheld or deducted; (ii) to
the extent available, promptly forward to the Agent an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authority; and (iii) pay to the Agent,
for the account of each affected Lender, such additional amount or amounts as are necessary to
ensure that the net amount actually received by such Lender will equal the full amount such Lender
would have received had no such withholding or deduction been required. Each Lender shall
determine such additional amount or amounts payable to it (which determination shall, in the
absence of manifest error, be conclusive and binding on the Borrower). If a Lender becomes aware
that any such withholding or deduction from any payment to be made by the Borrower hereunder or
under any other Credit Document is required, then such Lender shall promptly notify the Agent and
the Borrower thereof stating the reasons therefor and the additional amount required to be paid
under this Section. Each Lender shall execute and deliver to the Agent and Borrower such forms as
it may be required to execute and deliver pursuant to subsection (f) below. To the extent
that any such withholding or deduction results from the failure of a Lender to provide a form
required by subsection (f) below (unless such failure is due to some prohibition under
applicable Legal Requirements), the Borrower shall have no obligation to pay the additional amount
required by clause (iii) above. Anything in this Section notwithstanding, if any Lender
elects to require payment by the Borrower of any material amount under this Section, the Borrower
may, within 60 days after the date of receiving notice thereof and so long as no Default shall have
occurred and be continuing, elect to terminate such Lender as a party to this Agreement; provided
that, concurrently with such termination the Borrower shall (1) if the Agent and each of the other
Lenders shall consent, pay that Lender all principal, interest and fees and other amounts owed to
such Lender through such date of

24

 

termination or (2) have arranged for another institution approved by the Agent (such approval
not to be unreasonably withheld) as of such date, to become a substitute Lender for all purposes
under this Agreement in the manner provided in Section 10.5; provided further that, prior
to substitution for any Lender, the Borrower shall have given written notice to the Agent of such
intention and the Lenders shall have the option, but no obligation, for a period of 60 days after
receipt of such notice, to increase their Commitments pro rata based on their Lender Commitments in
order to replace the affected Lender in lieu of such substitution.

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

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

     2.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been notified by a
Lender or the Borrower (the “Payor”) prior to the date on which such Lender is to make payment to
the Agent of the proceeds of a Loan (or purchase of a portion of a Swing Loan) to be made by it
hereunder or the Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the “Required Payment”), which notice
shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the
Agent, the Agent may assume that the Required Payment has been made and may, in reliance upon such

25

 

assumption (but shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required Payment to the Agent,
the recipient of such payment shall, on demand, pay to the Agent the amount made available by the
Agent together with interest thereon in respect of the period commencing on the date such amount
was so made available by the Agent until the date the Agent recovers such amount at a rate per
annum equal to (a) the Past Due Rate for such period if the recipient returning a Required Payment
is the Borrower, or (b) the Federal Funds Effective Rate for such period if the recipient returning
a Required Payment is the Agent or a Lender.

     2.6 Sharing of Payments, Etc. The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers’ lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled, at its option, to offset balances held by it for the account of the
Borrower at any of its offices, against any principal of or interest on any of such Lender’s Loans
to the Borrower hereunder, or other Obligations of the Borrower hereunder, which is not paid
(regardless of whether such balances are then due to the Borrower), in which case it shall promptly
notify the Borrower and the Agent thereof, provided that such Lender’s failure to give such notice
shall not affect the validity thereof. If a Lender shall obtain payment of any principal of or
interest on any Committed Loan made by it under this Agreement (other than Swing Loans made by
JPMC), or other Obligation then due to such Lender hereunder, through the exercise of any right of
set-off, banker’s lien, counterclaim or similar right, or otherwise, it shall promptly purchase
from the other Lenders portions of the Loans made or other Obligations held (other than Swing Loans
made by JPMC), by the other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the benefit of such payment
(net of any expenses which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with the unpaid principal and interest on the Obligations then due to each
of them. To such end all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must otherwise be
restored. Nothing contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness or obligation of the Borrower.

     2.7 Fees. The Borrower shall pay fees equal to the following:

          (a) An amount payable as a facility fee by the Borrower to the Agent for the account of each
Lender equal to the following percentage per annum multiplied by the Commitment (and after the
Commitment terminates or expires, the aggregate Revolving Credit Exposures), which will be in
effect whenever and for so long as the Borrower has received the corresponding Credit Rating (the
method of determining the Credit Rating based on multiple ratings to be the same as set forth and
used to determine the Credit Rating for the definition of Applicable Margin):

26

 

	 	 	 	 	 
	CREDIT RATING	 	FACILITY FEE
	A/A2 or better

	 	 	0.125	%
	A-/A3

	 	 	0.150	%
	BBB+/Baa1

	 	 	0.150	%
	BBB/Baa2

	 	 	0.150	%
	BBB-/Baa3

	 	 	0.200	%

If the Credit Rating is worse than BBB-/Baa3, or if there is no Credit Rating, then for that
calendar quarter and for so long thereafter as the Credit Rating is worse than BBB-/Baa3 or if
there is no Credit Rating, the facility fee will be equal to the daily unused amount of the
Commitment (Swing Loans shall be deemed to be a utilization of the Commitment solely for the
purposes of this Section 2.7(a)) multiplied by 0.250% per annum. The facility fee is
payable in arrears on or before the tenth (10th) day of each January, April, July and October prior
to termination or expiration of the Commitment, and on demand thereafter.

          (b) If the Maturity Date is extended pursuant to Section 9 of this Agreement, an
amount payable as an extension fee by the Borrower to the Agent for the account of each Lender
equal to 0.150% of each Lender’s Lender Commitment at that time payable on the first day of the
extension.

          (c) (i) to the Agent for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Margin provided for
Eurodollar Rate Borrowings on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including the
date of this Agreement to but excluding the later of the date of termination of the Commitment and
the date on which there ceases to be any LC Exposure, and (ii) to the Issuing Bank a nonrefundable
fronting fee which shall accrue at the rate of 0.100% per annum on the face amount of each Letter
of Credit, as well as the Issuing Bank’s standard fees (not to be less than $1,500.00 per
transaction) with respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall be payable on the
tenth (10th) day following such last day, commencing on the first such date to occur
after the date of this Agreement; provided that all such fees shall be payable on the date
on which the Commitment terminates and any such fees accruing after the date on which the
Commitment terminates shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within ten (10) days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day).

     The Fee shall not be refundable (except as required by Section 3.1(c) of this
Agreement). Any portion of the Fee which is not paid by the Borrower when due shall bear interest
at the Past Due Rate from the date due until the date paid by the Borrower. The Fee shall be
calculated on the actual number of days elapsed in a year deemed to consist of 360 days.

27

 

     2.8 Money Market Borrowings.

          (a) The Borrower may, as set forth in this Section, whenever at the time of the request
therefor the Borrower has received an Acceptable Credit Rating, request the Lenders prior to the
Maturity Date to make offers to make Money Market Loans to the Borrower, not to exceed, at such
time, the lesser of (i) the difference between the Commitment and the aggregate Revolving Credit
Exposures, and (ii) fifty percent (50%) of the Commitment. The Lenders may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section. The Borrower shall pay the Agent a fee of
$2,000.00 for each Money Market Quote Request provided below, payable monthly based on the requests
for the previous month.

          (b) When the Borrower wishes to request offers to make Money Market Loans under this Section,
it shall transmit to the Agent (in care of Ms. Angelica M. Castillo, Loan and Agency Services, 1111
Fannin, Houston, Texas 77002, Facsimile No. 713-750-2228, telephone number 713-750-2513) by
facsimile transmission a Money Market Quote Request (“Money Market Quote Request”) substantially in
the form of Exhibit E hereto so as to be received no later than 12:00 noon, New York, New
York time on (i) the fourth Eurodollar Business Day prior to the date of borrowing proposed
therein, in the case of a LIBOR Auction or (ii) the Business Day next preceding the date of
borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other
time or date as the Borrower and the Agent shall have mutually agreed and shall have notified to
the Lenders not later than the date of the Money Market Quote Request for the first LIBOR Auction
or Absolute Rate Auction for which such change is to be effective) specifying:

                  (x) the proposed date of borrowing, which shall be a
Eurodollar Business Day in the case of a LIBOR Auction or a
Business Day in the case of an Absolute Rate Auction, and

                  (y) the aggregate amount of such borrowing, which shall be
$20,000,000.00 or a larger multiple of $1,000,000.00.

The Borrower may request offers to make Money Market Loans for more than one Interest Period in a
single Money Market Quote Request. No Money Market Quote Request shall be given within five (5)
Eurodollar Business Days (or such other number of days as the Borrower and the Agent may agree in
writing ) of any other Money Market Quote Request.

          (c) Promptly upon receipt of a Money Market Quote Request, the Agent shall send to the Lenders
by telex or facsimile transmission an Invitation for Money Market Quotes substantially in the form
of Exhibit F hereto, which shall constitute an invitation by the Borrower to each Lender to
submit Money Market Quotes offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.

28

 

          (d) (i) Each Lender may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each Money Market Quote
must comply with the requirements of this subsection (d) and must be received by the Agent
by telex or facsimile transmission not later than (x) 9:30 a.m. New York, New York time on the
third Eurodollar Business Day prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 9:30 a.m. New York, New York time on the proposed date of borrowing, in the case of
an Absolute Rate Auction; provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent or its Designated Lender) in the capacity of a Lender may be submitted, and
may only be submitted, if the Agent or such affiliate notifies the Borrower of the terms of the
offer or offers contained therein not later than thirty (30) minutes prior to the applicable
deadline for the other Lenders. Any Money Market Quote so made shall be irrevocable except with
the written consent of the Agent given on the instructions of the Borrower. If, and only if, the
Borrower elected in the applicable Money Market Quote Request to permit the Lenders to designate
Designated Lenders to fund such Money Market Loans, such Money Market Loans may be funded by such
Lender’s Designated Lender (if any) as provided in Section 10.5(f), however such Lender
shall not be required to specify in its Money Market Quote whether such Money Market Loans will be
funded by such Designated Lender.

          (ii) Each Money Market Quote shall be in substantially the form of Exhibit G hereto
and shall in any case specify:

               (1) the principal amount of the Money Market Loan for which each offer is being made,
which principal amount (w) may be greater than or less than the Lender Commitment of the
quoting Lender, (x) must be $5,000,000.00 or a larger multiple of $500,000.00, (y) may not
exceed the principal amount of Money Market Loans for which offers were requested, and (z)
may be subject to an aggregate limitation as to the principal amount of Money Market Loans
for which offers being made by such quoting Lender may be accepted,

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

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

A Money Market Quote may set forth up to five (5) separate offers by the quoting Lender with
respect to each Interest Period specified in the related Invitation for Money Market Quotes.

          (iii) Any Money Market Quote shall be disregarded if it:

29

 

               (1) is not substantially in conformity with Exhibit G hereto or does not
specify all of the information required by subsection (d)(ii) above;

               (2) contains qualifying, conditional or similar language;

               (3) proposes terms other than or in addition to those set forth in the applicable
Invitation for Money Market Quotes; or

               (4) arrives after the time set forth in subsection (d)(i) above.

          (e) The Agent shall promptly notify the Borrower (i) of the terms of each proper Money Market
Quote and the identity of the Lender submitting such Money Market Quote, and (ii) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Lender with respect to the same Money Market Quote Request. Any such subsequent
Money Market Quote shall be disregarded by the Agent unless such subsequent Money Market Quote is
submitted solely to correct a manifest error in such former Money Market Quote. The Agent’s notice
to the Borrower shall specify (1) the aggregate principal amount of Money Market Loans for which
offers have been received for each Interest Period specified in the related Money Market Quote
Request, (2) the respective principal amounts and Money Market Margins or Money Market Absolute
Rates, as the case may be, so offered, and (3) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money Market Quote may be
accepted.

          (f) Not later than 10:30 a.m. New York, New York time on (i) the third Eurodollar Business Day
prior to the proposed date of borrowing, in the case of a LIBOR Auction, or (ii) the proposed date
of borrowing, in the case of an Absolute Rate Auction, the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to subsection (e)
above. In the case of acceptance, such notice (a “Notice of Money Market Borrowing”) shall specify
the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower
may accept any Money Market Quote in whole or in part; provided that:

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

               (2) the principal amount of each borrowing must be $5,000,000.00 or a larger multiple
of $500,000.00;

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

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

30

 

          (g) If offers are made by two or more Lenders with the same Money Market Margins or Money
Market Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount
in respect of which such offers are accepted for the related Interest Period, the principal amount
of Money Market Loans in respect of which such offers are accepted shall be allocated by the Agent
among such Lenders as nearly as possible (in multiples of $500,000.00, as the Agent may deem
appropriate) in proportion to the aggregate principal amounts of such offers. The Agent shall
promptly (and in any event within one (1) Business Day after such offers are accepted) notify the
Borrower and each such Lender in writing of any such allocation of Money Market Loans.
Determinations by the Agent of the allocation of Money Market Loans shall be conclusive in the
absence of manifest error.

          (h) Upon receipt of the Borrower’s Notice of Money Market Borrowing, the Agent shall, on the
date such Notice of Money Market Borrowing is received by the Agent, promptly notify each Lender of
the principal amount of the Money Market Loans accepted by the Borrower and of such Lender’s share
(if any) of such Money Market Loans and such Notice of Money Market Borrowing shall not thereafter
be revocable by the Borrower. Any Lender so notified shall fund such Money Market Loans at the
times provided in Section 2.1(b). A Lender that is notified that it has been selected to
make a Money Market Loan may designate its Designated Lender (if any) to fund such Money Market
Loan on its behalf, as described in Section 10.5(f). Any Designated Lender which funds a
Money Market Loan shall on and after the time of such funding become the obligee under such Money
Market Loan and be entitled to receive payment thereof when due. No Lender shall be relieved of
its obligation to fund a Money Market Loan, and no Designated Lender shall assume such obligation,
prior to the time the applicable Money Market Loan is funded. Money Market Loans shall be
evidenced by a promissory note in the form of Exhibit C-2 attached hereto.

          (i) Notwithstanding anything to the contrary contained herein, each Lender shall be required
to fund its Percentage of each Committed Loan in accordance with Section 2.1 despite the
fact that any Lender’s Lender Commitment may have been or may be exceeded as a result of such
Lender’s making of Money Market Loans.

          (j) Each Money Market LIBOR Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the
Eurodollar Interbank Rate for such Interest Period plus (or minus) the Money Market Margin quoted
by the Lender making such Loan in accordance with Section 2.8. Each Money Market Absolute
Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by the
Lender making such Loan in accordance with Section 2.8. Such interest shall be payable on
each Interest Payment Date. Each Money Market Loan shall mature at the end of each Interest
Period, as specified in the Money Market Quote.

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     2.9 Reduction of Commitment.

          (a) Unless previously terminated, the Commitment shall terminate on the Maturity Date.

          (b) The Borrower may on three (3) occasions reduce the Commitment; provided that (i)
each reduction in the Commitment shall be a minimum of $50,000,000, (ii) the total Commitment may
not be reduced to less than $200,000,000, (iii) after any reduction in the Commitment, the
Borrower’s option to increase the Commitment provided in Section 2.1(d) shall terminate,
and (iv) no reduction in the Commitment will be allowed if a Default is then in existence.

          (c) The Borrower shall notify the Agent of any election to reduce the Commitment under
Section 2.9(b) at least three (3) Business Days prior to the effective date of such
reduction, specifying such election and the effective date thereof. Promptly following receipt of
any notice, the Agent shall advise the Lenders of the contents thereof. Each notice delivered
pursuant to this Section shall be irrevocable. Any reduction of the Commitment shall be permanent.
Each reduction in the Commitment shall be made ratably among the Lenders in accordance with their
respective Lender Commitments.

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

3. Conditions.

     3.1 All Loans. The obligation of any Lender to make any Loan, or to issue, renew or
extend any Letter of Credit, is subject to the accuracy of all representations and warranties of
the Borrower on the date of such Loan, or issuance, renewal or extension of such Letter of Credit,
to the performance by the Borrower of its obligations under the Credit Documents and to the
satisfaction of the following further conditions: (a) the Agent shall have received the following,
all of which shall be duly executed and in Proper Form: (1) for Committed Loans, a Request for Loan
(i) by 12:00 noon, New York, New York time, one (1) Business Day before the date (which shall also
be a Business Day) of the proposed Loan which is to be a Base Rate Borrowing (other than Swing
Loans or Base Rate Borrowings to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.2(e) hereof), (ii) by 12:00 noon, New York, New York time, on the same

32

 

Business Day of any proposed Swing Loan or Base Rate Borrowing to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.2(e) hereof, provided that by 12:00 noon,
New York, New York time on the date of the proposed Loan, Borrower shall also have notified JPMC by
telephone of its request for a Loan, or (iii) by the Rate Designation Date of the proposed Loan
which is to be a Eurodollar Rate Borrowing; (2) for Money Market Loans the information required by
Section 2.8; (3) for Letters of Credit the documents required by Section 2.2
hereof; and (4) such other documents as the Agent may reasonably require to satisfy itself or the
request of any Lender; (b) no Default or Event of Default shall have occurred and be continuing;
(c) the making of the Loan or issuance, renewal or extension of such Letter of Credit, shall not be
prohibited by any Legal Requirement (in which event the applicable portion of the Fee will not be
charged to the Borrower); (d) the Borrower shall have paid all legal fees and expenses of the type
described in Section 5.10 hereof through the date of such Loan; (e) in the case of a
Committed Loan other than a Swing Loan, all Swing Loans then outstanding shall have been paid or
shall be paid with the proceeds of such Loan and (f) the Agent shall have received an Officer’s
Certificate certifying the information set forth therein as of the end of the immediately preceding
fiscal quarter.

     3.2 First Loan. In addition to the matters described in Section 3.1 hereof,
the obligation of the Lenders to make the first Loan under this Agreement is subject to the receipt
by the Lenders of each of the following, in Proper Form: (a) the Notes, executed by the Borrower;
(b) a separate certificate executed by each of the Secretary of the Borrower and the Secretary of
the Parent dated as of the date hereof; (c) a separate certificate from the Secretary of State or
other appropriate public official of Maryland as to the continued existence and good standing of
each of the Parent and the Borrower; (d) a separate certificate from the appropriate public
official of Maryland as to the due qualification and good standing of each of the Parent and the
Borrower; (e) a legal opinion from independent counsel for the Parent, the Borrower and the
Guarantors as to the matters set forth on Exhibit D acceptable to the Lenders; (f) policies
of insurance addressed to the Agent reflecting the insurance required by Section 5.7
hereof; (g) an Officer’s Certificate in the form of Exhibit A as of the end of the
immediately preceding fiscal quarter; (h) a certificate from Borrower and Parent setting forth the
pro forma calculations of Secured Debt to Total Asset Value Ratio, Coverage Ratio, Fixed Charge
Coverage Ratio, Tangible Net Worth, Debt to Total Asset Value Ratio, and the Pool pursuant to
Section 5.15 (which include actual figures as of September 30, 2004; and (i) any Guaranty
required by Section 5.15 together with such Guarantors’ organizational documents and
certificates of existence and good standing from the state of its organization; and to the further
condition that, at the time of the initial Loan, all legal matters incident to the transactions
herein contemplated shall be satisfactory to Locke Liddell & Sapp LLP, counsel for the Agent.

