Document:

Exhibit
10.1

 

AMENDMENT NO. 2

TO SENIOR SECURED
CREDIT AGREEMENT

 

THIS
AMENDMENT NO. 2 TO SENIOR SECURED CREDIT AGREEMENT (this “Amendment”)
is entered into as of September 2, 2004 by and among THE TITAN
CORPORATION, a Delaware corporation (the “Borrower”), the various
financial institutions from time to time parties hereto (the “Lenders”),
WACHOVIA BANK, NATIONAL ASSOCIATION (“Wachovia”), as administrative
agent (in such capacity, the “Administrative Agent”) for the Lenders,
THE BANK OF NOVA SCOTIA (“Scotiabank”), as a syndication agent (in such
capacity, a “Syndication Agent”), COMERICA BANK-CALIFORNIA (“Comerica”),
as a syndication agent (in such capacity, a “Syndication Agent”), BRANCH
BANKING AND TRUST (“BB&T”), as a documentation agent (in such
capacity, a “Documentation Agent”), and TORONTO DOMINION (NEW YORK),
INC. (“TD”), as a documentation agent (in such capacity, a “Documentation
Agent”).  Capitalized terms used but
not otherwise defined herein shall have the respective meanings given to them
in the Credit Agreement (hereinafter defined), after giving effect to this
Amendment.

 

WITNESSETH

 

WHEREAS,
the Borrower, the Lenders, the Syndication Agents, the Documentation Agents,
and the Administrative Agent are party to that certain Senior Secured Credit
Agreement dated as of May 23, 2002 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”);

 

WHEREAS,
the Borrower has requested that the Lenders agree to amend certain provisions
of the Credit Agreement, and the Lenders are willing to agree to such
amendments upon the terms and conditions contained in this Amendment;

 

NOW,
THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

I.                                       AMENDMENTS
TO CREDIT AGREEMENT

 

1.1                            Section 1.1
is amended by adding the following definitions in the alphabetically
appropriate places:

 

“Amendment
No. 2” means Amendment No. 2 to Senior Secured Credit Agreement, dated as
of September 2, 2004, by and among the Borrower, the Lenders party
thereto, the Syndication Agents, the Documentation Agents and the
Administrative Agent.

 

“Amendment
No. 2 Effective Date” shall have the meaning given to such term in
Section 2 of Amendment No. 2.

 

 

“Debt
Rating” shall mean the debt rating for the Term B Loan as determined by
Moody’s and S&P, including any rating watch assigned thereto.

 

1.2                            Certain
definitions in Section 1.1 are amended as follows:

 

(a)                               The definition of “Applicable
Margin” in Section 1.1 is hereby amended and restated in its entirety
to read as follows:

 

“Applicable
Margin” means

 

(a)                              in
the case of Revolving Loans, the percentages determined by reference to the
Total Debt to EBITDA Ratio as set forth in the performance pricing grid below:

 

 

	
  Total Debt to EBITDA Ratio

  	
   

  	
  LIBO Rate Loans

  	
   

  	
  Base Rate Loans

  	
   

  
	
  >
  3.5

  	
   

  	
  2.75

  	
  %

  	
  1.50

  	
  %

  
	
  >3.0
  but < 3.5

  	
   

  	
  2.50

  	
  %

  	
  1.25

  	
  %

  
	
  >
  2.5 but < 3.0

  	
   

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  
	
  >
  2.0 but < 2.5

  	
   

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  
	
  <
  2.0

  	
   

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  

 

 

The Total
Debt to EBITDA Ratio used to compute the Applicable Margin for Revolving Loans
shall be determined as of the last day of each Fiscal Quarter as set forth in
the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent; changes in interest rates resulting from changes in such
ratio shall become effective on the date (each a “Calculation Date”)
which is five (5) Business Days after the date on which the financial
statements covering the quarter-end date as of which such ratio is computed are
delivered to the Administrative Agent in accordance with Section 7.1(a)
or (b), as applicable.  If the
Borrower shall fail to deliver a Compliance Certificate within 60 days after
the end of any Fiscal Quarter (or within 105 days, in the case of the last
Fiscal Quarter of the Fiscal Year), the Applicable Margin for Revolving Loans
from and including the 61st (or 106th, as the case may be) day after the end of
such Fiscal Quarter to but not including the date the Borrower delivers to the
Administrative Agent a Compliance Certificate shall conclusively equal the
highest Applicable Margin set forth above; and

 

(b)                              in
the case of Term B Loans, 2.75% for LIBO Rate Loans and 1.50% for Base Rate
Loans; provided, that if (A) the Borrower’s Debt Rating from S&P is
BB- without a rating watch of “Negative Outlook,” or higher and (B) the
Borrower’s Debt Rating from Moody’s is Ba3 without a rating watch of
“Watch-Possible Downgrade,” or higher, then the Applicable Margin for the Term
B Loans shall be 2.50% for LIBO Rate Loans and 1.25% for Base Rate Loans; provided,
further, that if (X) the Borrower’s Debt Rating from S&P is B+ or
lower or (Y) the Borrower’s Debt Rating from Moody’s is B1 or lower, then the

 

2

 

Applicable
Margin for the Term B Loans shall be 3.00% for LIBO Rate Loans and 1.75% for
Base Rate Loans.

 

(c)                               The definition of “EBITDA”
in Section 1.1 is amended by amending and restating paragraph (b) thereof
as follows:

 

(b)                              all
amounts deducted by the Borrower and its Restricted Subsidiaries, in
determining Net Income, representing either non-cash or non-recurring items
including fees, costs, charges and other expenses incurred by the Borrower and
its Restricted Subsidiaries in connection with any (i) operation reflected as
discontinued on the consolidated income statement of the Borrower in accordance
with GAAP, (ii) acquisition, (iii) restructuring, (iv) changes in accounting
treatment under GAAP, (v) non-cash asset impairment charges under GAAP, (vi)
non-cash deferred compensation expense and (vii) settlement of charges
resulting from investigations of the Borrower and its Subsidiaries by the
Department of Justice and the Securities and Exchange Commission under the
Foreign Corrupt Practices Act.  Each item
above in this clause (b) (other than the item described in subclause (i) above)
shall be added back for the fiscal quarter in which it is incurred.  In addition, each item above in this clause
(b) shall be accounted for on a consistent basis with the past financial and
accounting practices of the Borrower, minus

 

(d)                              The definition of “EBITDA”
in Section 1.1 is further amended by amending and restating the final
paragraph thereof as follows:

 

provided,
that the total amount of non-recurring cash items added back pursuant to clause
(b) above and the total amount of cash expenses incurred in achieving cost
savings that are added back pursuant to clause (g) above shall not comprise
more than 25% of total trailing twelve-month EBITDA; and provided, further,
that the non-recurring cash items on Schedule III hereto and under clauses
(b)(i) and (b)(vii) (to the extent such items under clause (b)(vii) do not
exceed $30,000,000 in the aggregate) above shall not be included in such
limitation.

 

1.3                            Section 3.1
is amended by amending and restating the final paragraph thereof as follows:

 

Each
prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4; provided
that any voluntary prepayment of the outstanding Term B Loan made pursuant to
Section 3.1(a) during the first year following the Amendment No. 2
Effective Date resulting from a refinancing of the Term B Loan (other than any
refinancing resulting from a Change in Control) shall be made at 101% of the
par value thereof.  No prepayment of
principal of any Revolving Loans or Swing Line Loans pursuant to clause (a)
or (b) shall cause a reduction in the Revolving Loan

 

3

 

Commitment
Amount or the Swing Line Loan Commitment Amount, as the case may be.

 

1.4                            The
Disclosure Schedule to the Credit Agreement is hereby amended by adding
the items set forth on Schedule 1 attached hereto to Item 6.7 of
the Disclosure Schedule.

 

II.                                  CONDITIONS

 

2.1                            Amendment.  This Amendment shall be and become effective
as of the date hereof (the “Amendment No. 2 Effective Date”) when all of
the following conditions set forth in this Section 2.1 shall have been
satisfied:

 

(a)                               Executed Amendment.  The Agent shall have received executed
counterparts of this Amendment and the Consent attached hereto (or other
evidence of execution, satisfactory to the Agent), which collectively shall
have been duly executed on behalf of the Borrower, each of the Guarantors, the
Required Lenders and each Term Loan Lender.

 

(b)                              Fees and Expenses.  The Agent shall have received all fees and
expenses owed and due to the Agent by the Borrower and the Guarantors.

 

(c)                               Other Items.  The Agent shall have received such other
documents, agreements or information which may be reasonably requested by the
Agent.

 

III.                             MISCELLANEOUS

 

3.1                            Representations
and Warranties.  The Borrower and
each Subsidiary of the Borrower executing the Consent attached to this
Amendment (hereinafter, collectively the “Credit Parties” or individually a
“Credit Party”) hereby represents and warrants that:

 

(a)                               (i) it has the requisite
power and authority to execute, deliver and perform this Amendment and the
Consent attached hereto, (ii) it is duly authorized to, and has been authorized
by all necessary action, to execute, deliver and perform this Amendment and the
Consent attached hereto, and (iii) this Amendment and the Consent attached
hereto have been duly executed and delivered by the applicable Credit Parties
and constitute such Credit Parties’ legal, valid and binding obligations,
enforceable in accordance with its terms, except as such enforceability may be
subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors’ rights generally and
(B) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity);

 

(b)                              the representations and
warranties contained in the Credit Agreement are on the date hereof, and will
be on and as of the Amendment No. 2 Effective Date, subject to

 

4

 

the limitations set forth
therein, true and correct in all material respects as though made on and as of
such dates (or as of the date indicated therein in the case that such date is
other than the date hereof or the Amendment No. 2 Effective Date);

 

(c)                               no Default or Event of
Default under the Credit Agreement exists on the date hereof or will exist on
and as of the Amendment No. 2 Effective Date, and no Default or Event of
Default will occur as a result of the transactions contemplated hereby; and

 

(d)                              no consent, approval,
authorization or order of, or filing, registration or qualification with, any
court or governmental authority or third party is required in connection with
the execution, delivery or performance by any Credit Party of this Amendment or
the Consent attached hereto.

 

3.2                            Ratification
and Reaffirmation.  Each Credit Party
hereby ratifies the Loan Documents to which it is a party and acknowledges and
reaffirms (a) that it is bound by all terms of such Loan Documents (as amended
hereby) applicable to it and (b) that it is responsible for the observance and
full performance of its respective obligations under such Loan Documents.

 

3.3                            Instrument
Pursuant to Credit Agreement.  This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Credit
Agreement.

 

3.4                            Successors
and Assigns.  This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.

 

3.5                            No
Other Changes.  Except as expressly
modified and amended by this Amendment, the Credit Agreement and all other Loan
Documents shall continue in full force and effect and all the terms, provisions
and conditions of the Loan Documents shall remain unchanged.

 

3.6                            Counterparts.  This Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.  Delivery of executed counterparts of this Amendment
by telecopy shall be effective as an original and shall constitute a
representation that an original shall be delivered.

 

3.7                            Severability.  Any provision of this Amendment held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

3.8                            Governing
Law.  THE VALIDITY, INTERPRETATION
AND ENFORCEMENT OF THIS AMENDMENT NO. 2 SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (without giving effect to the principles of conflicts of
law).  The provisions of the

 

5

 

Credit Agreement
regarding jurisdiction, venue, service of process and waiver of jury trial are
hereby incorporated by reference, mutatis mutandis.

 

[remainder of page
intentionally left blank]

 

6

 

IN WITNESS WHEREOF, each
of the parties hereto has caused a counterpart of this Amendment to be duly
executed and delivered by their proper and duly authorized officer as of the
day and year first above written.

 

	
  BORROWER:

  	
  THE TITAN CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK W. SOPP

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  AGENTS AND LENDERS:

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION,

  
	
   

  	
  f/k/a FIRST UNION NATIONAL BANK

  
	
   

  	
  as Administrative Agent
  and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SCOTT SANTA CRUZ

  	
   

  
	
   

  	
  Name:

  	
  Scott Santa Cruz

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
						

 

 

	
   

  	
  COMERICA BANK-CALIFORNIA,

  
	
   

  	
  as Syndication Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ STEVEN J. STUCKEY

  	
   

  
	
   

  	
  Name:

  	
  Steven J. Stuckey

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

	
   

  	
  TORONTO DOMINION (NEW YORK),
  INC.,

  
	
   

  	
  as Documentation Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GWEN ZIRKLE

  	
   

  
	
   

  	
  Name:

  	
  Gwen Zirkle

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

CONSENT

 

This Consent (this “Consent”),
dated as of September 2, 2004, is delivered in connection with Amendment
No. 2 to Credit Agreement, dated as of the date hereof (“Amendment No. 2”),
by and among THE TITAN CORPORATION, a Delaware corporation (the “Borrower”),
the various financial institutions from time to time parties hereto (the “Lenders”),
WACHOVIA BANK, NATIONAL ASSOCIATION (“Wachovia”), as administrative
agent (in such capacity, the “Administrative Agent”) for the Lenders,
THE BANK OF NOVA SCOTIA (“Scotiabank”), as a syndication agent (in such
capacity, a “Syndication Agent”), COMERICA BANK-CALIFORNIA (“Comerica”),
as a syndication agent (in such capacity, a “Syndication Agent”), BRANCH
BANKING AND TRUST (“BB&T”), as a documentation agent (in such
capacity, a “Documentation Agent”), and TORONTO DOMINION (NEW YORK),
INC. (“TD”), as a documentation agent (in such capacity, a “Documentation
Agent”).  Unless otherwise defined,
terms used herein have the meanings provided in the Credit Agreement (as
defined in Amendment No. 2) as amended by Amendment No. 2 (such agreement, as
so amended, being the “Amended Credit Agreement”).

 

Each of the undersigned,
as a party to one or more Loan Documents hereby acknowledges and consents to
the execution and delivery of Amendment No. 2, and hereby confirms and agrees
that each Loan Document to which it is a party is, and shall continue to be, in
full force and effect, and hereby ratifies and confirms in all respects its
obligations thereunder, except that, upon the effectiveness of, and on and
after the date of, Amendment No. 2, all references in each such Loan Document
to the “Credit Agreement,” “thereunder,” “thereof” or words of like import
referring to the existing Credit Agreement shall mean the Amended Credit
Agreement.  This Consent may be executed by
the parties hereto in counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
instrument.

 

	
  GUARANTORS:

  	
   

  	
  ACS Technologies, Inc.

  
	
   

  	
   

  	
  Atlantic Aerospace
  Electronics Corporation

  
	
   

  	
   

  	
  AverCom Corporation

  
	
   

  	
   

  	
  BTG Systems
  Engineering, Inc.

  
	
   

  	
   

  	
  BTG Technology
  Resources, Inc.

  
	
   

  	
   

  	
  BTG Technology Systems,
  Inc.

  
	
   

  	
   

  	
  BTG, Inc.

  
	
   

  	
   

  	
  C&N Enterprises,
  Inc.

  
	
   

  	
   

  	
  California Tube
  Laboratory, Inc.

  
	
   

  	
   

  	
  Cayenta eUtility
  Solutions – eMunicipal Solutions Inc.

  
	
   

  	
   

  	
  Cayenta Operating LLC

  
	
   

  	
   

  	
  Cayenta, Inc.

  
	
   

  	
   

  	
  Concept Automation,
  Inc. of America

  
	
   

  	
   

  	
  Datacentric Automation
  Corporation

  
	
   

  	
   

  	
  DBA Systems, Inc.

  
	
   

  	
   

  	
  Delfin Systems

  

 

 

	
   

  	
   

  	
  Delta Construction
  Management, Inc.

  
	
   

  	
   

  	
  GlobalNet, Inc.

  
	
   

  	
   

  	
  GlobalNet
  International, LLC

  
	
   

  	
   

  	
  Horizons Services
  Company, Inc.

  
	
   

  	
   

  	
  Intermetrics International,
  Inc.

  
	
   

  	
   

  	
  Intermetrics
  Securities, Inc.

  
	
   

  	
   

  	
  International Systems,
  LLC

  
	
   

  	
   

  	
  Jaycor, Inc.

  
	
   

  	
   

  	
  LinCom Corporation

  
	
   

  	
   

  	
  LinCom Wireless, Inc.

  
	
   

  	
   

  	
  Linkabit Wireless, LLC

  
	
   

  	
   

  	
  MicroLithics
  Corporation

  
	
   

  	
   

  	
  Midnight Oil Services,
  Inc.

  
	
   

  	
   

  	
  MJR Associates, Inc.

  
	
   

  	
   

  	
  Nations, Inc.

  
	
   

  	
   

  	
  Procom Services, Inc.

  
	
   

  	
   

  	
  Program Support
  Associates Inc.

  
	
   

  	
   

  	
  Pulse Engineering, Inc.

  
	
   

  	
   

  	
  Pulse Sciences, Inc.

  
	
   

  	
   

  	
  Research Planning, Inc.

  
	
   

  	
   

  	
  RW Consultants, Inc.

  
	
   

  	
   

  	
  Sencom Corp.

  
	
   

  	
   

  	
  STAC, Inc.

  
	
   

  	
   

  	
  Titan Africa, Inc.

  
	
   

  	
   

  	
  Titan Wireless Afripa
  Holding, Inc.

  
	
   

  	
   

  	
  Titan Scan Technologies
  Corporation

  
	
   

  	
   

  	
  Titan Vigil, Inc.

  
	
   

  	
   

  	
  Titan Wireless, Inc.

  
	
   

  	
   

  	
  Tomotherapeutics, Inc.

  
	
   

  	
   

  	
  Unidyne LLC

  
	
   

  	
   

  	
  UniVision Technologies,
  Inc.

  
	
   

  	
   

  	
  VisiCom Laboratories,
  Inc.

  
	
   

  	
   

  	
  WaveScience, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All
  By:

  	
  /s/ RAY H. GUILLAUME

  	
   

  
	
   

  	
   

  	
  Name:
  Ray H. Guillaume

  
	
   

  	
   

  	
  Title:
  Assistant Treasurer

  

 

 

SCHEDULE 1

 

The following items are
hereby added to Item 6.7 of the Disclosure Schedule:

 

1.                                    As disclosed in recent public filings, and most
recently in Borrower’s Form 10-Q for the quarter ended June 30, 2004,
Borrower is currently under an investigation by the Department of Justice and
Securities Exchange Commission regarding possible violations of the Foreign
Corruption Practices Act.  Borrower has
provided for a provision of $28.5 million to settle this investigation at
June 30, 2004.  As of
August 31, 2004, Borrower has not been indicted for any such violations.

 

2.                                    As a result of the above-mentioned
investigations, a number of class action lawsuits were filed against Borrower
and certain of its officers with respect to the alleged Foreign Corrupt
Practices Act violations.  Borrower
intends to vigorously defend these class action lawsuits.

 

3.                                    Borrower and certain of its officers and
directors were named as defendants in a class action lawsuit regarding the
bankruptcy of Surebeam, Borrower’s former subsidiary.  Borrower intends to vigorously defend these
class action lawsuits.

 

Certain
information concerning the foregoing matters is available in Borrower’s public
filings.Exhibit 10.1

 

 

EXECUTION COPY

 

CREDIT AGREEMENT

 

Dated as of August 31, 2004

 

by and among

 

KITE REALTY GROUP, L.P.,

as
Borrower,

 

KITE REALTY GROUP TRUST,

as
Parent,

 

WACHOVIA CAPITAL MARKETS, LLC,

and

LEHMAN BROTHERS INC.

as
Joint Lead Arrangers and

Joint
Book Runners,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as
Administrative Agent,

 

LEHMAN COMMERCIAL PAPER INC.,

as
Syndication Agent,

 

and

 

THE FINANCIAL INSTITUTIONS INITIALLY SIGNATORY HERETO

AND THEIR ASSIGNEES PURSUANT TO SECTION 13.5.,

as
Lenders

 

 

 

TABLE OF CONTENTS

 

	
  Article I.
  Definitions

  	
   

  
	
   

  	
   

  
	
  Section 1.1.  Definitions.

  	
   

  
	
  Section 1.2.  General; References to Times.

  	
   

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

  	
   

  
	
   

  	
   

  
	
  Article II. Credit
  Facility

  	
   

  
	
   

  	
   

  
	
  Section 2.1.  Revolving Loans.

  	
   

  
	
  Section 2.2.  Swingline Loans.

  	
   

  
	
  Section 2.3.  Letters of Credit.

  	
   

  
	
  Section 2.4.  Rates and Payment of Interest on Loans.

  	
   

  
	
  Section 2.5.  Number of Interest Periods.

  	
   

  
	
  Section 2.6.  Repayment of Loans.

  	
   

  
	
  Section 2.7.  Prepayments.

  	
   

  
	
  Section 2.8.  Continuation.

  	
   

  
	
  Section 2.9.  Conversion.

  	
   

  
	
  Section 2.10.  Notes.

  	
   

  
	
  Section 2.11.  Voluntary Reductions of the Commitment.

  	
   

  
	
  Section 2.12.  Extension of Termination Date.

  	
   

  
	
  Section 2.13.  Expiration or Maturity Date of Letters of
  Credit Past Termination Date.

  	
   

  
	
  Section 2.14.  Amount Limitations.

  	
   

  
	
  Section 2.15.  Increase of Commitments.

  	
   

  
	
   

  	
   

  
	
  Article III.
  Payments, Fees and Other General Provisions

  	
   

  
	
   

  	
   

  
	
  Section 3.1.  Payments.

  	
   

  
	
  Section 3.2.  Pro Rata Treatment.

  	
   

  
	
  Section 3.3.  Sharing of Payments, Etc.

  	
   

  
	
  Section 3.4.  Several Obligations.

  	
   

  
	
  Section 3.5.  Minimum Amounts.

  	
   

  
	
  Section 3.6.  Fees.

  	
   

  
	
  Section 3.7.  Computations.

  	
   

  
	
  Section 3.8.  Usury.

  	
   

  
	
  Section 3.9.  Agreement Regarding Interest and Charges.

  	
   

  
	
  Section 3.10.  Statements of Account.

  	
   

  
	
  Section 3.11.  Defaulting Lenders.

  	
   

  
	
  Section 3.12.  Taxes.

  	
   

  
	
   

  	
   

  
	
  Article IV.
  Collateral Properties

  	
   

  
	
   

  	
   

  
	
  Section 4.1.  Eligibility of Properties.

  	
   

  
	
  Section 4.2.  Conditions Precedent to a Property
  Becoming a Collateral Property.

  	
   

  
	
  Section 4.3.  Release of Collateral Properties.

  	
   

  
	
  Section 4.4.  Frequency of Calculations of Borrowing
  Base.

  	
   

  
	
  Section 4.5.  Additional Appraisals Required under
  Applicable Law.

  	
   

  

 

i

 

	
  Article V. Yield
  Protection, Etc.

  	
   

  
	
   

  	
   

  
	
  Section 5.1.  Additional Costs; Capital Adequacy.

  	
   

  
	
  Section 5.2.  Suspension of LIBOR Loans.

  	
   

  
	
  Section 5.3.  Illegality.

  	
   

  
	
  Section 5.4.  Compensation.

  	
   

  
	
  Section 5.5.  Treatment of Affected Loans.

  	
   

  
	
  Section 5.6.  Change of Lending Office.

  	
   

  
	
  Section 5.7.  Assumptions Concerning Funding of LIBOR
  Loans.

  	
   

  
	
   

  	
   

  
	
  Article VI.
  Conditions Precedent

  	
   

  
	
   

  	
   

  
	
  Section 6.1.  Initial Conditions Precedent.

  	
   

  
	
  Section 6.2.  Conditions Precedent to All Loans and
  Letters of Credit.

  	
   

  
	
   

  	
   

  
	
  Article VII.
  Representations and Warranties

  	
   

  
	
   

  	
   

  
	
  Section 7.1.  Representations and Warranties.

  	
   

  
	
  Section 7.2.  Survival of Representations and
  Warranties, Etc.

  	
   

  
	
   

  	
   

  
	
  Article VIII.
  Affirmative Covenants

  	
   

  
	
   

  	
   

  
	
  Section 8.1.  Preservation of Existence and Similar
  Matters.

  	
   

  
	
  Section 8.2.  Compliance with Applicable Law and
  Material Contracts.

  	
   

  
	
  Section 8.3.  Maintenance of Property.

  	
   

  
	
  Section 8.4.  Conduct of Business.

  	
   

  
	
  Section 8.5.  Insurance.

  	
   

  
	
  Section 8.6.  Payment of Taxes and Claims.

  	
   

  
	
  Section 8.7.  Visits and Inspections.

  	
   

  
	
  Section 8.8.  Use of Proceeds; Letters of Credit.

  	
   

  
	
  Section 8.9.  Environmental Matters.

  	
   

  
	
  Section 8.10.  Books and Records.

  	
   

  
	
  Section 8.11.  Further Assurances.

  	
   

  
	
  Section 8.12.  REIT Status.

  	
   

  
	
  Section 8.13.  Exchange Listing.

  	
   

  
	
   

  	
   

  
	
  Article IX. Information

  	
   

  
	
   

  	
   

  
	
  Section 9.1.  Quarterly Financial Statements.

  	
   

  
	
  Section 9.2.  Year-End Statements.

  	
   

  
	
  Section 9.3.  Compliance Certificate.

  	
   

  
	
  Section 9.4.  Other Information.

  	
   

  
	
   

  	
   

  
	
  Article X.
  Negative Covenants

  	
   

  
	
   

  	
   

  
	
  Section 10.1.  Financial Covenants.

  	
   

  
	
  Section 10.2.  Restricted Payments.

  	
   

  
	
  Section 10.3.  Indebtedness.

  	
   

  
	
  Section 10.4.  Investments Generally.

  	
   

  
	
  Section 10.5.  Liens; Negative Pledges; Other Matters.

  	
   

  
	
  Section 10.6.  Merger, Consolidation, Sales of Assets and
  Other Arrangements.

  	
   

  
	
  Section 10.7.  Fiscal Year.

  	
   

  

 

ii

 

	
  Section 10.8.  Modifications to Material Contracts.

  	
   

  
	
  Section 10.9.  Modifications of Organizational Documents.

  	
   

  
	
  Section 10.10.  Transactions with Affiliates.

  	
   

  
	
  Section 10.11.  ERISA Exemptions.

  	
   

  
	
   

  	
   

  
	
  Article XI. Default

  	
   

  
	
   

  	
   

  
	
  Section 11.1.  Events of Default.

  	
   

  
	
  Section 11.2.  Remedies Upon Event of Default.

  	
   

  
	
  Section 11.3.  Remedies Upon Default.

  	
   

  
	
  Section 11.4.  Allocation of Proceeds.

  	
   

  
	
  Section 11.5.  Collateral Account.

  	
   

  
	
  Section 11.6.  Performance by Agent.

  	
   

  
	
  Section 11.7.  Rights Cumulative.

  	
   

  
	
   

  	
   

  
	
  Article XII. The Agent

  	
   

  
	
   

  	
   

  
	
  Section 12.1.  Authorization and Action.

  	
   

  
	
  Section 12.2.  Agent’s Reliance, Etc.