     3.3 Options Available. The outstanding principal balance of the Notes shall bear
interest at the Base Rate; provided, that (1) all past due amounts, both principal and accrued
interest, shall bear interest at the Past Due Rate, and (2) subject to the provisions hereof,
Borrower shall have the option of having all or any portion of the principal balance of the Notes,
other than the Swing Loan Note, from time to time outstanding bear interest at a Eurodollar Rate.
The records of the Lenders with respect to Interest Options, Interest Periods and the amounts of
Loans to which they are applicable shall be prima facie

33

 

evidence thereof. Interest on the Loans shall be calculated at the Base Rate except where it
is expressly provided pursuant to this Agreement that a Eurodollar Rate is to apply.

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

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

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

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

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

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

     3.5 Special Provisions Applicable to Eurodollar Rate Borrowings and Money Market
Loans.

          (a) If the adoption of any applicable Legal Requirement or any change in any applicable Legal
Requirement or in the interpretation or administration thereof by any Governmental Authority or
compliance by the Lenders with any request or directive (whether or not having the force of law) of
any central bank or other Governmental Authority shall at any time make it unlawful or impossible
for any Lender to permit the establishment of or to maintain any Eurodollar Rate Borrowing or a
Money Market Loan, or to increase the cost to such Lender of participating in or maintaining any
Letter of Credit, the commitment of the Lenders to establish or maintain such Eurodollar Rate
Borrowing or a Money Market Loan, or to issue or participate in Letters of Credit shall forthwith
be suspended until such condition shall cease to exist and Borrower shall forthwith, upon

34

 

demand by Agent to Borrower, (1) convert the Eurodollar Rate Borrowing with respect to which
such demand was made to a Base Rate Borrowing; (2) convert the Money Market LIBOR Loan with respect
to which such demand was made to a Loan bearing interest at the Base Rate; (3) pay all accrued and
unpaid interest to date on the amount so converted; and (4) pay any amounts required to compensate
the Lenders for any additional cost or expense which the Lenders may incur as a result of such
adoption of or change in such Legal Requirement or in the interpretation or administration thereof
and any Funding Loss which the Lenders may incur as a result of such conversion. If, when Agent so
notifies Borrower, Borrower has given a Request for Loan specifying a Eurodollar Rate Borrowing or
a Notice of Money Market Borrowing but the selected Interest Period has not yet begun, such Request
for Loan or a Notice of Money Market Borrowing shall be deemed to be of no force and effect, as if
never made, and the balance of the Loans specified in such Request for Loan shall bear interest at
the Base Rate until a different available Interest Option shall be designated in accordance
herewith.

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

	 	(1)  	subject any Lender (or make it apparent that any Lender is
subject) to any Taxes, or any deduction or withholding for any Taxes, on or
from any payment due under any Eurodollar Rate Borrowing, Money Market Loan or
other amount due hereunder, other than income and franchise taxes of the
United States and its political subdivisions; or
	 
	 	(2)  	change the basis of taxation of payments due from Borrower to
any Lender under any Eurodollar Rate Borrowing or Money Market Loan (otherwise
than by a change in the rate of taxation of the overall net income of a
Lender); or
	 
	 	(3)  	impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement included in the
calculation of the applicable interest rate), special deposit requirement or
similar requirement (including, but not limited to, state law requirements and
Regulation D) imposed, modified, increased or deemed applicable by any
Governmental Authority against assets held by any Lender, or against deposits
or accounts in or for the account of any Lender, or against loans made by any
Lender, or against any other funds, obligations or other property owned or
held by any Lender; or

35

 

	 	(4)  	impose on any Lender any other condition regarding any
Eurodollar Rate Borrowing, Money Market Loan or Letter of Credit;

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

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

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

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

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

then Agent shall give Borrower notice thereof and thereupon, (A) any Request for
Loan previously given by Borrower designating the applicable Eurodollar Rate
Borrowing which has not commenced as of the date of such notice from Agent shall be
deemed for all purposes hereof to be of no force and effect, as if never given, and
(B) until Agent shall notify Borrower that the circumstances giving rise to such
notice from Agent no longer exist, each Request for Loan requesting the applicable
Eurodollar Rate shall be

36

 

deemed a request for a Base Rate Borrowing, and any applicable Eurodollar Rate
Borrowing then outstanding shall be converted, without any notice to or from
Borrower, upon the termination of the Interest Period then in effect with respect
to it, to a Base Rate Borrowing.

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

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

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

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

     3.8 Mitigation, Non-Discrimination.

          (a) Each Lender will notify the Borrower through the Agent of any event occurring after the
date of this Agreement which will require or enable such Lender to take the actions described in
Sections 3.5(a) or (b) of this Agreement as promptly as practicable after it
obtains knowledge thereof and determines to request such action, and (if so requested by the
Borrower through the Agent) will designate a different lending office of such Lender for the
applicable Eurodollar Rate Borrowing or Money Market Loan or will

37

 

take such other action as the Borrower reasonably requests if such designation or action is
consistent with the internal policy of such Lender and legal and regulatory restrictions, can be
undertaken at no additional cost, will avoid the need for, or reduce the amount of, such action and
will not, in the sole opinion of such Lender, be disadvantageous to such Lender (provided that such
Lender will have no obligation to designate a different lending office which is located in the
United States of America).

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

          (c) If any Lender elects under Section 3.5 of this Agreement to suspend or terminate
the availability of Eurodollar Rate Borrowings for any material period of time, and the event
giving rise to such election is not generally applicable to all of the Lenders, the Borrower may
within sixty (60) days after notification of such Lender’s election, and so long as no Event of
Default is then in existence, either (i) demand that such Lender, and upon such demand, such Lender
shall promptly, assign its Lender Commitment to another financial institution subject to and in
accordance with the provisions of Section 10.5 of this Agreement for a purchase price equal
to the unpaid balance of principal, accrued interest, the unpaid balance of the Fee and expenses
owing to such Lender pursuant to this Agreement, or (ii) pay such Lender the unpaid balance of
principal, accrued interest, the unpaid balance of the Fee and expenses owing to such Lender
pursuant to this Agreement, whereupon, such Lender shall no longer be a party to this Agreement or
have any rights or obligations hereunder or under any other Credit Documents, and the Commitment
shall immediately and permanently be reduced by an amount equal to the Lender Commitment of such
Lender.

4. Representations and Warranties.

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

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

     4.2 Financial Statements. The financial statements delivered to the Agent fairly
present, in accordance with Generally Accepted Accounting Principles (provided, however, that the
Quarterly Unaudited Financial Statements are subject to normal year-end adjustments and may contain
condensed footnotes as permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the Borrower as at the dates
and for the periods indicated. No

38

 

Material Adverse Change has occurred since the dates of such financial statements. The
Borrower is not subject to any instrument or agreement which would materially prevent it from
conducting its business as it is now conducted or as it is contemplated to be conducted.

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

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

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

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

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

     4.8 Securities Act of 1933. Other than the Agent’s efforts in syndicating the Loans
(for which the Agent is responsible) neither the Borrower nor any agent acting for it

39

 

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

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

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

     4.11 Public Utility Holding Company Act Not Applicable. The Borrower is not a
“holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a
“holding company”, or an affiliate of a “subsidiary company” of a “holding company”, as such terms
are defined in the Public Utility Holding Company Act of 1935, as amended.

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

5. Affirmative Covenants. 

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

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

     5.2 Financial Statements and Information. Furnish or caused to be furnished (which
may be by electronic access) to the Agent each of the following: (a) as soon as

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available and in any event within 90 days after the end of each fiscal year of the Parent,
Annual Audited Financial Statements of the Borrower and the Parent; (b) as soon as available and in
any event within 50 days after the end of each quarter (except the last quarter) of each fiscal
year of the Parent, Quarterly Unaudited Financial Statements of the Borrower and the Parent; (c)
concurrently with the financial statements provided for in Sections 5.2(a) and (b)
hereof, an Officer’s Certificate, together with such schedules, computations and other information
(including, without limitation, if provided to Borrower information as to Unconsolidated Affiliates
of the Borrower), in reasonable detail, as may be required by the Agent to demonstrate compliance
with the covenants set forth herein or reflecting any non-compliance therewith as of the applicable
date, all certified as true, correct and complete by a managing director, vice president, senior
vice president, controller, a co-controller of Borrower and of the Parent; (d) promptly after the
filing thereof, all reports to or filings made by the Parent or the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission, including, without limitation,
registration statements and reports on Forms 10-K, 10-Q and 8-K (or their equivalents); (e) within
two (2) Business Days after the receipt thereof, a copy of the notification to the Borrower or to
the Parent of the respective Credit Rating of each, or change therein, and (f) such other
information relating to the financial condition and affairs of the Borrower and the Parent as from
time to time may be reasonably requested by any Lender. The Agent will send to each Lender the
information received by the Agent pursuant to this Section 5.2 promptly after the receipt
thereof by Agent. The financial calculations for Sections 5.3, 5.15 and
6.4 shall be made (1) on the date of each Loan or issuance, renewal or extension of a
Letter of Credit using the best information available to the Borrower, and (2) on the last day of
each of the Parent’s fiscal quarters.

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

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

          (b) a Coverage Ratio of not less than 2.0:1.0;

          (c) a Fixed Charge Coverage Ratio of not less than 1.75:1.00;

          (d) a Tangible Net Worth of at least Three Billion Five Hundred Million Dollars
($3,500,000,000.00); and

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

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

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

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

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

     5.8 Notice of Certain Matters. Notify the Agent promptly upon acquiring knowledge of
the occurrence of any of the following: the institution or threatened institution of any lawsuit or
administrative proceeding affecting the Borrower in which the claim exceeds $25,000,000.00 and if
determined adversely could have a Material Adverse Effect; when the Borrower believes that there
has been a Material Adverse Change; or the occurrence of any Event of Default or any Default. The
Borrower will notify the Agent in writing at least thirty (30) Business Days prior to the date that
the Borrower changes its name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records.

     5.9 Use of Proceeds. The proceeds of the Loans will be used for general business
purposes, including (without limitation) for acquisition of multifamily real estate properties, for
the development and enhancement of multifamily real estate properties, for the costs of
construction of multifamily real estate projects owned or to be acquired by the Borrower, for
repurchase of the Borrower’s stock, or for other investments permitted by this Agreement.
Notwithstanding the foregoing, none of the proceeds of the Loans will be used to finance, fund or
complete any hostile acquisition of any Person.

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

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to disputes or claims among or between the Agent, the Lenders, or any of them unless during
the continuance of an Event of Default and related to details of enforcement of the Lenders’ rights
under the Credit Documents.

     5.11 Legal Compliance; Indemnification.

          (a) The Borrower shall operate its Property and businesses in full compliance with all Legal
Requirements. It shall not constitute an Event of Default if there is a failure to comply with any
Legal Requirement which failure could not reasonably be expected to have a Material Adverse Effect.
The Borrower shall indemnify the Agent and each Lender, their directors, officers, employees and
shareholders (the “Indemnified Parties”) for and defend and hold the Indemnified Parties harmless
against any and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without limitation,
interest, penalties, attorneys’ fees, and amounts paid in settlement) threatened or incurred by
reason of, arising out of or in any way related to (i) any failure of the Borrower to so comply
with the provisions of any Legal Requirement, this Agreement or the other Credit Documents, or (ii)
the Agent or any Lender’s making of the Loans, issuing or participating in any Letters of Credit,
or any other acts or omissions taken or made in connection with the Loans or Letters of Credit
(including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
the Letter of Credit), and any and all matters arising out of any act, omission, event or
circumstance, regardless of whether the act, omission, event or circumstance constituted a
violation of any such Legal Requirement, this Agreement or the other Credit Documents at the time
of its existence or occurrence. THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH LENDER PURSUANT TO
THIS SECTION REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCES OR CONDITIONS GIVING
RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART BY THE AGENT’S OR SUCH LENDER’S
NEGLIGENCE (SIMPLE, BUT NOT GROSS NEGLIGENCE).

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

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

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the Parent’s securities; and (v) hold all of its assets and conduct all of its operations
through the Borrower, the QRS Entities in existence on October 31, 2001 and one or more of the
Borrower’s Subsidiaries.

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

     5.13 Professional Services. Promptly upon the Agent’s request to satisfy itself or
the request of any Lender, the Borrower shall: (a) allow an inspection and/or appraisal of the
Borrower’s Property to be made by a Person approved by the Agent in its sole discretion; and (b) if
the Agent believes that an Event of Default has occurred or is about to occur, cause to be
conducted or prepared any other written report, summary, opinion, inspection, review, survey, audit
or other professional service relating to the Borrower’s Property or any operations in connection
with it (all as designated in the Agent’s request), including, without limitation, any accounting,
auctioneering, architectural, consulting, engineering, design, legal, management, pest control,
surveying, title abstracting or other technical, managerial or professional service relating to
such property or its operations. So long as no Event of Default has occurred and is continuing,
the foregoing shall not be at the Borrower’s expense.

     5.14 Capital Adequacy.

          (a) If after the date of this Agreement, the Agent or any Lender shall have determined that
the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy
of general applicability, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Agent or any Lender with
any request or directive regarding capital adequacy of general applicability (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on the Agent’s or any Lender’s capital as a
consequence of its obligations

44

 

hereunder to a level below that which the Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent’s or such Lender’s
policies with respect to capital adequacy) by an amount deemed by the Agent or such Lender to be
material, then from time to time, the Borrower shall pay to the Agent or such Lender such
additional amount or amounts as will compensate the Agent or such Lender for such reduction.

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

     5.15 Property Pool.

          (a) The Borrower (or a Subsidiary of the Borrower if the conditions in clause (c)
below are satisfied) will at all times own fee simple title to a pool (the “Pool”) of Real Property
that is not subject to any Lien other than Permitted Encumbrances (the “Pool Real Estate”) and
except as permitted by Section 6.5 with an aggregate Pool Value of at least one hundred
sixty-seven percent (167%) of the Borrower’s Indebtedness other than Secured Debt outstanding from
time to time, with the following characteristics:

     (i) the Borrower must provide the Agent with written confirmation that it has received
from third party independent environmental consultants, written assessments for each Pool
Real Estate in, or to be added to, the Pool that do not disclose any material environmental
conditions or risks related to such properties, and

     (ii) the Property is not subject to or affected by any Limiting Agreement except as
permitted by Section 6.5.

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

          (b) Notwithstanding the foregoing, (i) the maximum Pool Value that can be attributable to the
Value of land not improved for multifamily use (not including land that is either under development
for multifamily use or planned for commencement of development for multifamily use within three (3)
years after the date of acquisition) is five percent (5%) of the Pool Value after adding the effect
of said land, (ii) the maximum Pool Value that can be attributable to the Value (in the aggregate)
of Real Property that is under

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construction or development, that has not reached the Calculation Date, that has reached the
Calculation Date but the Occupancy Level is less than eighty percent (80%), unimproved land that is
planned for commencement of development within three (3) years after the date of acquisition, and
land not improved for multifamily use, is twenty-five percent (25%) of the Pool Value after adding
the effect of said Real Property and land; and (iii) the maximum Pool Value that can be
attributable to the Value of improved property not used for multifamily residential use (property
will be considered as multifamily residential use even if it includes other non-primary uses which
are incidental to the residential use, such as retail or office) is ten percent (10%) of the Pool
Value after adding the effect of said property.

            (c) If any Pool Real Estate is owned by a Subsidiary, then it may be included in the Pool only
if:

     (i) the owner of the Pool Real Estate is either (1) a wholly owned Subsidiary of the
Borrower or (2) if not a wholly owned Subsidiary, then (x) the value of the Pool Real
Estate owned by such Subsidiary (“Partial Subsidiary Real Estate”) to be used in the
calculation in clauses (a) and (b) above shall be as provided in
clauses (a) and (b) multiplied by the cumulative percentage interest of the
Subsidiary legally owned by the Borrower, (y) the maximum Pool Value that can be
attributable to Partial Subsidiary Real Estate is seventeen and one-half percent (17-1/2%)
of the Pool Value after adding the effect of the Partial Subsidiary Real Estate, and (z)
the Borrower controls the right to sell, encumber or refinance the Partial Subsidiary Real
Estate;

     (ii) the owner of the Pool Real Estate (1) either (x) executes a Guaranty and delivers
it to the Agent, together with such Subsidiary’s Organizational Documents and current
certificates of existence and good standing for the state in which it is organized and such
Guaranty must remain in full force and effect, or (y) if such Subsidiary is not wholly
owned by the Borrower, has no Indebtedness other than Non-recourse Debt, and other than
Indebtedness to the Borrower subordinated to the Indebtedness incurred under this Agreement
on terms satisfactory to the Agent; and (2) would not at any time be in default of
Sections 7.1(g), (h), (i), (j), or (k), if said
subsections were applicable to said owner; and

     (iii) the indicia of ownership of the Subsidiary is not subject to a Lien (other than
Permitted Encumbrances).

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

6. Negative Covenants. 

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

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

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

     6.3 Nature of Business. Change the nature of its business or enter into any business
which is substantially different from the business in which it is presently engaged. Borrower’s
primary business will be the ownership, operation and development of multi-family residential
properties, and may include other business initiatives, investments and activities which are
related, but incidental, to Borrower’s primary business, subject only to the limitations on
specific loans and investments described below (“Specified Permitted Holdings”); provided, however,
that the aggregate value of the Specified Permitted Holdings shall not at any time exceed thirty
percent (30%) of the Total Asset Value after giving effect to the Specified Permitted Holdings.

     “Specified Permitted Holdings” means the following:

          (a) securities received in settlement of liabilities created in the ordinary course of
business, so long as the market value of such securities does not exceed five percent (5%) of the
Total Asset Value after giving effect to such investment;

          (b) investments in Unconsolidated Affiliates that are engaged primarily in Borrower’s primary
business as described in this section, so long as the aggregate amount of such investments does not
exceed twenty percent (20%) of the Total Asset Value after giving effect to such investments;

          (c) loans, advances, and extensions of credit to Persons (who are not Affiliates of the
Borrower), so long as the aggregate unpaid amount of such loans does not exceed ten percent (10%)
of the Total Asset Value after giving effect to such loans;

          (d) investments in Persons not included in any other Specified Permitted Holdings so long as
the aggregate value of all such investments (valued at the lower of cost or then market value) does
not exceed ten percent (10%) of the Total Asset Value after giving effect to such investments;

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

47

 

investments does not exceed ten percent (10%) of the Total Asset Value after giving effect to
such investments;

          (f) investments in land not improved for multifamily use (not including land that is either
under development or planned for commencement of development within three (3) years after the date
of acquisition), so long as the aggregate Historical Value of such investments does not exceed
seven and one-half percent (7-1/2%) of the Total Asset Value after giving effect to such
investments; and

          (g) investments of any kind not included in any other Specified Permitted Holdings and which
are not incidental to Borrower’s primary business as described in this Section, so long as the
aggregate value of such investments (valued at the lower of cost or then market value) does not
exceed five percent (5%) of the Total Asset Value after giving effect to such investments.

     6.4 Transactions with Related Parties. Enter into any transaction or agreement with
any officer, director, or holder of more than five percent (5%) (based on voting rights) of the
issued and outstanding capital stock of the Borrower (or any Affiliate of the Borrower), unless the
same is upon terms substantially similar to those obtainable from qualified wholly unrelated
sources, and is approved by the majority of the Borrower’s non-interested directors.

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

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

7. Events of Default and Remedies. 

     7.1 Events of Default. If any of the following events shall occur, then, as to the
events described in Sections 7.1(b), (c), and (d), if the event has not
been waived, cured or remedied within twenty (20) days after the Agent gives the Borrower notice of
such event,

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at any time thereafter, and as to all of the other events described herein, at any time, the
Agent may do any or all of the following: (1) without notice to the Borrower, declare the Notes to
be, and thereupon the Notes shall forthwith become, immediately due and payable, together with all
accrued interest thereon, without notice of any kind, notice of acceleration or of intention to
accelerate, presentment and demand or protest, all of which are hereby expressly waived; (2)
without notice to the Borrower, terminate the Commitment; (3) exercise, as may any other Lender,
its rights of offset against each account and all other Property of the Borrower in the possession
of the Agent or any such Lender, which right is hereby granted by the Borrower to the Agent and
each Lender; and (4) exercise any and all other rights pursuant to the Credit Documents:

          (a) The Borrower shall fail to pay or prepay any principal of or interest on the Notes, any
reimbursement obligation in respect of an LC Disbursement, or any fee or any other obligation
hereunder within five (5) days after it was due; or

          (b) The Borrower or any Guarantor shall (i) fail to pay when due (whether on the scheduled
maturity date or otherwise), or within any applicable period of grace, any principal of or interest
on (1) any other Indebtedness, other than Non-recourse Debt or Disqualified Stock, in excess of
$35,000,000.00 in principal amount, or (2) Non-recourse Debt in excess of $50,000,000.00 in
principal amount; or (ii) fail to comply with Section 1004 of the Indenture dated February 1, 1994
between the Borrower and Morgan Guaranty Trust Company of New York, as Trustee, as said Section
1004 may be amended with the consent of the Majority Lenders; or

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

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

          (e) A final judgment or judgments in the aggregate for the payment of money in excess of
$35,000,000.00 shall be rendered against the Borrower or any Guarantor and the same shall remain
undischarged for a period of thirty (30) days during which execution shall not be effectively
stayed; or

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

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

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

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

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

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

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

     7.3 Guaranty Proceeds.

          (a) Notwithstanding any other provision of any Credit Document to the contrary, any funds,
claims, or distributions actually received by Agent for the account of any Lender as a result of
the enforcement of, or pursuant to, any Guaranty, net of Agent’s and Lenders’ expenses of
collection thereof (such net amount, “Guaranty Proceeds”), shall be made available for distribution
equally and ratably (in proportion to the aggregate amount of principal, interest and other amounts
then owed in respect of the Obligations or of an issuance of Public Debt (as defined below), as the
case may be) among the Agent, the Lenders and the trustee or trustees of any Indebtedness not
subordinated to the Obligations (or to the holders thereof), issued by Borrower, before or after
the date of this Agreement, in offerings registered under the Securities Act of 1933, as amended,
or in transactions exempt from registration pursuant to rule 144A thereof (“Public Debt”). Agent
is hereby authorized by Borrower, by each Lender and by each Guarantor (by its execution and
delivery of the Guaranty to which it is party) to make such Guaranty Proceeds so available. No
Lender

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shall have any interest in any amount paid over by Agent to the trustee or trustees in respect
of any Public Debt (or to the holders thereof) pursuant to the foregoing authorization. This
Section 7.3(a) shall apply (i) solely to Guaranty Proceeds and not to any payments, funds,
claims or distributions received by Agent or Lenders directly or indirectly from Borrower or any
other Person other than from a Guarantor pursuant to a Guaranty, and (ii) as to Public Debt issued
after December 20, 2000, only if the documents governing the Public Debt provide for the same
sharing with the Lenders of guaranty proceeds recovered to pay the Public Debt. Borrower is aware
of the terms of the Guaranty, and specifically understands and agrees with Agent and the Lenders
that, to the extent Guaranty Proceeds are distributed to holders of Public Debt or their respective
trustees, such Guarantor has agreed that the Obligations will not be deemed reduced by any such
distributions, and each Guarantor shall continue to make payments pursuant to its Guaranty until
such times as the Obligations have been paid in full (and the Commitment has been terminated and
any LC Exposure reduced to zero), after taking into account any such distributions of Guaranty
Proceeds in respect of Indebtedness other than the Obligations.

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

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

8. The Agent.

     8.1 Appointment, Powers and Immunities.

          (a) Each Lender hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Credit Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as are reasonably
incidental thereto. The Agent (i) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and the other Credit Documents, and shall not by reason of
this Agreement or any other Credit Document be a trustee for any Lender; (ii) shall not be
responsible to any Lender for any recitals, statements, representations or warranties contained in
this Agreement or any other Credit Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other Credit Document, or
for the value, validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency of this Agreement or
any other Credit Document or any other document referred to or provided for herein or therein or
any property covered thereby or for any failure by any Party or any other Person to perform any

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of its obligations hereunder or thereunder, and shall not have any duty to inquire into or
pass upon any of the foregoing matters; (iii) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or any other Credit Document except to the extent
requested by the Majority Lenders; (iv) SHALL NOT BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR
ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY
OTHER DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN CONNECTION
HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS OWN NEGLIGENCE, BUT NOT
INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT; (v) shall not be
bound by or obliged to recognize any agreement among or between the Borrower, the Agent, and any
Lender other than this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and provisions thereof; (vi)
shall not be charged with notice or knowledge of any fact or information not herein set out or
provided to the Agent in accordance with the terms of this Agreement or any other Credit Document;
(vii) shall not be responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (viii) shall not be responsible for the acts or edicts of
any Governmental Authority. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.

          (b) Without the prior written consent of Agent and all of the Lenders, Agent shall not (i)
modify or amend in any respect whatsoever the interest rate provisions of the Credit Documents,
(ii) increase the Commitment above $600,000,000.00 (provided that an increase requested in
accordance with Section 2.1(d) must only be approved by the Lenders that are increasing
their Commitments), (iii) extend the Maturity Date other than in accordance with the express
provisions of the Credit Documents, (iv) extend or reduce the due date for, or change the amount
of, the scheduled payments of principal or interest on the Loans, the LC Disbursements or the fees
set forth in Section 2.7, (v) amend the definitions of Majority Lenders or Super-Majority
Lenders or any requirement that certain actions be taken only with the consent of a certain number
of the Lenders, (vi) amend or waive any provisions of Section 5.15 of this Agreement or
(vii) release any Subsidiary from a Guaranty required under and delivered pursuant to Section
5.15, unless the Guaranty is no longer required pursuant to Section 5.15. From time to
time upon Agent’s request, each Lender shall execute and deliver such documents and instruments as
may be reasonably necessary to enable Agent to effectively administer and service the Loan in its
capacity as lead lender and servicer and in the manner contemplated by the provisions of this
Agreement.

          (c) Without the prior written consent of the Super-Majority Lenders, Agent shall not modify,
amend or waive in any respect whatsoever the provisions of (i) Section 5.3 or the
definitions of the financial covenants (or any component thereof) described in Section 5.3
(any modification, amendment or waiver of the provisions of, or definitions relating to,
Section 5.3(e) must also be approved by the Agent, the Syndication Agents and the
Documentation Agents), (ii) Section 5.11(c)(i), or (iii) Section 6.1.

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

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

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

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

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in the best interests of the Lenders and within its rights under the Credit Documents in order
to preserve, protect or enhance the collectibility of the Loans, at law or in equity.

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

     8.5 Indemnification. The Lenders agree to indemnify the Agent, its officers,
directors, agents and Affiliates, ratably in accordance with each Lender’s respective Percentage,
for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or any other Credit
Document or any other documents contemplated by or referred to herein or therein, or the
transactions contemplated hereby or thereby (including, without limitation, interest, penalties,
reasonable attorneys’ fees and amounts paid in settlement in accordance with the terms of this
Section 8, but excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency duties hereunder) or
the enforcement of any of the terms hereof or thereof or of any such other documents, INCLUDING BUT
NOT LIMITED TO THE NEGLIGENCE OF THE AGENT, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful misconduct of the party to
be indemnified, or from the Agent’s default in the express obligations of the Agent to the Lenders
provided for in this Agreement. The obligations of the Lenders under this Section 8.5
shall survive the termination of this Agreement and the repayment of the Obligations.

     8.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it has received
current financial information with respect to the Borrower and that it has, independently and
without reliance on the Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Borrower and decision to enter into
this Agreement and that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action under this Agreement
or any of the other Credit Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by any Party of this Agreement or any of the other Credit
Documents or any other document referred to or provided for herein or therein or to inspect the
properties or

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books of the Borrower or any Party except as specifically required by the Credit Documents.
Except for notices, reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder or the other Credit Documents, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other information concerning the
affairs, financial condition or business of the Borrower or any other Party (or any of their
affiliates) which may come into the possession of the Agent. Each Lender assumes all risk of loss
in connection with its Percentage in the Loans to the full extent of its Percentage therein. The
Agent assumes all risk of loss in connection with its Percentage in the Loans to the full extent of
its Percentage therein.

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

     8.8 Resignation of Agent. Subject to the appointment and acceptance of a successor
Agent as provided below, the Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower. The Agent shall resign if it has assigned all of its Lender Commitment and Loans
and is not an Issuing Bank. Upon any such resignation, (i) the Majority Lenders with the consent
of the Borrower, so long as no Default is in existence, shall have the right to appoint a successor
Agent so long as such successor Agent is also a Lender at the time of such appointment and (ii) the
Majority Lenders shall have the right to appoint a successor Agent that is not a Lender at the time
of such appointment so long as the Borrower consents to such appointment (which consent shall not
be unreasonably withheld). If no successor Agent shall have been so appointed by the Majority
Lenders and accepted such appointment within 30 days after the retiring Agent’s giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, and with the consent of the
Borrower which shall not be unreasonably withheld, appoint a successor Agent. Any successor Agent
shall be a bank which has an office in the United States and a combined capital and surplus of at
least $500,000,000.00. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as Agent thereafter arising hereunder and under any other Credit
Documents, but shall not be discharged from any liabilities for its actions as Agent prior to the
date of discharge. Such successor Agent shall promptly specify by notice to the Borrower its
principal office referred to in Section 2.1 and Section 2.3 hereof. After any
retiring Agent’s resignation hereunder as Agent, the provisions of this Section 8 shall
continue in effect for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.

     8.9 No Partnership. Neither the execution and delivery of this Agreement nor any of
the other Credit Documents nor any interest the Lenders, the Agent or any of them may now or
hereafter have in all or any part of the Obligations shall create or be construed as creating a
partnership, joint venture or other joint enterprise between the Lenders or

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among the Lenders and the Agent. The relationship between the Lenders, on the one hand, and
the Agent, on the other, is and shall be that of principals and agent only, and nothing in this
Agreement or any of the other Credit Documents shall be construed to constitute the Agent as
trustee or other fiduciary for any Lender or to impose on the Agent any duty, responsibility or
obligation other than those expressly provided for herein and therein.

9. Renewal and Extension.

     9.1 Procedure for Renewal and Extension. The Borrower may extend the Maturity Date
one (1) time by one (1) year by executing and delivering to the Agent a written request for
extension (the “Extension Request”) at least thirty (30) days (but not more than ninety (90) days)
prior to the Maturity Date.

     9.2 Conditions to Renewal and Extension. The extension of the Maturity Date under
Section 9.1 of this Agreement shall be conditioned upon, among other things, the following
terms and conditions (which shall be in addition to those required by Sections 2.7,
3 and 9.1 of this Agreement):

          (a) Execution by the Borrower of a renewal and extension agreement for each Note in Proper
Form.

          (b) No Default must be in existence on the date of the Extension Request or on the Maturity
Date (before extension).

          (c) Payment of the extension fee as set forth in Section 2.7(b).

          (d) Such other documents, instruments and items as Agent or any Lender shall reasonably
require to document extension.

10. Miscellaneous. 

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

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

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be given by telecopy or facsimile effective upon the earlier of actual receipt or confirmation
of receipt by telephone.

     10.3 Venue. HARRIS COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO ENFORCE PAYMENT
OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, UNLESS THE AGENT SHALL GIVE ITS
PRIOR WRITTEN CONSENT TO A DIFFERENT VENUE. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND
CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING ARISING OUT OF ANY OF THE
CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW. THE BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE
CREDIT DOCUMENTS IN THE DISTRICT COURTS OF HARRIS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND HEREBY FURTHER IRREVOCABLY WAIVES
ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. THE BORROWER (A) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF
PROCESS IN THE STATE OF TEXAS IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER
TO THE AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY NOTICE GIVEN AS PROVIDED FOR IN
THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS
IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER HEREBY IRREVOCABLY AGREES THAT ANY LEGAL
ACTION OR PROCEEDING AGAINST THE AGENT OR ANY LENDER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE OTHER CREDIT DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT COURTS OF
HARRIS COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS,
HOUSTON DIVISION.

     10.4 Choice of Law. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT DOCUMENTS HAVE
BEEN NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF TEXAS AND SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, INCLUDING ALL
APPLICABLE FEDERAL LAW, FROM TIME TO TIME IN FORCE IN THE STATE OF TEXAS.

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     10.5 Survival; Parties Bound; Successors and Assigns.

          (a) All representations, warranties, covenants and agreements made by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of the Credit Documents,
shall not be affected by any investigation made by any Person, and shall bind the Borrower and its
successors, trustees, receivers and assigns and inure to the benefit of the successors and assigns
of the Agent and the Lenders (including any Affiliate of the Issuing Bank that issues any Letter of
Credit); provided, however, that (i) the Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Agent and all of the Lenders, and
any such assignment or transfer without such consent shall be null and void, and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns permitted hereby,
participants (to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Affiliates of each of the Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

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

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

     (B) the Agent.

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

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

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

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

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

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

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

          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of
this Section, from and after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.5, 5.10, 5.11 and 10.7). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this Section shall
be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.

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

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

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

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

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

          (f) Any Lender (each, a “Designating Lender”) may at any time designate one Designated Lender
to fund Money Market Loans on behalf of such Designating Lender subject to the terms of this
Section 10.5(f), and the provisions in Sections 10.5(b) and (c) shall not
apply to such designation. No Lender may designate more than one (1) 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 will give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Lender a Designated Lender
Note payable to the order of the Designated Lender, (ii) from and after the effective date
specified in the Designation Agreement, the Designated Lender shall become a party to this
Agreement with a right (subject to the provisions of Section 2.8(b)) to make Money Market
Loans on behalf of its Designating Lender pursuant to Section 2.8 after the Borrower has

60

 

accepted a Money Market Loan (or portion thereof) of the Designating Lender, and (iii) the
Designated Lender shall not be required to make payments with respect to any obligations in this
Agreement except to the extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and payable; provided,
however, that regardless of such designation and assumption by the Designated Lender, the
Designating Lender shall be and remain obligated to the Borrower, Agent and the Lenders for each
and every obligation of the Designating Lender and its related Designated Lender with respect to
this Agreement, including, without limitation, any indemnification obligations under Section
8.5 hereof and any sums otherwise payable to the Borrower by the Designated Lender. Each
Designating Lender shall serve as the administrative agent of the Designated Lender and shall on
behalf of, and to the exclusion of, the Designated Lender: (1) receive any and all payments made
for the benefit of the Designated Lender and (2) 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 Credit Documents. Any such
notice, communication, vote, approval, waiver, consent or amendment shall be signed by the
Designating Lender as administrative agent for the Designated Lender and shall not be signed by the
Designated Lender on its own behalf, and shall be binding upon the Designated Lender to the same
extent as if signed by the Designated Lender on its own behalf. The Borrower, the 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 Credit Document, other than assignments to the Designating Lender which originally
designated such Designated Lender or otherwise in accordance with the provisions of Sections
10.5(b) and (c). The Agent and each Lender agrees that it will not institute against
any Designated Lender or join any other Person in instituting against any Designated Lender any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under any federal or
state bankruptcy or similar law, until the later to occur of (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 Maturity Date.

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

     10.7 Usury Not Intended; Refund of Any Excess Payments. It is the intent of the
parties in the execution and performance of this Agreement to contract in strict compliance with
the usury laws of the State of Texas and the United States of America from time to time in effect.
In furtherance thereof, the Agent, the Lenders and the Borrower stipulate and agree that none of
the terms and provisions contained in this Agreement or the other Credit Documents shall ever be
construed to create a contract to pay for the use, forbearance or detention of money with interest
at a rate in excess of the Ceiling Rate and that for purposes hereof “interest” shall include the
aggregate of all charges which constitute interest under such laws that are contracted for,
reserved, taken, charged or received under this Agreement. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Ceiling Rate, the Borrower,
the Agent and the

61

 

Lenders shall, to the maximum extent permitted under applicable law, (a) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) “spread” the total amount of interest throughout the
entire contemplated term of the Loans. The provisions of this paragraph shall control over all
other provisions of the Credit Documents which may be in apparent conflict herewith.

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

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

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

     10.11 No Novation. THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS SOLELY TO AMEND, RESTATE AND RESTRUCTURE THE TERMS OF, AND THE OBLIGATIONS OWING
UNDER AND IN CONNECTION WITH, THE CREDIT AGREEMENT DATED OCTOBER 30, 2003 AMONG THE BORROWER, THE
AGENT AND CERTAIN OF THE LENDERS. THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS
CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION
WITH THE SAID CREDIT AGREEMENT.