  	
   

  
	
  Section 12.3.  Notice of Defaults.

  	
   

  
	
  Section 12.4.  Wachovia as Lender.

  	
   

  
	
  Section 12.5.  Approvals of Lenders.

  	
   

  
	
  Section 12.6.  Lender Credit Decision, Etc.

  	
   

  
	
  Section 12.7.  Collateral Matters.

  	
   

  
	
  Section 12.8.  Indemnification of Agent.

  	
   

  
	
  Section 12.9.  Successor Agent.

  	
   

  
	
  Section 12.10.  Titled Agents.

  	
   

  
	
   

  	
   

  
	
  Article XIII.
  Miscellaneous

  	
   

  
	
   

  	
   

  
	
  Section 13.1.  Notices.

  	
   

  
	
  Section 13.2.  Expenses.

  	
   

  
	
  Section 13.3.  Setoff.

  	
   

  
	
  Section 13.4.  Litigation; Jurisdiction; Other Matters;
  Waivers.

  	
   

  
	
  Section 13.5.  Successors and Assigns.

  	
   

  
	
  Section 13.6.  Amendments.

  	
   

  
	
  Section 13.7.  Nonliability of Agent and Lenders.

  	
   

  
	
  Section 13.8.  Confidentiality.

  	
   

  
	
  Section 13.9.  Indemnification.

  	
   

  
	
  Section 13.10.  Termination; Survival.

  	
   

  
	
  Section 13.11.  Severability of Provisions.

  	
   

  
	
  Section 13.12.  GOVERNING LAW.

  	
   

  
	
  Section 13.13.  Patriot Act.

  	
   

  
	
  Section 13.14.  Counterparts.

  	
   

  
	
  Section 13.15.  Obligations with Respect to Loan Parties.

  	
   

  
	
  Section 13.16.  Limitation of Liability.

  	
   

  
	
  Section 13.17.  Entire Agreement.

  	
   

  
	
  Section 13.18.  Construction.

  	
   

  

 

iii

 

THIS
CREDIT AGREEMENT (this “Agreement”) dated as of August 31, 2004 by and
among KITE REALTY GROUP, L.P., a limited partnership formed under the laws of
the State of Delaware (the “Borrower”), KITE REALTY GROUP TRUST, a real estate
investment trust formed under the laws of the State of Maryland (the “Parent”),
each of the financial institutions initially a signatory hereto together with
their assignees pursuant to Section 13.5.(d), WACHOVIA BANK, NATIONAL
ASSOCIATION, as Agent, WACHOVIA CAPITAL MARKETS, LLC and LEHMAN BROTHERS INC.,
as Joint Lead Arrangers (the “Arrangers”) and Joint Book Runners (the “Joint
Book Runners”) and LEHMAN COMMERCIAL PAPER INC., as Syndication Agent (the
“Syndication Agent”).

 

WHEREAS,
the Agent and the Lenders desire to make available to the Borrower a revolving
credit facility in the initial amount of $150,000,000, which will include a
$25,000,000 letter of credit subfacility and a $20,000,000 swingline
subfacility, on the terms and conditions contained herein.

 

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

 

ARTICLE I. DEFINITIONS

 

Section 1.1.  Definitions.

 

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

 

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

 

“Additional Costs” has the meaning given
that term in Section 5.1.

 

“Adjusted EBITDA” means, for any given
period, (a) the EBITDA of the Parent and its Subsidiaries determined on a
consolidated basis for such period, minus (b) Capital Reserves.

 

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

 

“Affiliate” means any Person (other than the
Agent or any Lender):  (a) directly or
indirectly controlling, controlled by, or under common control with, the
Borrower; (b) directly or 

 

 

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

 

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

 

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

 

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

 

“Applicable Margin” means the percentage
rate set forth below corresponding to the Collateral Pool Leverage Ratio in
effect at such time:

 

	
  Level

  	
   

  	
  Collateral
  Pool Leverage Ratio

  	
   

  	
  Applicable
  Margin

  for LIBOR Loans

  	
   

  	
  Applicable
  Margin

  for Base Rate Loans

  	
   

  
	
  1

  	
   

  	
  Less
  than or equal to 60.0%

  	
   

  	
  1.35

  	
  %

  	
  0.35

  	
  %

  
	
  2

  	
   

  	
  Greater
  than 60.0% but less than 65.0%

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  

 

The
Applicable Margin shall be determined by the Agent under this clause (a) from
time to time, based on the Collateral Pool Leverage Ratio as set forth in the
Compliance Certificate most recently delivered by the Borrower pursuant to
Section 9.3.  Any adjustment to the
Applicable Margin shall be effective (i) in the case of a Compliance
Certificate delivered in connection with quarterly financial statements of the
Borrower delivered pursuant to Section 9.3., as of the date 50 days
following the end of the last day of the applicable fiscal period covered by
such Compliance Certificate, (ii) in the case of a Compliance Certificate
delivered in connection with annual financial statements of the Parent
delivered pursuant to Section 9.3., as of the date 95 days following the
end of the last day of the applicable fiscal period covered by such Compliance
Certificate, and (iii) in the case of any other Compliance Certificate, as of
the date 5 Business Days following the Agent’s request for such Compliance
Certificate.  Notwithstanding the
foregoing, for the period from the Effective Date through but excluding the
date on which the Agent first determines the Applicable Margin as set forth
above, the Applicable Margin shall be determined based on Level 1.  Thereafter, the Applicable Margin shall be
adjusted from time to time as set forth above. 
If the Borrower shall fail to deliver a compliance certificate within
the time period required under Section 9.3., the Applicable Margin shall
be determined based on Level 2 until the Borrower delivers the required
Compliance Certificate, in which case the Applicable Margin shall be determined
as provided above effective as of the date of delivery of such Compliance
Certificate.

 

2

 

“Appraisal” means, in respect of any
Property, an M.A.I. appraisal commissioned by and addressed to the Agent
(acceptable to the Agent as to form, substance and appraisal date), prepared by
a professional appraiser acceptable to the Agent, having at least the minimum
qualifications required under Applicable Law governing the Agent and the
Lenders, including FIRREA, and determining the “as is” market value of such
Property as between a willing buyer and a willing seller.

 

“Appraised Value” means, with respect to any
Property, the “as is” market value of such Property as reflected in the then
most recent Appraisal of such Property as the same may have been reasonably
adjusted by the Agent based upon its internal review of such Appraisal which is
based on criteria and factors then generally used and considered by the Agent
in determining the value of similar properties, which review shall be conducted
prior to acceptance of such Appraisal by the Agent.

 

“Arrangers” has the meaning given to such
term in the introductory paragraph hereof.

 

“Assignee” has the meaning given that term
in Section 13.5.(d).

 

“Assignment and Acceptance Agreement” means
an Assignment and Acceptance Agreement among a Lender, an Assignee and the
Agent, substantially in the form of Exhibit A.

 

“Assignment of Leases and Rents” means an
Assignment of Leases and Rents executed by a Loan Party in favor of the Agent
for the benefit of the Lenders, substantially in the form of Exhibit B or
otherwise in form and substance satisfactory to the Agent.

 

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

 

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

 

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

 

“Borrower” has the meaning set forth in the
introductory paragraph hereof.

 

“Borrowing Base” means an amount equal to
65% of the sum of the Collateral Property Values of the Collateral Properties; provided,
however, to the extent that the aggregate Collateral Property Values of
all Collateral Properties leased by Loan Parties under Ground Leases would 

 

3

 

exceed
15.0% of the Borrowing Base, such excess shall be excluded.  Notwithstanding the foregoing, a Collateral
Property shall be excluded from calculations of the Borrowing Base if (a) at
any time such Property shall cease to be an Eligible Property, (b) the Agent
shall cease to hold a valid and perfected first priority Lien in such
Collateral Property, or (c) there shall have occurred and be continuing an
event of default under the Security Deed, Assignment of Leases and Rents or
other Security Document relating to such Collateral Property.  The Borrowing Base shall equal $0 if, at any
time after 45 days following the Effective Date, (x) there are fewer than 8
Collateral Properties or (y) the Collateral Property Values of the Collateral
Properties is less than $130,000,000.

 

“Borrowing Base Certificate” means a report
certified by the chief financial officer of the Borrower, setting forth the
calculations required to establish the Collateral Property Value for each
Collateral Property and the Borrowing Base for all Collateral Properties as of
a specified date, all in form and detail satisfactory to the Agent.

 

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

 

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

 

“Capitalization Rate” means nine percent
(9.00%).

 

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

 

“Cash Equivalents” means:  (a) securities issued, guaranteed or insured
by the United States of America or any of its agencies with maturities of not
more than one year from the date acquired; (b) certificates of deposit with
maturities of not more than one year from the date acquired issued by a United
States federal or state chartered commercial bank of recognized standing, or a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the 

 

4

 

equivalent
by Moody’s; (c) reverse repurchase agreements with terms of not more than seven
days from the date acquired, for securities of the type described in clause (a)
above and entered into only with commercial banks having the qualifications
described in clause (b) above; (d) commercial paper issued by any Person
incorporated under the laws of the United States of America or any State
thereof and rated at least A-2 or the equivalent thereof by S&P or at least
P-2 or the equivalent thereof by Moody’s, in each case with maturities of not
more than one year from the date acquired; and (e) investments in money market
funds registered under the Investment Company Act of 1940, which have net
assets of at least $500,000,000 and at least 85% of whose assets consist of
securities and other obligations of the type described in clauses (a) through
(d) above.

 

“Collateral” means any real or personal
property directly or indirectly securing any of the Obligations or any other
obligation of a Person under or in respect of any Loan Document to which it is
a party, and includes, without limitation, all “Collateral” under and as
defined in any Security Deed, all “Management Agreements” as defined in any
Property Management Contract Assignment, all “Leases” and “Rents” as defined in
any Assignment of Leases and Rents and all other property subject to a Lien
created by a Security Document.

 

“Collateral Account” means a special deposit
account established by the Agent pursuant to Section 11.5. and under its
sole dominion and control.

 

“Collateral Pool Leverage Ratio” means, at
any time, the ratio of (a) the aggregate principal amount of all outstanding
Loans, together with the aggregate amount of all Letter of Credit Liabilities,
at such time to (b) the aggregate Collateral Property Values at such time of
all Collateral Properties then included in calculations of the Borrowing Base.

 

“Collateral Property” means a Property which
the Agent and the Requisite Lenders have agreed to include in calculations of
the Borrowing Base pursuant to Section 4.1.

 

“Collateral Property Value” means, with
respect to a Collateral Property, (a) from the date on which such Property
first becomes a Collateral Property through and including the last day of the
second complete fiscal quarter of the Parent occurring after such date (or in
the case of the Collateral Properties identified on Schedule 4.1., at all
times prior to December 31, 2004), an amount equal to the Appraised Value
of such Collateral Property, and (b) at all times thereafter, an amount equal
to (i) the Net Operating Income of such Collateral Property for the two most
recently ended fiscal quarters of the Borrower times (ii) 2 divided
by (iii) the Capitalization Rate.

 

“Commitment” means, as to each Lender, such
Lender’s obligation to make Revolving Loans pursuant to Section 2.1. and
to issue (in the case of the Agent) or participate in (in the case of the Lenders)
Letters of Credit pursuant to Section 2.3.(a) and 2.3.(i), respectively,
in an amount up to, but not exceeding (but in the case of the Lender acting as
the Agent excluding the aggregate amount of participations in the Letters of
Credit held by other Lenders), the amount set forth for such Lender on its
signature page hereto as such Lender’s “Commitment Amount” or as set forth in
the applicable Assignment and Acceptance Agreement, as the same may be reduced
from time to time pursuant to Section 2.11. or as appropriate to reflect
any assignments to or by such Lender effected in accordance with
Section 13.5.

 

5

 

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

 

“Compliance Certificate” has the meaning
given that term in Section 9.3.

 

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

 

“Continue”, “Continuation” and “Continued”
each refers to the continuation of a LIBOR Loan from one Interest Period to
another Interest Period pursuant to Section 2.8.

 

“Contribution Agreement” means that certain
Contribution Agreement dated as of April 5, 2004 by and among the
Borrower, Alvin E. Kite, Jr., John A. Kite, Paul W. Kite, Thomas K. McGowan,
Daniel R. Sink, George F. McMannis, IV and Mark Jenkins.

 

“Convert”, “Conversion” and “Converted”
each refers to the conversion of a Loan of one Type into a Loan of another Type
pursuant to Section 2.9.

 

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

 

“Default” means any of the events specified
in Section 11.1., whether or not there has been satisfied any requirement
for the giving of notice, the lapse of time, or both.

 

“Defaulting Lender” has the meaning set
forth in Section 3.11.

 

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

 

6

 

other
master agreement, including any such obligations or liabilities under any such
master agreement.

 

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

 

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

 

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

 

“Effective Date” means the later of:  (a) the Agreement Date and (b) the date on
which all of the conditions precedent set forth in Section 6.1. shall have
been fulfilled or waived in writing by the Requisite Lenders.

 

“Eligible Assignee” means any Person who
is:  (i) currently a Lender or an
affiliate of a Lender; (ii) a commercial bank, trust, trust company, insurance
company, investment bank or pension fund organized under the laws of the United
States of America, or any state thereof, and having total assets in excess of
$5,000,000,000; (iii) a savings and loan association or savings bank organized
under the laws of the United States of America, or any state thereof, and
having a tangible net worth of at least $500,000,000; or (iv) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. 
If such Person is not currently a Lender or an affiliate of a Lender,
such Person’s (or its parent’s) senior unsecured long term indebtedness must be
rated BBB or higher by S&P, Baa2 or higher by Moody’s, or the equivalent or
higher of either such rating by another rating agency acceptable to the Agent.

 

“Eligible Property” means a Property which
satisfies all of the following requirements: 
(a) such Property is located in the contiguous United States of America;
(b) the Property is owned in fee simple, or leased under a Ground Lease
entirely by, the Borrower or a Wholly Owned Subsidiary; (c) neither such
Property, nor any interest of the Borrower or any Subsidiary 

 

7

 

therein,
is subject to any Lien (other than Permitted Liens (but not Liens of the type
described in clause (g) of the definition of Permitted Liens)) or a Negative
Pledge; (d) if such Property is owned or leased by a Guarantor (i) none of the
Borrower’s direct or indirect ownership interest in such Guarantor is subject
to any Lien (other than Permitted Liens (but not Liens of the type described in
clause (g) of the definition of Permitted Liens)) or to a Negative Pledge; and
(ii) the Borrower directly, or indirectly through a Subsidiary, has the right
to take the following actions without the need to obtain the consent of any
Person:  (x) to sell, transfer or otherwise
dispose of such Property and (y) to create a Lien on such Property as security
for Indebtedness of the Borrower or such Guarantor, as applicable; and (e) such
Property is free of all structural defects or major architectural deficiencies,
title defects, environmental conditions or other adverse matters except for
defects, deficiencies, conditions or other matters individually or collectively
which are not material to the profitable operation of such Property.

 

“Environmental Indemnity Agreement” means an
Environmental Indemnity Agreement executed by a Loan Party in favor of the
Agent and the Lenders and substantially in the form of Exhibit C.

 

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

 

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

 

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

 

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

 

8

 

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

 

“Event of Default” means any of the events
specified in Section 11.1., provided that any requirement for notice or
lapse of time or any other condition has been satisfied.

 

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

 

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

 

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

 

“FIRREA” means the Financial Institution
Recovery, Reform and Enforcement Act of 1989, as amended.

 

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

 

“Floating Rate Indebtedness”  means all Indebtedness of a Person which
bears interest at a variable rate during the scheduled life of such
Indebtedness and for which such Person has not obtained interest rate swap
agreements, interest rate “cap” or “collar” agreements or other similar
Derivatives Contracts which effectively cause such variable rates (exclusive of
any fixed margins added to any variable component of such rates) to be
equivalent to fixed rates less than or equal to the rate (as reasonably
determined by the Agent) borne by United States 10-year Treasury Notes at the
time the applicable Derivatives Contract became effective.

 

9

 

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

 

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

 

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

 

“Governmental Authority” means any national,
state or local government (whether domestic or foreign), any political
subdivision thereof or any other governmental, quasi-governmental, judicial,
public or statutory instrumentality, authority, body, agency, bureau,
commission, board, department or other entity (including, without limitation,
the Federal Deposit Insurance Corporation, the Comptroller of the Currency or
the Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.

 

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

 

“Guarantor” means any Person that is a party
to the Guaranty as a “Guarantor” and in any event shall include the Parent and
any Subsidiary that owns a Collateral Property.

 

“Guaranty”, “Guaranteed”, “Guarantying”
or to “Guarantee” as applied to
any obligation means and includes:  (a)
a guaranty (other than by endorsement of negotiable instruments for collection
or deposit in the ordinary course of business), directly or indirectly, in any
manner, of any part or all of such obligation, or (b) an agreement, direct or
indirect, contingent or otherwise, and whether or not constituting a guaranty,
the practical effect of which 

 

10

 

is
to assure the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation whether by:  (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down
by beneficiaries of letters of credit (including Letters of Credit), or (v) the
supplying of funds to or investing in a Person on account of all or any part of
such Person’s obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation.  As the context requires,
“Guaranty” shall also mean the Guaranty to which the Guarantors are parties
substantially in the form of Exhibit D.

 

“Hazardous Materials” means all or any of
the following:  (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable
Environmental Laws as “hazardous substances”, “hazardous materials”, “hazardous
wastes”, “toxic substances” or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity,
“TCLP” toxicity or “EP toxicity”; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive materials; (d)
asbestos in any form; (e) toxic mold; and (f) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million.

 

“Implied Debt Service” means, as of a given
date, an amount equal to the annual principal and interest payment sufficient
to amortize in full during a 25-year period the aggregate principal balance of
Loans and the amount of all Letter of Credit Liabilities outstanding as of such
date calculated using an interest rate equal to 1.5% plus the greater of
(i) the yield on a 10 year United States Treasury Note at such time as
determined by the Agent or (ii) 6.00%.

 

“Indebtedness” means, with respect to a
Person, at the time of computation thereof, all of the following (without
duplication):  (a) all obligations of
such Person in respect of money borrowed (other than trade debt incurred in the
ordinary course of business which is not more than 180 days past due); (b) all
obligations of such Person, whether or not for money borrowed (i) represented
by notes payable, or drafts accepted, in each case representing extensions of
credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or services rendered; (c) Capitalized Lease
Obligations of such Person; (d) all reimbursement obligations of such Person under
any letters of credit or acceptances (whether or not the same have been
presented for payment); (e) all Off-Balance Sheet Obligations of such Person;
(f) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Mandatorily Redeemable Stock
issued by such Person or any other Person, valued at the greater of its
voluntary or involuntary 

 

11

 

liquidation
preference plus accrued and unpaid dividends; (g) all obligations of
such Person in respect of any purchase obligation, repurchase obligation,
takeout commitment or forward equity commitment, in each case evidenced by a
binding agreement (excluding any such obligation to the extent the obligation can
be satisfied by the issuance of Equity Interests (other than Mandatorily
Redeemable Stock)); (h) net obligations under any Derivatives Contract not
entered into as a hedge against existing Indebtedness, in an amount equal to
the Derivatives Termination Value thereof; (i) all Indebtedness of other
Persons which such Person has Guaranteed or is otherwise recourse to such
Person (except for guaranties of customary exceptions for fraud, misapplication
of funds, environmental indemnities and other similar exceptions to recourse
liability (but not exceptions relating to bankruptcy, insolvency, receivership
or other similar events)); (j) all Indebtedness of another Person secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property or assets owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness or other payment obligation; and (k) such Person’s
pro rata share of the Indebtedness of any Unconsolidated Affiliate of such
Person.

 

“Intellectual Property” has the meaning
given that term in Section 7.1.(t).

 

“Interest Expense” means, for any period,
without duplication, (a) total interest expense of the Parent and its
Subsidiaries, including capitalized interest not funded under a construction
loan interest reserve account, determined on a consolidated basis for such
period, plus (b) the Parent’s pro rata share of Interest Expense of
Unconsolidated Affiliates for such period.

 

“Interest Period” means with respect to any
LIBOR Loan, each period commencing on the date such LIBOR Loan is made or the
last day of the next preceding Interest Period for such Loan and ending 1, 2, 3
or 6 months thereafter, as the Borrower may select in a Notice of Borrowing,
Notice of Continuation or Notice of Conversion, as the case may be, except that
each Interest Period that commences on the last Business Day of a calendar
month shall end on the last Business Day of the appropriate subsequent calendar
month.  Notwithstanding the
foregoing:  (i) if any Interest Period
would otherwise end after the Termination Date, such Interest Period shall end
on the Termination Date; and (ii) each Interest Period that would otherwise end
on a day which is not a Business Day shall end on the immediately following
Business Day (or, if such immediately following Business Day falls in the next
calendar month, on the immediately preceding Business Day).

 

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

 

“Investment” means, with respect to any
Person, any acquisition or investment (whether or not of a controlling
interest) by such Person, by means of any of the following:  (a) the purchase or other acquisition of any
Equity Interest in another Person, (b) a loan, advance or extension of credit
to, capital contribution to, Guaranty of Indebtedness of, or purchase or other
acquisition of any Indebtedness of, another Person, including any partnership
or joint venture interest in such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute the business or a division or operating unit of
another Person.  Any binding commitment
to make an Investment in any other Person, as well as any option of another
Person to require an Investment in such Person, shall 

 

12

 

constitute
an Investment.  Except as expressly
provided otherwise, for purposes of determining compliance with any covenant
contained in a Loan Document, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.

 

“Joint Book Runners” has the meaning given
to such term in the introductory paragraph hereof.

 

“L/C Commitment Amount” equals $25,000,000.

 

“Lender” means each financial institution
from time to time party hereto as a “Lender” and as the context requires,
includes the Swingline Lender.

 

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

 

“Letter of Credit” has the meaning given
that term in Section 2.3.(a).

 

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

 

“Letter of Credit Liabilities” means,
without duplication, at any time and in respect of any Letter of Credit, the
sum of (a) the Stated Amount of such Letter of Credit plus (b) the
aggregate unpaid principal amount of all Reimbursement Obligations of the
Borrower at such time due and payable in respect of all drawings made under
such Letter of Credit.  For purposes of
this Agreement, a Lender (other than the Lender acting as the Agent) shall be
deemed to hold a Letter of Credit Liability in an amount equal to its
participation interest in the related Letter of Credit under
Section 2.3.(i), and the Lender acting as the Agent shall be deemed to
hold a Letter of Credit Liability in an amount equal to its retained interest
in the related Letter of Credit after giving effect to the acquisition by the
Lenders other than the Lender acting as the Agent of their participation
interests under such Section.

 

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

 

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

 

13

 

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

 

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

 

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

 

“Loan” means a Revolving Loan or a Swingline
Loan.

 

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

 

“Loan Party” means the Borrower, the Parent
and each other Guarantor. 
Schedule 1.1.(A) sets forth the Loan Parties in addition to the
Borrower and the Parent as of the Agreement Date.

 

“Mandatorily Redeemable Stock” means, with
respect to any Person, any Equity Interest of such Person which by the terms of
such Equity Interest (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (a) matures or is mandatorily redeemable, pursuant to
a 

 

14

 

sinking
fund obligation or otherwise (other than an Equity Interest to the extent
redeemable in exchange for common stock or other equivalent common Equity
Interests), (b) is convertible into or exchangeable or exercisable for
Indebtedness or Mandatorily Redeemable Stock, or (c) is redeemable at the
option of the holder thereof, in whole or in part (other than an Equity
Interest which is redeemable solely in exchange for common stock or other
equivalent common Equity Interests), in each case on or prior to the date on
which all Revolving Loans are scheduled to be due and payable in full.

 

“Material Adverse Effect” means a materially
adverse effect on (a) the business, assets, liabilities, condition (financial
or otherwise), results of operations or business prospects of the Parent and
its Subsidiaries, or the Borrower and its Subsidiaries, in each case, taken as
a whole, (b) the ability of the Borrower or any other Loan Party to perform its
obligations under any Loan Document to which it is a party, (c) the validity or
enforceability of any of the Loan Documents, (d) the rights and remedies of the
Lenders and the Agent under any of the Loan Documents or (e) the timely payment
of the principal of or interest on the Loans or other amounts payable in
connection therewith or the timely payment of all Reimbursement Obligations.

 

“Material Contract” means any contract or
other arrangement (other than Loan Documents), whether written or oral, to
which the Parent, the Borrower, or any other Subsidiary is a party as to which
the breach, nonperformance, cancellation or failure to renew by any party
thereto could reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

“Mortgage Receivable” means a promissory
note secured by a Mortgage of which the Parent, the Borrower or another
Subsidiary is the holder and retains the rights of collection of all payments
thereunder.

 

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

 

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

 

15

 

“Net Operating Income” or “NOI” means, for any Property and for a
given period, the sum of the following (without duplication and determined on a
consistent basis with prior periods): 
(a) rents and other revenues received in the ordinary course from such
Property (excluding pre-paid rents and revenues and security deposits except to
the extent applied in satisfaction of tenants’ obligations for rent) minus
(b) all expenses paid (excluding interest) related to the ownership, operation
or maintenance of such Property, including but not limited to, an appropriate
accrual for property taxes and insurance, assessments and the like, utilities,
payroll costs, maintenance, repair and landscaping expenses, marketing
expenses, and general and administrative expenses (including an appropriate
allocation for legal, accounting, advertising, marketing and other expenses
incurred in connection with such Property, but specifically excluding general
overhead expenses of the Borrower or any Subsidiary and any property management
fees) minus (c) the Capital Reserves for such Property as of the end of
such period minus (d) the greater of (i) the actual property management
fee paid during such period and (ii) an imputed management fee in the amount of
three percent (3.0%) of the gross revenues for such Property for such
period.  Net Operating Income shall be
adjusted to remove any impact from straight line rent leveling adjustments
required under GAAP and amortization of intangibles pursuant to Statement of
Financial Accounting Standards number 141.

 

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

 

“Nonrecourse Indebtedness” means, with
respect to a Person, Indebtedness for borrowed money in respect of which
recourse for payment (except for customary exceptions for fraud, misapplication
of funds, environmental indemnities, and other similar exceptions to recourse
liability (but not exceptions relating to bankruptcy, insolvency, receivership
or other similar events)) is contractually limited to specific assets of such
Person encumbered by a Lien securing such Indebtedness.

 

“Note” means a Revolving Note or a Swingline
Note.

 

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

 

“Notice of Continuation” means a notice in
the form of Exhibit F to be delivered to the Agent pursuant to
Section 2.8. evidencing the Borrower’s request for the Continuation of a
LIBOR Loan.

 

“Notice of Conversion” means a notice in the
form of Exhibit G to be delivered to the Agent pursuant to Section 2.9.
evidencing the Borrower’s request for the Conversion of a Loan from one Type to
another Type.

 

16

 

“Notice of Swingline Borrowing” means a
notice in the form of Exhibit H to be delivered to the Agent pursuant to
Section 2.2. evidencing the Borrower’s request for a borrowing of
Swingline Loans.

 

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

 

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

 

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

 

“Parent” has the meaning given such term in the introductory paragraph hereof.

 

“Participant” has the meaning given that
term in Section 13.5.(c).

 

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

 

“Permitted Liens” means, as to any Person:  (a) Liens securing taxes, assessments and
other charges or levies imposed by any Governmental Authority (excluding any
Lien imposed pursuant to any of the provisions of ERISA or pursuant to any
Environmental Laws) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which are not at the time required to be paid
or discharged under Section 8.6.; (b) Liens consisting of deposits or
pledges made, in 

 

17

 

the
ordinary course of business, in connection with, or to secure payment of,
obligations under workers’ compensation, unemployment insurance or similar
Applicable Laws; (c) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of
real property, which do not materially detract from the value of such property
or impair the intended use thereof in the business of such Person; (d) the
rights of tenants under leases or subleases not interfering with the ordinary
conduct of business of such Person; (e) Liens in favor of the Agent for the
benefit of the Lenders; (f) Liens in favor of the Borrower or a Guarantor
securing obligations owing by a Subsidiary to the Borrower or a Guarantor; (g)
Liens in existence as of the Agreement Date and set forth in Part II of
Schedule 7.1.(f); and (h) in the case of any Collateral encumbered by a
Collateral Document, other Liens expressly permitted by such Collateral
Document.

 

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

 

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

 

“Post-Default Rate” means, in respect of any
principal of any Loan or any other Obligation that is not paid when due
(whether at stated maturity, by acceleration, by optional or mandatory
prepayment or otherwise), a rate per annum equal to the Base Rate as in effect
from time to time plus the Applicable Margin for Base Rate Loans plus
four percent (4.0%).

 

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

 

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

 

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

 

18

 

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

 

“Property” means any parcel of real property
owned or leased (in whole or in part) or operated by the Parent, the Borrower,
any other Subsidiary or any Unconsolidated Affiliate of the Parent and which is
located in a state of the United States of America or the District of Columbia.

 

“Property Management Agreement” means,
collectively, all agreements entered into by a Loan Party pursuant to which
such Loan Party engages a Person to advise it with respect to the management of
a Collateral Property.

 

“Property Management Contract Assignment”
means a an Assignment of Management Agreement and Subordination of Management
Fees executed by a Loan Party in favor of the Agent for the benefit of the
Lenders substantially in the form of Exhibit I or otherwise in form and
substance satisfactory to the Agent. 
Such document may, at the Agent’s election, constitute a subordination
of Property Management Agreement, rather than an assignment thereof.

 

“Qualified REIT Subsidiary” shall have the
meaning given to such term in the Internal Revenue Code.

 

“Register” has the meaning given that term
in Section 13.5.(e).

 

“Regulatory Change” means, with respect to
any Lender, any change effective after the Agreement Date in Applicable Law (including
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks, including
such Lender, of or under any Applicable Law (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof or compliance by any Lender with any request or
directive regarding capital adequacy.

 

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

 

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

 

“Requisite Lenders” means, as of any date,
Lenders having at least 66-2/3% of the aggregate amount of the Commitments (not
held by Defaulting Lenders who are not entitled to vote), or, if the
Commitments have been terminated or reduced to zero, Lenders holding at least
66-2/3% of the principal amount of the aggregate outstanding Loans and Letter
of Credit Liabilities (not held by Defaulting Lenders who are not entitled to
vote).  Commitments, 

 

19

 

Revolving
Loans and Letter of Credit Liabilities held by Defaulting Lenders shall be
disregarded when determining the Requisite Lenders.

 

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

 

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

 

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

 

“Revolving Note” has the meaning given that
term in Section 2.10.(a).

 

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

 

“Security Deed” means a deed to secure debt,
deed of trust or other mortgage executed by a Loan Party in favor of the Agent
and substantially in the form of Exhibit J or otherwise in form and substance
satisfactory to the Agent.

 

“Security Document” means any Security Deed,
any Assignment of Leases and Rents, any Property Management Contract
Assignments, and any other security agreement, financing statement, or other
document, instrument or agreement creating, evidencing or perfecting the
Agent’s Liens in any of the Collateral.

 

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

 

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

 

20

 

“Stabilized Property” means, any Property
that has achieved an Occupancy Rate of 85.0%.

 

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

 

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

 

“Swingline Commitment” means the Swingline
Lender’s obligation to make Swingline Loans pursuant to Section 2.2. in an
amount up to, but not exceeding, $20,000,000, as such amount may be reduced
from time to time in accordance with the terms hereof.

 

“Swingline Lender” means Wachovia Bank,
National Association.

 

“Swingline Loan” means a loan made by the
Swingline Lender to the Borrower pursuant to Section 2.2.(a).

 

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

 

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

 

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

 

“Termination Date” means August 30,
2007, or such later date to which the Termination Date may be extended pursuant
to Section 2.12.

 

“Tie-In Jurisdiction” means a jurisdiction
in which a “tie-in” endorsement may be obtained for a title insurance policy
covering property located in such jurisdiction which 

 

21

 

endorsement
effectively ties coverage to other title insurance policies covering properties
located in other jurisdictions.

 

“Titled Agents” means each of the Arrangers,
the Joint Book Runners and the Syndication Agent.

 

“Total Asset Value” means the sum of all of
the following of the Borrower and its Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis:  (a) cash and cash equivalents, plus
(b) with respect to each Stabilized Property owned by the Borrower or any
Subsidiary, the quotient of (i) the product of (A) Net Operating Income
attributable to such Property for the fiscal two quarters most recently ended minus
the Capital Reserves for such property for such period times (B) 2, divided by
(ii) the Capitalization Rate, plus (c) the GAAP book value of Properties
acquired during the two fiscal quarters most recently ended, plus (d)
Construction-in-Process until the earlier of the (i) one year anniversary date
of project completion or (ii) the second fiscal quarter after the Property
achieves an Occupancy Rate of 85%, plus (e) the GAAP book value of
Unimproved Land, Mortgage Receivables and other promissory notes.  The Borrower’s pro rata share of assets held
by Unconsolidated Affiliates will be included in Total Asset Value calculations
consistent with the above described treatment for wholly owned assets.  For purposes of determining Total Asset
Value, Net Operating Income from Properties acquired or disposed of by the
Borrower or any Subsidiary during the immediately preceding two fiscal quarter
period of the Borrower shall be excluded.

 

“Total Indebtedness”  means all Indebtedness of the Parent, the
Borrower and all other Subsidiaries of the Parent determined on a consolidated
basis.

 

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

 

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

 

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

 

22

 

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

 

“Wachovia” means Wachovia Bank, National
Association.

 

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

 

Section 1.2.  General; References to Times.

 

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

 

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

 

When
determining compliance by the Borrower or the Parent with any financial
covenant contained in any of the Loan Documents, only the pro rata share of the
Borrower or the Parent, 

 

23

 

as
applicable, of the financial attributes of a Subsidiary that is not a Wholly
Owned Subsidiary shall be included.

 

ARTICLE II.
CREDIT FACILITY

 

Section 2.1.
 Revolving Loans.

 

(a)                                  Generally.  Subject to the terms and
conditions hereof, during the period from the Effective Date to but excluding
the Termination Date, each Lender severally and not jointly agrees to make
Revolving Loans to the Borrower in an aggregate principal amount at any one
time outstanding up to, but not exceeding, the lesser of (a) the amount of such
Lender’s Commitment and (b) such Lender’s Commitment Percentage of the
Borrowing Base.  Subject to the terms
and conditions of this Agreement, during the period from the Effective Date to
but excluding the Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans hereunder.

 

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

 

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

 

24

 

Section 2.2.  Swingline Loans.

 

(a)                                  Swingline Loans. 
Subject to the terms and conditions hereof, during the period from the
Effective Date to but excluding the Termination Date, the Swingline Lender
agrees to make Swingline Loans to the Borrower in an aggregate principal amount
at any one time outstanding up to, but not exceeding, the amount of the
Swingline Commitment.  If at any time
the aggregate principal amount of the Swingline Loans outstanding at such time
exceeds the Swingline Commitment in effect at such time, the Borrower shall
immediately pay the Agent for the account of the Swingline Lender the amount of
such excess.  Subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow
Swingline Loans hereunder.

 

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

 

(c)                                  Interest.  Swingline Loans shall bear
interest at a per annum rate equal to the Base Rate plus the Applicable
Margin for Base Rate Loans.  Interest
payable on Swingline Loans is solely for the account of the Swingline
Lender.  All accrued and unpaid interest
on Swingline Loans shall be payable on the dates and in the manner provided in
Section 2.4. with respect to interest on Base Rate Loans (except as the
Swingline Lender and the Borrower may otherwise agree in writing in connection
with any particular Swingline Loan).

 

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

 

(e)                                  Repayment and Participations of Swingline
Loans.  The Borrower agrees to repay each Swingline
Loan within one Business Day of demand therefor by the Swingline Lender and in
any event, within 5 Business Days after the date such Swingline Loan was
made.  Notwithstanding the foregoing,
the Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Swingline Loans on the Termination Date (or
such 

 

25

 

earlier
date as the Swingline Lender and the Borrower may agree in writing).  In lieu of demanding repayment of any
outstanding Swingline Loan from the Borrower, the Swingline Lender may, on
behalf of the Borrower (which hereby irrevocably directs the Swingline Lender
to act on its behalf for such purpose), request a borrowing of Base Rate Loans
from the Lenders in an amount equal to the principal balance of such Swingline
Loan.  The amount limitations of
Section 3.5.(a) shall not apply to any borrowing of Base Rate Loans made
pursuant to this subsection.  The
Swingline Lender shall give notice to the Agent of any such borrowing of Base
Rate Loans not later than 12:00 noon on the proposed date of such borrowing and
the Agent shall give prompt notice of such borrowing to the Lenders.  No later than 2:00 p.m. on such date, each
Lender will make available to the Agent at the Principal Office for the account
of Swingline Lender, in immediately available funds, the proceeds of the Base
Rate Loan to be made by such Lender. 
The Agent shall pay the proceeds of such Base Rate Loans to the
Swingline Lender, which shall apply such proceeds to repay such Swingline
Loan.  At the time each Swingline Loan
is made, each Lender shall automatically (and without any further notice or
action) be deemed to have purchased from the Swingline Lender, without recourse
or warranty, an undivided interest and participation to the extent of such
Lender’s Commitment Percentage in such Swingline Loan.  If the Lenders are prohibited from making
Loans required to be made under this subsection for any reason, including
without limitation, the occurrence of any Default or Event of Default described
in Section 11.1.(f) or 11.1.(g), upon notice from the Agent or the Swingline
Lender, each Lender severally agrees to pay to the Agent for the account of the
Swingline Lender in respect of such participation the amount of such Lender’s
Commitment Percentage of each outstanding Swingline Loan.  If such amount is not in fact made available
to the Agent by any Lender, the Swingline Lender shall be entitled to recover
such amount on demand from such Lender, together with accrued interest thereon
for each day from the date of demand thereof, at the Federal Funds Rate.  If such Lender does not pay such amount
forthwith upon demand therefor by the Agent or the Swingline Lender, and until
such time as such Lender makes the required payment, the Swingline Lender shall
be deemed to continue to have outstanding Swingline Loans in the amount of such
unpaid participation obligation for all purposes of the Loan Documents (other
than those provisions requiring the other Lenders to purchase a participation
therein).  Further, such Lender shall be
deemed to have assigned any and all payments made of principal and interest on
its Loans, and any other amounts due to it hereunder, to the Swingline Lender
to fund Swingline Loans in the amount of the participation in Swingline Loans
that such Lender failed to purchase pursuant to this Section until such amount
has been purchased (as a result of such assignment or otherwise).  A Lender’s obligation to make payments in
respect of a participation in a Swingline Loan shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, (i) any claim of setoff, counterclaim,
recoupment, defense or other right which such Lender or any other Person may
have or claim against the Agent, the Swingline Lender or any other Person
whatsoever, (ii) the occurrence or continuation of a Default or Event of
Default (including, without limitation, any of the Defaults or Events of
Default described in Sections 11.1.(f) or 11.1.(g)) or the termination of any
Lender’s Revolving Commitment, (iii) the existence (or alleged existence) of an
event or condition which has had or could have a Material Adverse Effect, (iv)
any breach of any Loan Document by the Agent, any Lender or the Borrower or (v)
any other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing.

 

26

 

Section 2.3.  Letters of Credit.

 

(a)                                  Letters of Credit. 
Subject to the terms and conditions of this Agreement, the Agent, on
behalf of the Lenders, agrees to issue for the account of the Borrower during
the period from and including the Effective Date to, but excluding, the date 30
days prior to the Termination Date one or more letters of credit (each a
“Letter of Credit”) up to a maximum aggregate Stated Amount at any one time
outstanding not to exceed the L/C Commitment Amount.

 

(b)                                 Terms of Letters of Credit.  At
the time of issuance, the amount, form, terms and conditions of each Letter of
Credit, and of any drafts or acceptances thereunder, shall be subject to
approval by the Agent and the Borrower. 
Notwithstanding the foregoing, in no event may the expiration date of
any Letter of Credit extend beyond the earlier of (i) the date one year from
its date of issuance or (ii) the Termination Date; provided, however, a Letter
of Credit may contain a provision providing for the automatic extension of the
expiration date in the absence of a notice of non-renewal from the Agent but in
no event shall any such provision permit the extension of the expiration date
of such Letter of Credit beyond the Termination Date.

 

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

 

(d)                                 Reimbursement Obligations. 
Upon receipt by the Agent from the beneficiary of a Letter of Credit of
any demand for payment under such Letter of Credit, the Agent shall promptly
notify the Borrower of the amount to be paid by the Agent as a result of such
demand and the date on which payment is to be made by the Agent to such
beneficiary in respect of such demand; provided, however, the Agent’s failure
to give, or delay in giving, such notice shall not discharge the Borrower in
any respect from the applicable Reimbursement Obligation.  The Borrower hereby unconditionally and
irrevocably agrees to pay and reimburse the Agent for the amount of each demand
for payment under such Letter of Credit not later than the date on which
payment is to be made by the Agent to the beneficiary thereunder, without
presentment, demand, protest or other formalities of any kind (other than
notice as provided in this subsection). 
Upon receipt by the Agent of any payment in respect of any Reimbursement
Obligation, the Agent shall promptly pay to each Lender that has acquired a
participation therein under the second sentence of Section 2.3.(i) such
Lender’s Commitment Percentage of such payment.

 

27

 

(e)                                  Manner of Reimbursement. 
Upon its receipt of a notice referred to in the immediately preceding
subsection (d), the Borrower shall advise the Agent whether or not the
Borrower intends to borrow hereunder to finance its obligation to reimburse the
Agent for the amount of the related demand for payment and, if it does, the
Borrower shall submit a timely request for such borrowing as provided in the
applicable provisions of this Agreement. 
If the Borrower fails to so advise the Agent, or if the Borrower fails
to reimburse the Agent for a demand for payment under a Letter of Credit by the
date of such payment, then (i) if the applicable conditions contained in Article VI.
would permit the making of Revolving Loans, the Borrower shall be deemed to
have requested a borrowing of Revolving Loans (which shall be Base Rate Loans)
in an amount equal to the unpaid Reimbursement Obligation and the Agent shall
give each Lender prompt notice of the amount of the Revolving Loan to be made
available to the Agent not later than 1:00 p.m. and (ii) if such conditions
would not permit the making of Revolving Loans, the provisions of
subsection (j) of this Section shall apply.  The limitations of Section 3.5.(a) shall not apply to any
borrowing of Base Rate Loans under this subsection.

 

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

 

(g)                                 Agent’s Duties Regarding Letters of Credit;
Unconditional Nature of Reimbursement Obligations.  In
examining documents presented in connection with drawings under Letters of Credit
and making payments under such Letters of Credit against such documents, the
Agent shall only be required to use the same standard of care as it uses in
connection with examining documents presented in connection with drawings under
letters of credit in which it has not sold participations and making payments
under such letters of credit.  The
Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of
Credit.  In furtherance and not in
limitation of the foregoing, neither the Agent nor any of the Lenders shall be
responsible for (i) the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the application
for and issuance of or any drawing honored under any Letter of Credit even if
it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit, or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telex, telecopy or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit, or of the proceeds thereof; (vii) the misapplication
by the beneficiary of any Letter of Credit, or the proceeds of any drawing
under any Letter of Credit; or (viii) any consequences arising from causes
beyond the control of the Agent or the 

 

28

 

Lenders.  None of the above
shall affect, impair or prevent the vesting of any of the Agent’s rights or
powers hereunder.  Any action taken or
omitted to be taken by the Agent under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final,
non-appealable judgment), shall not create against the Agent or any Lender any
liability to the Borrower or any Lender. 
In this regard, the obligation of the Borrower to reimburse the Agent
for any drawing made under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement and any other applicable Letter of Credit Document
under all circumstances whatsoever, including without limitation, the following
circumstances:  (A) any lack of validity
or enforceability of any Letter of Credit Document or any term or provisions
therein; (B) any amendment or waiver of or any consent to departure from all or
any of the Letter of Credit Documents; (C) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against the
Agent, any Lender, any beneficiary of a Letter of Credit or any other Person, whether
in connection with this Agreement, the transactions contemplated hereby or in
the Letter of Credit Documents or any unrelated transaction; (D) any breach of
contract or dispute between the Borrower, the Agent, any Lender or any other
Person; (E) any demand, statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein or made in connection therewith being
untrue or inaccurate in any respect whatsoever; (F) any non-application or
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of Credit; (G) payment by the Agent under any Letter
of Credit against presentation of a draft or certificate which does not
strictly comply with the terms of such Letter of Credit; and (H) any other act,
omission to act, delay or circumstance whatsoever that might, but for the
provisions of this Section, constitute a legal or equitable defense to or
discharge of the Borrower’s Reimbursement Obligations.  Notwithstanding anything to the contrary
contained in this Section or Section 13.9., but not in limitation of
the Borrower’s unconditional obligation to reimburse the Agent for any drawing
made under a Letter of Credit as provided in this Section, the Borrower shall
have no obligation to indemnify the Agent or any Lender in respect of any
liability incurred by the Agent or a Lender arising solely out of the gross
negligence or willful misconduct of the Agent or a Lender in respect of a
Letter of Credit as determined by a court of competent jurisdiction in a final,
non-appealable judgment.  Except as
otherwise provided in this Section, nothing in this Section shall affect
any rights the Borrower may have with respect to the gross negligence or
willful misconduct of the Agent or any Lender with respect to any Letter of
Credit.

 

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

 

29

 

(i)                                     Lenders’ Participation in Letters of Credit.  Immediately
upon the issuance by the Agent of any Letter of Credit each Lender shall be
deemed to have irrevocably and unconditionally purchased and received from the
Agent, without recourse or warranty, an undivided interest and participation to
the extent of such Lender’s Commitment Percentage of the liability of the Agent
with respect to such Letter of Credit, and each Lender thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Agent to pay and
discharge when due, such Lender’s Commitment Percentage of the Agent’s
liability under such Letter of Credit. 
In addition, upon the making of each payment by a Lender to the Agent in
respect of any Letter of Credit pursuant to the immediately following
subsection (j), such Lender shall, automatically and without any further
action on the part of the Agent or such Lender, acquire (i) a participation in
an amount equal to such payment in the Reimbursement Obligation owing to the
Agent by the Borrower in respect of such Letter of Credit and (ii) a
participation in a percentage equal to such Lender’s Commitment Percentage in
any interest or other amounts payable by the Borrower in respect of such
Reimbursement Obligation (other than the Fees payable to the Agent pursuant to
the third and last sentences of Section 3.6.(b)).

 

(j)                                     Payment Obligation of Lenders. 
Each Lender severally agrees to pay to the Agent on demand in
immediately available funds in Dollars the amount of such Lender’s Commitment
Percentage of each drawing paid by the Agent under each Letter of Credit to the
extent such amount is not reimbursed by the Borrower pursuant to
Section 2.3.(d); provided, however, that in respect of any drawing under
any Letter of Credit, the maximum amount that any Lender shall be required to
fund, whether as a Revolving Loan or as a participation, shall not exceed such
Lender’s Commitment Percentage of such drawing.  If the notice referenced in the second sentence of
Section 2.3.(e) is received by a Lender not later than 11:00 a.m., then
such Lender shall make such payment available to the Agent not later than 2:00
p.m. on the date of demand therefor; otherwise, such payment shall be made
available to the Agent not later than 1:00 p.m. on the next succeeding Business
Day.  Each such Lender’s obligation to
make such payments to the Agent under this subsection, and the Agent’s right to
receive the same, shall be absolute, irrevocable and unconditional and shall
not be affected in any way by any circumstance whatsoever, including without
limitation, (i) the failure of any other Lender to make its payment under this
subsection, (ii) the financial condition of the Borrower or any other Loan
Party, (iii) the existence of any Default or Event of Default, including any
Event of Default described in Section 11.1.(f) or 11.1.(g) or (iv) the
termination of the Commitments.  Each
such payment to the Agent shall be made without any offset, abatement, withholding
or deduction whatsoever.

 

(k)                                  Information to Lenders. The Agent shall periodically deliver to the
Lenders information setting forth the Stated Amount of all outstanding Letters
of Credit.  Other than as set forth in
this subsection, the Agent shall have no duty to notify the Lenders regarding the
issuance or other matters regarding Letters of Credit issued hereunder.  The failure of the Agent to perform its
requirements under this subsection shall not relieve any Lender from its
obligations under Section 2.3.(j).

 

Section 2.4.  Rates and Payment of Interest on Loans.

 

(a)                                  Rates.  The Borrower promises to pay
to the Agent for the account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from 

 

30

 

and
including the date of the making of such Loan to but excluding the date such
Loan shall be paid in full, at the following per annum rates:

 

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

 

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

 

Notwithstanding
the foregoing, during the continuance of an Event of Default, the Borrower
shall pay to the Agent for the account of each Lender interest at the
Post-Default Rate on the outstanding principal amount of any Loan made by such
Lender, on all Reimbursement Obligations and on any other amount payable by the
Borrower hereunder or under the Notes held by such Lender to or for the account
of such Lender (including without limitation, accrued but unpaid interest to
the extent permitted under Applicable Law).

 

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

 

Section 2.5.  Number of Interest Periods.

 

There
may be no more than 6 different Interest Periods for LIBOR Loans outstanding at
the same time.

 

Section 2.6.  Repayment of Loans.

 

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

 

Section 2.7.  Prepayments.

 

(a)                                  Optional.  Subject to Section 5.4.,
the Borrower may prepay any Loan at any time without premium or penalty.  The Borrower shall give the Agent at least
one Business Day’s prior written notice of the prepayment of any Revolving
Loan.

 

31

 

(b)                                 Mandatory.

 

(i)                                     Outstandings In Excess of Commitments. If at any time the aggregate principal amount
of all outstanding Revolving Loans, together with the aggregate amount of all
Letter of Credit Liabilities and the aggregate principal amount of all
outstanding Swingline Loans, exceeds the aggregate amount of the Commitments in
effect at such time, the Borrower shall immediately pay to the Agent for the
accounts of the Lenders the amount of such excess; and

 

(ii)                                  Outstandings in Excess of Borrowing Base.  If
at any time the aggregate outstanding principal balance of Loans, together with
the aggregate amount of all Letter of Credit Liabilities, exceeds the Borrowing
Base, then the Borrower shall, within 5 days of the Agent’s demand, eliminate
such excess.  If such excess is not
eliminated within such time period, then the entire outstanding principal balance
of all Loans, together with an amount equal to the aggregate principal amount
of all Letter of Credit Liabilities, shall be immediately due and payable in
full.  All payments under this
Section shall be applied to pay all amounts of principal outstanding on
the Loans and any Reimbursement Obligations pro rata in accordance with
Section 3.2. and if any Letters of Credit are outstanding at such time the
remainder, if any, shall be deposited into the Collateral Account for
application to any Reimbursement Obligations. 
If the Borrower is required to pay any outstanding LIBOR Loans by reason
of this Section prior to the end of the applicable Interest Period
therefor, the Borrower shall pay all amounts due under Section 5.4.

 

Section 2.8.  Continuation.

 

So
long as no Default or Event of Default shall exist, the Borrower may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan.  Each new Interest
Period selected under this Section shall commence on the last day of the
immediately preceding Interest Period. 
Each selection of a new Interest Period shall be made by the Borrower
giving to the Agent a Notice of Continuation not later than 11:00 a.m. on the
third Business Day prior to the date of any such Continuation.  Such notice by the Borrower of a
Continuation shall be by telephone or telecopy, confirmed immediately in
writing if by telephone, in the form of a Notice of Continuation, specifying
(a) the proposed date of such Continuation, (b) the LIBOR Loans and portions
thereof subject to such Continuation and (c) the duration of the selected
Interest Period, all of which shall be specified in such manner as is necessary
to comply with all limitations on Loans outstanding hereunder.  Each Notice of Continuation shall be
irrevocable by and binding on the Borrower once given.  Promptly after receipt of a Notice of
Continuation, the Agent shall notify each Lender by telecopy, or other similar
form of transmission, of the proposed Continuation.  If the Borrower shall fail to select in a timely manner a new
Interest Period for any LIBOR Loan in accordance with this Section, or if a
Default or Event of Default shall exist, such Loan will automatically, on the
last day of the current Interest Period therefor, Convert into a Base Rate Loan
notwithstanding the first sentence of Section 2.9. or the Borrower’s
failure to comply with any of the terms of such Section.

 

32

 

Section 2.9.  Conversion.

 

The
Borrower may on any Business Day, upon the Borrower’s giving of a Notice of
Conversion to the Agent, Convert all or a portion of a Loan of one Type into a
Loan of another Type; provided, however, a Base Rate Loan may not be Converted
to a LIBOR Loan if a Default or Event of Default shall exist.  Any Conversion of a LIBOR Loan into a Base
Rate Loan shall be made on, and only on, the last day of an Interest Period for
such LIBOR Loan and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the
Borrower shall pay accrued interest to the date of Conversion on the principal
amount so Converted.  Each such Notice
of Conversion shall be given not later than 11:00 a.m. on the Business Day
prior to the date of any proposed Conversion into Base Rate Loans and on the
third Business Day prior to the date of any proposed Conversion into LIBOR
Loans.  Promptly after receipt of a
Notice of Conversion, the Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed Conversion.  Subject to the restrictions specified above,
each Notice of Conversion shall be by telephone (confirmed immediately in
writing) or telecopy in the form of a Notice of Conversion specifying (a) the
requested date of such Conversion, (b) the Type of Loan to be Converted, (c)
the portion of such Type of Loan to be Converted, (d) the Type of Loan such
Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan,
the requested duration of the Interest Period of such Loan.  Each Notice of Conversion shall be
irrevocable by and binding on the Borrower once given.

 

Section 2.10.  Notes.

 

(a)                                  Revolving Note.  The
Revolving Loans made by each Lender shall, in addition to this Agreement, also
be evidenced by a promissory note of the Borrower substantially in the form of
Exhibit L (each a “Revolving Note”), payable to the order of such Lender in a
principal amount equal to the amount of its Commitment as originally in effect
and otherwise duly completed.