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

     10.13 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TOGETHER
CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS

62

 

OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

63

 

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

	 	 	 	 	 
	 	ARCHSTONE-SMITH OPERATING TRUST

 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 
	 

	 	 	 
	

	 	Address:
	

	 	9200 E. Panorama Circle
	

	 	Suite 400
	

	 	Englewood, Colorado 80112
	

	 	Attention: Corporate Finance

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

	 	 	 	 	 
	 	ARCHSTONE — SMITH TRUST

 	 
	 	By:  	 	 
	 	Name:	 	 
	 	Title:	 	 

64

 

	 	 	 	 	 

	 	 	 
	Lender Commitment: $38,000,000.00

	 	JPMORGAN CHASE BANK, N.A.,
	Percentage: 6.333333333%

	 	as Agent and as a Lender

	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	Name:	 	 
	 	Title:	 	 

	 	 	 
	

	 	Address:
	

	 	712 Main Street
	

	 	Houston, Texas 77002
	

	 	Attention: Manager, Real Estate Group

	 	 	 	 	 
	

	 	Telecopy No.:
	 	713/216-7713
	

	 	Telephone No.:
	 	Kent Kaiser
	

	 	 	 	713/216-8699

 

 

	 	 	 
	Lender Commitment: $38,000,000.00

	 	BANK OF AMERICA, N.A.
	Percentage: 6.333333333%
	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	901 Main Street, 64th Floor
	

	 	Dallas, Texas 75202
	

	 	Attention: Charlotte Wai Deinhart
	 
	 	 
	

	 	Telephone No.: 214/209-9129
	

	 	Telecopy No.: 214/209-0996

 

 

	 	 	 
	Lender Commitment: $38,000,000.00

	 	WELLS FARGO BANK, NATIONAL
	Percentage: 6.333333333%

	 	ASSOCIATION

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	4643 S. Ulster Street
	

	 	Suite 1400
	

	 	Denver, Colorado 80237
	

	 	Attention: Martia Kontak
	 
	 	 
	

	 	Telephone No.: 303/741-0800 X208
	

	 	Telecopy No.: 303/741-0867

 

 

	 	 	 
	Lender Commitment: $38,000,000.00

	 	COMMERZBANK AG, NEW YORK AND
	Percentage: 6.333333333%

	 	GRAND CAYMAN BRANCHES

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	

Commerzbank AG, New York Branch
	

	 	2 World Financial Center
	

	 	New York, New York 10281-1050
	

	 	Attention: David Goldman
	 
	 	 
	

	 	Telephone No.: 212/266-7457
	

	 	Telecopy No.: 212/266-7565

 

 

	 	 	 
	Lender Commitment: $38,000,000.00

	 	SUNTRUST BANK
	Percentage: 6.333333333%
	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	8330 Boone Blvd., 8th Floor
	

	 	Vienna, Virginia 22182-2624
	

	 	Attention: Gregory T. Horstman

	 	 	 	 	 
	

	 	Telephone No.:
	 	703/442-1549

	

	 	Telecopy No.:
	 	703/442-1570

 

 

	 	 	 
	Lender Commitment: $35,000,000.00

	 	PNC BANK, NATIONAL ASSOCIATION
	Percentage: 5.833333333%
	 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	One PNC Plaza
	

	 	Mail Stop PL-POPP-19-2
	

	 	Pittsburgh, Pennsylvania 15222
	

	 	Attention: James Collella
	 
	 	 
	

	 	Telephone No.: 412/762-2260
	

	 	Telecopy No.: 412/762-6500

 

 

	 	 	 
	Lender Commitment: $35,000,000.00

	 	U.S. BANK NATIONAL ASSOCIATION
	Percentage: 5.833333333%
	 	 

	 	 	 	 	 
	 	By:  	
 	 
	 	Name:	
 	 
	 	Title:	
 	 
	 

	 	 	 
	

	 	Address:
	

	 	918 17th Street, 5th Floor
	

	 	Denver, Colorado 80203
	

	 	Attention: Leanne Toler
	 
	 	 
	

	 	Telephone No.: 303/585-4172
	

	 	Telecopy No.: 303/585-4199

 

 

	 	 	 	 	 
	Lender Commitment: $35,000,000.00	 	CITICORP NORTH AMERICA, INC.
	Percentage: 5.833333333%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	390 Greenwich Street
	 	 	New York, New York 10013
	 	 	Attention: Mr. Blake Gronich
	 
	 	 	 	 
	 	 	Telephone No.: 212/723-6590
	 	 	Telecopier No.: 212/723-8548

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	SCOTIABANC, INC.
	Percentage: 1.666666667%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	600 Peachtree Street, Suite 2700
	 	 	Atlanta, Georgia 30308
	 	 	Attention: Bill Zarrett
	 
	 	 	 	 
	 	 	Telephone No.: 404/877-1504
	 	 	Telecopy No.: 404/888-8998
	 
	 	 	 	 
	Lender Commitment: $25,000,000.00	 	THE BANK OF NOVA SCOTIA
	Percentage: 4.166666666%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	580 California Street, Suite 2100
	 	 	San Francisco, California 94104
	 	 	Attention: Mark Sparrow
	 
	 	 	 	 
	 	 	Telephone No.: 415/646-4108
	 	 	Telecopy No.: 415/397-0791

 

 

	 	 	 	 	 
	Lender Commitment: $35,000,000.00	 	KEYBANK NATIONAL ASSOCIATION
	Percentage: 5.833333333%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 	 	Name: Donald Woods
	 	 	Title: Asst Vice President
	 
	 	 	 	 
	 	 	Address:
	 	 	127 Public Square, 8th Floor
	 	 	Cleveland, OH 44114
	 	 	Attention: Scott Childs
	 
	 	 	 	 
	 	 	Telephone No.: 216-689-7547
	 	 	Telecopy No.: 216-689-4997

 

 

	 	 	 	 	 
	Lender Commitment: $27,000,000.00	 	CITIZENS BANK OF RHODE ISLAND
	Percentage: 4.500000000%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	One Citizens Plaza (RC0440)
	 	 	Providence, Rhode Island 02903
	 	 	Attention: Craig E. Schermerhorn
	 
	 	 	 	 
	 	 	Telephone No.: 401/455-5425
	 	 	Telecopy No.: 401/282-4485

 

 

	 	 	 	 	 
	Lender Commitment: $27,000,000.00	 	LASALLE BANK NATIONAL
	Percentage: 4.500000000%	 	ASSOCIATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	135 South LaSalle Street
	 	 	Chicago, Illinois 60603
	 	 	Attention: Jay Palmer
	 
	 	 	 	 
	 	 	Telephone No.: 312/904-7211
	 	 	Telecopy No.: 312/904-6691

 

 

	 	 	 	 	 
	Lender Commitment: $27,000,000.00	 	MORGAN STANLEY BANK
	Percentage: 4.500000000%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	750 Seventh Avenue, 11th Floor
	 	 	New York, New York 10020
	 	 	Attention: Christopher Whelan
	 
	 	 	 	 
	 	 	Telephone No.: 212/762-2929
	 	 	Telecopy No.: 212/762-0346

 

 

	 	 	 	 	 
	Lender Commitment: $27,000,000.00	 	UNION BANK OF CALIFORNIA, N.A.
	Percentage: 4.500000000%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	350 California Street, 7th Floor
	 	 	San Francisco, California 94120
	 	 	Attention: Karen Kokame
	 
	 	 	 	 
	 	 	Telephone No.: 415/705-7116
	 	 	Telecopy No.: 415/433-7438

 

 

	 	 	 	 	 
	Lender Commitment: $27,000,000.00	 	BANK OF CHINA, NEW YORK BRANCH
	Percentage: 4.500000000%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	410 Madison Avenue
	 	 	New York, New York 10017
	 	 	Attention: Joseph Zeng/David Hoang
	 
	 	 	 	 
	 	 	Telephone No.: 212/935-3101 X408/X229
	 	 	Telecopy No.: 212/308-4993

 

 

	 	 	 	 	 
	Lender Commitment: $20,000,000.00	 	LEHMAN BROTHERS BANK, FSB
	Percentage: 3.333333333%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	745 Seventh Avenue, 7th Floor
	 	 	New York, New York 10019
	 	 	Attention: Janine Shugan
	 
	 	 	 	 
	 	 	Telephone No.: 212/526-8625
	 	 	Telecopy No.: 201/508-4654

 

 

	 	 	 	 	 
	Lender Commitment: $20,000,000.00	 	MANUFACTURERS AND TRADERS
	Percentage: 3.333333333%	 	TRUST COMPANY
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	Mail Code 101-747
	 	 	25 South Charles Street, 17th Floor
	 	 	Baltimore, Maryland 21201
	 	 	Attention: D. Stewart Cooper
	 
	 	 	 	 
	 	 	Telephone No.: 410/545-2368
	 	 	Telecopy No.: 410/545-2385

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00

Percentage: 1.666666667%	 	UFJ BANK LIMITED
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	55 East 52nd Street
	 	 	New York, New York 10055
	 	 	Attention: Douglas E. Crater
	 
	 	 	 	 
	 	 	Telephone No.: 212/339-6233
	 	 	Telecopy No.: 212/754-1304

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	CHANG HWA COMMERCIAL BANK, LTD.
	Percentage: 1.666666667%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	685 Third Avenue, 29th Floor
	 	 	New York, New York 10017
	 	 	Attention: Melody Tsou
	 
	 	 	 	 
	 	 	Telephone No.: 212/651-9770 X28
	 	 	Telecopy No.: 212/651-9785

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	THE GOVERNOR AND COMPANY OF
	Percentage: 1.666666667%	 	THE BANK OF IRELAND
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	Bank of Ireland Corporate
	 	 	La Touche House
	 	 	International Financial Services Centre
	 	 	Custom House Docks
	 	 	Dublin 1, Ireland
	 	 	Attention: Philip Allen
	 
	 	 	 	 
	 	 	Telephone No.: 00 353 1 611 5406
	 	 	Telecopy No.: 00 353 1 829 0129

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	CHEVY CHASE BANK, F.S.B.
	Percentage: 1.666666667%
	 	 	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	7501 Wisconsin Avenue, 12th Floor
	 	 	Bethesda, Maryland 20814
	 	 	Attention: Carlos L. Heard
	 
	 	 	 	 
	 	 	Telephone No.: 240/497-7758
	 	 	Telecopy No.: 240/497-7714

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	FIRST HORIZON BANK, A DIVISION OF
	Percentage: 1.666666667%	 	FIRST TENNESSEE BANK N.A.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	1650 Leesburg Pike, Suite 1650
	 	 	McLean, Virginia 22102
	 	 	Attention: Stephanie A. Carey
	 
	 	 	 	 
	 	 	Telephone No.: 703/394-2506
	 	 	Telecopy No.: 703/394-2644

 

 

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	COMPASS BANK, an Alabama banking
	Percentage: 1.666666667%	 	corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	Address:
	 	 	15 South 20th Street, 15th Floor
	 	 	Birmingham, Alabama 35233
	 	 	Attention: Johanna Duke Paley
	 
	 	 	 	 
	 	 	Telephone No.: 205/297-3851
	 	 	Telecopy No.: 205/297-7994

 

 

SCHEDULE I

Ameriton Properties Incorporated

API Cameron Park LLC

API Genesis Park LLC

ASN Bowie LLC

ASN Cambridge LLC

ASN City Place LLC

ASN Dakota Ridge LLC

ASN Doral West LLC

ASN Dupont Circle LLC

ASN Estancia LLC

ASN Fairfax Corner LLC

ASN Gresham Commons LLC

ASN Hoboken I LLC

ASN Hoboken II LLC

ASN Lakeshore East LLC

ASN Marina Del Rey LLC

ASN Northgate, LLC

ASN Palm Trace Landings, LLC

ASN Park Essex LLC

ASN Richardson Highlands LLC

ASN Rockville LLC

ASN Roosevelt Center LLC

ASN Santa Monica LLC

ASN Saybrooke LLC

ASN Studio City LLC

ASN Sussex Commons LLC

ASN Ventura LLC

ASN Warner Center, LLC

ASN Washington Boulevard LLC

ASN Watertown LLC

ASN Wendemere, LLC

ASN-Massachusetts Holdings (2) LLC

ASN-Massachusetts Holdings (4) LLC

ASN-Massachusetts Holdings (5) LLC

ASN-Washington Holdings (1) LLC

Courthouse Hill LLC

First Herndon Associates Limited Partnership

Hacienda Cove, LLC

Interlocken Apartments LLC

PTR-California Holdings (1) LLC

PTR-California Holdings (3) LLC

SCA Florida Holdings (2) LLC

SCA North Carolina Limited Partnership

 

 

Security Capital Atlantic Multifamily LLC

Smith Property Holdings 4411 Connecticut L.L.C.

Smith Property Holdings Four LP

Smith Property Holdings Harbour House L.L.C.

Smith Property Holdings Illinois Center LLC

Smith Property Holdings Lincoln Towers LLC

Smith Property Holdings One East Delaware LLC

Smith Property Holdings One L.P.

Smith Property Holdings Reston Landing L.L.C.

Smith Property Holdings Seven L.P.

Smith Property Holdings Six L.P.

Smith Property Holdings Superior Place L.L.C.

Smith Property Holdings Two (D.C.) L.P.

Smith Property Holdings Two L.P.

St. Andrews at Kings Point, Tamarac, Ltd.

TRG-Pembroke Road, LLC

2

 

OFFICER’S CERTIFICATE

     Archstone-Smith Operating Trust (the “Borrower”), Archstone-Smith Trust (the “Parent”),
JPMorgan Chase Bank, N.A. (“JPMC”), Wells Fargo Bank, N.A. and Bank of America, N.A., as Agents
(the “Agents”) and certain other Lenders (the “Lenders”) entered into that certain Amended and
Restated Credit Agreement (the “Agreement”) dated as of December 13, 2004, as the same may be
amended. Any term used herein and not otherwise defined shall have the meaning ascribed to it in
the Agreement.

	   	The undersigned hereby certifies that:
	 
	I.  	I am a Vice President of the Borrower and a Vice President of the Parent, and I make these
certifications on behalf of the Borrower or the Parent, as applicable.
	 
	II.  	The Parent’s financial statements as of                      as filed with the Securities and Exchange
Commission (“SEC”), and the Borrower’s financial statements as of                      delivered to
JPMC, were prepared in conformity with generally accepted accounting principles consistently
applied and present fairly the financial position of the Parent and of the Borrower,
respectively, as of the date thereof and the results of its operations for the period covered
thereby subject to normal year-end adjustments.
	 
	III.  	Borrower hereby certifies the following as of the end of the period covered by the financial
statements described above:

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	1.	 	 	Maximum Debt to Total Asset Value Ratio Calculation	 	 	 	 
	

	 	 	 	 	 	(Section 5.3 (e))	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(A	)	 	Indebtedness (Borrower and Parent)	 	 	 	 
	

	 	 	 	 	 	Total Unsecured Debt (per GAAP)
	 	$                    

	

	 	 	 	 	 	Total Secured Debt (per GAAP)
	 	$                    

	

	 	 	 	 	 	Guarantees, Endorsements and Other Contingent Obligations
	 	$                    

	

	 	 	 	 	 	Obligations under Hedging Agreements, as defined
	 	$                    

	

	 	 	 	 	 	Equity Percentage of Indebtedness of Unconsolidated Affiliates
	 	$                    

	

	 	 	 	 	 	Other (pursuant to the Agreement)
	 	$                    

	

	 	 	 	 	 	Total Indebtedness, as defined
	 	$                    

	 
	

	 	 	(B	)	 	Total Asset Value:	 	 	 	 
	

	 	 	 	 	 	Aggregated Net Operating Income from Stabilized Properties	 	 	 	 
	

	 	 	 	 	 	Divided by 7.50%
	 	$                    

	

	 	 	 	 	 	Historical Value of Pre-Stabilized Properties
	 	$                    

	

	 	 	 	 	 	Historical Value of Properties Under Construction
	 	$                    

	

	 	 	 	 	 	Historical Value of Undeveloped Land
	 	$                    

	

	 	 	 	 	 	Other Assets (excluding intangibles as defined by GAAP)
	 	$                    

	

	 	 	 	 	 	Total Asset Value of Unconsolidated Affiliates
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	Page 1 of 7 Pages

	EXHIBIT A

 

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Total Asset Value, as defined
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(C	)	 	Maximum Debt to Total Asset Value (Ratio of 1(A) to 1(B))	 	 	 	 
	

	 	 	 	 	 	Required: Maximum:
	 	 	60	%
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	2.	 	 	Maximum Secured Debt Calculation	 	 	 	 
	

	 	 	 	 	 	(Section 5.3 (a))	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(A) Secured Debt, as defined
	 	$                    

	

	 	 	 	 	 	(B) Total Asset Value, as defined
	 	$                    

	

	 	 	 	 	 	(C) Maximum Secured Debt to Total Asset Value	 	 	 	 
	

	 	 	 	 	 	(Ratio of 2(A) to 2(B))
	 	                    

	

	 	 	 	 	 	Required:Maximum:
	 	 	40	%
	 
	 	 	 	 	 	 	 	                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	3.	 	 	Coverage Ratio Calculation	 	 	 	 
	

	 	 	 	 	 	(Section 5.3 (b))	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(A	)	 	Borrower’s EBITDA:	 	 	 	 
	

	 	 	 	 	 	Net Income (per GAAP)
	 	$                    

	

	 	 	 	 	 	Plus:	 	 	 	 
	

	 	 	 	 	 	Depreciation and Amortization (per GAAP)
	 	$                    

	

	 	 	 	 	 	Interest Expense, as defined, of Borrower
and Parent
	 	$                    

	

	 	 	 	 	 	Income Taxes (per GAAP)
	 	$                    

	

	 	 	 	 	 	Extraordinary Gains/Losses (per GAAP)
	 	$                    

	

	 	 	 	 	 	Payments on Borrower’s Preferred Stock (to
the extent included in net income)
	 	$                    

	

	 	 	 	 	 	Equity Percentage of EBITDA for
	 	$                    

	

	 	 	 	 	 	Unconsolidated Affiliates
	 	$                    

	

	 	 	 	 	 	Other (pursuant to the Agreement)
	 	$                    

	

	 	 	 	 	 	Borrower’s EBITDA, as defined
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(B	)	 	Dividends and Distributions Paid with Respect to Disqualified
Stock
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(C	)	 	Interest Expense, as defined, of Borrower and Parent
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(D	)	 	Sum of 3(B) and 3(C)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(E	)	 	Coverage Ratio (Ratio of 3(A) to 3(D)):
	 	 	1.0	 
	 
	 	 	 	 	 	 	 	                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Required:
	 	Minimum of 2.0 to 1.0

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	4.	 	 	Fixed Charge Coverage Ratio Calculation	 	 	 	 
	

	 	 	 	 	 	(Section 5.3(c))	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(A	)	 	Borrower’s EBITDA, as defined
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(B	)	 	Unit Capital Expenditures
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(C	)	 	EBITDA minus Unit Capital Expenditures
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	Page 2 of 7 Pages

	EXHIBIT A

 

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	(D	)	 	Interest Expense, as defined, of Borrower and Parent
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(E	)	 	Payments and Payables on Disqualified Stock
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(F	)	 	Regularly Scheduled Principal Paid and Payable
(Borrower and Parent)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(G	)	 	Sum of 4(D), 4(E) and 4(F)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(H	)	 	Fixed Charge Coverage Ratio (Ratio of 4(C) to 4(G))
	 	 	1.0	 
	 
	 	 	 	 	 	 	 	                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Required:
	 	Minimum of 1.75 to 1.0

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	5.	 	 	Tangible Net Worth 	 	 	 	 
	

	 	 	 	 	 	(Section 5.3(d))	 	 	 	 
	

	 	 	 	 	 	Assets
	 	$                    

	

	 	 	 	 	 	Liabilities
	 	$                    

	

	 	 	 	 	 	Tangible Net Worth, as defined
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	Required:
	 	Minimum of $3.500 billion

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	6.	 	 	Property Pool	 	 	 	 
	

	 	 	 	 	 	(Section 5.15)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(A	)	 	Sum of the Aggregate Net Operating Income for Pool Real Estate
That Has Reached the Stabilization Date Divided by 7.50% and the
Aggregate Historical Value for Pool Real Estate That Has Not
Reached the Stabilization Date
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(B	)	 	Outstanding Unsecured Indebtedness
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(C	)	 	Pool Value Divided by Outstanding Unsecured	 	 	 	 
	

	 	 	 	 	 	Indebtedness (6(A) divided by 6(B))
	 	                    %

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Required:	 	Minimum of 167%

	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(D	)	 	Pool Value attributable to unimproved land (Maximum-5%)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(E	)	 	Pool Value attributable to unimproved land, land under
construction or development, projects that do not have 80%
Occupancy Level, non-multifamily land, land that has not
reached the Calculation Date (Maximum-25%)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(F	)	 	Pool Value attributable to improved property that is not
multifamily residential (Maximum-10%)
	 	$                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(G	)	 	The Borrower confirms that it has received the
environmental assessments required by
Section 5.15(a)(i)
	 	                    

	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	7.	 	 	Specified Permitted Holdings	 	 	 	 
	

	 	 	 	 	 	(Section 6.3)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Page 3 of 7 Pages

	EXHIBIT A

 

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	(A	)	 	Securities Received in Settlement Liabilities Created in the
Ordinary Course of Business
	 	                    

	

	 	 	 	 	 	(Maximum – 5%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(B	)	 	Unconsolidated Affiliates Engaged in Permitted Businesses
	 	                    

	

	 	 	 	 	 	(Maximum – 20%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(C	)	 	Loans to Unaffiliated Persons
	 	                    

	

	 	 	 	 	 	(Maximum – 10%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(D	)	 	Other Securities
	 	                    

	

	 	 	 	 	 	(Maximum – 10%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(E	)	 	Income Producing Properties That Are Not Multifamily

Residential
	 	                    

	

	 	 	 	 	 	(Maximum – 10%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(F	)	 	Unimproved Land
	 	                    

	

	 	 	 	 	 	(Maximum – 7.5%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(G	)	 	Unrelated, Non-Incidental Investments
	 	                    

	

	 	 	 	 	 	(Maximum – 5%)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	(H	)	 	Aggregate Value of the specified Permitted Holdings
(sum of 7(A) through 7(H))
	 	                    

	

	 	 	 	 	 	(Maximum – 30%)	 	 	 	 

	IV.  	A review of the activities of the Borrower during the period covered by the financial
statements has been made under my supervision and with a view to determining whether during
such period the Borrower has kept, observed, performed and fulfilled all of its obligations
under the Agreement.
	 