 

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

 

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

 

33

 

Section 2.11.  Voluntary Reductions of the Commitment.

 

The
Borrower shall have the right to terminate or reduce the aggregate unused
amount of the Commitments (for which purpose use of the Commitments shall be
deemed to include the aggregate amount of Letter of Credit Liabilities and the
aggregate principal amount of all outstanding Swingline Loans) at any time and
from time to time without penalty or premium upon not less than 5 Business Days
prior written notice to the Agent of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of any such
reduction and shall be irrevocable once given and effective only upon receipt by
the Agent; provided, however, if the Borrower seeks to reduce the aggregate
amount of the Commitments below $100,000,000, then the Commitments shall all
automatically and permanently be reduced to zero.  The Agent will promptly transmit such notice to each Lender.  The Commitments, once terminated or reduced
may not be increased or reinstated.

 

Section 2.12.  Extension of Termination Date.

 

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

 

Section 2.13.  Expiration or Maturity Date of Letters of Credit Past Termination Date.

 

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

 

Section 2.14.  Amount Limitations.

 

Notwithstanding
any other term of this Agreement or any other Loan Document, no Lender shall be
required to make a Loan, the Agent shall not be required to issue a Letter of
Credit and no reduction of the Commitments pursuant to Section 2.11. shall
take effect, if immediately after the making of such Loan, the issuance of such
Letter of Credit or such reduction in the Commitments, the aggregate principal
amount of all outstanding Loans, together 

 

34

 

with
the aggregate amount of all Letter of Credit Liabilities, would exceed the
lesser of (a) the aggregate amount of the Commitments at such time or (b) the
Borrowing Base at such time.

 

Section 2.15.  Increase of Commitments.

 

With
the prior consent of the Agent, the Borrower shall have the right at any time
and from time to time from  during
the term of this Agreement to request increases in the aggregate amount of the
Commitments (provided that after giving effect to any increases in the
Revolving Commitments pursuant to this Section, the aggregate amount of the
Revolving Commitments may not exceed $250,000,000) by providing written notice
to the Agent, which notice shall be irrevocable once given.  Each such increase in the Commitments must
be in an aggregate minimum amount of $10,000,000 and integral multiples of
$5,000,000 in excess thereof.  No Lender
shall be required to increase its Commitment and any new Lender becoming a
party to this Agreement in connection with any such requested increase must be
an Eligible Assignee.  If a new Lender
becomes a party to this Agreement, or if any existing Lender agrees to increase
its Commitment, such Lender shall on the date it becomes a Lender hereunder (or
increases its Commitment, in the case of an existing Lender) (and as a
condition thereto) purchase from the other Lenders its Commitment Percentage
(as determined after giving effect to the increase of Commitments) of any
outstanding Revolving Loans, by making available to the Agent for the account
of such other Lenders at the Principal Office, in same day funds, an amount
equal to the sum of (A) the portion of the outstanding principal amount of such
Revolving Loans to be purchased by such Lender plus (B) the aggregate
amount of payments previously made by the other Lenders under
Section 2.3.(j) which have not been repaid plus (C) interest
accrued and unpaid to and as of such date on such portion of the outstanding
principal amount of such Revolving Loans. 
The Borrower shall pay to the Lenders amounts payable, if any, to such
Lenders under Section 5.4. as a result of the prepayment of any such
Revolving Loans.  No increase of the
Commitments may be effected under this Section if (x) a Default or Event
of Default shall be in existence on the effective date of such increase or (y)
any representation or warranty made or deemed made by the Borrower or any other
Loan Party in any Loan Document to which any such Loan Party is a party is not
(or would not be) true or correct on the effective date of such increase
(except for representations or warranties which expressly relate solely to an
earlier date).  In connection with any
increase in the aggregate amount of the Commitments pursuant to this
subsection, (a) any Lender becoming a party hereto shall execute such documents
and agreements as the Agent may reasonably request and (b) the Borrower shall
make appropriate arrangements so that each new Lender, and any existing Lender
increasing its Commitment, receives a new or replacement Note, as appropriate,
in the amount of such Lender’s Commitment within 2 Business Days of the
effectiveness of the applicable increase in the aggregate amount of
Commitments.

 

ARTICLE III.
PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

 

Section 3.1.  Payments.

 

Except
to the extent otherwise provided herein, all payments of principal, interest
and other amounts to be made by the Borrower under this Agreement or any other
Loan Document shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, to the Agent at its Principal Office, not
later than 2:00 p.m. on the date on which 

 

35

 

such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day).  Subject to Section 11.4., the Borrower
may, at the time of making each payment under this Agreement or any Note,
specify to the Agent the amounts payable by the Borrower hereunder to which
such payment is to be applied.  Each
payment received by the Agent for the account of a Lender under this Agreement
or any Note shall be paid to such Lender at the applicable Lending Office of
such Lender no later than 5:00 p.m. on the date of receipt.  If the Agent fails to pay such amount to a
Lender as provided in the previous sentence, the Agent shall pay interest on
such amount until paid at a rate per annum equal to the Federal Funds Rate from
time to time in effect.  If the due date
of any payment under this Agreement or any other Loan Document would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for the period of
such extension.

 

Section 3.2.  Pro Rata Treatment.

 

Except
to the extent otherwise provided herein: 
(a) each borrowing from the Lenders under Section 2.1.(a), 2.2.(e)
and 2.3.(e) shall be made from the Lenders, each payment of the Fees under
Section 3.6.(a), the first sentence of Section 3.6.(b) and
Section 3.6.(c) shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments under
Section 2.11. shall be applied to the respective Commitments of the
Lenders, pro rata according to the amounts of their respective Commitments; (b)
each payment or prepayment of principal of Revolving Loans by the Borrower
shall be made for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Revolving Loans held by them,
provided that if immediately prior to giving effect to any such payment in
respect of any Revolving Loans the outstanding principal amount of the
Revolving Loans shall not be held by the Lenders pro rata in accordance with
their respective Commitments in effect at the time such Loans were made, then
such payment shall be applied to the Revolving Loans in such manner as shall
result, as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment of interest on Revolving Loans by the
Borrower shall be made for the account of the Lenders pro rata in accordance
with the amounts of interest on such Loans then due and payable to the
respective Lenders; (d) the making, Conversion and Continuation of Revolving
Loans of a particular Type (other than Conversions provided for by
Section 5.5.) shall be made pro rata among the Lenders according to the
amounts of their respective Commitments (in the case of making of Loans) or
their respective Loans (in the case of Conversions and Continuations of Loans)
and the then current Interest Period for each Lender’s portion of each Loan of
such Type shall be coterminous; (e) the Lenders’ participation in, and payment
obligations in respect of, Letters of Credit under Section 2.3., shall be
pro rata in accordance with their respective Commitments; and (f) the Lenders’
participation in, and payment obligations in respect of, Swingline Loans under
Section 2.2., shall be pro rata in accordance with their respective
Commitments.  All payments of principal,
interest, fees and other amounts in respect of the Swingline Loans shall be for
the account of the Swingline Lender only (except to the extent any Lender shall
have acquired a participating interest in any such Swingline Loan pursuant to
Section 2.2.(e), in which case such payments shall be pro rata in
accordance with such participating interests).

 

36

 

Section 3.3.  Sharing of Payments, Etc.

 

If
a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrower under this Agreement, or shall obtain payment on any
other Obligation owing by the Borrower or a Loan Party through the exercise of
any right of set-off, banker’s lien or counterclaim or similar right or
otherwise or through voluntary prepayments directly to a Lender or other
payments made by the Borrower to a Lender not in accordance with the terms of
this Agreement and such payment should be distributed to the Lenders pro rata
in accordance with Section 3.2. or Section 11.4., as applicable, such
Lender shall promptly purchase from the other Lenders participations in (or, if
and to the extent specified by such Lender, direct interests in) the Loans made
by the other Lenders or other Obligations owed to such other Lenders in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
payment (net of any reasonable expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with
Section 3.2. or Section 11.4., as applicable.  To such end, all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.  The Borrower agrees that any Lender so
purchasing a participation (or direct interest) in the Loans or other
Obligations owed to such other Lenders may exercise all rights of set-off,
banker’s lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans in the
amount of such participation.  Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.

 

Section 3.4.  Several Obligations.

 

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

 

Section 3.5.  Minimum Amounts.

 

(a)                                  Borrowings and Conversions. 
Except as otherwise provided in Sections 2.2.(e) and 2.3.(e), each
borrowing of Base Rate Loans shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess thereof.  Each borrowing and each Conversion of LIBOR
Loans shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $1,000,000 in excess of that amount.

 

(b)                                 Prepayments.  Each voluntary prepayment of
Revolving Loans shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess thereof (or, if less, the aggregate
principal amount of Revolving Loans then outstanding).

 

(c)                                  Reductions of Commitments. 
Each reduction of the Commitments under Section 2.11. shall be in
an aggregate minimum amount of $10,000,000 and integral multiples of $5,000,000
in excess thereof.

 

37

 

(d)                                 Letters of Credit.  The
initial Stated Amount of each Letter of Credit shall be at least $100,000 or
such lesser amount as is acceptable to the Agent.

 

Section 3.6.  Fees.

 

(a)                                  Unused Fee. During the period from the Effective Date to but excluding the
Termination Date, the Borrower agrees to pay to the Agent for the account of
the Lenders an unused facility fee with respect to the average daily difference
between the (i) aggregate amount of the Commitments and (ii) the aggregate
principal amount of all outstanding Loans plus the aggregate amount of
all Letter of Credit Liabilities (the “Unused Amount”).  Such fee shall be computed by multiplying
the Unused Amount with respect to such quarter by the corresponding per annum
rate set forth below:

 

	
  Unused Amount

  	
   

  	
  Unused Fee

  	
   

  
	
  Greater than 50% of the aggregate amount of
  Commitments

  	
   

  	
  0.250

  	
  %

  
	
  Less than or equal to 50% of the aggregate
  amount of Commitments

  	
   

  	
  0.125

  	
  %

  

 

Such
fee shall be payable in arrears on the last day of each March, June,
September or December of each calendar year.  Any such accrued and unpaid fee shall also
be payable on the Termination Date or any earlier date of termination of the
Commitments or reduction of the Commitments to zero.

 

(b)                                 Letter of Credit Fees.  The
Borrower agrees to pay to the Agent for the account of the Lenders a letter of
credit fee at a rate per annum equal to the Applicable Margin for LIBOR Loans
times the daily average Stated Amount of each Letter of Credit for the period
from and including the date of issuance of such Letter of Credit (x) through
and including the date such Letter of Credit expires or is terminated or (y) to
but excluding the date such Letter of Credit is drawn in full.  The fees provided for in the immediately
preceding sentence shall be nonrefundable and payable in arrears on (i) the
last day of March, June, September and December in each year, (ii)
the Termination Date, (iii) the date the Commitments are terminated or reduced
to zero and (iv) thereafter from time to time on demand of the Agent.  In addition, the Borrower shall pay to the
Agent for its own account and not the account of any Lender, an issuance fee in
respect of each Letter of Credit equal to the greater of (i) $250 or (ii)
one-eighth of one percent (0.125%) per annum on the initial Stated Amount of
such Letter of Credit for the period from and including the date of issuance of
such Letter of Credit (A) through and including the date such Letter of Credit
expires or is terminated or (B) to but excluding the date such Letter of Credit
is drawn in full.  The fees provided for
in the immediately preceding sentence shall be nonrefundable and payable upon
issuance.  The Borrower shall pay
directly to the Agent from time to time on demand all commissions, charges,
costs and expenses in the amounts customarily charged by the Agent from time to
time in like circumstances with respect to the issuance of each Letter of
Credit, drawings, amendments and other transactions relating thereto.

 

(c)                                  Extension Fee.  If
the Borrower exercises its right to extend the Termination Date in accordance
with Section 2.12., the Borrower agrees to pay to the Agent for the
account of each Lender a fee equal to two-tenths of one percent (0.20%) of the
amount of such Lender’s 

 

38

 

Commitment
(whether or not utilized) at the time of such extension.  Such fee shall be due and payable in full on
the date the Agent receives the Extension Request pursuant to such Section.

 

(d)                                 Collateral Property Review Fee.  The
Borrower agrees to pay to the Agent for the account of the Lenders a fee equal
to $500 per Lender for each Property which the Borrower has requested become a
Collateral Property (excluding the Properties initially designated as
Collateral Properties under Section 4.1.(a)).  Such fee shall be payable upon the Borrower’s receipt of notice
that the Agent is prepared to proceed with acceptance of such Property as a
Collateral Property.

 

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

 

Section 3.7.  Computations.

 

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

 

Section 3.8.  Usury.

 

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

 

Section 3.9.  Agreement Regarding Interest and Charges.

 

The
parties hereto hereby agree and stipulate that the only charge imposed upon the
Borrower for the use of money in connection with this Agreement is and shall be
the interest specifically described in Section 2.4.(a)(i) and (ii) and in
Section 2.2.(c).  Notwithstanding
the foregoing, the parties hereto further agree and stipulate that all agency
fees, syndication fees, unused fees, closing fees, letter of credit fees, underwriting
fees, default charges, late charges, funding or “breakage” charges, increased
cost charges, attorneys’ fees and reimbursement for costs and expenses paid by
the Agent or any Lender to third parties or for damages incurred by the Agent
or any Lender, in each case in connection with the transactions contemplated by
this Agreement and the other Loan Documents, are charges made to compensate the
Agent or any such Lender for underwriting or administrative services and costs
or losses performed or incurred, and to be performed or incurred, by the Agent
and the Lenders in connection with this Agreement and shall under no
circumstances be deemed to be charges for the use of money.  All 

 

39

 

charges
other than charges for the use of money shall be fully earned and nonrefundable
when due.

 

Section 3.10.  Statements of Account.

 

The
Agent will account to the Borrower monthly with a statement of Loans, Letters
of Credit, accrued interest and Fees, charges and payments made pursuant to
this Agreement and the other Loan Documents, and such account rendered by the
Agent shall be deemed conclusive upon Borrower absent manifest error.  The failure of the Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.

 

Section 3.11.  Defaulting Lenders.

 

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

 

(b)                                 Purchase or Cancellation of Defaulting
Lender’s Commitment.  Any Lender who is not a Defaulting Lender
shall have the right, but not the obligation, in its sole discretion, to
acquire all of a Defaulting Lender’s Commitment.  Any Lender desiring to exercise such right shall give written
notice thereof to the Agent and the Borrower no sooner than 2 Business Days and
not later than 5 Business Days after such Defaulting Lender became a Defaulting
Lender.  If more than one Lender exercises
such right, each such Lender shall have the right to acquire an amount of such
Defaulting Lender’s Commitment in proportion to the Commitments of the other
Lenders exercising such right.  If after
such 5th Business Day, the Lenders have not elected to purchase all of the
Commitment of such Defaulting Lender, then the Borrower may, by giving 

 

40

 

written
notice thereof to the Agent, such Defaulting Lender and the other Lenders,
either (i) demand that such Defaulting Lender assign its Commitment to an
Eligible Assignee subject to and in accordance with the provisions of
Section 13.5.(d) for the purchase price provided for below or (ii)
terminate the Commitment of such Defaulting Lender, whereupon such Defaulting
Lender shall no longer be a party hereto or have any rights or obligations
hereunder or under any of the other Loan Documents.  No party hereto shall have any obligation whatsoever to initiate
any such replacement or to assist in finding an Eligible Assignee.  Upon any such purchase or assignment, the
Defaulting Lender’s interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser or assignee thereof, including an
appropriate Assignment and Acceptance Agreement and, notwithstanding
Section 13.5.(d), shall pay to the Agent an assignment fee in the amount
of $7,000.  The purchase price for the
Commitment of a Defaulting Lender shall be equal to the amount of the principal
balance of the Loans outstanding and owed by the Borrower to the Defaulting
Lender.  Prior to payment of such
purchase price to a Defaulting Lender, the Agent shall apply against such
purchase price any amounts retained by the Agent pursuant to the last sentence
of the immediately preceding subsection (a).  The Defaulting Lender shall be entitled to receive amounts owed
to it by the Borrower under the Loan Documents which accrued prior to the date
of the default by the Defaulting Lender, to the extent the same are received by
the Agent from or on behalf of the Borrower. 
There shall be no recourse against any Lender or the Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.

 

Section 3.12.  Taxes.

 

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

 

41

 

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

 

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

 

(iii)                               pay to the Agent for its account or the
account of the applicable Lender, as the case may be, such additional amount or
amounts as is necessary to ensure that the net amount actually received by the
Agent or such Lender will equal the full amount that the Agent or such Lender
would have received had no such withholding or deduction been required.

 

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

 

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

 

42

 

Section,
and costs and expenses (including all reasonable fees and disbursements of any
law firm or other external counsel and the allocated cost of internal legal
services and all disbursements of internal counsel) of the Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Commitments, repayment of all
Obligations and the resignation or replacement of the Agent.

 

(d)                                 Right to Replace of Lender.  If
a Lender requests compensation pursuant to this Section 3.12., and the
Requisite Lenders are not also doing the same, then, so long as there does not
then exist any Default or Event of Default, the Borrower may demand that such
Lender (the “Affected Lender”), and upon such demand the Affected Lender shall
promptly, assign its Commitment to an Eligible Assignee subject to and in
accordance with the provisions of Section 13.5.(d) for a purchase price to
be agreed on by the Affected Lender and the Eligible Assignee.  Each of the Agent and the Affected Lender
shall reasonably cooperate in effectuating the replacement of such Affected
Lender under this subsection, but at no time shall the Agent, such Affected
Lender nor any other Lender be obligated in any way whatsoever to initiate any
such replacement or to assist in finding an Eligible Assignee.  The exercise by the Borrower of its rights
under this subsection shall be at the Borrower’s sole cost and expense and
at no cost or expense to the Agent, the Affected Lender or any of the other
Lenders.  The terms of this
subsection shall not in any way limit the Borrower’s obligation to pay to
any Affected Lender compensation owing to such Affected Lender pursuant to this
Section 3.12. with respect to periods up to the date of replacement.

 

ARTICLE IV.
COLLATERAL PROPERTIES

 

Section 4.1.  Eligibility of Properties.

 

(a)                                  As of the Agreement Date, the Lenders have
approved for inclusion in calculations of the Borrowing Base the Properties
identified on Schedule 4.1.  Upon
satisfaction of the conditions set forth in Section 4.2., such Properties
shall become Collateral Properties.

 

(b)                                 If, after the Agreement Date, the Borrower
desires that the Lenders include any additional Property in calculations of the
Borrowing Base, the Borrower shall so notify the Agent in writing.  No Property will be evaluated by the Lenders
unless it is an Eligible Property, and unless and until the Borrower delivers
to the Agent the following, in form and substance satisfactory to the Agent:

 

(i)                                     a description of such Property, such
description to include the age, location, size and Occupancy Rate of such
Property;

 

(ii)                                  an operating statement and a rent roll for
such Property for the two prior fiscal years, for the current fiscal year
through the fiscal quarter most recently ending and for the current fiscal
quarter, certified by a representative of the Borrower to the best of such
representative’s knowledge as being true and correct in all material respects
provided that (x) with respect to any period such Property was not owned by a
Loan Party, such information shall only be required to be delivered to the
extent reasonably available to the Borrower and (y) if such Property has not
been in operation for two 

 

43

 

years,
the Borrower shall provide such projections and other information concerning
the anticipated operation of such Property as the Agent may reasonably request;

 

(iii)                               an operating budget for such Property with
respect to the current and immediately following fiscal years;

 

(iv)                              a budget for capital expenditures for the
immediately following 12-month period; and

 

(v)                                 such other information the Agent may
reasonably request in order to evaluate such Property.

 

(c)                                  If, after receipt and review of the
foregoing, the Agent is prepared to proceed with acceptance of such Property as
a Collateral Property, the Agent will so notify the Borrower and each Lender
within 10 Business Days after receipt of all of the above items, and the Agent
will obtain an Appraisal of such Property in order to determine the Appraised
Value thereof.  After obtaining such
Appraisal, the Agent will promptly submit the foregoing documents and information,
including the Appraisal and the Appraised Value, to the Lenders, for approval
by the Requisite Lenders within 10 Business Days thereafter.  Each Lender shall notify the Agent whether
it approves of the designation of such Property as a Collateral Property within
10 Business Days of receipt of all such documents and information.  If a Lender shall fail to so notify the
Agent, then such Lender shall be deemed to have approved of such Property.  Upon approval of such Property by the
Requisite Lenders, and upon execution and delivery of all of the documents
required to be provided under Section 4.2., such Property shall become a
Collateral Property.

 

Section 4.2.  Conditions Precedent to a Property Becoming a Collateral Property.

 

No
Property shall become a Collateral Property until the Borrower shall have
caused to be executed and delivered to the Agent and the Lenders all documents
and instruments required to be so executed and delivered under
Section 4.1., the Requisite Lenders shall have approved of such Property
as provided in such Section, and the Borrower shall have caused to be executed
and delivered to the Agent the following instruments, documents and agreements
in respect of such Property, each to be in form and substance satisfactory to
the Agent:

 

(a)                                  a Security Deed executed by the Loan Party
owing (or leasing) such Property, the form of such Security Deed to be modified
as appropriate to conform to the Applicable Laws of the jurisdiction in which
such Property is located;

 

(b)                                 an Assignment of Leases and Rents executed by
such Loan Party, the form of such Assignment of Leases and Rents to be modified
as appropriate to conform to the Applicable Laws of the jurisdiction in which
such Property is located;

 

(c)                                  an Environmental Indemnity Agreement executed
by such Loan Party, and if not the Borrower, the Borrower;

 

44

 

(d)                                 copies of (i) all Property Management
Agreements and all other material contracts, if any, which will relate to the
use, occupancy, operation, maintenance, enjoyment or ownership of such
Property, and (ii) if such Property is not yet owned by the Borrower or a
Subsidiary, the purchase agreement pursuant to which the Borrower or a
Subsidiary is to acquire such Property;

 

(e)                                  a Property Management Agreement Assignment
executed by such Loan Party and the applicable property manager;

 

(f)                                    if requested by the Agent, collateral
assignments of the other material contracts and any other rights or benefits of
such Property, relating to the use, occupancy, operation, maintenance,
enjoyment or ownership of such Property;

 

(g)                                 an ALTA 1992 Form mortgagee’s Policy of Title
Insurance (with deletion of the creditor’s rights exclusion and deletion of the
mandatory arbitration provision) or other form acceptable to the Agent in favor
of the Agent for the benefit of the Lenders with respect to such Property,
including endorsements with respect to such items of coverage as the Agent may
request (and which endorsements are available in the applicable state), in a
coverage amount equal to no less than 100% of the Appraised Value of such
Property (excluding the value of any personal property located at such
Property), issued by a title insurance company acceptable to the Agent and with
coinsurance or reinsurance (with direct access agreements) with title insurance
companies acceptable to the Agent, showing the fee simple title (or a leasehold
estate if leased under a Ground Lease) to the land and improvements described
in the applicable Security Deed as vested in the Borrower or a Subsidiary, and
insuring that the Lien granted by such Security Deed is a valid first priority
Lien against such Property, subject only to such restrictions, encumbrances,
easements and reservations as are acceptable to the Agent;

 

(h)                                 copies of all documents of record reflected
in Schedule B of such Policy of Title Insurance;

 

(i)                                     if such Property is located in a Tie-In
Jurisdiction, endorsements to all other existing title insurance policies
issued to the Agent with respect to all other Properties located in Tie-In
Jurisdictions reflecting an increase in the aggregate insured amount under the
“tie-in” endorsements to an amount equal to the Appraised Values of all such
Properties (including the Property to be included as a Collateral Property) but
in no event in an amount in excess of the aggregate amount of the Commitments;

 

(j)                                     a current or currently certified survey of
such Property certified to the Agent and the Lenders by a surveyor licensed in
the jurisdiction where such Property is located to have been prepared in
accordance with the then effective Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys;

 

(k)                                  if not adequately covered by the survey
certification, a certificate from a licensed engineer or other professional
satisfactory to the Agent that such Property is not located in a Special Flood
Hazard Area as defined by the Federal Insurance Administration;

 

45

 

(l)                                     evidence that such Property complies with
applicable zoning and land use laws;

 

(m)                               if requested by the Agent, copies of all
engineering, mechanical, structural and maintenance studies performed with
respect to such Property not more than twelve months old;

 

(n)                                 a “Phase I” environmental assessment of such
Property not more than 12 months old prepared by an environmental engineering
firm acceptable to the Agent and upon which the Agent and the Lenders are
expressly permitted to rely, and any additional environmental studies or
assessments available to the Borrower performed with respect to such Property;

 

(o)                                 UCC, tax, judgment and lien search reports
with respect to such Loan Party and such Property in all necessary or
appropriate jurisdictions and under all legal and appropriate trade names
indicating that there are no Liens of record on such Property or any of the
Collateral relating thereto other than Permitted Liens or Liens to be
terminated prior to such Property’s acceptance as a Collateral Property;

 

(p)                                 copies of all leases of such Property and
lease abstracts in form and substance acceptable to Agent relating to such
leases covering 5,000 or more square feet of such Property;

 

(q)                                 estoppel certificates and subordination,
non-disturbance and attornment agreements from each tenant leasing 5,000 or more
square feet of such Property and in any event from tenants renting in the
aggregate at least 85% of the square feet of such Property;

 

(r)                                    an opinion of counsel admitted to practice
law in the jurisdiction in which such Property is located and acceptable to the
Agent, addressed to the Agent and each Lender covering such legal matters
relating to the transactions contemplated hereby as the Agent may reasonably
request;

 

(s)                                  an opinion of counsel admitted to practice
law in the jurisdiction in which the Borrower is formed (and if the Property is
owned by a Subsidiary, also in the jurisdiction where such Subsidiary is
formed) acceptable to the Agent, addressed to the Agent and each Lender
covering such legal matters relating to the formation and existence and power
of the Person executing documents, and the due authorization, execution and
delivery of the applicable Security Documents and other documents for
consummating the transactions contemplated hereby as the Agent may reasonably
request;

 

(t)                                    if such Property is owned by a Subsidiary
that is not already a Guarantor, an Accession Agreement executed by such
Subsidiary and all of the items that would have been required to be delivered
to the Agent under Section 6.1.(iv) through (vii) had such Subsidiary been
a Loan Party on the Effective Date;

 

(u)                                 final certificates of occupancy relating to
such Property, if available and if requested by the Agent;

 

(v)                                 evidence that the insurance required under
the applicable Loan Document for such Property is then in effect;

 

46

 

(w)                               a Borrowing Base Certificate calculated after
giving effect to the inclusion of such Property as a Collateral Property; and

 

(x)                                   such other due diligence materials,
instruments, documents, agreements, financing statements, certificates,
opinions and other Collateral Documents as the Agent may reasonably request.

 

Section 4.3.  Release of Collateral Properties.

 

From
time to time the Borrower may request, upon not less than 30 days prior written
notice to the Agent, that a Collateral Property be released from the Liens
created by the Security Documents applicable thereto, which release (the
“Release”) shall be effected by the Agent if all of the following conditions
are satisfied as of the date of such Release:

 

(a)                                  no Default or Event of Default has occurred
and is then continuing or would occur or exist immediately after giving effect
to such Release;

 

(b)                                 the Borrower shall have delivered to the
Agent all documents and instruments reasonably requested by the Agent in
connection with such Release including, without limitation, the following:

 

(i)                                     a quitclaim deed or other instrument to be
used to effect such Release; and

 

(ii)                                  an appropriate endorsement to the mortgagee
title insurance policy in effect with respect to the affected Collateral
Property (and appropriate corrective endorsements with respect to any other
mortgagee policies of title insurance on Collateral Properties which have
tie-in clauses which are affected by the release);

 

(c)                                  the Borrower shall have delivered a
compliance certificate showing pro forma compliance with the covenants set
forth in Section 10.1. giving effect to such Release;

 

(d)                                 the Borrower shall have delivered to the
Agent a Borrowing Base Certificate reflecting the Borrowing Base after giving
effect to such Property Release; and

 

(e)                                  the outstanding principal balance of the
Loans, together with the aggregate principal amount of all Letter of Credit
Liabilities, will not exceed the Borrowing Base after giving effect to such
Release and any prepayment to be made and/or the acceptance of any Property
pursuant to Section 4.1. which is to be given concurrently with such
Release as an additional or replacement Collateral Property.

 

In
connection with a Release, the Borrower shall deliver to the Agent a
certificate from the Borrower’s chief executive officer or chief financial
officer regarding the matters referred to in the immediately preceding clauses
(a) and (c).  After giving effect to any
request that a Collateral Property owned by a Subsidiary cease to be included
in determinations of the Borrowing Base, the Borrower may request in writing
that the Agent release, and upon receipt of such request the 

 

47

 

Agent
shall release, such Subsidiary from the Guaranty so long as such Subsidiary
does not own any other Collateral Property.

 

Section 4.4.  Frequency of Calculations of Borrowing Base.

 

Initially,
the Borrowing Base shall be the amount set forth as such in the Borrowing Base
Certificate delivered under Section 6.1. 
Thereafter, the Borrowing Base shall be the amount set forth as such in
the Borrowing Base Certificate delivered from time to time under
Section 4.2.(w), 4.3.(d) or 9.4.(b). 
Any increase in the Collateral Property Value of an Eligible Property
shall become effective as of the next determination of the Borrowing Base as
provided in this Section, provided that prior to such date of determination (a)
the applicable Borrowing Base Certificate substantiates such increase and (b)
if at such time such Collateral Property is subject to a Security Deed, the
Borrower delivers to the Agent (i) if the Property is not located in a Tie-In
Jurisdiction, an endorsement to the title insurance policy in favor of the
Agent with respect to such Property increasing the coverage amount thereof as
related to such Property to not less than 100% of the Collateral Property Value
for such Property and (ii) if the Property is located in a Tie-In Jurisdiction,
an endorsement to the title insurance policy in favor of the Agent with respect
to such Property increasing the coverage amount thereof as related to such
Property to not less than the Collateral Property Value of such Property, as
well as endorsements to all other existing title insurance policies issued to
the Agent with respect to all other Properties located in Tie-In Jurisdictions
reflecting an increase in the aggregate insured amount under the “tie-in”
endorsements to an amount equal to the aggregate amount of the Collateral Property
Values of all such Properties (including the Property which experienced the
increase in Collateral Property Value) but in no event in an amount in excess
of the aggregate amount of the Commitments.

 

Section 4.5.  Additional Appraisals Required under Applicable Law.

 

If
under FIRREA or any other Applicable Law, a Lender is required to obtain an
Appraisal of any Collateral Property in addition to any other Appraisal
previously obtained with respect to such Property pursuant to this Agreement,
the Agent shall have the right to cause such an Appraisal to be prepared at the
Borrower’s cost and expense.  The
Borrowing Base shall only be redetermined as a result of delivery of any such
new Appraisal if Applicable Law requires such redetermination, in which case the
Borrowing Base shall be redetermined in the manner required under such
Applicable Law.

 

ARTICLE V.
YIELD PROTECTION, ETC.

 

Section 5.1.  Additional Costs; Capital Adequacy.

 

(a)                                  Additional Costs.  The
Borrower shall promptly pay to the Agent for the account of a Lender from time
to time such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs incurred by such Lender that it determines are
attributable to its making or maintaining of any LIBOR Loans or its obligation
to make any LIBOR Loans hereunder, any reduction in any amount receivable by
such Lender under this Agreement or any of the other Loan Documents in respect
of any of such Loans or such obligation or the maintenance by such Lender of
capital in respect of its Loans or its Commitment (such increases 

 

48

 

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

 

(b)                                 Lender’s Suspension of LIBOR Loans. 
Without limiting the effect of the provisions of the immediately
preceding subsection (a), if, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the interest
rate on LIBOR Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of such Lender that includes LIBOR
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets that it may hold, then, if such Lender so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such
Lender to make or Continue, or to Convert any other Type of Loans into, LIBOR
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.5. shall apply).

 

(c)                                  Additional Costs in Respect of Letters of
Credit.  Without limiting the obligations of the
Borrower under the preceding subsections of this Section (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed applicable
any tax, reserve, special deposit, capital adequacy or similar requirement
against or with respect to or measured by reference to Letters of Credit and
the result shall be to increase the cost to the Agent of issuing (or any Lender
of purchasing participations in) or maintaining its obligation hereunder to
issue (or purchase participations in) any Letter of Credit or reduce any amount
receivable by the Agent or any Lender hereunder in respect of any Letter of
Credit, then, upon demand by the Agent or such Lender, the Borrower shall pay
promptly, and in any event within 3 Business Days of demand, to the Agent for
its account or the account of such Lender, as applicable, from time to time as
specified by the Agent or a Lender, such additional amounts as shall be
sufficient to compensate the Agent or such Lender for such increased costs or
reductions in amount.

 

(d)                                 Notification and Determination of Additional
Costs.  Each of the Agent and each Lender agrees to
notify the Borrower of any event occurring after the Agreement Date entitling
the Agent or such Lender to compensation under any of the preceding subsections
of this Section 

 

49

 

as
promptly as practicable; provided, however, the failure of the Agent or any
Lender to give such notice shall not release the Borrower from any of its
obligations hereunder (and in the case of a Lender, to the Agent).  The Agent or such Lender agrees to furnish
to the Borrower (and in the case of a Lender, to the Agent) a certificate
setting forth in reasonable detail the basis and amount of each request by the
Agent or such Lender for compensation under this Section.  Absent manifest error, determinations by the
Agent or any Lender of the effect of any Regulatory Change shall be conclusive,
provided that such determinations are made on a reasonable basis and in good
faith.

 

Section 5.2.  Suspension of LIBOR Loans.

 

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

 

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

 

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

 

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

 

Section 5.3.  Illegality.

 

Notwithstanding
any other provision of this Agreement, if any Lender shall reasonably determine
(which determination shall be conclusive and binding) that it has become
unlawful for such Lender to honor its obligation to make or maintain LIBOR
Loans hereunder, then such Lender shall promptly notify the Borrower thereof
(with a copy to the Agent) and such Lender’s obligation to make or Continue, or
to Convert Loans of any other Type into, LIBOR Loans shall be suspended until
such time as such Lender may again make and maintain LIBOR Loans (in which case
the provisions of Section 5.5. shall be applicable).

 

Section 5.4.  Compensation.

 

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

 

50

 

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

 

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

 

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

 

Section 5.5.  Treatment of Affected Loans.

 

If
the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert
Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1.(b) or 5.3., then such Lender’s LIBOR Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 5.1.(b) or 5.3., on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 5.1. or 5.3. that gave rise to such Conversion no longer exist:

 

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

 

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

 

If
such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1. or 5.3. that gave rise to the
Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding,
then such Lender’s Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding LIBOR Loans and by such Lender are held pro rata
(as to principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.

 

51

 

Section 5.6.  Change of Lending Office.

 

Each
Lender agrees that it will use reasonable efforts to designate an alternate
Lending Office with respect to any of its Loans affected by the matters or
circumstances described in Sections 3.12., 5.1. or 5.3. to reduce the liability
of the Borrower or avoid the results provided thereunder, so long as such
designation is not disadvantageous to such Lender as determined by such Lender
in its sole discretion, except that such Lender shall have no obligation to
designate a Lending Office located in the United States of America.

 

Section 5.7.  Assumptions Concerning Funding of LIBOR Loans.

 

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

 

ARTICLE VI.
CONDITIONS PRECEDENT

 

Section 6.1.  Initial Conditions Precedent.

 

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

 

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

 

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

 

(ii)                                  Revolving Notes executed by the Borrower,
payable to each Lender and complying with the applicable provisions of
Section 2.10., and the Swingline Note executed by the Borrower;

 

(iii)                               the Guaranty executed by the Parent and each
Subsidiary that owns or leases a Collateral Property as of the Effective Date;

 

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

 

(v)                                 a certificate of good standing or certificate
of similar meaning with respect to each Loan Party issued as of a recent date
by the Secretary of State of the state of formation of each such Loan Party and
certificates of qualification to transact business or 

 

52

 

other
comparable certificates issued by each Secretary of State (and any state
department of taxation, as applicable) of each state in which such Loan Party
is required to be so qualified and where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect;

 

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

 

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

 

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

 

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

 

(x)                                   a Compliance Certificate calculated as of the
Effective Date (giving pro forma effect to the financing evidenced by this
Agreement and the use of the proceeds of the Loans to be funded on the
Agreement Date);

 

(xi)                                a Borrowing Base Certificate calculated as of
the Effective Date;

 

(xii)                             the Borrower shall have consummated its
initial public offering of common shares and shall have received Net Proceeds
therefrom as contemplated in the Borrower’s Form S-11 as filed with the
Securities and Exchange Commission;

 

(xiii)                          a statement of funds flow setting forth in
reasonable detail the application of such Net Proceeds and the proceeds of the
initial Loans being funded on the Effective Date; and

 

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

 

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

 

53

 

(i)                                     there shall not have occurred or become known
to the Agent  or any of the Lenders
any event, condition, situation or status since the date of the information
contained in the financial and business projections, budgets, pro forma data
and forecasts concerning the Parent, the Borrower and its other Subsidiaries
delivered to the Agent and the Lenders prior to the Agreement Date that has had
or could reasonably be expected to result in a Material Adverse Effect;

 

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

 

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

 

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

 

Section 6.2.  Conditions Precedent to All Loans and Letters of Credit.

 

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

 

54

 

the
Agent and the Lenders at the time such Loan is made or Letter of Credit issued
that all conditions to the occurrence of such Credit Event contained in
Article VI. have been satisfied.

 

ARTICLE VII. REPRESENTATIONS AND WARRANTIES

 

Section 7.1.  Representations and Warranties.

 

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

 

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

 

(b)                                 Ownership Structure.  As
of the Agreement Date, Part I of Schedule 7.1.(b) is a complete and
correct list of all Subsidiaries of the Parent setting forth for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each
Person holding any Equity Interests in such Subsidiary, (iii) the nature of the
Equity Interests held by each such Person, and (iv) the percentage of ownership
of such Subsidiary represented by such Equity Interests.  Except as disclosed in such Schedule, as of
the Agreement Date (i) each of the Parent and its Subsidiaries owns, free and
clear of all Liens (other than Permitted Liens), and has the unencumbered right
to vote, all outstanding Equity Interests in each Person shown to be held by it
on such Schedule, (ii) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid and
nonassessable and (iii) there are no outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including,
without limitation, any stockholders’ or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, any such Person.  As of the Agreement Date Part II of
Schedule 7.1.(b) correctly sets forth all Unconsolidated Affiliates of the
Parent, including the correct legal name of such Person, the type of legal
entity which each such Person is, and all Equity Interests in such Person held
directly or indirectly by the Parent.

 

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

 

55

 

and
delivered by the duly authorized officers of such Person and each is a legal,
valid and binding obligation of such Person enforceable against such Person in
accordance with its respective terms except as the same may be limited by
bankruptcy, insolvency, and other similar laws affecting the rights of
creditors generally and the availability of equitable remedies for the
enforcement of certain obligations (other than the payment of principal)
contained herein or therein and as may be limited by equitable principles
generally.

 

(d)                                 Compliance of Loan Documents with Laws, Etc.  The
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which any Loan Party is a party in accordance with their
respective terms and the borrowings and other extensions of credit hereunder do
not and will not, by the passage of time, the giving of notice, or both:  (i) require any Governmental Approval or
violate any Applicable Law (including all Environmental Laws) relating to any
Loan Party; (ii) conflict with, result in a breach of or constitute a default
under the organizational documents of any Loan Party, or any indenture,
agreement or other instrument to which any Loan Party is a party or by which it
or any of its respective properties may be bound; or (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by any Loan Party.

 

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

 

(f)                                    Title to Properties; Liens.  As
of the Agreement Date, Part I of Schedule 7.1.(f) is a complete and
correct listing of all of the real property owned or leased by the Parent, the
Borrower and each other Subsidiary. 
Each such Person has good, marketable and legal title to, or a valid
leasehold interest in, its respective assets. 
As of the Agreement Date, there are no Liens against any assets of the
Parent, the Borrower or any other Subsidiary except for Permitted Liens.

 

(g)                                 Existing Indebtedness. 
Schedule 7.1.(g) is, as of the Agreement Date, a complete and
correct listing of all Indebtedness of the Parent and its Subsidiaries,
including without limitation, Guarantees of the Parent and its Subsidiaries,
and indicating whether such Indebtedness is Secured Indebtedness or Unsecured
Indebtedness.

 

(h)                                 Material Contracts. 
Schedule 7.1.(h) is, as of the Agreement Date, a true, correct and
complete listing of all Material Contracts. 
Each of the Parent and its Subsidiaries that is a party to any Material
Contract has performed and is in compliance with all of the terms of such
Material Contract, and no default or event of default, or event or condition
which with the giving of notice, the lapse of time, or both, would constitute
such a default or event of default, exists with respect to any such Material
Contract.

 

(i)                                     Litigation.  Except as set forth on
Schedule 7.1.(i), there are no actions, suits, investigations or
proceedings pending (nor, to the knowledge of the Parent, are there any
actions, 

 

56

 

suits
or proceedings threatened) against or in any other way relating adversely to or
affecting the Parent or any of its Subsidiaries or any of their respective
property in any court or before any arbitrator of any kind or before or by any
other Governmental Authority which could reasonably be expected to have a
Material Adverse Effect.

 

(j)                                     Taxes.  All federal, state and other
tax returns of the Parent and its Subsidiaries required by Applicable Law to be
filed have been duly filed, and all federal, state and other taxes, assessments
and other governmental charges or levies upon the Parent and its Subsidiaries
and their respective properties, income, profits and assets which are due and
payable have been paid, except any such nonpayment which is at the time
permitted under Section 8.6.  As of
the Agreement Date, none of the United States income tax returns of the Parent
or any of its Subsidiaries is under audit. 
All charges, accruals and reserves on the books of the Parent and each
of its Subsidiaries and each other Loan Party in respect of any taxes or other
governmental charges are in accordance with GAAP.

 

(k)                                  Financial Statements.  The
Parent has furnished to each Lender copies of the unaudited pro forma condensed
consolidated balance sheet of the Parent and its consolidated Subsidiaries as
of March 31, 2004, and the unaudited pro forma condensed consolidated
statement of operations of the Parent and its consolidated Subsidiaries for the
year ended December 31, 2003 and for the three-month period ended
March 31, 2004. Such financial statements (including in each case related
schedules and notes) are present fairly, in all material respects and in
accordance with GAAP consistently applied throughout the periods involved, the
consolidated financial position of the Parent and its consolidated Subsidiaries
as at their respective dates and the results of operations for such periods
(subject, as to interim statements, to changes resulting from normal year-end
audit adjustments).  Neither the Parent
nor any of its Subsidiaries has on the Agreement Date any material contingent
liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments that would be required to be set forth in its financial statements
or in the notes thereto, except as referred to or reflected or provided for in
said financial statements.

 

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

 

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

 

57

 

or
the Internal Revenue Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.

 

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

 

(o)                                 Absence of Defaults. 
None of the Parent, the Borrower or any other Subsidiary is in default
under its articles of incorporation, bylaws, partnership agreement or other
similar organizational documents, and no event has occurred, which has not been
remedied, cured or waived, which, in any such case:  (i) constitutes a Default or an Event of Default; or (ii)
constitutes, or which with the passage of time, the giving of notice, or both,
would constitute, a default or event of default by the Parent, the Borrower or
any other Subsidiary under any agreement (other than this Agreement) or
judgment, decree or order to which the Parent, the Borrower or any other
Subsidiary is a party or by which the Parent, the Borrower or any other
Subsidiary or any of their respective properties may be bound where such
default or event of default could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

(p)                                 Environmental Laws. 
Each of the Parent, the Borrower and its other Subsidiaries has obtained
all Governmental Approvals which are required under Environmental Laws and is
in compliance with all terms and conditions of such Governmental Approvals
which the failure to obtain or to comply with could reasonably be expected to
have a Material Adverse Effect.  Except
for any of the following matters that could not be reasonably expected to have
a Material Adverse Effect, (i) neither the Parent or the Borrower is aware of,
and has received notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans which, with
respect to the Parent, the Borrower or any of its other Subsidiaries, may
interfere with or prevent compliance or continued compliance with Environmental
Laws, or may give rise to any common-law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling or the
emission, discharge, release or threatened release into the environment, of any
Hazardous Material; and (ii) there is no civil, criminal, or administrative
action, suit, demand, claim, hearing, notice, or demand letter, notice of
violation, investigation, or proceeding pending or, to the Borrower’s knowledge
after due inquiry, threatened, against the Parent, the Borrower or any of its
other Subsidiaries relating in any way to Environmental Laws.

 

(q)                                 Investment Company; Public Utility Holding
Company.  None of the Parent, the Borrower or any
other Subsidiary is (i) an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, (ii) a “holding company” or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to 

 

58

 

any
other Applicable Law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by this Agreement or to
perform its obligations under any Loan Document to which it is a party.

 

(r)                                    Margin Stock. 
None of the Parent, the Borrower or any other Subsidiary is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying “margin stock” within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System.

 

(s)                                  Affiliate Transactions. 
Except as permitted by Section 10.10., none of the Parent, the
Borrower or any other Subsidiary is a party to any transaction with an
Affiliate.

 

(t)                                    Intellectual Property. 
Each of the Parent, the Borrower and each other Subsidiary owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights (collectively, “Intellectual Property”)
necessary to the conduct of its businesses as now conducted and as contemplated
by the Loan Documents, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, or other proprietary
right of any other Person.  The Parent,
the Borrower and each other Subsidiary have taken all such steps as they deem
reasonably necessary to protect their respective rights under and with respect
to such Intellectual Property.

 

(u)                                 Business.  As of the Agreement Date, the
Parent, the Borrower and the other Subsidiaries are engaged predominantly in
the business of developing, construction, acquiring, owning and operating
neighborhoods and community shopping centers, together with other business
activities incidental thereto.

 

(v)                                 Broker’s Fees.  No
broker’s or finder’s fee, commission or similar compensation will be payable
with respect to the transactions contemplated hereby.  No other similar fees or commissions will be payable by any Loan
Party for any other services rendered to the Parent, the Borrower or any of its
other Subsidiaries ancillary to the transactions contemplated hereby.

 

(w)                               Accuracy and Completeness of Information.  No
written information, report or other papers or data (excluding financial
projections and other forward looking statements) furnished to the Agent or any
Lender by, on behalf of, or at the direction of, the Parent, the Borrower or
any other Subsidiary in connection with or relating in any way to this
Agreement, contained any untrue statement of a fact material to the
creditworthiness of the Parent, the Borrower or any other Subsidiary or omitted
to state a material fact necessary in order to make such statements contained
therein, in light of the circumstances under which they were made, not misleading.  All financial statements (including in each
case all related schedules and notes) furnished to the Agent or any Lender by,
on behalf of, or at the direction of, the Parent, the Borrower or any other
Subsidiary in connection with or relating in any way to this Agreement, present
fairly, in all material respects and in accordance with GAAP consistently
applied throughout the periods involved, the financial position of the Persons
involved as at the date thereof and the results of operations for such periods
(subject, as to interim statements, to changes resulting from normal year-end
audit adjustments).  All financial
projections and other 

 

59

 

forward
looking statements prepared by or on behalf of the Parent, the Borrower or any
other Subsidiary that have been or may hereafter be made available to the Agent
or any Lender were or will be prepared in good faith based on reasonable
assumptions.  As of the Effective Date,
no fact is known to the Parent or the Borrower which has had, or may in the
future have (so far as the Parent or the Borrower can reasonably foresee), a
Material Adverse Effect which has not been set forth in the financial
statements referred to in Section 7.1.(k) or in such information, reports
or other papers or data or otherwise disclosed in writing to the Agent and the
Lenders.

 

(x)                                   REIT Status.  For all dates prior to the
first date upon which the Parent files a tax return under the Internal Revenue
Code (which date shall not be later than December 31, 2004), the Parent is
organized and operated in a manner such that upon its election of REIT status,
it shall be treated as a REIT for purposes of the Internal Revenue Code and
each of its Subsidiaries that are corporations (if any) are organized and
operated in a manner such that upon such election they will qualify as
Qualified REIT Subsidiaries.  For all
dates thereafter, the Parent is qualified as a REIT and each of its
Subsidiaries that is a corporation is a Qualified REIT Subsidiary.

 

(y)                                 Collateral Properties. 
Each of the Collateral Properties satisfies all of the requirements
contained in the definition of “Eligible Property”.

 

(z)                                   Contribution Agreement.  The
transactions contemplated by the Contribution Agreement have been consummated
in all material respects.

 

Section 7.2.  Survival of Representations and Warranties, Etc.

 

All
statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Parent, the Borrower or any other
Subsidiary to the Agent or any Lender pursuant to or in connection with this
Agreement or any of the other Loan Documents (including, but not limited to,
any such statement made in or in connection with any amendment thereto or any
statement contained in any certificate, financial statement or other instrument
delivered by or on behalf of the Parent and the Borrower prior to the Agreement
Date and delivered to the Agent or any Lender in connection with the
underwriting or closing of the transactions contemplated hereby) shall
constitute representations and warranties made by the Parent and or the
Borrower in favor of the Agent or any of the Lenders under this Agreement.  All representations and warranties made
under this Agreement and the other Loan Documents shall be deemed to be made at
and as of the Agreement Date, the Effective Date, the date on which any
extension of the Termination Date is effectuated pursuant to Section 2.12.
and the date of the occurrence of any Credit Event, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents.  All such representations and warranties
shall survive the effectiveness of this Agreement, the execution and delivery
of the Loan Documents and the making of the Loans and the issuance of the
Letters of Credit.

 

60

 

ARTICLE VIII.
AFFIRMATIVE COVENANTS

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner provided for in Section 13.6., the Parent and the
Borrower shall comply with the following covenants:

 

Section 8.1. 
Preservation of Existence and Similar Matters.

 

Except
as otherwise permitted under Section 10.6., the Parent and the Borrower
shall, and shall cause each Subsidiary to, preserve and maintain its respective
existence, rights, franchises, licenses and privileges in the jurisdiction of
its incorporation or formation and qualify and remain qualified and authorized
to do business in each jurisdiction in which the character of its properties or
the nature of its business requires such qualification and authorization and
where the failure to be so authorized and qualified could reasonably be
expected to have a Material Adverse Effect.

 

Section 8.2. 
Compliance with Applicable Law and Material Contracts.

 

The
Parent and the Borrower shall, and shall cause each Subsidiary to, comply with
(a) all Applicable Laws, including the obtaining of all Governmental Approvals,
the failure with which to comply could reasonably be expected to have a Material
Adverse Effect, and (b) all terms and conditions of all Material Contracts to
which it is a party.

 

Section 8.3. 
Maintenance of Property.

 

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

 

Section 8.4. 
Conduct of Business.

 

The
Parent and the Borrower shall, and shall cause each Subsidiary to, carry on,
their respective businesses as described in Section 7.1.(u).

 

Section 8.5. 
Insurance.

 

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

 

61

 

thereof
and the properties and risks covered thereby. 
Not in limitation of the foregoing, the Parent and the Borrower shall,
and shall cause each other Loan Party to, maintain insurance with respect to
each Collateral Property against such risks and in such amounts as set forth on
Schedule 8.5.

 

Section 8.6.  Payment of Taxes and Claims.

 

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

 

Section 8.7. 
Visits and Inspections.

 

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

 

Section 8.8. 
Use of Proceeds; Letters of Credit.

 

The
Borrower shall use the proceeds of the Loans and the Letters of Credit for
general corporate purposes only.  No
part of the proceeds of any Loan or Letter of Credit will be used for the
purpose of buying or carrying “margin stock” within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System or to extend credit to
others for the purpose of purchasing or carrying any such margin stock.

 

62

 

Section 8.9. 
Environmental Matters.

 

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

 

Section 8.10. 
Books and Records.

 

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

 

Section 8.11. 
Further Assurances.

 

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

 

Section 8.12. 
REIT Status.

 

The
Parent will (a) for all dates prior to the first date upon which the Parent
files a tax return under the Internal Revenue Code (which date shall not be
later than December 31, 2004), continue to be organized and operated in a
manner such that upon its election of REIT status, it shall be treated as a
REIT for purposes of the Internal Revenue Code and (b) for all dates
thereafter, maintain its status as a REIT.

 

Section 8.13. 
Exchange Listing.

 

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

 

63

 

ARTICLE IX. INFORMATION

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 13.6., the Borrower shall
furnish to each Lender (or to the Agent if so provided below) at its Lending
Office:

 

Section 9.1. 
Quarterly Financial Statements.

 

As
soon as available and in any event within 5 days after the same is required to
be filed with the Securities and Exchange Commission (but in no event later
than 50 days after the end of each of the first, second and third fiscal
quarters of the Borrower), the unaudited consolidated balance sheet of the
Parent and its Subsidiaries as at the end of such period and the related
unaudited consolidated statements of income, shareholders’ equity, cash flows
and Funds from Operations of the Parent and its Subsidiaries for such period,
setting forth in each case in comparative form the figures as of the end of and
for the corresponding periods of the previous fiscal year, all of which shall
be certified by the chief executive officer or chief financial officer of the
Parent, in his or her opinion, to present fairly, in accordance with GAAP and
in all material respects, the consolidated financial position of the Parent and
its Subsidiaries as at the date thereof and the results of operations for such
period (subject to normal year-end audit adjustments).

 

Section 9.2. 
Year-End Statements.

 

As
soon as available and in any event within 5 days after the same is required to
be filed with the Securities and Exchange Commission (but in no event later
than 95 days after the end of each fiscal year of the Parent), the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such fiscal year and the related audited consolidated statements of income,
shareholders’ equity, cash flows and Funds from Operations of the Parent and
its Subsidiaries for such fiscal year, setting forth in comparative form the
figures as at the end of and for the previous fiscal year, all of which shall
be (a) certified by the chief executive officer or chief financial officer of
the Parent, in his or her opinion, to present fairly, in accordance with GAAP,
the consolidated financial position of the Parent, the Borrower and its other
Subsidiaries as at the date thereof and the results of operations for such
period and (b) accompanied by the report thereon (other than the statement of
Funds from Operations) of independent certified public accountants of
recognized national standing acceptable to the Agent, whose certificate shall
be unqualified and in scope and substance satisfactory to the Requisite
Lenders.