	   	The Parent has made available its financial statements and related footnotes for the most
recent period ended                     , as filed with the SEC and can be accessed at
http://www.sec.gov/. The Borrower has delivered to JPMC its financial statements and
related footnotes for the most recent period ended                     . The Parent’s and the
Borrower’s earnings press releases and supplemental information for such period have been
posted to the Parent’s website (                                        ). The financial statements
were prepared in conformity with generally accepted accounting principles consistently
applied (except for the omission of footnote disclosures and appropriately disclosed
consistency exceptions) and present fairly the financial position of the Parent and the
Borrower, respectively, as of the date thereof and the results of its operations for the
period covered thereby subject to normal year-end adjustments.
	 
	V.  	(Check either (A) or (B))

	 	 	 	 	 
	

	 	o
	 	(A) The Borrower has kept, observed, performed and fulfilled each and
every one of its obligations under the Agreement during the period covered by the
applicable financial statements.
	 
	 	 	 	 
	Page 4 of 7 Pages

	EXHIBIT A

 

 

	 	 	 	 	 
	

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

	VI.  	With regard to Section 1004 of the Indenture dated as of February 1, 1994 between the Borrower and Morgan
Guaranty Trust Company of New York, as Trustee (and using the terms defined therein), a certificate required
thereunder showing compliance with Section 1004 is attached (only required for the fourth quarter Officer’s
Certificate), for the most recent period ended                      :

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	1.	 	 	(A)
	 	Sum of Total Assets, Aggregate Purchase Price of Real
Estate Assets, or Mortgages Receivable Acquired, and
Securities Offering Proceeds Received to Purchase
said Assets
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(B)
	 	Maximum amount of Debt
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(C)
	 	Debt
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	2.	 	 	(A)
	 	Consolidated Income Available for Debt Service
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(B)
	 	Annual Service Charge
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(C)
	 	Ratio of Consolidated Income Available for Debt	 	 
	

	 	 	 	 	 	 	 	Service to Annual Service Charge	 	                      
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	3.	 	 	(A)
	 	Total Assets
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(B)
	 	Maximum Secured Debt
	 	$                    
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	(C)
	 	Secured Debt
	 	$                    

	VII.  	The Parent hereby certifies the following as to itself as of the end of
the period covered by the financial statements dated                      as
filed with the SEC:

	 	 	 	 	 	 	 	 	 
	

	 	 	1.	 	 	Indebtedness
	 	$                    
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	                                        	 	 
	

	 	 	2.	 	 	Interest Expense
	 	$                    

	VIII.  	Check either (A) or (B)

	 	 	 	 	 
	

	 	o
	 	(A) The Parent has kept, observed, performed and fulfilled each and every
one of its obligations under the Agreement during the period covered by the applicable
financial statements.
	 
	 	 	 	 
	

	 	o
	 	(B) The Parent has kept, observed, performed and fulfilled each and every
one of its obligations under the Agreement during the period covered by the applicable
financial statements except for the following matters:
	 
	 	 	 	 
	Page 5 of 7 Pages

	EXHIBIT A

 

 

	 	 	 	 	 
	

	 	 	 	[Describe all such defaults, specifying the nature, duration and status thereof and
what action the Parent has taken or proposes to take with respect thereto].

	 	 	 	 	 	 	 
	Date:

	 	 	 	Name:	 	 
	

	 	

	 	 	 	

	

	 	 	 	 	 	     [Vice President Name]

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

Page 6 of 7 Pages

EXHIBIT A

 

 

POOL PROPERTY LIST

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

Page 7 of 7 Pages

EXHIBIT A

 

REQUEST FOR LOAN

Date:                                         , 2004

JPMorgan Chase Bank, N.A.

712 Main Street

Houston, Texas 77002

(“Agent”)

	 	 	 	 	 
	

	 	RE:
	 	Request for Loan Under Amended and Restated Credit Agreement (as
	

	 	 	 	amended from time to time, the “Credit Agreement”) dated as of
	

	 	 	 	December 13, 2004, among Archstone-Smith Operating Trust (the “Borrower”),
	

	 	 	 	the Agent and the Lenders as signatory to the Credit Agreement

Gentlemen:

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

	 	 	 	 	 
	Maximum Principal Amount

	 	$	600,000,000.00	 
	 
	 	 	 	 
	Less the amount outstanding under the
	 	 	 	 
	Credit Agreement (including Swing Loans
	 	 	 	 
	and Money Market Loans)

	 	($                    .___)

	Less the LC Exposure

	 	($                    .___)

	 
	 	 	 	 
	Less the LC Exposure

	 	($                    .___)

	 
	 	 	 	 
	Available amount

	 	($                    .___)

	 
	 	 	 	 
	Less amount requested

	 	($                    .___)

	 
	 	 	 	 
	Amount remaining to be advanced

	 	$                    .___

Page 1 of 3 Pages

EXHIBIT B

 

 

The advance or conversion is to be made as follows:

	 	 	 	 	 
	A.

	 	Base Rate Borrowing.	 	 
	 
	 	 	 	 
	

	 	1. Amount of Base Rate Borrowing:
	 	$                    .___
	 
	 
	

	 	2. Date of Base Rate Borrowing
	 	                    ,20___
	 
	 	 	 	 
	B.

	 	Eurodollar Rate Borrowing:	 	 
	 
	 	 	 	 
	

	 	1. Amount of Eurodollar Rate	 	 
	

	 	    Borrowing:
	 	$                    .___
	 
	 	 	 	 
	

	 	2. Amount of conversion of existing	 	 
	

	 	    Loan to Eurodollar Rate Borrowing:
	 	$                    .___
	 
	 	 	 	 
	

	 	3. Number of Eurodollar Rate	 	 
	

	 	    Borrowing(s) now in effect:
	 	                              
	

	 	    [cannot exceed 12]	 	 
	 
	 	 	 	 
	

	 	4. Date of Eurodollar Rate Borrowing	 	 
	

	 	    or conversion:
	 	                    ,20___
	 
	 	 	 	 
	

	 	5. Interest Period:
	 	                                
	 
	 	 	 	 
	

	 	6. Expiration date of current Interest	 	 
	

	 	    Period as to this conversion:
	 	                    , 20___
	 
	 	 	 	 
	C.

	 	Swing Loan.	 	 
	 
	 	 	 	 
	

	 	1. Amount of Swing Loan:
	 	$                    ,___
	

	 	    [minimum of $1,000,000.00 and in	 	 
	

	 	    multiples of $100,000.00]	 	 
	 
	 	 	 	 
	

	 	2. Date of Swing Loan:
	 	                    ,20___

Page 2 of 3 Pages

EXHIBIT B

 

 

     Borrower hereby represents and warrants that the amounts set forth above are true and correct,
that the amount above requested has actually been incurred, that the representations and warranties
contained in the Credit Agreement are true and correct as if made as of this date, and that
Borrower has kept, observed, performed and fulfilled each and every one of its obligations under
the Credit Agreement as of the date hereof [except as follows:]

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

Page 3 of 3 Pages

EXHIBIT B

 

 

	 	 	 
	$[                    ]

	 	                    ,2004

     FOR VALUE RECEIVED ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust
(herein called “Maker”) promises to pay to the order of
[                                                                                                    ], a [                                                            ] (“Payee”), at the offices
of JPMorgan Chase Bank, N.A., as “Agent” under the Credit Agreement, at 712 Main Street,
Houston, Texas 77002, or at such other place as the holder (the “Holder”, whether or not
Payee is such holder) of this note may hereafter designate in writing, in immediately available
funds and in lawful money of the United States of America, the principal sum of
[                                                                                ] Dollars ($[                                        ]) (or the unpaid balance of all
principal advanced against this note, if that amount is less), together with interest on the unpaid
principal balance of this note from time to time outstanding at the Stated Rate and interest on all
past due amounts, both principal and accrued interest, at the Past Due Rate; provided, that
for the full term of this note the interest rate produced by the aggregate of all sums paid or
agreed to be paid to the Holder of this note for the use, forbearance or detention of the debt
evidenced hereby (including, but not limited to, all interest on this note at the Stated Rate)
shall not exceed the Ceiling Rate.

     1. Definitions. Any terms not defined herein shall have the meaning given to them in the
Amended and Restated Credit Agreement dated of even date herewith among the Maker, the Agent and
certain other Lenders (as the same may be amended or modified the “Credit Agreement”).

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

     3. Calculation of Interest. Interest shall be computed for the actual number of days elapsed
in a year (up to 365, or 366 in a leap year) deemed to consist of 360 days, unless the Ceiling Rate
would thereby be exceeded, in which event, to the extent necessary to avoid exceeding the Ceiling
Rate, interest shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which it accrued.

     4. Excess Interest Will be Refunded or Credited. If, for any reason whatever, the interest
paid or received on this note during its full term produces a rate which exceeds the Ceiling Rate,
the Holder of this note shall refund to the payor or, at the Holder’s option, credit against the
principal of this note such portion of that interest as shall be necessary to cause the interest
paid on this note to produce a rate equal to the Ceiling Rate.

Page 1 of 5 Pages

EXHIBIT C

 

 

     5. Interest Will be Spread. All sums paid or agreed to be paid to the Holder of this note for
the use, forbearance or detention of the indebtedness evidenced hereby, to the extent permitted by
applicable law and to the extent necessary to avoid violating applicable usury laws, shall be
amortized, prorated, allocated and spread in equal parts throughout the full term of this note, so
that the interest rate is uniform throughout the full term of this note.

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

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

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

Page 2 of 5 Pages

EXHIBIT C

 

 

Maker’s entitlement to credit for that payment as of the date of its receipt by the Holder.
Maker and Payee expressly agree, as expressly allowed by Chapter 346 of the Texas Finance Code,
that Chapter 346 (which relates to open-end line of credit revolving loan accounts) shall not apply
to this note or to any loan evidenced by this note and that neither this note nor any such loan
shall be governed by Chapter 346 or subject to its provisions in any manner whatsoever.

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

     10. Defaults and Remedies. Time is of the essence. Maker’s failure to pay any principal or
accrued interest owing on this note when due and after expiration of any applicable period for
notice and right to cure such a default which is specifically provided for in the Credit Agreement
or any other provision of this note, or the occurrence of any default under the Credit Agreement or
any other Credit Documents shall constitute default under this note, whereupon the Holder may elect
to exercise any or all rights, powers and remedies afforded (a) under the Credit Agreement and all
other papers related to this note and (b) by law, including the right to accelerate the maturity of
this entire note.

     In addition to and cumulative of such rights, the Holder is hereby authorized at any time and
from time to time after any such default, at Holder’s option, without notice to Maker or any other
person or entity (all rights to any such notice being hereby waived), to set off and apply any and
all of any Maker’s deposits at any time held by the Holder, and any other debt at any time owing by
the Holder to or for the credit or account of any Maker, against the outstanding balance of this
note, in such order and manner as Holder may elect in its sole discretion.

     The Holder’s right to accelerate this note on account of any late payment or other default
shall not be waived or deemed waived by the Holder by reason of the Holder’s having previously
accepted one or more late payments or by reason of any Holder’s otherwise not accelerating this
note or exercising other remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict compliance with this
note or any papers securing or otherwise relating to it before such Holder may accelerate this note
or exercise any other remedy.

Page 3 of 5 Pages

EXHIBIT C

 

 

     Nothing in this Section or elsewhere shall be construed as diminishing Holder’s absolute right
to demand payment of all or any part of this note at any time.

     11. Legal Costs. If any Holder of this note retains an attorney in connection with any such
default or to collect, enforce or defend this note or any papers intended to secure or guarantee it
in any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, or if Maker sues
any Holder in connection with this note or any such papers and does not prevail, then Maker agrees
to pay to each such Holder, in addition to principal and interest, all reasonable costs and
expenses incurred by such Holder in trying to collect this note or in any such suit or proceeding,
including reasonable attorneys’ fees.

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

     13. Rate of Return Maintenance Covenant. If at any time after the date of this note, any
Holder determines that (a) any applicable law, rule or regulation regarding capital adequacy of
general applicability has been adopted or changed, or (b) its interpretation or administration by
any governmental authority, central bank or comparable agency has changed, and determines that such
change or the Holder’s compliance with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of return on the Holder’s
capital as a consequence of its obligations under this note or any related papers to a level below
that which the Holder could have achieved but for such adoption, change or compliance (taking into
consideration the Holder’s own capital adequacy policies) by an amount the Holder deems to be
material, then Maker promises to pay from time to time to the order of the Holder such additional
amount or amounts as will compensate the Holder for such reduction. A certificate of any Holder
setting forth the amount or amounts necessary to compensate the Holder as specified above shall be
given to Maker as soon as practicable after the Holder has made such determination and shall be
conclusive and binding, absent manifest error. Maker shall pay the Holder the amount shown as due
on any such certificate within 15 days after the Holder gives it. In preparing such certificate,
the Holder may employ such assumptions and make such allocations of costs and expenses as

Page 4 of 5 Pages

EXHIBIT C

 

 

the Holder in good faith deems reasonable and may use any reasonable averaging and attribution
method.

     14. Governing Law, Jurisdiction and Venue. This note shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America from time to time
in effect.

     15. General Purpose of Loan. Maker warrants and represents to Payee and all other Holders
that all loans evidenced by this note are and will be for business, commercial, investment or other
similar purpose and not primarily for personal, family, household or agricultural use.

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

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

	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

Page 5 of 5 Pages

EXHIBIT C

 

 

SWING LOAN NOTE

	 	 	 
	$100,000,000.00

	 	                    ,2004

     FOR VALUE RECEIVED ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust
(herein called “Maker”) promises to pay to the order of JPMORGAN CHASE BANK, N.A., at 712
Main Street, Houston, Texas 77002, or at such other place as the holder (the “Holder”,
whether or not Payee is such holder) of this note may hereafter designate in writing, in
immediately available funds and in lawful money of the United States of America, the principal sum
of One Hundred Million Dollars ($100,000,000.00) (or the unpaid balance of all principal advanced
against this note, if that amount is less), together with interest on the unpaid principal balance
of this note from time to time outstanding at the Stated Rate and interest on all past due amounts,
both principal and accrued interest, at the Past Due Rate; provided, that for the full term
of this note the interest rate produced by the aggregate of all sums paid or agreed to be paid to
the Holder of this note for the use, forbearance or detention of the debt evidenced hereby
(including, but not limited to, all interest on this note at the Stated Rate) shall not exceed the
Ceiling Rate.

     1. Definitions. Any terms not defined herein shall have the meaning given to them in the
Amended and Restated Credit Agreement dated of even date herewith among the Maker, and certain
other Lenders (as the same may be amended or modified the “Credit Agreement”).

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

     3. Calculation of Interest. Interest shall be computed for the actual number of days
elapsed in a year (up to 365, or 366 in a leap year) deemed to consist of 360 days, unless the
Ceiling Rate would thereby be exceeded, in which event, to the extent necessary to avoid exceeding
the Ceiling Rate, interest shall be computed on the basis of the actual number of days elapsed in
the applicable calendar year in which it accrued.

     4. Excess Interest Will be Refunded or Credited. If, for any reason whatever, the
interest paid or received on this note during its full term produces a rate which exceeds the
Ceiling Rate, the Holder of this note shall refund to the payor or, at the Holder’s option, credit
against the principal of this note such portion of that interest as shall be necessary to cause the
interest paid on this note to produce a rate equal to the Ceiling Rate.

     5. Interest Will be Spread. All sums paid or agreed to be paid to the Holder of this
note for the use, forbearance or detention of the indebtedness evidenced hereby, to the extent
permitted by applicable law and to the extent necessary to avoid violating applicable usury laws,

EXHIBIT C-1

Page 1 of 5 Pages

 

 

shall be amortized, prorated, allocated and spread in equal parts throughout the full term of
this note, so that the interest rate is uniform throughout the full term of this note.

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

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

     8. Revolving Credit. Upon and subject to the terms and conditions of the Credit
Agreement and the other provisions of this note, Maker may borrow, repay and reborrow against this
note at any time unless and until a default (however designated) or event (an “Event of
Potential Default”) which, if not cured after notice or before the lapse of time (or both)
would develop into a default under this note, the Credit Agreement or any other Credit Documents
has occurred which the Holder has not declared to have been fully cured or waived, and (except as
the Credit Agreement or any of the other Credit Documents may otherwise provide) there is no limit
on the number of advances against this note so long as the total unpaid principal of this note at
any time outstanding does not exceed $100,000,000.00. Interest on the amount of each advance
against this note shall be computed on the amount of the unpaid balance of that advance from the
date it is made until the date it is repaid. If Maker’s right (if any) to borrow against this note
shall ever lapse because of the occurrence of any default, it shall not be reinstated (or construed
from any course of conduct or otherwise to have been reinstated) unless and until the Holder shall
declare in a signed writing that it has been cured or waived. The unpaid principal balance of this
note at any time shall be the total of all principal lent against this note to Maker or for Maker’s
account less the sum of all principal payments and permitted prepayments on this note received by
the Holder. Absent manifest error, the Holder’s computer records shall on any day conclusively
evidence the unpaid balance of this note and its advances and payments history posted up to that
day. All loans and advances and all payments and permitted prepayments made on this note may be
(but are not required to be) endorsed by the Holder on the schedule attached hereto (which is
hereby made a part hereof for all purposes) or otherwise recorded in the Holder’s computer or
manual records; provided, that any Holder’s failure to make notation of (a) any principal
advance or accrual of interest shall not cancel, limit or otherwise affect Maker’s obligations or
any Holder’s rights with respect to that advance or accrual, or (b) any payment or permitted
prepayment of principal or interest shall not cancel, limit or otherwise affect Maker’s entitlement
to credit for that payment as of the date of its receipt by the Holder. Maker and Payee expressly
agree, as expressly allowed by Chapter 346 of the Texas Finance Code, that Chapter 346 (which
relates to open-end line of credit revolving loan accounts) shall not apply to this note or to any
loan evidenced by this note and that neither this note nor any such loan shall be governed by
Chapter 346 or subject to its provisions in any manner whatsoever.

     9. Credit Agreement. This note has been issued pursuant to the terms of the Credit
Agreement, to which reference is made for all purposes. Advances against this note by Payee or
other Holder hereof shall be governed by the Credit Agreement. Payee is entitled to the benefits
of the Credit Agreement. As additional security for this note, Maker hereby grants to Payee and

EXHIBIT C-1

Page 2 of 5 Pages

 

 

all other present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits (general or special,
time or demand, provisional or final) at any time held by the Payee or other Holder for any Maker’s
credit or account.

     10. Defaults and Remedies. Time is of the essence. Maker’s failure to pay any
principal or accrued interest owing on this note when due and after expiration of any applicable
period for notice and right to cure such a default which is specifically provided for in the Credit
Agreement or any other provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this note, whereupon the
Holder may elect to exercise any or all rights, powers and remedies afforded (a) under the Credit
Agreement and all other papers related to this note and (b) by law, including the right to
accelerate the maturity of this entire note.