 

Section 9.3. 
Compliance Certificate.

 

At
the time financial statements are furnished pursuant to Sections 9.1. and 9.2.,
and within 5 Business Days of the Agent’s request with respect to any other
fiscal period, a certificate substantially in the form of Exhibit N (a
“Compliance Certificate”) executed by the chief financial officer of the
Parent:  (a) setting forth in reasonable
detail as at the end of such quarterly accounting period, fiscal year, or other
fiscal period, as the case may be, the calculations required to establish
whether or not the Borrower was in compliance with the

 

64

 

covenants
contained in Sections 10.1. and 10.2. and (b) stating that, to the best of his
or her knowledge, information and belief after due inquiry, no Default or Event
of Default exists, or, if such is not the case, specifying such Default or
Event of Default and its nature, when it occurred, whether it is continuing and
the steps being taken by the Borrower with respect to such event, condition or
failure.

 

Section 9.4. 
Other Information.

 

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

 

(b)                                 Securities Filings. 
Within 5 Business Days of the filing thereof, copies of all registration
statements (excluding the exhibits thereto (unless requested by the Agent) and
any registration statements on Form S-8 or its equivalent), reports on Forms
10-K, 10-Q and 8-K (or their equivalents) and all other periodic reports which
the Parent, the Borrower, or any other Subsidiary shall file with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor) or any national securities exchange;

 

(c)                                  Shareholder Information. 
Promptly upon the mailing thereof to the shareholders of the Parent
generally, copies of all financial statements, reports and proxy statements so
mailed and promptly upon the issuance thereof copies of all press releases
issued by the Parent, the Borrower or any other Subsidiary;

 

(d)                                 Quarterly Operating Summaries.  At
the time financial statements are furnished pursuant to Sections 9.1. and 9.2.,
an operating summary with respect to each Collateral Property for the fiscal
quarter most recently ended, including without limitation, a quarterly and
year-to-date statement of total revenues, expenses, net operating income and an
occupancy status report together with a current rent roll for each such
Property;

 

(e)                                  Quarterly Property Schedules.  At
the time financial statements are furnished pursuant to Sections 9.1. and 9.2.,
a schedule of all Properties owned or leased by the Parent, the Borrower
and each other Subsidiary of the Parent as of the fiscal quarter most recently
ended, and the applicable Net Operating Income and Occupancy Rate of each such
Property, such schedule certified by the chief financial officer or chief
accounting officer of the Parent as true, correct and complete as of the date
such information is delivered;

 

(f)                                    Development Property Updates.  At
the time financial statements are furnished pursuant to Sections 9.1. and 9.2.,
a schedule of all Properties of the Parent, the Borrower and each other
Subsidiary which are under development as of the fiscal quarter most recently
ended, setting forth for each such Property its percentage of completion, the
percentage preleased, the estimated completion date, the total amount of
development funded and the status of such development against the development
budget;

 

(g)                                 Borrowing Base Certificate.  As
soon as available and in any event within 50 days after the end of each fiscal
quarter of the Parent, a Borrowing Base Certificate setting forth the
information to be contained therein as of the last day of such fiscal quarter;

 

65

 

(h)                                 Litigation.  To the extent the Parent, the
Borrower or any other Subsidiary is aware of the same, prompt notice of the
commencement of any proceeding or investigation by or before any Governmental
Authority and any action or proceeding in any court or other tribunal or before
any arbitrator against or in any other way relating adversely to, or adversely
affecting, the Parent, the Borrower or any other Subsidiary or any of their
respective properties, assets or businesses which could reasonably be expected
to have a Material Adverse Effect, and prompt notice of the receipt of notice
that any United States income tax returns of the Parent, the Borrower or any of
its Subsidiaries are being audited;

 

(i)                                     Change of Management or Financial Condition. 
Prompt notice of any change in the senior management of the Parent or
the Borrower and any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of the Parent, the
Borrower or any other Subsidiary which has had or could reasonably be expected
to have a Material Adverse Effect;

 

(j)                                     Default. Notice of the occurrence of any of the following promptly upon a
Responsible Officer of the Parent obtaining knowledge thereof:  (i) any Default or Event of Default or (ii)
any event which constitutes or which with the passage of time, the giving of
notice, or otherwise, would constitute a default or event of default by the
Parent, the Borrower or any other Subsidiary under any Material Contract to
which any such Person is a party or by which any such Person or any of its
respective properties may be bound;

 

(k)                                  Judgments.  Prompt notice of any order,
judgment or decree in excess of $1,000,000 having been entered against the
Parent, the Borrower or any other Subsidiary of any of their respective
properties or assets;

 

(l)                                     Notice of Violations of Law. 
Prompt notice if the Parent, the Borrower or any other Subsidiary shall
receive any notification from any Governmental Authority alleging a violation
of any Applicable Law or any inquiry which, in either case, could reasonably be
expected to have a Material Adverse Effect;

 

(m)                               Material Contracts. 
Promptly upon entering into any Material Contract after the Agreement
Date, a copy to the Agent of such Material Contract;

 

(n)                                 ERISA.  If and when any member of the
ERISA Group (i) gives or is required to give notice to the PBGC of any
“reportable event” (as defined in Section 4043 of ERISA) with respect to
any Plan which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal

 

66

 

Revenue
Code, a copy of such application; (v) gives notice of intent to terminate any
Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails
to make any payment or contribution to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement or makes any amendment to any Plan or
Benefit Arrangement, and of which has resulted or could reasonably be expected
to result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief executive officer or chief financial
officer of the Parent setting forth details as to such occurrence and the
action, if any, which the Parent or applicable member of the ERISA Group is
required or proposes to take; and

 

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

 

ARTICLE X.
NEGATIVE COVENANTS

 

For
so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 13.6., the Parent and the
Borrower shall comply with the following covenants, as applicable:

 

Section 10.1. 
Financial Covenants.

 

The
Parent shall not permit:

 

(a)                                  Maximum Leverage Ratio.  The
ratio of (i) Total Indebtedness to (ii) Total Asset Value, to exceed 0.65 to
1.0 at any time; provided, however, that the foregoing ratio may
be greater than 0.65 to 1.0, but may not be greater than 0.70 to 1.0, for no
more than two periods during the term of this Agreement but such periods (x)
may not exceed two fiscal quarters in duration and (y) may not be consecutive.

 

(b)                                 Minimum Interest Coverage Ratio.  The
ratio of (i) Adjusted EBITDA of the Parent and its Subsidiaries determined on a
consolidated basis for the fiscal quarter of the Parent most recently ending to
(ii) Interest Expense for such period, to be less than 1.75 to 1.00 at any
time.

 

(c)                                  Minimum Fixed Charge Coverage Ratio.  The
ratio of (i) Adjusted EBITDA for the fiscal quarter of the Parent most recently
ending to (ii) Fixed Charges for such period, to be less than 1.5 to 1.00 at
any time.

 

(d)                                 Minimum Tangible Net Worth. 
Tangible Net Worth at any time to be less than (i) $170,000,000 plus
(ii) 75.0% of the Net Proceeds of all Equity Issuances effected by the Parent
or any Subsidiary after the Agreement Date (other than Equity Issuances to the
Parent or any Subsidiary).

 

67

 

(e)                                  Floating Rate Indebtedness.  The
ratio of (i) Floating Rate Indebtedness of the Parent and its Subsidiaries determined
on a consolidated basis to (ii) Total Indebtedness, to exceed 0.5 to 1.00 at
any time.

 

(f)                                    Minimum Implied Debt Service Ratio.  The
ratio of (x) the aggregate Net Operating Income for all Collateral Properties
for the period of two consecutive fiscal quarters most recently ended times 2 to
(y) Implied Debt Service determined as of the end of such period, to be less
than 1.50 to 1.00.  Collateral
Properties that were disposed of during such period or which are excluded from
calculations of Borrowing Base shall be excluded from determinations of such
ratio.  The Net Operating Income for any
Collateral Property acquired during such period shall be included only on a pro
forma basis acceptable to the Agent.

 

(g)                                 Occupancy Rate of Collateral Properties.  The
aggregate Occupancy Rate of all Collateral Properties to be less than 80.0% as
of the end of each fiscal quarter.

 

For
purposes of determining the Parent’s compliance with the covenants contained in
the immediately preceding subsections (a), (b), (c) and (f) at any time prior
to which the Parent has operated for two full fiscal quarters, Total Asset
Value, Adjusted EBITDA, Interest Expense, Fixed Charges and Net Operating
Income shall be calculated on an annualized basis in a manner acceptable to the
Agent.

 

Section 10.2. 
Restricted Payments.

 

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

 

(a)                                  the Parent may declare or make cash
distributions to its shareholders during the period of four consecutive fiscal
quarters most recently ending in an aggregate amount not to exceed the greater
of (i) 90% of the Parent’s Funds from Operation for such four quarter period or
(ii) the amount required to be distributed for the Parent to remain in
compliance with Section 8.12.;

 

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

 

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

 

(d)                                 Subsidiaries may pay Restricted Payments to
the Parent, the Borrower or any other Subsidiary.

 

Notwithstanding
the foregoing, but subject to the following sentence, if a Default or Event of
Default exists, the Parent may only declare or make cash distributions to its
shareholders during

 

68

 

any
period of four consecutive fiscal quarters in an aggregate amount not to exceed
the minimum amount necessary for the Parent to remain in compliance with
Section 8.12.  If a Default or
Event of Default specified in Section 11.1.(a), Section 11.1.(b),
Section 11.1.(f) or Section 11.1.(g) shall exist, or if as a result
of the occurrence of any other Event of Default any of the Obligations have
been accelerated pursuant to Section 11.2.(a), the Parent shall not, and
shall not permit any Subsidiary to, make any Restricted Payments to any Person
other than to the Parent, the Borrower or any other Subsidiary.

 

Section 10.3. 
Indebtedness.

 

The
Parent and the Borrower shall not, and shall not permit any Subsidiary to,
incur, assume, or otherwise become obligated in respect of any Indebtedness
after the Agreement Date if immediately prior to the assumption, incurring or
becoming obligated in respect thereof, or immediately thereafter and after
giving effect thereto, a Default or Event of Default is or would be in
existence, including without limitation, a Default or Event of Default
resulting from a violation of any of the covenants contained in
Section 10.1.

 

Section 10.4. 
Investments Generally.

 

The
Parent and the Borrower shall not, and shall not permit any Subsidiary to,
directly or indirectly, acquire, make or purchase any Investment, or permit any
Investment of such Person to be outstanding on and after the Agreement Date,
other than the following:

 

(a)                                  Investments in Subsidiaries in existence on
the Agreement Date and disclosed on Part I of Schedule 7.1.(b);

 

(b)                                 Investments to acquire Equity Interests of a
Subsidiary or any other Person who after giving effect to such acquisition
would be a Subsidiary, so long as in each case immediately prior to such
Investment, and after giving effect thereto, no Default or Event of Default is
or would be in existence;

 

(c)                                  Investments permitted under
Section 5.1.;

 

(d)                                 Investments in Cash Equivalents;

 

(e)                                  intercompany Indebtedness among (i) the
Parent and the Borrower and (ii) the Borrower and its Wholly Owned Subsidiaries
provided that such Indebtedness is permitted by the terms of
Section 10.3.;

 

(f)                                    loans and advances to employees for moving,
entertainment, travel and other similar expenses in the ordinary course of
business consistent with past practices; and

 

(g)                                 any other Investment so long as immediately
prior to making such Investment, and immediately thereafter and after giving
effect thereto, no Default or Event of Default is or would be in existence.

 

69

 

Section 10.5. 
Liens; Negative Pledges; Other Matters.

 

(a)                                  The Parent and the Borrower shall not, and
shall not permit any Subsidiary to, create, assume, or incur any Lien (other
than Permitted Liens) upon (i) any of its properties, assets, income or profits
of any character whether now owned or hereafter acquired if immediately prior
to the creation, assumption or incurring of such Lien, or immediately
thereafter, a Default or Event of Default is or would be in existence or (ii)
any Collateral Property.

 

(b)                                 The Parent and the Borrower shall not, and
shall not permit any Subsidiary to, enter into, assume or otherwise be bound by
any Negative Pledge except for a Negative Pledge contained in any agreement (i)
evidencing Indebtedness which the Parent, the Borrower or such Subsidiary may
create, incur, assume, or permit or suffer to exist under Section 10.3.;
(ii) which Indebtedness is secured by a Lien permitted to exist; (iii) which
prohibits the creation of any other Lien on only the property securing such
Indebtedness as of the date such agreement was entered into; and (iv) relating
to the sale of a Subsidiary or assets pending such sale, provided that in any
such case the Negative Pledge applies only to the Subsidiary or the assets that
are the subject of such sale.

 

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

 

Section 10.6. 
Merger, Consolidation, Sales of Assets and Other Arrangements.

 

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

 

(a)                                  any of the actions described in the
immediately preceding clauses (i) through (iii) may be taken with respect to
any Subsidiary that is not a Loan Party so long as immediately prior to the
taking of such action, and immediately thereafter and after giving effect
thereto, no Default or Event of Default is or would be in existence

 

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

 

(c)                                  a Person may merge with and into a Loan Party
so long as (i) such Loan Party is the survivor of such merger, (ii) immediately
prior to such merger, and immediately thereafter

 

70

 

and
after giving effect thereto, (x) no Default or Event of Default is or would be
in existence and (y) the representations and warranties made or deemed made by
the Borrower and each other Loan Party in the Loan Documents to which any of
them is a party are and shall be true and correct in all material respects,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents, and
(iii) the Borrower shall have given the Agent and the Lenders at least 30-days’
prior written notice of such merger, such notice to include a certification as
to the matters described in the immediately preceding clause (ii); and

 

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

 

Section 10.7. 
Fiscal Year.

 

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

 

Section 10.8. 
Modifications to Material Contracts.

 

The
Parent and the Borrower shall not, and shall not permit any Subsidiary to,
enter into any amendment or modification to any Material Contract which could
reasonably be expected to have a Material Adverse Effect.

 

Section 10.9. 
Modifications of Organizational Documents.

 

The
Parent and the Borrower shall not, and shall not permit any Subsidiary to,
amend, supplement, restate or otherwise modify its articles or certificate of
incorporation, by-laws, operating agreement, declaration of trust, partnership
agreement or other applicable organizational document if such amendment,
supplement, restatement or other modification could reasonably be expected to
have a Material Adverse Effect.

 

Section 10.10. 
Transactions with Affiliates.

 

The
Parent and the Borrower shall not, and shall not permit any Subsidiary to,
permit to exist or enter into, any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate (other than a Loan Party), except transactions in the ordinary course
of and pursuant to the reasonable requirements of the business of the Parent,
the Borrower or any of the other Subsidiaries and upon fair and reasonable
terms which are no less favorable to the Parent, the Borrower or such
Subsidiary, as applicable, than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate.

 

Section 10.11. 
ERISA Exemptions.

 

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

 

71

 

ARTICLE XI. DEFAULT

 

Section 11.1. 
Events of Default.

 

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

 

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

 

(b)                                 Default in Payment of Interest and Other
Obligations.  The Borrower shall fail to pay when due any
interest on any of the Loans or any of the other payment Obligations owing by
the Borrower under this Agreement or any other Loan Document, or any other Loan
Party shall fail to pay when due any payment Obligation owing by such other
Loan Party under any Loan Document to which it is a party, and such failure
shall continue for a period of 5 Business Days.

 

(c)                                  Default in Performance.  (i)
The Borrower or the Parent shall fail to perform or observe any term, covenant,
condition or agreement contained in Section 9.4.(j) or in Article X.
or (ii) any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement contained in this Agreement or any other Loan Document
(other than any Security Document) to which it is a party and not otherwise
mentioned in this Section and in the case of this clause (ii) only such
failure shall continue for a period of 30 days after the earlier of (x) the
date upon which a Responsible Officer of the Parent or such Loan Party obtains
knowledge of such failure or (y) the date upon which the Parent has received
written notice of such failure from the Agent.

 

(d)                                 Misrepresentations.  Any
written statement, representation or warranty made or deemed made by or on
behalf of any Loan Party under this Agreement or under any other Loan Document
(other than any Security Document), or any amendment hereto or thereto, or in
any other writing or statement at any time furnished or made or deemed made by
or on behalf of any Loan Party to the Agent or any Lender, shall at any time
prove to have been incorrect or misleading, in light of the circumstances in
which made or deemed made, in any material respect when furnished or made or
deemed made.

 

(e)                                  Indebtedness Cross-Default; Derivatives
Contracts.

 

(i)                                     any Loan Party shall fail to pay when due and
payable, within any applicable grace of cure period, the principal of, or
interest on, any Indebtedness (other than the Loans) having an aggregate
outstanding principal amount of $10,000,000 (or $20,000,000 in the case of
Nonrecourse Indebtedness) or more (“Material Indebtedness”); or

 

(ii)                                  (x) the maturity of any Material Indebtedness
shall have been accelerated in accordance with the provisions of any indenture,
contract or instrument evidencing, providing for the creation of or otherwise
concerning such Material Indebtedness or

 

72

 

(y)
any Material Indebtedness shall have been required to be prepaid or repurchased
prior to the stated maturity thereof;

 

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

 

(iv)                              there occurs under any Derivatives Contract
an Early Termination Date (as defined in such Derivatives Contract) resulting
from (A) any event of default under such Derivatives Contract as to which any
Loan Party is the Defaulting Party (as defined in such Derivatives Contract) or
(B) any Termination Event (as so defined) under such Derivatives Contract as to
which any Loan Party is an Affected Party (as so defined) and, in either event,
the Derivatives Termination Value owed by any Loan Party as a result thereof is
$10,000,000 or more.

 

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

 

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

 

73

 

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

 

(i)                                     Judgment.  A judgment or order for the
payment of money or for an injunction shall be entered against any Loan Party
or any other Subsidiary, by any court or other tribunal and (i) such judgment
or order shall continue for a period of 30 days without being paid, stayed or
dismissed through appropriate appellate proceedings and (ii) either (A) the
amount of such judgment or order for which insurance has not been acknowledged
in writing by the applicable insurance carrier (or the amount as to which the
insurer has denied liability) exceeds, individually or together with all other
such outstanding judgments or orders entered against the Parent and its
Subsidiaries, $10,000,000 (or $20,000,000 solely with respect to Subsidiaries
that are not Loan Parties) or (B) in the case of an injunction or other
non-monetary judgment, such judgment could reasonably be expected to have a
Material Adverse Effect.

 

(j)                                     Attachment.  A warrant, writ of
attachment, execution or similar process shall be issued against any property
of any Loan Party or any other Subsidiary which exceeds, individually or
together with all other such warrants, writs, executions and processes,
$10,000,000 (or $20,000,000 solely with respect to Subsidiaries that are not
Loan Parties) in amount and such warrant, writ, execution or process shall not
be discharged, vacated, stayed or bonded for a period of 30 days; provided,
however, that if a bond has been issued in favor of the claimant or other
Person obtaining such warrant, writ, execution or process, the issuer of such
bond shall execute a waiver or subordination agreement in form and substance
satisfactory to the Agent pursuant to which the issuer of such bond
subordinates its right of reimbursement, contribution or subrogation to the
Obligations and waives or subordinates any Lien it may have on the assets of
any Loan Party.

 

(k)                                  ERISA.  Any member of the ERISA Group
shall fail to pay when due an amount or amounts aggregating in excess of
$10,000,000 which it shall have become liable to pay under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $10,000,000 shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007
of ERISA) in respect of, or to cause a trustee to be appointed to administer,
any Plan or Plans having aggregate Unfunded Liabilities in excess of
$10,000,000; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan must be terminated;
or there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000.

 

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

 

74

 

(m)                               Change of Control/Change in Management.

 

(i)                                     Any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), is or becomes the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be
deemed to have “beneficial ownership” of all securities that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 25.0% of the
total voting power of the then outstanding voting stock of the Parent;

 

(ii)                                  During any period of 12 consecutive months
ending after the Agreement Date, individuals who at the beginning of any such
12-month period constituted the Board of Trustees of the Parent (together with
any new trustees whose election by such Board or whose nomination for election
by the shareholders of the Parent was approved by a vote of a majority of the
trustees then still in office who were either trustees at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Trustees of the
Parent then in office; or

 

(iii)                               The Parent or a Wholly Owned Subsidiary of
the Parent shall cease to be the sole general partner of the Borrower or shall
cease to have the sole and exclusive power to exercise all management and
control over the Borrower.

 

(n)                                 Failure of Security.  The
Agent shall cease to have a valid and perfected first priority security
interest in any of the Collateral, in each case, for any reason other than the
failure of the Agent to take any action within its control.

 

(o)                                 Liquidating Events.  The occurrence of a “Liquidating Event” under and as defined in
the partnership agreement of the Borrower or any event occurs that results in
the dissolution of the Borrower.

 

Section 11.2. 
Remedies Upon Event of Default.

 

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

 

(a)                                  Acceleration; Termination of Facilities.

 

(i)                                     Automatic.  Upon the occurrence of an
Event of Default specified in Sections 11.1.(f) or 11.1.(g), (A)(i) the
principal of, and all accrued interest on, the Loans and the Notes at the time
outstanding, (ii) an amount equal to the Stated Amount of all Letters of Credit
outstanding as of the date of the occurrence of such Event of Default for
deposit into the Collateral Account pursuant to Section 11.5. and (iii)
all of the other Obligations of the Borrower, including, but not limited to,
the other amounts owed to the Lenders, the Swingline Lender and the Agent under
this Agreement, the Notes or any of the other Loan Documents shall become
immediately and automatically due and payable by the Borrower without
presentment, demand, protest, or other notice of any kind, all of

 

75

 

which
are expressly waived by the Borrower and (B) all of the Commitments, the
obligation of the Lenders to make Revolving Loans, the Swingline Commitment,
the obligation of the Swingline Lender to make Swingline Loans, and the
obligation of the Agent to issue Letters of Credit hereunder, shall all
immediately and automatically terminate.

 

(ii)                                  Optional.  If any other Event of Default
shall exist, the Agent shall, at the direction of the Requisite Lenders:  (A) declare (1) the principal of, and
accrued interest on, the Loans and the Notes at the time outstanding, (2) an
amount equal to the Stated Amount of all Letters of Credit outstanding as of
the date of the occurrence of such other Event of Default for deposit into the
Collateral Account pursuant to Section 11.5. and (3) all of the other
Obligations, including, but not limited to, the other amounts owed to the
Lenders and the Agent under this Agreement, the Notes or any of the other Loan
Documents to be forthwith due and payable, whereupon the same shall immediately
become due and payable without presentment, demand, protest or other notice of
any kind, all of which are expressly waived by the Borrower and (B) terminate
the Commitments and the obligation of the Lenders to make Loans hereunder and
the obligation of the Agent to issue Letters of Credit hereunder.  Further, if the Agent has exercised any of
the rights provided under the preceding sentence, the Swingline Lender
shall:  (x) declare the principal of,
and accrued interest on, the Swingline Loans and the Swingline Note at the time
outstanding, and all of the other Obligations owing to the Swingline Lender, to
be forthwith due and payable, whereupon the same shall immediately become due
and payable without presentment, demand, protest or other notice of any kind,
all of which are expressly waived by the Borrower and (y) terminate the
Swingline Commitment and the obligation of the Swingline Lender to make Swingline
Loans.

 

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

 

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

 

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

 

Section 11.3. 
Remedies Upon Default.

 

Upon
the occurrence of a Default specified in Section 11.1.(g), the Commitments
shall immediately and automatically terminate.

 

76

 

Section 11.4. 
Allocation of Proceeds.

 

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

 

(a)                                  amounts due to the Agent in respect of fees
and expenses due under Section 13.2.;

 

(b)                                 amounts due to the Lenders in respect of fees
and expenses due under Section 13.2., pro rata in the amount then due each
Lender;

 

(c)                                  payments of interest on Swingline Loans;

 

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

 

(e)                                  payments of principal of Swingline Loans;

 

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

 

(g)                                 amounts due the Agent and the Lenders
pursuant to Sections 12.8. and 13.9.;

 

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

 

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

 

Section 11.5. 
Collateral Account.

 

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

 

77

 

Agreement
to the contrary notwithstanding, funds held in the Collateral Account shall be
subject to withdrawal only as provided in this Section.

 

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

 

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

 

(d)                                 If an Event of Default exists, the Requisite
Lenders may, in their discretion, at any time and from time to time, instruct
the Agent to liquidate any such investments and reinvestments and apply
proceeds thereof to the Obligations in accordance with Section 11.4.

 

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

 

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

 

Section 11.6. 
Performance by Agent.

 

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

 

78

 

Section 11.7. 
Rights Cumulative.

 

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

 

ARTICLE XII. THE AGENT

 

Section 12.1. 
Authorization and Action.

 

Each
Lender hereby appoints and authorizes the Agent to take such action as
contractual representative on such Lender’s behalf and to exercise such powers
under this Agreement and the other Loan Documents as are specifically delegated
to the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto.  Not in
limitation of the foregoing, each Lender authorizes and directs the Agent to
enter into the Loan Documents for the benefit of the Lenders.  Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Requisite Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Requisite Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders.  Nothing herein shall be construed to deem the Agent a trustee or
fiduciary for any Lender nor to impose on the Agent duties or obligations other
than those expressly provided for herein. 
At the request of a Lender, the Agent will forward to such Lender copies
or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents.  The Agent will also furnish to any Lender,
upon the request of such Lender, a copy of any certificate or notice furnished
to the Agent by the Borrower, any Loan Party or any other Affiliate of the
Borrower, pursuant to this Agreement or any other Loan Document not already
delivered to such Lender pursuant to the terms of this Agreement or any such
other Loan Document.  As to any matters
not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of any of the Obligations), the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Requisite
Lenders (or all of the Lenders if explicitly required under any other provision
of this Agreement), and such instructions shall be binding upon all Lenders and
all holders of any of the Obligations; provided, however, that, notwithstanding
anything in this Agreement to the contrary, the Agent shall not be required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or Applicable Law.  Not in limitation of the foregoing, the
Agent shall not exercise any right or remedy it or the Lenders may have under
any Loan Document upon the occurrence of a Default or an Event of Default
unless the Requisite Lenders have so directed the Agent to exercise such right
or remedy.

 

79

 

Section 12.2. 
Agent’s Reliance, Etc.

 

Notwithstanding
any other provisions of this Agreement or any other Loan Documents, neither the
Agent nor any of its directors, officers, agents, employees or counsel shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Document, except for its or
their own gross negligence or willful misconduct as determined by a court of
competent jurisdiction in a final, non-appealable judgment.  Without limiting the generality of the
foregoing, the Agent:  (a) may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form satisfactory
to the Agent; (b) may consult with legal counsel (including its own counsel or
counsel for the Parent, the Borrower or any other Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible
to any Lender or any other Person for any statements, warranties or
representations made by any Person in or in connection with this Agreement or
any other Loan Document; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or
conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Parent, the Borrower or other Persons or inspect
the property, books or records of the Parent, the Borrower or any other Person;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document, any other instrument or document furnished pursuant
thereto or any collateral covered thereby or the perfection or priority of any
Lien in favor of the Agent on behalf of the Lenders in any such collateral; and
(f) shall incur no liability under or in respect of this Agreement or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telephone or telecopy) believed by it to
be genuine and signed, sent or given by the proper party or parties.  Unless set forth in writing to the contrary,
the making of its initial Loan by a Lender shall constitute a certification by
such Lender to the Agent and the other Lenders that the conditions precedent
for initial Loans set forth in Sections 6.1. and 6.2. that have not previously
been waived by the Requisite Lenders have been satisfied.

 

Section 12.3. 
Notice of Defaults.

 

The
Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default or Event of Default unless the Agent has received notice from a Lender
or the Borrower referring to this Agreement, describing with reasonable
specificity such Default or Event of Default and stating that such notice is a
“notice of default.”  If any Lender
(excluding the Lender which is also serving as the Agent) becomes aware of any
Default or Event of Default, it shall promptly send to the Agent such a “notice
of default.”  Further, if the Agent
receives such a “notice of default”, the Agent shall give prompt notice thereof
to the Lenders.

 

Section 12.4. 
Wachovia as Lender.

 

Wachovia,
as a Lender, shall have the same rights and powers under this Agreement and any
other Loan Document as any other Lender and may exercise the same as though it
were not

 

80

 

the
Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include Wachovia in each case in its individual capacity.  Wachovia and its affiliates may each accept
deposits from, maintain deposits or credit balances for, invest in, lend money
to, act as trustee under indentures of, serve as financial advisor to, and
generally engage in any kind of business with, the Parent, the Borrower, any
other Loan Party or any other affiliate thereof as if it were any other bank
and without any duty to account therefor to the other Lenders.  Further, the Agent and any affiliate may
accept fees and other consideration from the Loan Parties for services in
connection with this Agreement and otherwise without having to account for the
same to the other Lenders.  The Lenders
acknowledge that, pursuant to such activities, Wachovia or its affiliates may
receive information regarding the Parent, the Borrower, other Loan Parties,
other Subsidiaries and other Affiliates (including information that may be
subject to confidentiality obligations in favor of such Person) and acknowledge
that the Agent shall be under no obligation to provide such information to
them.

 

Section 12.5. 
Approvals of Lenders.

 

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

 

Section 12.6. 
Lender Credit Decision, Etc.

 

Each
Lender expressly acknowledges and agrees that neither the Agent nor any of its
officers, directors, employees, agents, counsel, attorneys-in-fact or other
affiliates has made any representations or warranties as to the financial
condition, operations, creditworthiness, solvency or other information
concerning the business or affairs of the Parent, the Borrower, any other Loan
Party, any Subsidiary or any other Person to such Lender and that no act by the
Agent hereafter taken, including any review of the affairs of the Parent, the
Borrower, any other Loan Party or any other Subsidiary, shall be deemed to
constitute any such representation or warranty by the Agent to any Lender.  Each Lender acknowledges that it has made
its own credit and legal analysis and decision to enter into this Agreement and
the transactions contemplated hereby, independently and without reliance upon
the Agent, any other Lender or counsel to the Agent, or any of their respective
officers, directors, employees and agents, and based on the financial 

 

81

 

statements
of the Parent, the Borrower, the other Subsidiaries or any other Affiliate
thereof, and inquiries of such Persons, its independent due diligence of the
business and affairs of the Parent, the Borrower, the other Loan Parties, the
other Subsidiaries and other Persons, its review of the Loan Documents, the
legal opinions required to be delivered to it hereunder, the advice of its own
counsel and such other documents and information as it has deemed appropriate.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agent, any other Lender or counsel
to the Agent or any of their respective officers, directors, employees and
agents, and based on such review, advice, documents and information as it shall
deem appropriate at the time, continue to make its own decisions in taking or
not taking action under the Loan Documents. 
Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent under this
Agreement or any of the other Loan Documents, the Agent shall have no duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Parent, the Borrower, any other Loan Party or any other
Affiliate thereof which may come into possession of the Agent, or any of its
officers, directors, employees, agents, attorneys-in-fact or other affiliates.  Each Lender acknowledges that the Agent’s
legal counsel in connection with the transactions contemplated by this
Agreement is only acting as counsel to the Agent and is not acting as counsel
to such Lender.

 

Section 12.7. 
Collateral Matters.

 

(a)                                  The Agent is authorized on behalf of all of
the Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Loan Documents which may be necessary to perfect
and maintain perfected the Liens upon the Collateral granted pursuant to any of
the Loan Documents.

 

(b)                                 The Lenders hereby authorize the Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of this Agreement in accordance
with Section 13.10.; or (ii) as required or permitted by
Section 4.3.  Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent’s authority to
release particular types or items of Collateral pursuant to this
Section or any other applicable provision of any of the other Loan
Documents.

 

(c)                                  Upon any sale and transfer of Collateral
which is expressly permitted pursuant to the terms of this Agreement, and upon
at least 5 Business Days’ prior written request by the Borrower, the Agent
shall (and is hereby irrevocably authorized by all of the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Lenders herein or pursuant hereto upon the
Collateral that was sold or transferred; provided, however, that (i) the Agent
shall not be required to execute any such document on terms which, in the
Agent’s opinion, would expose the Agent to liability or create any obligation
or entail any consequence other than the release of such Liens without recourse
or warranty; and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of the Borrower or any
Loan Party in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.  In the event of any sale or transfer of
Collateral, or any foreclosure with respect to any of the Collateral, the Agent
shall be

 

82

 

authorized
to deduct all of the expenses reasonably incurred by the Agent from the
proceeds of any such sale, transfer or foreclosure.

 

(d)                                 The Agent shall have no obligation whatsoever
to the Lenders or to any other Person to assure that the Collateral exists or
is owned by any Loan Party or is cared for, protected or insured or that the
Liens granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising
at all or in any manner or under any duty of care, disclosure or fidelity any
of the rights, authorities and powers granted or available to the Agent in this
Section or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent’s own interest in the Collateral as one of the
Lenders and that the Agent shall have no duty or liability whatsoever to the
Lenders, except to the extent found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the Agent’s gross
negligence or willful misconduct.

 

Section 12.8. 
Indemnification of Agent.

 

Each
Lender agrees to indemnify the Agent (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so) pro rata
in accordance with such Lender’s respective Commitment Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as Agent but not as a Lender) in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, “Indemnifiable Amounts”); provided, however, that no
Lender shall be liable for any portion of such Indemnifiable Amounts to the extent
resulting from the Agent’s gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final, non-appealable judgment or if
the Agent fails to follow the written direction of the Requisite Lenders (or
all of the Lenders if expressly required hereunder) unless such failure results
from the Agent following the advice of counsel to the Agent of which advice the
Lenders have received notice.  Without
limiting the generality of the foregoing but subject to the preceding proviso,
each Lender agrees to reimburse the Agent (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so),
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees of the counsel(s) of the Agent’s own choosing) incurred
by the Agent in connection with the preparation, negotiation, execution, or
enforcement of, or legal advice with respect to the rights or responsibilities
of the parties under, the Loan Documents, any suit or action brought by the
Agent to enforce the terms of the Loan Documents and/or collect any
Obligations, any “lender liability” suit or claim brought against the Agent
and/or the Lenders, and any claim or suit brought against the Agent, and/or the
Lenders arising under any Environmental Laws. 
Such out-of-pocket expenses (including counsel fees) shall be advanced
by the Lenders on the request of the Agent notwithstanding any claim or
assertion that the Agent is not entitled to indemnification hereunder upon
receipt of an undertaking by the Agent that the Agent will reimburse the
Lenders if it is actually and finally determined by a court of competent
jurisdiction that the Agent is not so entitled to indemnification.  The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder or

 

83

 

under
the other Loan Documents and the termination of this Agreement.  If the Borrower shall reimburse the Agent
for any Indemnifiable Amount following payment by any Lender to the Agent in
respect of such Indemnifiable Amount pursuant to this Section, the Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.

 

Section 12.9. 
Successor Agent.

 

The
Agent may resign at any time as Agent under the Loan Documents by giving
written notice thereof to the Lenders and the Borrower.  Upon any such resignation, the Requisite
Lenders shall have the right to appoint a successor Agent which appointment
shall, provided no Default or Event of Default exists, be subject to the
Borrower’s approval, which approval shall not be unreasonably withheld or
delayed (except that the Borrower shall, in all events, be deemed to have
approved each Lender and its affiliates as a successor Agent).  If no successor Agent shall have been so
appointed in accordance with the immediately preceding sentence, and shall have
accepted such appointment, within 30 days after the resigning Agent’s giving of
notice of resignation, then the resigning Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a Lender, if any Lender shall be
willing to serve, and otherwise shall be a commercial bank having total
combined assets of at least $50,000,000,000. 
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents.  Such successor Agent
shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or shall make other
arrangements satisfactory to the current Agent, in either case, to assume
effectively the obligations of the current Agent with respect to such Letters
of Credit.  After any Agent’s
resignation hereunder as Agent, the provisions of this Article XII. shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under the Loan Documents.

 

Section 12.10. 
Titled Agents.

 

Each
of the Titled Agents in each such respective capacity, assumes no
responsibility or obligation hereunder, including, without limitation, for
servicing, enforcement or collection of any of the Loans, nor any duties as an
agent hereunder for the Lenders.  The
titles of “Joint Lead Arranger”, “Joint Book Manager” and “Syndication Agent” are
solely honorific and imply no fiduciary responsibility on the part of the
Titled Agents to the Agent, the Borrower or any Lender and the use of such
titles does not impose on the Titled Agents any duties or obligations greater
than those of any other Lender or entitle the Titled Agents to any rights other
than those to which any other Lender is entitled.

 

ARTICLE XIII.
MISCELLANEOUS

 

Section 13.1. 
Notices.

 

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

 

84

 

If
to the Borrower:

 

Kite
Realty Group, L.P.

c/o
Kite Realty Group Trust

30
S. Meridian Street, Suite 1100

Indianapolis,
Indiana 46204

Attn:  President and Chief Financial Officer

Telephone:                 (317) 577-5600

Telecopy:                        (317) 577-5605

 

with
a copy to:

 

Ice
Miller

One
American Square

Box 82001

Indianapolis, IN  46282-0002

Attn: Zeff A. Weiss

Telephone:                 (317) 236-2100

Telecopy:                        (317) 236-2219

 

If
to the Agent:

 

Wachovia
Bank, National Association

301
S. College Street, NC0172

Charlotte,
North Carolina 28288

Attn:  Rex E. Rudy

Telephone:                 (704) 383-6506

Telecopy:                        (704) 383-6205

 

If
to a Lender:

 

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

 

or,
as to each party at such other address as shall be designated by such party in
a written notice to the other parties delivered in compliance with this
Section.  All such notices and other
communications shall be effective (i) if mailed, when received; (ii) if
telecopied, when transmitted; or (iii) if hand delivered or sent by overnight
courier, when delivered. 
Notwithstanding the immediately preceding sentence, all notices or
communications to the Agent or any Lender under Article II. shall be
effective only when actually received. 
Neither the Agent nor any Lender shall incur any liability to the
Borrower (nor shall the Agent incur any liability to the Lenders) for acting
upon any telephonic notice referred to in this Agreement which the Agent or
such Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
hereunder. Failure of a

 

85

 

Person
designated to get a copy of a notice to receive such copy shall not affect the
validity of notice properly given to any other Person.

 

Section 13.2. 
Expenses.

 

The
Borrower agrees (a) to pay or reimburse each of the Agent and the Arrangers for
all of its reasonable out-of-pocket costs and expenses incurred in connection
with the preparation, negotiation and execution of, and any amendment,
supplement or modification to, any of the Loan Documents (including due
diligence expenses and travel expenses relating to closing), and the
consummation of the transactions contemplated thereby, including (x) the
reasonable fees and disbursements of counsel to the Agent and the Arrangers,
(y) costs and expenses of the Agent in connection with the use of IntraLinks,
Inc. or other similar information transmission systems in connection with the
Loan Documents, and (z) reasonable costs and expenses incurred by the Agent in
connection with the review of Properties for inclusion in calculations of the
Borrowing Base and the Agent’s other activities under Article XII.,
including the cost of all Appraisals, title insurance, any inspection by the
Agent of any such Properties, and the reasonable fees and disbursements of
counsel to the Agent relating to all such activities, (b) to pay or reimburse
the Agent, the Arrangers and the Lenders for all their reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents, including the reasonable fees and
disbursements of their respective counsel (including the allocated fees and
expenses of in-house counsel) and any payments in indemnification or otherwise
payable by the Lenders to the Agent pursuant to the Loan Documents, (c) to pay,
and indemnify and hold harmless the Agent, the Arrangers and the Lenders from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any failure to pay or delay in paying, documentary,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of any
of the Loan Documents, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Loan
Document and (d) to the extent not already covered by any of the preceding
subsections, to pay or reimburse the Agent, the Arrangers and the Lenders for
all their costs and expenses incurred in connection with any bankruptcy or
other proceeding of the type described in Sections 11.1.(f) or 11.1.(g),
including the reasonable fees and disbursements of counsel to the Agent, the
Arrangers and any Lender, whether such fees and expenses are incurred prior to,
during or after the commencement of such proceeding or the confirmation or
conclusion of any such proceeding.  If
the Borrower shall fail to pay any amounts required to be paid by it pursuant
to this Section, the Agent, and/or the Lenders may pay such amounts on behalf
of the Borrower and either deem the same to be Loans outstanding hereunder or
otherwise Obligations owing hereunder.

 

Section 13.3. 
Setoff.

 

Subject
to Section 3.3. and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Agent, each Lender and each Participant is hereby authorized by the Borrower,
at any time or from time to time during the continuance of an Event of Default,
without prior notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, but in the case of a Lender or Participant
subject to receipt of the prior written consent of the Agent exercised in its
sole discretion, to set

 

86

 

off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Agent, such Lender or any affiliate of the Agent or such
Lender, to or for the credit or the account of the Borrower against and on
account of any of the Obligations, irrespective of whether or not any or all of
the Loans and all other Obligations have been declared to be, or have otherwise
become, due and payable as permitted by Section 11.2., and although such
obligations shall be contingent or unmatured.

 

Section 13.4. 
Litigation; Jurisdiction; Other Matters; Waivers.

 

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

 

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

 

(c)                                  THE PROVISIONS OF THIS SECTION HAVE BEEN
CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL

 

87

 

UNDERSTANDING
OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS
AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE
TERMINATION OR EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS
AGREEMENT.

 

Section 13.5. 
Successors and Assigns.

 

(a)                                  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither the Parent or
the Borrower may assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of all Lenders and any
such assignment or other transfer to which all of the Lenders have not so
consented shall be null and void.

 

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

 

(c)                                  Any Lender may at any time grant to one or
more banks or other financial institutions (each a “Participant”) participating
interests in its Commitment or the Obligations owing to such Lender; provided,
however, after giving effect to any such participation by a Lender, the amount
of its Commitment, or if the Commitments have been terminated, the aggregate
outstanding principal balance of Notes held by it, in which it has not granted
any participating interests must be equal to $5,000,000.  Except as otherwise provided in
Section 13.3., no Participant shall have any rights or benefits under this
Agreement or any other Loan Document.  In
the event of any such grant by a Lender of a participating interest to a
Participant, such Lender shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. 
Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided, however, such Lender
may agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase, or extend the term or extend the time or
waive any requirement for the reduction or termination of, such Lender’s
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the Loans or portions thereof owing to such Lender, (iii) reduce
the amount of any such payment of principal, (iv) reduce the rate at which
interest is payable thereon or (v) release any Guarantor (except as otherwise
permitted under Section 4.3. (c)). 
An assignment or other transfer which is not permitted by
subsection (d) or (e) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance with
this subsection (c).  Upon request
from the Agent, a Lender shall notify the Agent of the sale of any
participation hereunder and, if requested by the Agent, certify to the Agent
that such participation is permitted hereunder and that the requirements of
Section 3.12. (c) have been satisfied.

 

88

 

(d)                                 Any Lender may with the prior written consent
of the Agent and, so long as no Default or Event of Default exists, the
Borrower (which consent, in each case, shall not be unreasonably withheld (it
being agreed that the Borrower’s withholding of consent to an assignment which
would result in the Borrower having to pay amounts under Section 3.12.
shall be deemed to be reasonable)), assign to one or more Eligible Assignees
(each an “Assignee”) all or a portion of its rights and obligations under this
Agreement and the Notes (including all or a portion of its Commitments and the
Loans owing to such Lender); provided, however, (i) no such consent by the
Borrower or the Agent shall be required in the case of any assignment to
another Lender or any affiliate of such Lender; (ii) unless the Borrower and
the Agent otherwise agree, after giving effect to any partial assignment by a
Lender, the Assignee shall hold, and the assigning Lender shall retain, a
Commitment, or if the Commitments have been terminated, Loans having an
outstanding principal balance, of at least $5,000,000 and integral multiples of
$1,000,000 in excess thereof; and (iii) each such assignment shall be effected
by means of an Assignment and Acceptance Agreement.  Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Lender of an amount equal to the purchase
price agreed between such transferor Lender and such Assignee, such Assignee
shall be a Lender party to this Agreement with respect to the assigned interest
as of the effective date of the Assignment and Acceptance Agreement and shall
have all the rights and obligations of a Lender with respect to the assigned
interest as set forth in such Assignment and Acceptance Agreement, and the
transferor Lender shall be released from its obligations hereunder with respect
to the assigned interest to a corresponding extent, and no further consent or
action by any party shall be required. 
Upon the consummation of any assignment pursuant to this subsection, the
transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that new Notes are issued to the Assignee and such transferor
Lender, as appropriate.  In connection
with any such assignment, the transferor Lender shall pay to the Agent an
administrative fee for processing such assignment in the amount of $3,500.  Anything in this Section to the
contrary notwithstanding, no Lender may assign or participate any interest in
its Commitment or any Loan held by it hereunder to the Borrower or any
Subsidiary or Affiliate of the Borrower.

 

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

 

89

 

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

 

(g)                                 A Lender may furnish any information
concerning the Borrower, any other Loan Party or any of their respective
Subsidiaries in the possession of such Lender from time to time to Assignees
and Participants (including prospective Assignees and Participants) subject to
compliance with Section 13.8.

 

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

 

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

 

Section 13.6. 
Amendments.

 

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

 

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

 

(i)                                     increase the Commitments of the Lenders
(except for any increase in the Commitments effectuated pursuant to
Section 2.15.)  or subject the
Lenders to any additional obligations;

 

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

 

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

 

90

 

(iv)                              modify the definition of the term
“Termination Date” (except as contemplated under Section 2.12.) or
otherwise postpone any date fixed for any payment of any principal of, or
interest on, any Loans or any other Obligations (including the waiver of any
Default or Event of Default as a result of the nonpayment of any such
Obligations as and when due), or extend the expiration date of any Letter of
Credit beyond the Termination Date;

 

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

 

(vi)                              modify the definition of the term “Requisite
Lenders” or otherwise modify in any other manner the number or percentage of
the Lenders required to make any determinations or waive any rights hereunder
or to modify any provision hereof, including without limitation, any
modification of this Section 13.6. if such modification would have such
effect;

 

(vii)                           release any Guarantor from the Guaranty other
than as provided in Section 4.3. in connection with the release of a
Collateral Property;

 

(viii)                        release any of the Collateral from the Lien
of the Security Documents other than as provided in Section 4.3. in
connection with the release of a Collateral Property;

 

(ix)                                amend or otherwise modify the provisions of
Section 2.14.; or

 

(x)                                   increase the number of Interest Periods
permitted with respect to Loans under Section 2.5.

 

(c)                                  No amendment, waiver or consent, unless in
writing and signed by the Agent, in such capacity, in addition to the Lenders
required hereinabove to take such action, shall affect the rights or duties of
the Agent under this Agreement or any of the other Loan Documents.  Any amendment, waiver or consent relating to
Section 2.2. or the obligations of the Swingline Lender under this
Agreement or any other Loan Document shall, in addition to the Lenders required
hereinabove to take such action, require the written consent of the Swingline
Lender.

 

(d)                                 No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon and any
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose set forth therein.  Except as otherwise provided in Section 12.5., no course of
dealing or delay or omission on the part of the Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto.  Any Default or
Event of Default occurring hereunder shall continue to exist until such time as
such Default or Event of Default is waived in writing in accordance with the
terms of this Section, notwithstanding any attempted cure or other action by
any Loan Party or any other Person subsequent to the occurrence of such Event
of Default.  Except as otherwise
explicitly provided for herein or in any other Loan Document, no notice to or
demand upon any Loan Party shall entitle such Loan Party to any other or
further notice or demand in similar or other circumstances.

 

91

Section 13.7. 
Nonliability of Agent and Lenders.

 

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

 

Section 13.8. 
Confidentiality.

 

The
Agent and each Lender shall use reasonable efforts to assure that information
about Borrower, the other Loan Parties and other Subsidiaries, and the
Properties thereof and their operations, affairs and financial condition, not
generally disclosed to the public, which is furnished to the Agent or any
Lender pursuant to the provisions of this Agreement or any other Loan Document,
is used only for the purposes of this Agreement and the other Loan Documents
and shall not be divulged to any Person other than the Agent, the Lenders, and
their respective agents who are actively and directly participating in the
evaluation, administration or enforcement of the Loan Documents and other transactions
between the Agent or such Lender, as applicable, and the Borrower, but in any
event the Agent and the Lenders may make disclosure:  (a) to any of their respective affiliates (provided they shall
agree to keep such information confidential in accordance with the terms of
this Section 13.8.); (b) as reasonably requested by any potential
Assignee, Participant or other transferee in connection with the contemplated
transfer of any Commitment or participations therein as permitted hereunder
(provided they shall agree to keep such information confidential in accordance
with the terms of this Section); (c) as required or requested by any
Governmental Authority or representative thereof or pursuant to legal process
or in connection with any legal proceedings; (d) to the Agent’s or such
Lender’s independent auditors and other professional advisors (provided they
shall be notified of the confidential nature of the information); (e) after the
happening and during the continuance of an Event of Default, to any other
Person, in connection with the exercise by the Agent or the Lenders of rights
hereunder or under any of the other Loan Documents; (f) upon Borrower’s prior
consent (which consent shall not be unreasonably withheld), to any contractual
counter-parties to any swap or similar hedging agreement or to any rating
agency; and (g) to the extent such information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes
available to the Agent or any Lender on a nonconfidential basis from a source
other than the Borrower or any Affiliate.

 

Section 13.9. 
Indemnification.

 

(a)                                  The Borrower shall and hereby agrees to
indemnify, defend and hold harmless the Agent, each of the Lenders, any
affiliate of the Agent or any Lender, and their respective directors, officers,
shareholders, agents, employees and counsel (each referred to herein as an
“Indemnified Party”) from and against any and all of the following
(collectively, the

 

92

 

“Indemnified
Costs”):  losses, costs, claims,
damages, liabilities, deficiencies, judgments or reasonable expenses of every
kind and nature (including, without limitation, amounts paid in settlement,
court costs and the reasonable fees and disbursements of counsel incurred in
connection with any litigation, investigation, claim or proceeding or any
advice rendered in connection therewith, but excluding losses, costs, claims,
damages, liabilities, deficiencies, judgments or expenses indemnification in
respect of which is specifically covered by Section 3.12. or 5.1. or
expressly excluded from the coverage of such Sections 3.12. or 5.1.) incurred
by an Indemnified Party in connection with, arising out of, or by reason of,
any suit, cause of action, claim, arbitration, investigation or settlement,
consent decree or other proceeding (the foregoing referred to herein as an
“Indemnity Proceeding”) which is in any way related directly or indirectly
to:  (i) this Agreement or any other
Loan Document or the transactions contemplated thereby; (ii) the making of any
Loans or issuance of Letters of Credit hereunder; (iii) any actual or proposed
use by the Borrower of the proceeds of the Loans or Letters of Credit; (iv) the
Agent’s or any Lender’s entering into this Agreement; (v) the fact that the
Agent and the Lenders have established the credit facility evidenced hereby in
favor of the Borrower; (vi) the fact that the Agent and the Lenders are
creditors of the Borrower and have or are alleged to have information regarding
the financial condition, strategic plans or business operations of the Parent,
the Borrower and the Subsidiaries; (vii) the fact that the Agent and the
Lenders are material creditors of the Borrower and are alleged to influence
directly or indirectly the business decisions or affairs of the Parent, the
Borrower and the Subsidiaries or their financial condition; (viii) the exercise
of any right or remedy the Agent or the Lenders may have under this Agreement
or the other Loan Documents; or (ix) any violation or non-compliance by the
Parent, the Borrower or any Subsidiary of any Applicable Law (including any
Environmental Law) including, but not limited to, any Indemnity Proceeding
commenced by (A) the Internal Revenue Service or state taxing authority or (B) any
Governmental Authority or other Person under any Environmental Law, including
any Indemnity Proceeding commenced by a Governmental Authority or other Person
seeking remedial or other action to cause the Borrower or its Subsidiaries (or
its respective properties) (or the Agent and/or the Lenders as successors to
the Borrower) to be in compliance with such Environmental Laws; provided,
however, that the Borrower shall not be obligated to indemnify any Indemnified
Party for (A) any acts or omissions of such Indemnified Party in connection
with matters described in this subsection to the extent arising from the
gross negligence or willful misconduct of such Indemnified Party, as determined
by a court of competent jurisdiction in a final, non-appealable judgment or (B)
Indemnified Costs to the extent arising directly out of or resulting directly
from claims of one or more Indemnified Parties against another Indemnified
Party.

 

(b)                                 The Borrower’s indemnification obligations
under this Section 13.9. shall apply to all Indemnity Proceedings arising
out of, or related to, the foregoing whether or not an Indemnified Party is a
named party in such Indemnity Proceeding. 
In this regard, this indemnification shall cover all Indemnified Costs
of any Indemnified Party in connection with any deposition of any Indemnified
Party or compliance with any subpoena (including any subpoena requesting the
production of documents).  This
indemnification shall, among other things, apply to any Indemnity Proceeding
commenced by other creditors of the Borrower or any Subsidiary, any shareholder
of the Borrower or any Subsidiary (whether such shareholder(s) are prosecuting
such Indemnity Proceeding in their individual capacity or derivatively on
behalf of the Borrower), any account debtor of the Borrower or any Subsidiary
or by any Governmental

 

93

 

Authority.
If indemnification is to be sought hereunder by an Indemnified Party, then such
Indemnified Party shall notify the Borrower of the commencement of any
Indemnity Proceeding; provided, however, that the failure to so notify the
Borrower shall not relieve the Borrower from any liability that it may have to
such Indemnified Party pursuant to this Section 13.9.

 

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

 

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

 

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

 

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

 

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

 

Section 13.10. 
Termination; Survival.