     In addition to and cumulative of such rights, the Holder is hereby authorized at any time and
from time to time after any such default, at Holder’s option, without notice to Maker or any other
person or entity (all rights to any such notice being hereby waived), to set off and apply any and
all of any Maker’s deposits at any time held by the Holder, and any other debt at any time owing by
the Holder to or for the credit or account of any Maker, against the outstanding balance of this
note, in such order and manner as Holder may elect in its sole discretion.

     The Holder’s right to accelerate this note on account of any late payment or other default
shall not be waived or deemed waived by the Holder by reason of the Holder’s having previously
accepted one or more late payments or by reason of any Holder’s otherwise not accelerating this
note or exercising other remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict compliance with this
note or any papers securing or otherwise relating to it before such Holder may accelerate this note
or exercise any other remedy.

     Nothing in this Section or elsewhere shall be construed as diminishing Holder’s absolute right
to demand payment of all or any part of this note at any time.

     11. Legal Costs. If any Holder of this note retains an attorney in connection with
any such default or to collect, enforce or defend this note or any papers intended to secure or
guarantee it in any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, or
if Maker sues any Holder in connection with this note or any such papers and does not prevail, then
Maker agrees to pay to each such Holder, in addition to principal and interest, all reasonable
costs and expenses incurred by such Holder in trying to collect this note or in any such suit or
proceeding, including reasonable attorneys’ fees.

     12. Waivers. Except only for any notices which are specifically required by the
Credit Agreement, Maker and any and all co-makers, endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for payment, protest,
diligence in collecting and the filing of suit for the purpose of fixing liability and consent

EXHIBIT C-1

Page 3 of 5 Pages

 

 

that the time of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability on or with respect
to this note shall not be affected by any release of or change in any guaranty or security at any
time existing or by any failure to perfect or maintain perfection of any lien against or security
interest in any such security or the partial or complete unenforceability of any guaranty or other
surety obligation, in each case in whole or in part, with or without notice and before or after
maturity.

     13. Rate of Return Maintenance Covenant. If at any time after the date of this note,
any Holder determines that (a) any applicable law, rule or regulation regarding capital adequacy of
general applicability has been adopted or changed, or (b) its interpretation or administration by
any governmental authority, central bank or comparable agency has changed, and determines that such
change or the Holder’s compliance with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of return on the Holder’s
capital as a consequence of its obligations under this note or any related papers to a level below
that which the Holder could have achieved but for such adoption, change or compliance (taking into
consideration the Holder’s own capital adequacy policies) by an amount the Holder deems to be
material, then Maker promises to pay from time to time to the order of the Holder such additional
amount or amounts as will compensate the Holder for such reduction. A certificate of any Holder
setting forth the amount or amounts necessary to compensate the Holder as specified above shall be
given to Maker as soon as practicable after the Holder has made such determination and shall be
conclusive and binding, absent manifest error. Maker shall pay the Holder the amount shown as due
on any such certificate within 15 days after the Holder gives it. In preparing such certificate,
the Holder may employ such assumptions and make such allocations of costs and expenses as the
Holder in good faith deems reasonable and may use any reasonable averaging and attribution method.

     14. Governing Law, Jurisdiction and Venue. This note shall be governed by and
construed in accordance with the laws of the State of Texas and the United States of America from
time to time in effect.

     15. General Purpose of Loan. Maker warrants and represents to Payee and all other
Holders that all loans evidenced by this note are and will be for business, commercial, investment
or other similar purpose and not primarily for personal, family, household or agricultural use.

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

     17. Limitation of Liability. No obligation or liability whatsoever of Maker which may
arise at any time under this promissory note or any obligation or liability which may be incurred
by it pursuant to any other instrument, transaction or undertaking contemplated hereby shall be
personally binding upon, nor shall resort for the enforcement thereof be had to the

EXHIBIT C-1

Page 4 of 5 Pages

 

 

private property of, any of Maker’s trustees or shareholders regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.

	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

EXHIBIT C-1

Page 5 of 5 Pages

 

 

MASTER NOTE

Money Market Borrowings

	 	 	 
	$300,000,000.00

	 	                    ,2004

     FOR VALUE RECEIVED ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust
(herein called “Maker”) promises to pay to the order of                                                              (“Payee”), at the offices
of JPMorgan Chase Bank, N.A., as “Agent” under the Credit Agreement, at 712 Main Street,
Houston, Texas 77002, or at such other place as the holder (the “Holder”, whether or not
Payee is such holder) of this note may hereafter designate in writing, in immediately available
funds and in lawful money of the United States of America, the principal sum of Three Hundred
Million Dollars ($300,000,000.00) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal balance of this note
from time to time outstanding at the Stated Rate for Money Market Loans and interest on all past
due amounts, both principal and accrued interest, at the Past Due Rate; provided, that for
the full term of this note the interest rate produced by the aggregate of all sums paid or agreed
to be paid to the Holder of this note for the use, forbearance or detention of the debt evidenced
hereby (including, but not limited to, all interest on this note at the Stated Rate for Money
Market Loans) shall not exceed the Ceiling Rate.

     1. Definitions. Any terms not defined herein shall have the meaning given to them in
the Amended and Restated Credit Agreement dated of even date herewith among the Maker, the Agent
and certain other Lenders (as the same has been and may be further amended or modified the “Credit
Agreement”).

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

     3. Calculation of Interest. Interest shall be computed for the actual number of days
elapsed in a year (up to 365, or 366 in a leap year) deemed to consist of 360 days, unless the
Ceiling Rate would thereby be exceeded, in which event, to the extent necessary to avoid exceeding
the Ceiling Rate, interest shall be computed on the basis of the actual number of days elapsed in
the applicable calendar year in which it accrued.

     4. Excess Interest Will be Refunded or Credited. If, for any reason whatever, the
interest paid or received on this note during its full term produces a rate which exceeds the

Ceiling Rate, the Holder of this note shall refund to the payor or, at the Holder’s option, credit

EXHIBIT C-2

Page 1 of 5 Pages

 

 

against the principal of this note such portion of that interest as shall be necessary to
cause the interest paid on this note to produce a rate equal to the Ceiling Rate.

     5. Interest Will be Spread. All sums paid or agreed to be paid to the Holder of this
note for the use, forbearance or detention of the indebtedness evidenced hereby, to the extent
permitted by applicable law and to the extent necessary to avoid violating applicable usury laws,
shall be amortized, prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this note.

     6. Payment Schedule. The principal of this note shall be due and payable on the date
set forth in each Notice of Money Market Borrowing with respect to the principal borrowed pursuant
to said Notice, and the Maturity Date. Accrued and unpaid interest shall be due and payable on
each Interest Payment Date.

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

     8. Revolving Credit. Upon and subject to the terms and conditions of the Credit
Agreement and the other provisions of this note, Maker may borrow, repay and reborrow against this
note at any time unless and until a default (however designated) or event (an “Event of Potential
Default”) which, if not cured after notice or before the lapse of time (or both) would develop into
a default under this note, the Credit Agreement or any other Credit Documents has occurred which
the Holder has not declared to have been fully cured or waived, and (except as the Credit Agreement
or any of the other Credit Documents may otherwise provide) there is no limit on the number of
advances against this note so long as the total unpaid principal of this note at any time
outstanding does not exceed $300,000,000.00. Interest on the amount of each advance against this
note shall be computed on the amount of the unpaid balance of that advance from the date it is made
until the date it is repaid. If Maker’s right (if any) to borrow against this note shall ever
lapse because of the occurrence of any default, it shall not be reinstated (or construed from any
course of conduct or otherwise to have been reinstated) unless and until the Holder shall declare
in a signed writing that it has been cured or waived. The unpaid principal balance of this note at
any time shall be the total of all principal lent against this note to Maker or for Maker’s account
less the sum of all principal payments and permitted prepayments on this note received by the
Holder. Absent manifest error, the Holder’s computer records shall on any day conclusively
evidence the unpaid balance of this note and its advances and payments history posted up to that
day. All loans and advances and all payments and permitted prepayments made on this note may be
(but are not required to be) endorsed by the Holder on the schedule attached hereto (which is
hereby made a part hereof for all purposes) or otherwise recorded in the Holder’s computer or
manual records; provided, that any Holder’s failure to make notation of (a) any principal advance
or accrual of interest shall not cancel, limit or otherwise affect Maker’s obligations or any
Holder’s rights with respect to that advance or accrual, or (b) any payment or

EXHIBIT C-2

Page 2 of 5 Pages

 

 

permitted prepayment of principal or interest shall not cancel, limit or otherwise affect
Maker’s entitlement to credit for that payment as of the date of its receipt by the Holder. Maker
and Payee expressly agree, as expressly allowed by Chapter 346 of the Texas Finance Code, that
Chapter 346 (which relates to open-end line of credit revolving loan accounts) shall not apply to
this note or to any loan evidenced by this note and that neither this note nor any such loan shall
be governed by Chapter 346 or subject to its provisions in any manner whatsoever.

     9. Credit Agreement. This note has been issued pursuant to the terms of Section 2.8
of the Credit Agreement, to which reference is made for all purposes. Advances against this note
by Payee or other Holder hereof shall be governed by the Credit Agreement. Payee is entitled to
the benefits of the Credit Agreement. As additional security for this note, Maker hereby grants to
Payee and all other present and future Holders an express lien against, security interest in and
contractual right of setoff in and to, all property and any and all deposits (general or special,
time or demand, provisional or final) at any time held by the Payee or other Holder for any Maker’s
credit or account.

     10. Defaults and Remedies. Time is of the essence. Maker’s failure to pay any
principal or accrued interest owing on this note when due and after expiration of any applicable
period for notice and right to cure such a default which is specifically provided for in the Credit
Agreement or any other provision of this note, or the occurrence of any default under the Credit
Agreement or any other Credit Documents shall constitute default under this note, whereupon the
Holder may elect to exercise any or all rights, powers and remedies afforded (a) under the Credit
Agreement and all other papers related to this note and (b) by law, including the right to
accelerate the maturity of this entire note.

     In addition to and cumulative of such rights, the Holder is hereby authorized at any time and
from time to time after any such default, at Holder’s option, without notice to Maker or any other
person or entity (all rights to any such notice being hereby waived), to set off and apply any and
all of any Maker’s deposits at any time held by the Holder, and any other debt at any time owing by
the Holder to or for the credit or account of any Maker, against the outstanding balance of this
note, in such order and manner as Holder may elect in its sole discretion.

     The Holder’s right to accelerate this note on account of any late payment or other default
shall not be waived or deemed waived by the Holder by reason of the Holder’s having previously
accepted one or more late payments or by reason of any Holder’s otherwise not accelerating this
note or exercising other remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person that Holder is requiring strict compliance with this
note or any papers securing or otherwise relating to it before such Holder may accelerate this note
or exercise any other remedy.

     Nothing in this Section or elsewhere shall be construed as diminishing Holder’s absolute right
to demand payment of all or any part of this note at any time.

EXHIBIT C-2

Page 3 of 5 Pages

 

 

     11. Legal Costs. If any Holder of this note retains an attorney in connection with
any such default or to collect, enforce or defend this note or any papers intended to secure or
guarantee it in any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, or
if Maker sues any Holder in connection with this note or any such papers and does not prevail, then
Maker agrees to pay to each such Holder, in addition to principal and interest, all reasonable
costs and expenses incurred by such Holder in trying to collect this note or in any such suit or
proceeding, including reasonable attorneys’ fees.

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

     13. Rate of Return Maintenance Covenant. If at any time after the date of this note,
any Holder determines that (a) any applicable law, rule or regulation regarding capital adequacy of
general applicability has been adopted or changed, or (b) its interpretation or administration by
any governmental authority, central bank or comparable agency has changed, and determines that such
change or the Holder’s compliance with any request or directive regarding capital adequacy of
general applicability (whether or not having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of return on the Holder’s
capital as a consequence of its obligations under this note or any related papers to a level below
that which the Holder could have achieved but for such adoption, change or compliance (taking into
consideration the Holder’s own capital adequacy policies) by an amount the Holder deems to be
material, then Maker promises to pay from time to time to the order of the Holder such additional
amount or amounts as will compensate the Holder for such reduction. A certificate of any Holder
setting forth the amount or amounts necessary to compensate the Holder as specified above shall be
given to Maker as soon as practicable after the Holder has made such determination and shall be
conclusive and binding, absent manifest error. Maker shall pay the Holder the amount shown as due
on any such certificate within 15 days after the Holder gives it. In preparing such certificate,
the Holder may employ such assumptions and make such allocations of costs and expenses as the
Holder in good faith deems reasonable and may use any reasonable averaging and attribution method.

EXHIBIT C-2

Page 4 of 5 Pages

 

 

     14. Governing Law, Jurisdiction and Venue. This note shall be governed by and
construed in accordance with the laws of the State of Texas and the United States of America from
time to time in effect.

     15. General Purpose of Loan. Maker warrants and represents to Payee and all other
Holders that all loans evidenced by this note are and will be for business, commercial, investment
or other similar purpose and not primarily for personal, family, household or agricultural use.

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

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

	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

EXHIBIT C-2

Page 5 of 5 Pages

 

 

Form of Money Market Quote Request

	 	 	 
	To:

	 	JPMorgan Chase Bank, N.A. (the “Agent”)
	 
	 	 
	From:

	 	Archstone-Smith Operating Trust (the “Borrower”)
	 
	 	 
	Re:

	 	Amended and Restated Credit Agreement (the “Credit Agreement”),
dated December 13, 2004 among the Borrower, the Lenders parties
thereto and the Agent

          We hereby give notice pursuant to Section 2.8 of the Credit Agreement that we request Money
Market Quotes for the following proposed Money Market Loan(s):

Date of Borrowing:                                         

	 	 	 
	Principal Amount

	 	Interest Period

	$
	 	 

          Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The
applicable base rate is the Adjusted Eurodollar Interbank Rate].

          The funding of Money Market Loans made in connection with this Money Market Quote Request
[may/may not] be made by Designated Lenders.

          Terms used herein have the meanings assigned to them in the Credit Agreement.

	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

                                             

Amount must be $20,000,000 or a larger multiple of $1,000,000.

Not less than one month (LIBOR Auction) or not less than 30 days (Absolute Rate Auction), subject
to the provisions of the definition of Interest Period.

EXHIBIT E

Page 1 of 1 Page

 

 

EXHIBIT F

Form of Invitation for Money Market Quotes

	 	 	 
	To:

	 	[Name of Lender]
	 
	 	 
	RE:

	 	Invitation for Money Market Quotes to Archstone-Smith Operating Trust
(the “Borrower”)

     Pursuant to Section 2.8 of the Amended and Restated Credit Agreement dated December 13, 2004
among the Borrower, the Lenders parties thereto and the undersigned, as Agent, we are pleased on
behalf of the Borrower to invite you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Loan(s):

Date of Borrowing:                                         

	 	 	 
	Principal Amount

	 	Interest Period
	$
	 	 

     Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate]. [The applicable
base rate is the Adjusted Eurodollar Interbank Rate.]

     Please respond to this invitation by no later than                      A.M. (New York, New York time) on
[date].

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as Agent
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Authorized Officer

EXHIBIT F

Page 1 of 1 Page

 

 

Form of Money Market Quote

To: JPMorgan Chase Bank, N.A., as Agent

RE: Money Market Quote to Archstone-Smith Operating Trust (the “Borrower”)

     In response to your invitation on behalf of the Borrower dated ___, 200___, we
hereby make the following Money Market Quote on the following terms:

	1.  	Quoting Bank:                                        
	 
	2.  	Person to contact at Quoting Bank:
	 
	3.  	We hereby offer to make Money Market Loan(s) in the following principal amounts, for the
following Interest Periods and the following rates:

	 	 	 	 	 	 	 	 	 
	 Principal	 	Interest	 	 	Money Market	 
	 Amount	 	Period	 	 	[Margin]_[Absolute Rate]	 
	$
	 	 	 	 	 	 	 	 
	$
	 	 	 	 	 	 	 	 

[Provided, that the aggregate principal amount of Money Market Loans for which the above
offers may be accepted shall not exceed $___.]

               We understand and agree that the offer(s) set forth above, subject to the satisfaction
of the applicable conditions set forth in the Amended and Restated Credit Agreement dated
December 13, 2004 among the Borrower, the Lenders parties thereto and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	[NAME OF LENDER]
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	By:	 	 
	

	 	 
	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	       Authorized Officer

EXHIBIT G

Page 1 of 1

 

Form of Designation Agreement

Dated ____________, 200__

     Reference is made to that certain Amended and Restated Credit Agreement dated December 13,
2004 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”)
among ARCHSTONE-SMITH OPERATING TRUST, the Lenders parties thereto, and JPMORGAN CHASE BANK, N.A.
(the “Agent”), as Agent. Terms defined in the Credit Agreement are used herein with the same
meaning.

     [NAME OF DESIGNOR] (the “Designor”), [NAME OF DESIGNEE] (the “Designee”), the Agent and
Borrower agree as follows:

     1. The Designor hereby designates the Designee, and the Designee hereby accepts such
designation, to have a right to make Money Market Loans pursuant to Section 2.8 of the Credit
Agreement. Any assignment by Designor to Designee of its rights to make a Money Market Loan
pursuant to such Section 2.8 shall be effective at the time of the funding of such Money Market
Loan and not before such time.

     2. Except as set forth in Section 7 below, the Designor makes no representation or warranty
and assumes no responsibility pursuant to this Designation Agreement with respect to (a) any
statements, warranties or representations made in or in connection with any Credit Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of any Credit
Document or any other instrument and document furnished pursuant thereto and (b) the financial
condition of the Borrower or the performance or observance by the Borrower of any of its
obligations under any Credit Document or any other instrument or document furnished pursuant
thereto.

     3. The Designee (a) confirms that it has received a copy of each Credit Document, together
with copies of the financial statements referred to in Section 5.2 of the Credit Agreement and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will independently and
without reliance upon the Agent, the Designor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under any Credit Document; (c) confirms that it is a Designated Lender;
(d) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under any Credit Document as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental thereto; and (e)
agrees to be bound by each and every provision of each Credit Document and further agrees that it
will perform in accordance with their terms all of the obligations which by the terms of any Credit
Document are required to be performed by it as a Lender.

     4. The Designee hereby appoints Designor as Designee’s agent and attorney in fact, and grants
to Designor an irrevocable power of attorney, to receive payments made for the

EXHIBIT H

Page 1 of 4

 

 

benefit of Designee under the Credit Agreement, to deliver and receive all communications and
notices under the Credit Agreement and other Credit Documents and to exercise on Designee’s behalf
all rights to vote and to grant and make approvals, waivers, consents or amendments to or under the
Credit Agreement or other Credit Documents. Any document executed by the Designor on the
Designee’s behalf in connection with the Credit Agreement or other Credit Documents shall be
binding on the Designee. The Borrower, the Agent and each of the Lenders may rely on and are
beneficiaries of the preceding provisions.

     5. Following the execution of this Designation Agreement by the Designor and its Designee, it
will be delivered to the Agent for acceptance by the Agent. The effective date for this
Designation Agreement (the “Effective Date”) shall be the date of acceptance hereof by the Agent,
unless otherwise specified on the signature page hereto.

     6. The Agent hereby agrees that it will not institute against any Designee or join any other
Person in instituting against any Designee any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any federal or state bankruptcy or similar law, until the later to
occur of (i) one year and one day after the payment in full of the latest maturing commercial paper
note issued by such Designee and (ii) the Maturity Date.

     7. The Designor unconditionally agrees to pay or reimburse the Designee and save the Designee
harmless against all liabilities, obligations, losses, damages, penalties, actions and judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed or
asserted by any of the parties to the Credit Documents against the Designee, in its capacity as
such, in any way relating to or arising out of this Designation Agreement or any other Credit
Documents or any action taken or omitted by the Designee hereunder or thereunder, INCLUDING THE
NEGLIGENCE OF THE DESIGNEE provided that the Designor shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements if the same results from the Designee’s gross negligence or willful misconduct.

     8. As of the Effective Date the Designee shall be a party to the Credit Agreement with a right
(subject to the provisions of Section 2.8(b)) to make Money Market Loans as a Lender pursuant to
Section 2.8 of the Credit Agreement and the rights and obligations of a Lender related thereto;
provided, however, that the Designee shall not be required to make payments with respect to such
obligations except to the extent of excess cash flow of such Designee which is not otherwise
required to repay obligations of such Designee, which are then due and payable. Notwithstanding
the foregoing, the Designor, as administrative agent for the Designee, shall be and remain
obligated to the Borrower, the Agent and the Lenders for each and every one of the obligations of
the Designee and its Designor with respect to the Credit Agreement, including, without limitation,
any indemnification obligations under Section 8.5 of the Credit Agreement and any sums otherwise
payable to the Borrower by the Designee.

     9. This Designation Agreement shall be governed by, and construed in accordance with, the laws
of the State of Texas.

EXHIBIT H

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     10. This Designation Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page to this Designation Agreement by facsimile transmission
shall be effective as delivery of a manually executed counterpart of this Designation Agreement.

     IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally bound, have caused
this Designation Agreement to be executed by their officers thereunto duly authorized as of the
date first above written.

Effective Date:

                                        , 200___

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	[NAME OF DESIGNOR], as Designor
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	[NAME OF DESIGNEE], as Designee
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Lending Office

(and address for notices):
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	[Address]	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Accepted this _____ day of	 	 	 	 	 	 	 	 
	______________, 200__	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A., as Agent	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 

EXHIBIT H

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FORM OF GUARANTY

     THIS GUARANTY dated as of ___, 2004 executed and delivered by each of the
undersigned, whether one or more, (all each a “Guarantor” and collectively, the “Guarantors”), in
favor of (a) JPMORGAN CHASE BANK, N.A., in its capacity as Agent (the “Agent”) for the Lenders
under that certain Amended and Restated Credit Agreement dated as of December 13, 2004 by and among
ARCHSTONE-SMITH OPERATING TRUST (the “Borrower”), the financial institutions party thereto and
their assignees in accordance therewith (the “Lenders”), and the Agent (as the same may be amended,
restated, supplemented or otherwise modified from time to time in accordance with its terms, the
“Credit Agreement”) and (b) the Lenders.

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

     WHEREAS, each Guarantor is a wholly-owned Subsidiary of the Borrower;

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

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

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

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

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

EXHIBIT I

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reasonable attorneys’ fees and disbursements, that are incurred by the Lenders or the Agent in
the enforcement of any of the foregoing or any obligation of such Guarantor hereunder.

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

     Section 3. Guaranty Absolute. Each Guarantor guarantees that the Obligations will be
paid strictly in accordance with the terms of the documents evidencing the same, regardless of any
Legal Requirement now or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Lenders with respect thereto. The liability of each Guarantor under this
Guaranty shall be absolute and unconditional in accordance with its terms and shall remain in full
force and effect without regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including without limitation, the
following (whether or not such Guarantor consents thereto or has notice thereof):

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

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

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

EXHIBIT I

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

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

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

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

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

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

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

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

     Section 5. Representations and Warranties. Each Guarantor hereby makes to the Agent
and the Lenders all of the representations and warranties made by the Borrower with respect to or
in any way relating to such Guarantor in the Credit Agreement and the other Credit Documents, as if
the same were set forth herein in full.

     Section 6. Covenants. Each Guarantor will comply with all covenants which the
Borrower is to cause such Guarantor to comply with under the terms of the Credit Agreement or

EXHIBIT I

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

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

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

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

     Section 10. Subrogation. Until all of the Obligations shall have been indefeasibly
paid in full, no Guarantor shall have any right of subrogation and each Guarantor hereby waives any
right to enforce any remedy which the Agent and/or the Lenders now have or may hereafter have
against the Borrower, and each Guarantor hereby waives any benefit of, and any right to participate
in, any security or collateral given to the Agent and the Lenders to secure payment or performance
of any of the Obligations.

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

     Section 12. Set-off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, each Lender is hereby authorized by
each

EXHIBIT I

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

     Section 13. Subordination. Each Guarantor hereby expressly covenants and agrees for
the benefit of the Agent and the Lenders that all obligations and liabilities of the Borrower or
any other Guarantor to such Guarantor of whatever description, including without limitation, all
intercompany receivables of such Guarantor from the Borrower or any other Guarantor (collectively,
the “Junior Claims”) shall be subordinate and junior in right of payment to all Obligations. If an
Event of Default shall have occurred and be continuing, then no Guarantor shall accept any direct
or indirect payment (in cash, property, securities by setoff or otherwise) from the Borrower or any
other Guarantor on account of or in any manner in respect of any Junior Claim until all of the
Obligations have been indefeasibly paid in full.

     Section 14. Avoidance Provisions. It is the intent of each Guarantor, the Agent and
the Lenders that in any Proceeding, such Guarantor’s maximum obligation hereunder shall equal, but
not exceed, the maximum amount which would not otherwise cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent and the Lenders) to be avoidable
or unenforceable against such Guarantor in such Proceeding as a result of applicable law, including
without limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the “Bankruptcy
Code”) and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in
such Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The
applicable laws under which the possible avoidance or unenforceability of the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the Agent and the Lenders) shall
be determined in any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly, to
the extent that the obligations of any Guarantor hereunder would otherwise be subject to avoidance
under the Avoidance Provisions, the maximum Obligations for which such Guarantor shall be liable
hereunder shall be reduced to that amount which, as of the time any of the Obligations are deemed
to have been incurred under the Avoidance Provisions, would not cause the obligations of any
Guarantor hereunder (or any other obligations of such Guarantor to the Agent and the Lenders), to
be subject to avoidance under the Avoidance Provisions. This Section is intended solely to preserve
the rights of the Agent and the Lenders hereunder to the maximum extent that would not cause the
obligations of any Guarantor hereunder to be subject to avoidance under the Avoidance Provisions,
and no Guarantor nor any other Person shall have any right or claim under this Section as against
the Agent and the Lenders that would not otherwise be available to such Person under the Avoidance
Provisions.

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

     Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

     SECTION 17. JURISDICTION, VENUE.

     (a) EACH GUARANTOR AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS,
HOUSTON DIVISION, OR, AT THE OPTION OF THE AGENT, ANY STATE COURT LOCATED IN HARRIS COUNTY, TEXAS
SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY
OR ANY OTHER CREDIT DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM OR ANY COLLATERAL. EACH
GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED IN SUCH COURTS. 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 IN ANY OTHER APPROPRIATE JURISDICTION. FURTHER, EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     (b) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND WITH A FULL
UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE OBLIGATIONS
AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER CREDIT DOCUMENTS AND THE TERMINATION OF
THIS GUARANTY.

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

EXHIBIT I

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

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

     SECTION 21. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE GUARANTORS
HEREUNDER AND UNDER OTHER CREDIT DOCUMENTS SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH
GUARANTOR CONFIRMS THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE OBLIGATIONS AND ALL OF THE
OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER AND UNDER OTHER COURT
DOCUMENTS.

     Section 22. Amendments. This Guaranty may not be amended except as provided in the
Credit Agreement.

     Section 23. Payments. All payments made by any Guarantor pursuant to this Guaranty
shall be made in Dollars, in immediately available funds to the Agent at its Lending Office, not
later than 12:00 noon, New York, New York time on the date one (1) Business Day after demand
therefor.

     Section 24. Notices. All notices, requests and other communications hereunder shall
be in writing and shall be given as provided in the Loan Agreement. Each Guarantor’s address for
notice is set forth below its signature hereto.

     Section 25. Severability. In case any provision of this Guaranty shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

     Section 26. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.

EXHIBIT I

Page 7 of 9

 

 

     Section 27. Definitions. (a) For the purposes of this Guaranty:

     “Proceeding” means any of the following: (i) a voluntary or involuntary case
concerning any Guarantor shall be commenced under the Bankruptcy Code or any other applicable
bankruptcy laws; (ii) a custodian (as defined in the Bankruptcy Code or any other applicable
bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property
of any Guarantor; (iii) any other proceeding under any applicable law, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of
debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any
Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief or other order approving
any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor
makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or
shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become
due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act
indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate
action shall be taken by any Guarantor for the purpose of effecting any of the foregoing.

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

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

	 	 	 	 	 
	

	 	 	 	[Guarantor Signature]
	 
	 	 	 	 
	

	 	 	 	Address:
	

	 	 	 	9200 E. Panorama Circle
	

	 	 	 	Suite 400
	

	 	 	 	Englewood, Colorado 80112
	

	 	 	 	Attention: Corporate Finance

EXHIBIT I

Page 8 of 9

 

 

ASSIGNMENT AND ASSUMPTION

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

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

	 	 	 	 	 
	1.

	 	Assignor:	 	 
	

	 	 	 	 
	 
	 	 	 	 
	2.

	 	Assignee:	 	 
	

	 	 	 	 
	 

	 	 	[and is an Affiliate/Approved Fund of [identify Lender]1]	 
	 
	 	 	 	 
	3.

	 	Borrower:
	Archstone-Smith Operating Trust	 
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	[The Amended and Restated Credit Agreement dated as of December 13, 2004 among Archstone-Smith
Operating Trust, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other lenders parties thereto]

	1 Select as applicable.

EXHIBIT J

Page 1 of 3

 

 

	6.  	Assigned Interest:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Aggregate Amount of	 	 	 	Amount of	 	 	 	 	 	 
	 	 	 	 	Commitment/Loans for	 	 	 	Commitment/Loans	 	 	 	Percentage Assigned of	 	 
	 	Facility Assigned2	 	 	all Lenders	 	 	 	Assigned	 	 	 	Commitment/Loans3	 	 
	 	 
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	 
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 	 
	 	 	$	 	 	 	 	$	 	 	 	 	 	%	 	 
	 

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

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

	 	 	 	 	 	 	 
	 	 	ASSIGNOR
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 Title:	 	 	 	 

	2 Fill in the appropriate terminology for the types of
facilities under the Credit Agreement that are being assigned under this
Assignment (e.g. “Revolving Commitment,” “Tranche A Commitment,” “Tranche B
Commitment,” etc.)
	 
	3 Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

EXHIBIT J

Page 2 of 3

 

 

[Consented to and]4 Accepted:

JPMORGAN CHASE BANK, N.A.,
as

Administrative Agent

	 	 	 
	By
	 	 
	

	 	 
	 Title:
	 	 

[Consented to:]5

[NAME OF RELEVANT PARTY]

	 	 	 
	By
	 	 
	

	 	 
	 Title:
	 	 

	4 To be added only if the consent of the Administrative
Agent is required by the terms of the Credit Agreement.
	 
	5 To be added only if the consent of the Borrower and/or
other parties (e.g. Swingline Lender, Issuing Bank) is required by the terms of
the Credit Agreement.

EXHIBIT J

Page 3 of 3

 

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

     1. Representations and Warranties.

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

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

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

     3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.

EXHIBIT J

Page 1 of 3

 

 

GUARANTY OF COLLECTION

     THIS GUARANTY (this “Guaranty”), dated as of ___is made by ___
(the “Guarantor”), in favor of (a) JPMorgan Chase Bank, N.A., in its capacity as Administrative
Agent (the “Agent”) for the Lenders under that certain Amended and Restated Credit Agreement dated
as of December 13, 2004 by and among Archstone-Smith Operating Trust (the “Borrower”), the
financial institutions party thereto and their assignees in accordance therewith (the “Lenders”),
and the Agent (as the same may be amended, restated, supplemented, or otherwise modified from time
to time in accordance with its terms, the “Credit Agreement”) and (b) the Lenders.

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

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

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

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

	 	(a)  	Any lack of validity or enforceability of the Credit Agreement or any other
Credit Documents or agreement relating thereto or executed in connection therewith;
	 
	 	(b)  	Any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations or any other amendment or waiver of or any consent

EXHIBIT K

Page 1 of 4

 

 

to any departure from the Credit Agreement, any other Credit Documents or any other
documents or agreement relating thereto or executed in connection therewith;

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

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

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

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

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

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

     SECTION 7. Notices. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing or by facsimile, telegraph or

EXHIBIT K

Page 2 of 4

 

 

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

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

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

     SECTION 10. Savings Clause. Nothing herein is intended to contract for, take,
reserve, charge or receive interest or other consideration for the use, forbearance or detention of
money at a rate in excess of the highest rate permitted by applicable laws (“Highest Lawful Rate”)
nor shall the Guarantor be required to pay unearned interest. If any amount payable by the
Guarantor hereunder is deemed to constitute unearned interest or if the Agent shall receive from
the Guarantor any monies that are deemed to constitute interest at a rate in excess of the Highest
Lawful Rate, then (a) the amount of interest which would otherwise be payable under this Guaranty
shall be reduced to the amount allowed under applicable law, and (b) any unearned interest paid by
the Guarantor or any interest paid by the Guarantor in excess of the Highest Lawful Rate shall, at
the option of the Agent, be either refunded to the Guarantor or credited against the amounts
payable by the Guarantor hereunder, in such order as the Agent shall determine.

     SECTION 11. Governing Law. This Guaranty shall be deemed to be executed by the
parties hereto under the laws of the State of Texas, and shall be construed in accordance with the
laws of Texas and applicable federal law.

     SECTION 12. Waiver of Suretyship Rights. By signing this Guaranty, Guarantor WAIVES
each and every right to which it may be entitled by virtue of any suretyship law, including any
rights it may have pursuant to Rule 31 of the Texas Rules of Civil Procedure, §17.001 of the Texas
Civil Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce Code, as the
same may be amended from time to time.

     SECTION 13. Release of Claims. Guarantor hereby releases, discharges and acquits
forever Agent, Lenders and their respective officers, directors, trustees, agents, employees and
counsel (in each case, past, present or future) from any and all Claims existing as of the date
hereof (or the date of actual execution hereof by Guarantor, if later). As used herein, the term
“Claim” shall mean any and all liabilities, claims, defenses, demands, actions, causes of
action,

EXHIBIT K

Page 3 of 4

 

 

judgments, deficiencies, interest, liens, costs or expenses (including court costs, penalties,
attorneys’ fees and disbursements, and amounts paid in settlement) of any kind and character
whatsoever, including claims for usury, breach of contract, breach of commitment, negligent
misrepresentation or failure to act in good faith, in each case whether now known or unknown,
suspected or unsuspected, asserted or unasserted or primary or contingent, and whether arising out
of written documents, unwritten undertakings, course of conduct, tort, violations of laws or
regulations or otherwise. To the maximum extent permitted by applicable law, Guarantor hereby
waives all rights, remedies, claims and defenses based upon or related to Sections 51.003,
51.004 and 51.005 of the Texas Property Code, to the extent the same pertain or may
pertain to any enforcement of this Guaranty.

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

	 	 	 	 	 	 	 
	 	 	[Name of Guarantor]
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[Address of Guarantor]

EXHIBIT K

Page 4 of 4exv10w54

 

Exhibit 10.54

DECEMBER 2004 AMENDMENT TO

LOAN AND SECURITY AGREEMENT

AND AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS

     THIS DECEMBER 2004 AMENDMENT TO LOAN AND SECURITY AGREEMENT AND AMENDMENT TO CERTAIN OTHER
LOAN DOCUMENTS (the “Amendment”) is made and entered into on this ___day of December,
2004, by and among FLEET CAPITAL CORPORATION, a Rhode Island corporation, successor in interest by
merger to FLEET CAPITAL CORPORATION, a Connecticut corporation, formerly known as SHAWMUT CAPITAL
CORPORATION, successor in interest by assignment to BARCLAYS BUSINESS CREDIT, INC.
(“Lender”), LOWRANCE ELECTRONICS, INC., a Delaware corporation (“Lowrance”), LEI
EXTRAS, INC., a Delaware corporation (“LEI”), LOWRANCE CONTRACTS, INC., a Delaware
corporation (“Lowrance Contracts”), and SEA ELECTRONICS, INC., an Oklahoma corporation
(“Sea Electronics”) (Lowrance, LEI, Lowrance Contracts and Sea Electronics are herein
individually and collectively called “Borrower”).

RECITALS

     (A) Borrower, Lowrance Australia Pty Limited (“Lowrance Australia”) and Lender have
entered into that certain Loan and Security Agreement, dated December 15, 1993, as such Loan and
Security Agreement has been amended, including, without limitation, as amended by (i) that certain
First Amendment to Loan and Security Agreement, dated October 16, 1995, by and among Lender,
Borrower and Lowrance Australia, (ii) that certain Second Amendment to Loan and Security Agreement,
dated November 1, 1996 by and among Lender and Borrower, (iii) that certain Third Amendment to Loan
and Security Agreement, dated December 30, 1996, by and among Lender and Borrower, (iv) that
certain Fourth Amendment to Loan and Security Agreement, entered into effective as of April 1,
1997, by and among Lender and Borrower, (v) that certain Fifth Amendment to Loan and Security
Agreement, entered into effective as of August 25, 1997, by and between Lender and Borrower, (vi)
that certain Sixth Amendment to Loan and Security Agreement and Certain Other Loan Documents,
entered into effective as of August 28, 1997, by and between Lender and Borrower, (vii) that
certain Seventh Amendment to Loan and Security Agreement, entered into effective as of November 1,
1997, by and between Lender and Borrower, (viii) that certain Eighth Amendment to Loan and Security
Agreement, made and entered into as of December 9, 1997, by and between Lender and Borrower, (ix)
that certain Ninth Amendment to Loan and Security Agreement made and entered into as of September
14, 1998, by and between Lender and Borrower, (x) that certain Tenth Amendment to Loan and Security
Agreement and Amendment to Certain Other Loan Documents, executed in November of 1998, by Lender
and Borrower; (xi) that certain Eleventh Amendment to Loan and Security Agreement and Amendment to
Certain Other Loan Documents, executed March 14, 2000, by Lender and Borrower, (xii) that certain Twelfth Amendment to Loan and Security
Agreement and Amendment to Certain Other Loan Documents, executed October 15, 2000, by Lender and
Borrower, (xiii) that certain Thirteenth Amendment to Loan and Security Agreement and Amendment to
Certain Other Loan Documents and Limited Waiver entered into on October 19, 2001, by Lender and
Borrower, (xiv) that certain letter agreement, dated

1

 

December 14, 2001, by and between Lender and
Borrower, (xv) that certain Fourteenth Amendment to Loan and Security Agreement and Amendment to
Certain Other Loan Documents, entered into on March 11, 2002, by Lender and Borrower, (xvi) that
certain November 2002 Amendment to Loan and Security Agreement and Amendment to Certain Other Loan
Documents, entered into on November 26, 2002, by Lender and Borrower, (xvii) that certain waiver
and amendment letter agreement, dated May 29, 2003, entered into by Lender and Borrower, (xviii)
that certain amendment letter agreement, dated September 10, 2003, executed by Lender and Borrower,
and (xix) that certain May 2004 Amendment to Loan and Security Agreement executed by Lender and
Borrower (as amended, the “Loan Agreement”).

     (B) Pursuant to the terms and conditions of this Amendment, Borrower and Lender are willing to
further amend the Loan Agreement as hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

     1.01 Capitalized terms used in this Amendment are defined in the Loan Agreement, as amended
hereby, unless otherwise stated.

ARTICLE II

AMENDMENTS TO LOAN AGREEMENT

AND OTHER AGREEMENTS

     2.01 Amendment to Section 1.1 of the Loan Agreement; Addition of New Definitions.
Effective as of December 1, 2004, the following new definitions are added to Section 1.1 of
the Loan Agreement, such definitions to read in their entirety as follows and to be inserted in
alphabetical order:

“Average Daily Availability – the amount obtained by adding the difference
between the Borrowing Base and the aggregate unpaid principal balance of the
Revolving Credit Loans owing by Borrower to Lender at the end of each day during the
period in question and by dividing such sum by the number of days in such period.

Base Rate Margin – (i) for each Loan which is a Base Rate Loan and is
outstanding during the period beginning on December 1, 2004, and ending on the
Initial Interest Rate Adjustment Date, 0.00% per annum; and (ii) thereafter for
each Loan which is a Base Rate Loan outstanding during the period beginning on an
Interest Rate Adjustment Date and ending on the day preceding the subsequent
Interest Rate Adjustment Date, the applicable percent per annum set forth in the
pricing table below opposite the ratio of (a) the aggregate principal amount of all
Money Borrowed outstanding on the calculation date of the applicable Quarterly

2

 

Compliance Certificate to (b) the EBITDA calculated for the trailing twelve calendar
month period ending on the calculation date of the applicable Quarterly Compliance
Certificate.

PRICING TABLE

	 	 	 	 	 	 	 
	 	 	Ratio of Money Borrowed	 	 	 	Base Rate
	 	 	to EBITDA	 	 	 	Margin
	(1)
	 	Less than 1.00 to 1.00	 	(1)	 	0.00%
	 
	 	 	 	 	 	 
	(2)
	 	Greater than or equal to	 	(2)	 	0.00%
	 
	 	1.00 to 1.00 but less than 2.00 to 1.00	 	 	 	 
	 
	 	 	 	 	 	 
	(3)
	 	Greater than or equal to	 	(3)	 	0.00%
	 
	 	2.00 to 1.00 but less than 4.00 to 1.00	 	 	 	 
	 
	 	 	 	 	 	 
	(4)
	 	Equal to or greater than 4.00 to 1.00	 	(4)	 	0.25%

If Borrower shall fail to deliver a Quarterly Compliance Certificate by the date
required pursuant to Section 9.1(J) of this Agreement, then effective as of
the date such Quarterly Compliance Certificate becomes delinquent, the Base Rate
Margin shall be conclusively presumed to equal the highest applicable Base Rate
Margin specified in the pricing table set forth above, such automatic adjustment to
remain in effect until the next Interest Rate Adjustment Date.

LIBOR Base Rate Margin – (i) for each Loan which is a LIBOR Loan and is
outstanding during the period beginning on December 1, 2004, and ending on the
Initial Interest Rate Adjustment Date, 1.75% per annum; and (ii) thereafter for each
Loan which is a LIBOR Loan outstanding during the period beginning on an Interest
Rate Adjustment Date and ending on the day preceding the subsequent Interest Rate
Adjustment Date, the applicable percent per annum set forth in the pricing table
below opposite the ratio of (a) the aggregate principal amount of all Money Borrowed
outstanding on the calculation date of the applicable Quarterly Compliance
Certificate to (b) the EBITDA calculated for the trailing twelve calendar month
period ending on the calculation date of the applicable Quarterly Compliance
Certificate.

3

 

PRICING TABLE

	 	 	 	 	 	 	 
	 	 	Ratio of Money Borrowed	 	 	 	LIBOR Base
	 	 	to EBITDA	 	 	 	Rate Margin
	(1)
	 	Less than 1.00 to 1.00	 	(1)	 	1.75%
	 
	 	 	 	 	 	 
	(2)
	 	Greater than or equal to	 	(2)	 	2.00%
	 
	 	1.00 to 1.00 but less than 2.00 to 1.00	 	 	 	 
	 
	 	 	 	 	 	 
	(3)
	 	Greater than or equal to	 	(3)	 	2.25%
	 
	 	2.00 to 1.00 but less than 4.00 to 1.00	 	 	 	 
	 
	 	 	 	 	 	 
	(4)
	 	Equal to or greater than 4.00 to 1.00	 	(4)	 	2.50%

If Borrower shall fail to deliver a Quarterly Compliance Certificate by the date
required pursuant to Section 9.1(J) of this Agreement, then effective as of
the date such Quarterly Compliance Certificate becomes delinquent, the LIBOR Base
Rate Margin shall be conclusively presumed to equal the highest applicable LIBOR
Base Rate Margin specified in the pricing table set forth above, such automatic
adjustment to remain in effect until the next Interest Rate Adjustment Date.

Initial Interest Rate Adjustment Date – the tenth Business Day after Lender
receives the Quarterly Compliance Certificate having a calculation date of January
31, 2005.

Interest Rate Adjustment Date – the tenth Business Day after Lender receives
the applicable Quarterly Compliance Certificate.

Quarterly Compliance Certificate – a Compliance Certificate required by
Section 9.1(J) of the Agreement having a calculation date as of the last day
of January, April, July or October, as the case may be, beginning with the
Compliance Certificate having the calculation date as of January 31, 2005.”

     2.02 Amendment to Section 1.1 of the Loan Agreement; Amendment of Definition of “Fixed
Charge Ratio.” Effective as of the date of execution of this Amendment, the definition of
“Fixed Charge Ratio” contained in Section 1.1 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

“Fixed Charge Ratio – for Borrower for any period means the ratio of (i) (a)
EBITDA for such period, minus (b) the sum of (x) Unfinanced Capital
Expenditures during such period and (y) taxes incurred during such period

4

 

(whether or not paid); to (ii) the sum of (a) Interest Expense during such
period, and (b) scheduled principal payments on Borrower’s long-term Indebtedness
(including, without limitation, scheduled principal amortization on Capitalized
Lease Obligations) during such period. Notwithstanding the foregoing, for the
purposes of calculating the Fixed Charge Ratio for any period which includes all or
a portion of the period beginning August 1, 2004, and continuing through July 31,
2005, the Borrower’s Unfinanced Capital Expenditures shall be deemed to be the
amount indicated below for the time period indicated below, regardless of what are
Borrower’s actual Unfinanced Capital Expenditures for such period:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Deemed Amount of
	 	 	 	 	 	 	Unfinanced Capital
	 	 	Time Period	 	 	 	Expenditures
	(i)
	 	August 1, 2004 through	 	(i)	 	$1,000,000
	 
	 	October 31, 2004	 	 	 	 
	 
	 	 	 	 	 	 
	(ii)
	 	November 1, 2004 through	 	(ii)	 	$1,000,000
	 
	 	January 31, 2005	 	 	 	 
	 
	 	 	 	 	 	 
	(iii)
	 	February 1, 2005 through	 	(iii)	 	$1,000,000
	 
	 	April 30, 2005	 	 	 	 
	 
	 	 	 	 	 	 
	(iv)
	 	May 1, 2005 through	 	(iv)	 	$1,000,000”
	 
	 	July 31, 2005	 	 	 	 

     2.03 Amendment to Section 1.1 of the Loan Agreement; Amendment of Definition of “Inventory
Commitment Amount.” Effective as of the date of execution of this Amendment, the definition of
“Inventory Commitment Amount” contained in Section 1.1 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:

     “Inventory
Commitment Amount – $15,000,000.”

     2.04 Amendment to Section 1.1 of the Loan Agreement; Amendment of Definition of
“Obligations.” Effective as of the date of execution of this Amendment, the definition of
“Obligations” contained in Section 1.1 of the Loan Agreement is hereby amended by adding
after the word “Lender” the phrase “or any Affiliate of Lender.”

     2.05 Amendment to Section 3.1(A) of the Loan Agreement. Effective as of December 1,
2004, Section 3.1(A) of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:

“Outstanding principal on the Loans shall bear interest, calculated daily, at the
following rates per annum (individually called, as applicable, an ‘Applicable
Annual Rate’): (i) each Loan which is a LIBOR Loan shall bear interest at a
rate

5

 

per annum equal to the applicable LIBOR Base Rate Margin above the LIBOR Base Rate
and (ii) each Loan which is a Base Rate Loan shall bear interest at a fluctuating
rate per annum equal to the applicable Base Rate Margin above the Base Rate.
Interest rate on each Base Rate Loan shall be increased or decreased, as the case
may be, by an amount equal to any increase or decrease in the Base Rate, with such
adjustments to be effective as of the opening of business on the day that any such
change in the Base Rate becomes effective. The Base Rate in effect on the date
hereof shall be the Base Rate effective as of the opening of business on the date
hereof, but if this Agreement is executed on a day that is not a Business Day, the
Base Rate on the date hereof shall be the Base Rate effective as of the opening of
business on the last Business Day immediately preceding the date hereof. The
interest rate on each Loan shall be calculated daily, based on the actual days
elapsed over a 360 day year. Further, for the purpose of computing interest, all
items of payment received by Lender shall be applied by Lender (subject to final
payment of all drafts and other items received in form other than immediately
available funds) against the Obligations on the first Business Day after receipt.
The determination of when a payment is received by Lender will be made in accordance
with Section 3.6.”

     2.06 Amendment to Section 3.2 of the Loan Agreement. Effective as of the date of
execution of this Amendment, Section 3.2 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

“3.2 Term of Agreement. Subject to Lender’s right to cease making Loans to
Borrower at any time upon or after the occurrence of a Default or an Event of
Default, this Agreement shall be in effect through and including December 31, 2008
(the ‘Original Term’). Notwithstanding anything herein to the contrary,
Lender may terminate this Agreement without notice upon or after the occurrence of
an Event of Default.”

     2.07 Amendment to Section 9.2(L) of the Loan Agreement. Effective August 1, 2004,
Section 9.2(L) of the Loan Agreement is hereby amended and restated to read in its entirety
as follows:

“(L) Capital Expenditures. Make Capital Expenditures which, in the
aggregate, as to Borrower and its Subsidiaries, exceed (i) $17,000,000 during
Borrower’s fiscal year ending July 31, 2005, or (ii) $7,000,000 during each fiscal
year of Borrower thereafter.”

     2.08 Amendment to Section 9.3 of the Loan Agreement. Effective as of the date of
execution of this Amendment, Section 9.3 of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:

“9.3 Specific Financial Covenants. During the term of this Agreement and
thereafter for so long as there are any Obligations, Borrower covenants that, unless
otherwise consented to by Lender in writing, Borrower shall:

6

 

(A) [Intentionally Omitted]

(B) [Intentionally Omitted]”

(C) Fixed Charge Ratio. Maintain, on a Consolidated basis, a Fixed Charge
Ratio of not less than 1.1 to 1.0 for the twelve calendar month period ending on the
last day of each January, April, July and October (each such day being referred to
herein as the ‘Quarterly Computation Date’); provided,
however, if the Average Daily Availability for the two calendar month period
ending on such Quarterly Computation Date is greater than $10,000,000, the Fixed
Charge Ratio will not be required to be tested on such Quarterly Computation Date.

(D) [Intentionally Omitted].

(E) [Intentionally Omitted].

     2.09 No Term Loans or Equipment Loans. The parties hereto agree that there are
presently no outstanding Term Loans or Equipment Loans and that hereafter Borrower shall have no
right to receive any new Term Loans or Equipment Loans.

     2.10 References to Exhibit F – Patents, Trademarks, Copyrights and Licenses.
Effective as of the date of execution of this Amendment, all references in the Loan Agreement to
Exhibit F, which is entitled “Patents, Trademarks, Copyrights and Licenses” shall be deemed
references to Exhibit F attached hereto.

     2.11 Release of Lien in Leasehold Interest and Building located in Ensenada, Mexico.
Lender hereby agrees and acknowledges that it has released its Lien in the real property and
building situated thereon, located in Ensenada, Mexico, and that such real estate and building
shall no longer be considered to be Collateral. Notwithstanding the foregoing, Lender has not and
hereby does not release its Lien in the Equipment and Inventory now or hereafter located at the
Ensenada, Mexico facility.

     2.12 Amendment to Revolving Credit Notes. Effective as of the date of execution of
this Amendment, each Revolving Credit Note is amended by deleting therefrom the date “December 31,
2005” and substituting therefor the date “December 31, 2008.”

     2.13 Post-Closing Covenants. Unless waived or extended in writing in Lender’s sole
discretion, on or before sixty days after the date of execution of this Amendment, Borrower shall
deliver to Lender, each in form and substance satisfactory to Lender, in its sole discretion:

     (i) A Seventh Amendment to Mortgage, Security Agreement, Financing Statement
and Assignment of Rents, duly executed by Lowrance regarding the existing Mortgage
covering Lowrance’s Tulsa, Oklahoma real property, and

     (ii) Amendments to the Trademark Assignment, the Patent Assignment and the
Copyright Assignment and such other documents as shall be deemed

7

 

desirable by Lender in order for Lender to have a valid first priority Lien on
all intellectual property of Borrower.

The failure of Borrower to satisfy any of the covenants set forth in this Section 2.13 of
this Amendment shall constitute an immediate Event of Default under the Loan Agreement.

ARTICLE III

CONDITIONS PRECEDENT

     3.01 Conditions Precedent. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent, unless specifically waived in writing by
Lender:

     (a) Lender shall have received each of the following, each in form and substance
satisfactory to Lender: (i) this Amendment, duly executed by Borrower; (ii) the Exhibit
F to this Amendment, fully and accurately completed by Borrower; and (iii) such
additional documents, instruments and information as Lender or its legal counsel may
request;

     (b) The representations and warranties contained herein, in the Loan Agreement and in
the other Loan Documents, as each is amended hereby, shall be true and correct as of the
date hereof, as if made on the date hereof;

     (c) After giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing, unless such Default or Event of Default has been specifically
waived in writing by Lender; and

     (d) All corporate proceedings taken in connection with the transactions contemplated by
this Amendment and all documents, instruments and other legal matters incident thereto shall
be satisfactory to Lender and its legal counsel.

ARTICLE IV

NO WAIVER

     4.01 No Waiver. Nothing contained in this Amendment shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement, the other Loan Documents, this
Amendment, or of any other contract or instrument between Borrower and Lender, and the failure of
Lender at any time or times hereafter to require strict performance by Borrower of any provision
thereof shall not waive, affect or diminish any right of Lender to thereafter demand strict
compliance therewith. Lender hereby reserves all rights granted under the Loan Agreement, the
other Loan Documents, this Amendment and any other contract or instrument between Borrower and
Lender.

8

 

ARTICLE V

RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

     5.01 Ratifications. The terms and provisions set forth in this Amendment shall modify
and supersede all inconsistent terms and provisions set forth in the Loan Agreement and the other
Loan Documents, and, except as expressly modified and superseded by this Amendment, the terms and
provisions of the Loan Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. Borrower and Lender agree that the Loan Agreement and the other
Loan Documents, as amended hereby, shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms.

     5.02 Representations and Warranties. Borrower hereby represents and warrants to
Lender that (a) the execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and will not violate the Certificate of
Incorporation or Bylaws of Borrower; (b) the representations and warranties contained in the Loan
Agreement, as amended hereby, and any other Loan Documents are true and correct on and as of the
date hereof and on and as of the date of execution hereof as though made on and as of each such
date; (c) no Default or Event of Default under the Loan Agreement, as amended hereby, has occurred
and is continuing; (d) Borrower is in full compliance with all covenants and agreements contained
in the Loan Agreement and the other Loan Documents, as amended hereby; (e) the Borrower’s
Certificate of Incorporation and Bylaws are in full force and effect on and as of the date hereof
without modification or amendment in any respect since November 1, 1996; (f) as of the date hereof,
(i) Borrower is in existence and in corporate and tax good standing in the State of its
organization, (ii) the Borrower is qualified to do business as a foreign corporation and is in
corporate and tax good standing in each jurisdiction where Borrower is doing business and is
required to be so qualified, (iii) Borrower does not owe franchise taxes or other taxes required to
maintain its corporate existence and no franchise tax reports are due, and (iv) no proceedings are
pending for forfeiture of the Borrower’s charter or for its dissolution either voluntarily or
involuntarily; and (g) the officer of Borrower executing this Amendment has been duly elected and
is, at present, qualified and acting in the office indicated below such officer’s name and is duly
authorized to execute this Amendment on behalf of Borrower.

ARTICLE VI

MISCELLANEOUS PROVISIONS

     6.01 Survival of Representations and Warranties. All representations and warranties
made in the Loan Agreement or any other Loan Document, including, without limitation, any document
furnished in connection with this Amendment, shall survive the execution and delivery of this
Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect
the representations and warranties or the right of Lender to rely upon them.

     6.02 Reference to Loan Agreement. Each of the Loan Agreement and the other Loan
Documents, and any and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Loan

9

 

Agreement, as amended hereby, are hereby amended so that any reference in the Loan Agreement
and such other Loan Documents to the Loan Agreement shall mean a reference to the Loan Agreement,
as amended hereby.

     6.03 Expenses of Lender. As provided in the Loan Agreement, Borrower agrees to pay on
demand all costs and expenses incurred by Lender in connection with the preparation, negotiation
and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and
all amendments, modifications, and supplements thereto, including, without limitation, the costs
and fees of Lender’s legal counsel, and all costs and expenses incurred by Lender in connection
with the enforcement or preservation of any rights under the Loan Agreement, as amended hereby, or
any other Loan Documents, including, without, limitation, the costs and fees of Lender’s legal
counsel.

     6.04 Severability. Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to be invalid or
unenforceable.

     6.05 Successors and Assigns. This Amendment is binding upon and shall inure to the
benefit of Lender and Borrower and their respective successors and assigns, except that Borrower
may not assign or transfer any of its rights or obligations hereunder without the prior written
consent of Lender.

     6.06 Counterparts. This Amendment may be executed in one or more counterparts, each
of which when so executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.

     6.07 Effect of Waiver. No consent or waiver, express or implied, by Lender to or for
any breach of or deviation from any covenant or condition by Borrower shall be deemed a consent to
or waiver of any other breach of the same or any other covenant, condition or duty.

     6.08 Headings. The headings, captions, and arrangements used in this Amendment are
for convenience only and shall not affect the interpretation of this Amendment.

     6.09 Applicable Law. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT
HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     6.10 Final Agreement. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS
AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE

10

 

PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND LENDER.

     6.11 Release. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM,
OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO
REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE “OBLIGATIONS” OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY,
ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE
BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, OFFICERS, DIRECTORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY “LOANS”,
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR
RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS, AND THE NEGOTIATION OF AND EXECUTION OF
THIS AMENDMENT.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

11

 

     IN WITNESS WHEREOF, this Amendment has been executed and is effective as of the date first
above-written.

	 	 	 	 	 	 	 
	 	 	“LENDER”
	 
	 	 	 	 	 	 
	 	 	FLEET CAPITAL CORPORATION
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	“BORROWER”
	 
	 	 	 	 	 	 
	 	 	LOWRANCE ELECTRONICS, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	LEI EXTRAS, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	LOWRANCE CONTRACTS, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SEA ELECTRONICS, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	 	 	 

 

 

EXHIBIT F

Patents, Trademarks, Copyrights and Licenses

[See attached]

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