 

At
such time as (a) all of the Commitments have been terminated, (b) all Letters
of Credit have terminated, (c) none of the Lenders nor the Swingline Lender is
obligated any longer under

 

94

 

this
Agreement to make any Loans and (d) all Obligations (other than obligations
which survive as provided in the following sentence) have been paid and
satisfied in full, this Agreement shall terminate.  The indemnities to which the Agent, the Lenders and the Swingline
Lender are entitled under the provisions of Sections 3.12., 5.1., 5.4., 12.8.,
13.2. and 13.9. and any other provision of this Agreement and the other Loan
Documents, and the provisions of Section 13.4., shall continue in full
force and effect and shall protect the Agent, the Lenders and the Swingline
Lender (i) notwithstanding any termination of this Agreement, or of the other
Loan Documents, against events arising after such termination as well as before
and (ii) at all times after any such party ceases to be a party to this
Agreement with respect to all matters and events existing on or prior to the
date such party ceased to be a party to this Agreement.

 

Section 13.11. 
Severability of Provisions.

 

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

 

Section 13.12. 
GOVERNING LAW.

 

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

 

Section 13.13. 
Patriot Act.

 

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

 

Section 13.14. 
Counterparts.

 

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

 

Section 13.15. 
Obligations with Respect to Loan Parties.

 

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

 

95

 

Section 13.16. 
Limitation of Liability.

 

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

 

Section 13.17. 
Entire Agreement.

 

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

 

Section 13.18. 
Construction.

 

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

 

[Signatures on Following Pages]

 

96

 

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

 

 

	
   

  	
  KITE
  REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  Kite Realty Group Trust, its sole General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John Kite

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  John Kite

  
	
   

  	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Kite

  	
   

  
	
   

  	
   

  	
  Name:
  John Kite

  
	
   

  	
   

  	
  Title:
  President

  
								

 

[Signatures Continued on Next Page]

 

97

 

[Signature Page to Credit Agreement dated as of

August 31, 2004 with Kite Realty Group, L.P.]

 

 

	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as

  Agent, as a Lender and as Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Cynthia A. Bean

  	
   

  
	
   

  	
   

  	
  Name:
  Cynthia A. Bean

  	
   

  
	
   

  	
   

  	
  Title:
  Vice President

  	
   

  

 

Commitment
Amount:

 

$75,000,000

 

Lending Office (all Types of Loans):

 

Wachovia
Bank, National Association

301
S. College Street, NC0172

Charlotte,
North Carolina 28288

Attn:  Rex E. Rudy

Telephone:               (704) 383-6506

Telecopy:                       (704) 383-6205

 

[Signatures Continued on Next Page]

 

98

 

[Signature Page to Credit Agreement dated as of

August 31, 2004 with Kite Realty Group, L.P.]

 

 

	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Yon Cho

  	
   

  
	
   

  	
   

  	
  Name:
  Yon Cho

  	
   

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  	
   

  

 

Commitment
Amount:

 

$75,000,000

 

Lending Office (all Types of Loans):

 

Lehman
Commercial Paper, Inc.

745
7th Avenue, 16th Floor

New
York, NY 10019

Michael
Herr

Telephone:
(212) 526-6560

Telecopy:
(212) 520-0450

 

Address for Notices:

 

Lehman
Commercial Paper, Inc.

399
Park Avenue, 8th Floor

New
York, NY 10022

Attention:  Tom Chilton

Telephone:
(212) 526-4684

Telecopy:
(646) 758-5320

 

99

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

THIS
ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of
                      ,
200   (the “Agreement”) by and among
                                           (the
“Assignor”),
                                             (the
“Assignee”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent (the “Agent”).

 

WHEREAS,
the Assignor is a Lender under that certain Credit Agreement dated as of August 31,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Kite Realty Group, L.P. (the
“Borrower”), the financial institutions party thereto and their assignees under
Section 13.5. thereof (the “Lenders”), the Agent, and the other parties
thereto;

 

WHEREAS,
the Assignor desires to assign to the Assignee, among other things, all or a
portion of the Assignor’s Commitment under the Credit Agreement, all on the
terms and conditions set forth herein; and

 

WHEREAS,
the Agent consents to such assignment on the terms and conditions set forth
herein;

 

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

 

Section 1.  Assignment.

 

(a)                                  Subject to the terms and conditions of this
Agreement and in consideration of the payment to be made by the Assignee to the
Assignor pursuant to Section 2 of this Agreement, effective as of
                     ,
200   (the “Assignment Date”), the Assignor hereby irrevocably sells,
transfers and assigns to the Assignee, without recourse, a
$                interest
(such interest being the “Assigned Commitment”) in and to the Assignor’s
Commitment and all of the other rights and obligations of the Assignor under
the Credit Agreement, such Assignor’s Revolving Note and the other Loan
Documents (representing                %
in respect of the aggregate amount of all Lenders’ Commitments), including
without limitation, a principal amount of outstanding Revolving Loans equal to
$               
and all voting rights of the Assignor associated with the Assigned Commitment,
all rights to receive interest on such amount of Revolving Loans and all
commitment and other Fees with respect to the Assigned Commitment and other
rights of the Assignor under the Credit Agreement and the other Loan Documents
with respect to the Assigned Commitment, all as if the Assignee were an
original Lender under and signatory to the Credit Agreement having a Commitment
equal to the amount of the Assigned Commitment.  The Assignee, subject to the terms and conditions hereof, hereby
assumes all obligations of the Assignor with respect to the Assigned Commitment
as if the Assignee were an original Lender under and signatory to the Credit
Agreement having a Commitment equal to the Assigned Commitment, which
obligations shall include, but shall not be limited to, the obligation of the
Assignor to make Revolving Loans to the Borrower with

 

A-1

 

respect
to the Assigned Commitment, the obligation to pay the Agent amounts due in
respect of draws under Letters of Credit as required under Section 2.3.(i)
of the Credit Agreement and the obligation to indemnify the Agent as provided
therein (the foregoing enumerated obligations, together with all other similar
obligations more particularly set forth in the Credit Agreement and the other
Loan Documents, collectively, the “Assigned Obligations”).  The Assignor shall have no further duties or
obligations with respect to, and shall have no further interest in, the
Assigned Obligations or the Assigned Commitment from and after the Assignment
Date.

 

(b)                                 The assignment by the Assignor to the
Assignee hereunder is without recourse to the Assignor.  The Assignee makes and confirms to the
Agent, the Assignor, and the other Lenders all of the representations,
warranties and covenants of a Lender under Article XII. of the Credit
Agreement.  Not in limitation of the
foregoing, the Assignee acknowledges and agrees that, except as set forth in
Section 4 below, the Assignor is making no representations or warranties
with respect to, and the Assignee hereby releases and discharges the Assignor
for any responsibility or liability for: 
(i) the present or future solvency or financial condition of the
Borrower, any Subsidiary or any other Loan Party, (ii) any representations,
warranties, statements or information made or furnished by the Borrower, any
Subsidiary or any other Loan Party in connection with the Credit Agreement or
otherwise, (iii) the validity, efficacy, sufficiency, or enforceability of the
Credit Agreement, any other Loan Document or any other document or instrument
executed in connection therewith, or the collectibility of the Assigned
Obligations, (iv) the perfection, priority or validity of any Lien with respect
to any collateral at any time securing the Obligations or the Assigned Obligations
under the Notes or the Credit Agreement and (v) the performance or failure to
perform by the Borrower or any other Loan Party of any obligation under the
Credit Agreement or any other Loan Document to which it is a party.  Further, the Assignee acknowledges that it
has, independently and without reliance upon the Agent, or on any affiliate or
subsidiary thereof, the Assignor or any other Lender and based on the financial
statements supplied by the Borrower and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to become
a Lender under the Credit Agreement. 
The Assignee also acknowledges that it will, independently and without
reliance upon the 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 Credit
Agreement or any other Loan Documents or pursuant to any other obligation.  Except as expressly provided in the Credit
Agreement, the Agent shall have no duty or responsibility whatsoever, either
initially or on a continuing basis, to provide the Assignee with any credit or
other information with respect to the Borrower or any other Loan Party or to
notify the Assignee of any Default or Event of Default.  The Assignee has not relied on the Agent as
to any legal or factual matter in connection therewith or in connection with
the transactions contemplated thereunder.

 

Section 2.  Payment by Assignee.  In consideration of the assignment made
pursuant to Section 1 of this Agreement, the Assignee agrees to pay to the
Assignor on the Assignment Date, such amount as they may agree.

 

Section 3.  Payments by Assignor.  The Assignor agrees to pay to the Agent on
the Assignment Date the administration fee, if any, payable under the
applicable provisions of the Credit Agreement.

 

A-2

 

Section 4.  Representations and Warranties of
Assignor.  The Assignor hereby represents
and warrants to the Assignee that (a) as of the Assignment Date (i) the
Assignor is a Lender under the Credit Agreement having a Commitment under the
Credit Agreement (without reduction by any assignments thereof which have not
yet become effective), equal to
$                       ,
and that the Assignor is not in default of its obligations under the Credit
Agreement; and (ii) the outstanding balance of Revolving Loans owing to the
Assignor (without reduction by any assignments thereof which have not yet
become effective) is
$                        ;
and (b) it is the legal and beneficial owner of the Assigned Commitment which
is free and clear of any adverse claim created by the Assignor.

 

Section 5.  Representations, Warranties and
Agreements of Assignee.  The
Assignee (a) represents and warrants that it is (i) legally authorized to enter
into this Agreement, (ii) an “accredited investor” (as such term is used in
Regulation D of the Securities Act) and (iii) an Eligible Assignee; (b)
confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant thereto and
such other documents and information (including without limitation the Loan
Documents) as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (c) appoints and authorizes the Agent to
take such action as contractual representative on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
thereof together with such powers as are reasonably incidental thereto; and (d)
agrees that it will become a party to and shall be bound by the Credit
Agreement and the other Loan Documents to which the other Lenders are a party
on the Assignment Date and will perform in accordance therewith all of the
obligations which are required to be performed by it as a Lender.

 

Section 6.  Recording and Acknowledgment by the Agent.  Following the execution of this Agreement,
the Assignor will deliver to the Agent (a) a duly executed copy of this
Agreement for acknowledgment and recording by the Agent and (b) the Assignor’s
Revolving Note.  Upon such
acknowledgment and recording, from and after the Assignment Date, the Agent
shall make all payments in respect of the interest assigned hereby (including
payments of principal, interest, Fees and other amounts) to the Assignee.  The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods
prior to the Assignment Date directly between themselves.

 

Section 7.  Addresses.  The Assignee specifies as its address for notices and its Lending
Office for all Loans, the offices set forth on Schedule 1 attached hereto.

 

Section 8.  Payment Instructions.  All payments to be made to the Assignee
under this Agreement by the Assignor, and all payments to be made to the
Assignee under the Credit Agreement, shall be made as provided in the Credit
Agreement in accordance with the instructions set forth on Schedule 1
attached hereto or as the Assignee may otherwise notify the Agent.

 

Section 9.  Effectiveness of Assignment.  This Agreement, and the assignment and
assumption contemplated herein, shall not be effective until (a) this Agreement
is executed and delivered by each of the Assignor, the Assignee, the Agent, and
if required under 

 

A-3

 

Section 13.5.(d)
of the Credit Agreement, the Borrower, and (b) the payment to the Assignor of
the amounts, if any, owing by the Assignee pursuant to Section 2 hereof
and (c) the payment to the Agent of the amounts, if any, owing by the Assignor
pursuant to Section 3 hereof.  Upon
recording and acknowledgment of this Agreement by the Agent, from and after the
Assignment Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Agreement, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Agreement, relinquish its rights (except as otherwise provided in
Section 13.10. of the Credit Agreement) and be released from its
obligations under the Credit Agreement; provided, however, that if the Assignor
does not assign its entire interest under the Loan Documents, it shall remain a
Lender entitled to all of the benefits and subject to all of the obligations
thereunder with respect to its Commitment.

 

Section 10.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 11.
Counterparts.  This Agreement may
be executed in any number of counterparts each of which, when taken together,
shall constitute one and the same agreement.

 

Section 12.  Headings.  Section headings have been inserted herein for convenience
only and shall not be construed to be a part hereof.

 

Section 13.  Amendments; Waivers.  This Agreement may not be amended, changed,
waived or modified except by a writing executed by the Assignee and the
Assignor; provided, however, any amendment, waiver or consent which shall
affect the rights or duties of the Agent under this Agreement shall not be
effective unless signed by the Agent.

 

Section 14.  Entire Agreement.  This Agreement embodies the entire agreement
between the Assignor and the Assignee with respect to the subject matter hereof
and supersedes all other prior arrangements and understandings relating to the
subject matter hereof.

 

Section 15.  Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

Section 16.  Definitions.  Terms not otherwise defined herein are used
herein with the respective meanings given them in the Credit Agreement.

 

[Include this Section only if Borrower’s consent is
required under Section 13.5.(d) Section 17.  Agreements
of the Borrower.  The Borrower
hereby agrees that the Assignee shall be a Lender under the Credit Agreement
having a Commitment equal to the Assigned Commitment.  The Borrower agrees that the Assignee shall have all of the
rights and remedies of a Lender under the Credit Agreement and the other Loan
Documents as if the Assignee were an original Lender under and signatory to the
Credit Agreement, including, but not limited to, the right of a Lender to
receive payments of principal and interest with respect to the Assigned
Obligations, and to the Revolving Loans made by the Lenders after the date
hereof and to receive

 

A-4

 

the
commitment and other Fees payable to the Lenders as provided in the Credit
Agreement.  Further, the Assignee shall
be entitled to the indemnification provisions from the Borrower in favor of the
Lenders as provided in the Credit Agreement and the other Loan Documents.  The Borrower further agrees, upon the
execution and delivery of this Agreement, to execute in favor of the Assignee
Notes as required by Section 13.5.(d) of the Credit Agreement.  Upon receipt by the Assignor of the amounts
due the Assignor under Section 2, the Assignor agrees to surrender to the
Borrower such Assignor’s Notes.]

 

[Signatures on Following Pages]

 

A-5

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Assignment and
Acceptance Agreement as of the date and year first written above.

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

	
  Accepted
  as of the date first written above.

  
	
   

  
	
  AGENT:

  
	
   

  
	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

[Signatures Continued on Following Page]

 

A-6

 

[Include signature of the Borrower
only if required

under Section 13.5.(d) of the Credit Agreement]

Agreed and consented to as of the

date first written above.

 

	
  BORROWER:

  
	
   

  
	
  KITE
  REALTY GROUP, L.P.

  
	
   

  
	
  By:
  Kite Realty Group Trust, its sole General Partner

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
						

 

A-7

 

SCHEDULE 1

 

Information Concerning the Assignee

 

	
  Notice
  Address:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
  Telecopy
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lending
  Office:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
  Telecopy
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payment
  Instructions:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-8

 

EXHIBIT D

 

FORM OF GUARANTY

 

THIS
GUARANTY dated as of August 31, 2004, executed and delivered by each of
the undersigned and the other Persons from time to time party hereto pursuant
to the execution and delivery of an Accession Agreement in the form of Annex I
hereto (all of the undersigned, together with such other Persons each a
“Guarantor” and collectively, the “Guarantors”) in favor of (a) WACHOVIA BANK,
NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders
under that certain Credit Agreement dated as of August 31, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Kite Realty Group, L.P. (the “Borrower”), the
financial institutions party thereto and their assignees under
Section 13.5. thereof (the “Lenders”), the Agent, and the other parties
thereto, and (b) the Lenders and the Swingline Lender.

 

WHEREAS,
pursuant to the Credit Agreement, the Agent, the Lenders and the Swingline
Lender have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS,
the Borrower and each of the Guarantors, 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, the Lenders and the Swingline
Lender through their collective efforts;

 

WHEREAS,
each Guarantor acknowledges that it will receive direct and indirect benefits
from the Agent, the Lenders and the Swingline Lender 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, the Lenders and the Swingline Lender on the terms and conditions
contained herein; and

 

WHEREAS,
each Guarantor’s execution and delivery of this Guaranty is a condition to the
Agent and the Lenders making, and 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, irrevocably and unconditionally
guaranties the due and punctual payment and performance when due, whether at
stated maturity, by acceleration or otherwise, of all of the following
(collectively referred to as the “Guarantied Obligations”):  (a) all indebtedness and obligations owing
by the Borrower to any Lender, the Swingline Lender or the Agent under or in
connection with the Credit Agreement and any other Loan Document, including
without limitation, the repayment of all principal of the Revolving Loans,
Swingline Loans and the Reimbursement Obligations, and the payment of all
interest, Fees, charges, attorneys’ fees and other amounts payable to any
Lender or the Agent thereunder

 

D-1

 

or
in connection therewith; (b) any and all extensions, renewals, modifications,
amendments or substitutions of the foregoing; (c) all expenses, including, without
limitation, reasonable attorneys’ fees and disbursements, that are incurred by
the Lenders and the Agent in the enforcement of any of the foregoing or any
obligation of such Guarantor hereunder; and (d) all other Obligations.

 

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, none of the Lenders, the
Swingline Lender or the Agent shall be obligated or required before enforcing
this Guaranty against any Guarantor: 
(a)  to pursue any right or
remedy any of them 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, the Swingline Lender or the Agent
which may secure any of the Guarantied Obligations; provided, however, with
respect to any Guarantor that owns a Collateral Property located in the State
of Florida, the Lenders, the Swingline Lender and the Agent shall not make
demand upon any such Guarantor unless the Borrower has failed to pay any of the
Guarantied Obligations as and when due. 
Prior to exercising their rights and remedies against any such Guarantor
hereunder (but without limiting their ability to exercise their rights and
remedies against Guarantors that do not own Collateral Property located in the
State of Florida), the Lenders, the Swingline Lender and the Agent agree, as it
relates to the Collateral Property located in the State of Florida, to provide
written notice to the Borrower of any default and to provide Borrower with an
opportunity to cure to the extent expressly required, and in the manner
specifically provided for, in the Credit Agreement.

 

Section 3.  Guaranty Absolute.  Each Guarantor guarantees that the
Guarantied Obligations will be paid strictly in accordance with the terms of
the documents evidencing the same, regardless of any Applicable Law now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent, the Lenders or the Swingline Lender with respect
thereto.  The liability of each
Guarantor under this Guaranty shall be absolute, irrevocable 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 Guarantied Obligations, (ii) any change
in the time, place or manner of payment of all or any portion of the Guarantied
Obligations, (iii) any amendment or waiver of, or consent to the departure from
or other indulgence with respect to, the Credit Agreement, any other Loan
Document, or any other document or instrument evidencing or relating to any
Guarantied 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 Loan Documents, or any other
documents, instruments or agreements relating to the Guarantied

 

D-2

 

Obligations
or any other instrument or agreement referred to therein or evidencing any
Guarantied 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 Loan Documents, or any other document,
instrument or agreement referred to therein or evidencing any Guarantied
Obligations or any assignment or transfer of any of the foregoing;

 

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

 

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

 

(e)                                  any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Guarantor, the Borrower, any other Loan Party 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 act or failure to act by the Borrower,
any other Loan Party 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;

 

(g)                                 any nonperfection or impairment of any
security interest or other Lien on any collateral, if any, securing in any way
any of the Obligations;

 

(h)                                 any application of sums paid by the Borrower,
any other Guarantor or any other Person with respect to the liabilities of the
Borrower to the Agent, the Lenders or the Swingline Lender, 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, a Guarantor hereunder
(other than indefeasible payment and performance in full).

 

Section 4.  Action with Respect to Guarantied
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 Guarantied Obligations, including, but not
limited to, extending or shortening the time of payment of any of the
Guarantied Obligations or changing the interest rate that may accrue on any of
the Guarantied Obligations; (b) amend, modify, alter or supplement the Credit
Agreement

 

D-3

 

or
any other Loan Document; (c) sell, exchange, release or otherwise deal with
all, or any part, of any collateral securing any of the Obligations; (d)
release any other Loan Party or other Person liable in any manner for the
payment or collection of the Guarantied Obligations; (e) exercise, or refrain
from exercising, any rights against the Borrower, any other Guarantor or any
other Person; and (f) apply any sum, by whomsoever paid or however realized, to
the Guarantied Obligations in such order as the Lenders shall elect.

 

Section 5.
 Representations and Warranties.  Each Guarantor hereby makes to the Agent,
the Lenders and the Swingline Lender 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 Loan 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 any of the other Loan Documents.

 

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, the Swingline Lender and/or
the Lenders are prevented under Applicable Law or otherwise from demanding or
accelerating payment of any of the Guarantied Obligations by reason of any
automatic stay or otherwise, the Agent, the Swingline Lender 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 Guarantied Obligations.  If claim is ever made on the Agent, any
Lender or the Swingline Lender for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guarantied Obligations,
and the Agent, such Lender or the Swingline Lender repays all or part of said
amount by reason of (a) any judgment, decree or order of any court or
administrative body of competent jurisdiction, or (b) any settlement or
compromise of any such claim effected by the Agent, such Lender or the
Swingline Lender with any such claimant (including the Borrower or a trustee in
bankruptcy for the Borrower), then and in such event each Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall be binding on
it, notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, any of the other Loan Documents, or any other instrument evidencing
any liability of the Borrower, and such Guarantor shall be and remain liable to
the Agent, such Lender or the Swingline Lender for the amounts so repaid or
recovered to the same extent as if such amount had never originally been paid
to the Agent, such Lender or the Swingline Lender.

 

Section 10.  Subrogation.  Upon the making by any Guarantor of any
payment hereunder for the account of the Borrower, such Guarantor shall be
subrogated to the rights of the payee

 

D-4

 

against
the Borrower; provided, however, that such Guarantor shall not enforce any
right or receive any payment by way of subrogation or otherwise take any action
in respect of any other claim or cause of action such Guarantor may have
against the Borrower arising by reason of any payment or performance by such
Guarantor pursuant to this Guaranty, unless and until all of the Guarantied
Obligations have been indefeasibly paid and performed in full.  If any amount shall be paid to such
Guarantor on account of or in respect of such subrogation rights or other
claims or causes of action, such Guarantor shall hold such amount in trust for
the benefit of the Agent, the Lenders and the Swingline Lender and shall
forthwith pay such amount to the Agent to be credited and applied against the
Guarantied Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Agreement or to be held by the Agent as collateral security
for any Guarantied Obligations existing.

 

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 Taxes), and if any Guarantor
is required by Applicable Law or by a Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Agent, the Lenders
and the Swingline Lender such additional amount as will result in the receipt
by the Agent, the Lenders and the Swingline Lender 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 any of
the other Loan Documents or Applicable Law and not by way of limitation of any
such rights, each Guarantor hereby authorizes the Agent and each Lender, at any
time during the continuance of an Event of Default, without any prior notice to
such Guarantor or to any other Person, any such notice being hereby expressly
waived, but in the case of a Lender or Participant subject to receipt of the
prior written consent of the Agent exercised in its sole discretion, to set off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time held
or owing by the Agent, such Lender, or any affiliate of the Agent or such
Lender, to or for the credit or the account of such Guarantor against and on
account of any of the Guarantied Obligations, although such obligations shall
be contingent or unmatured. Each Guarantor agrees, to the fullest extent
permitted by Applicable Law, that any Participant may exercise rights of setoff
or counterclaim and other rights with respect to its participation as fully as
if such Participant 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, the Lenders and the Swingline Lender
that all obligations and liabilities of the Borrower to such Guarantor of
whatever description, including without limitation, all intercompany
receivables of such Guarantor from the Borrower (collectively, the “Junior
Claims”) shall be subordinate and junior in right of payment to all Guarantied
Obligations.  If an Event of Default
shall exist, then no Guarantor shall accept any direct or indirect payment (in
cash, property or securities, by setoff or otherwise) from the Borrower on
account of or in any manner in respect of any Junior Claim until all of the Guarantied
Obligations have been indefeasibly paid in full.

 

D-5

 

Section 14.  Avoidance Provisions.  It is the intent of each Guarantor, the
Agent, the Lenders and the Swingline Lender 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,
the Lenders and the Swingline Lender) 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, the Lenders and the
Swingline Lender) 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 Guarantied Obligations for which such Guarantor shall
be liable hereunder shall be reduced to that amount which, as of the time any
of the Guarantied Obligations are deemed to have been incurred under the
Avoidance Provisions, would not cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent, the Lenders
and the Swingline Lender), to be subject to avoidance under the Avoidance
Provisions.  This Section is
intended solely to preserve the rights of the Agent, the Lenders and the
Swingline Lender 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 or any other Person shall have any right
or claim under this Section as against the Agent, the Lenders and the
Swingline Lender that would not otherwise be available to such Person under the
Avoidance Provisions.

 

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

 

Section 16.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

SECTION 17.  WAIVER OF JURY TRIAL.

 

(a)                                  EACH PARTY HERETO ACKNOWLEDGES THAT ANY
DISPUTE OR CONTROVERSY BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE
LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND
WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.

 

D-6

 

ACCORDINGLY,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE AGENT AND
EACH GUARANTOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION
MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR
DISPUTE WHATSOEVER BETWEEN OR AMONG ANY GUARANTOR, THE AGENT OR ANY OF THE
LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.

 

(b)                                 EACH OF THE GUARANTORS, THE AGENT AND EACH
LENDER HEREBY AGREES THAT ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK OR, AT
THE OPTION OF THE AGENT, ANY STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN,
NEW YORK, NEW YORK, SHALL HAVE 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 LOAN DOCUMENT
OR TO ANY MATTER ARISING HEREFROM OR THEREFROM.  EACH GUARANTOR AND EACH OF THE LENDERS EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
IN SUCH COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES.  EACH PARTY FURTHER WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE
ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM
IN ANY OTHER APPROPRIATE JURISDICTION.

 

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

 

Section 18.  Loan Accounts.  The Agent, each Lender and the Swingline
Lender may maintain books and accounts setting forth the amounts of principal,
interest and other sums paid and payable with respect to the Guarantied
Obligations, and in the case of any dispute relating to any of the outstanding
amount, payment or receipt of any of the Guarantied Obligations or otherwise,
the entries in such books and accounts shall be deemed conclusive evidence of
the amounts and other matters set forth herein, absent manifest error.  The failure of the Agent, any Lender or the
Swingline Lender to maintain such books and accounts shall not in any way
relieve or discharge any Guarantor of any of its obligations hereunder.

 

D-7

 

Section 19.  Waiver of Remedies.  No delay or failure on the part of the
Agent, any Lender or the Swingline Lender 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, any Lender
or the Swingline Lender of any such right or remedy shall preclude any other or
further exercise thereof or the exercise of any other such right or remedy.

 

Section 20.  Termination.  This Guaranty shall remain in full force and
effect until indefeasible payment in full of the Guarantied Obligations and the
other Obligations and the termination or cancellation of the Credit Agreement
in accordance with its terms.

 

Section 21.  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 Guarantied
Obligations) in whose favor the provisions of this Guaranty also shall inure,
and each reference herein to each Guarantor shall be deemed to include such
Guarantor’s successors and assigns, upon whom this Guaranty also shall be
binding.  The Lenders and the Swingline
Lender may, in accordance with the applicable provisions of the Credit
Agreement, assign, transfer or sell any Guarantied Obligation, or grant or sell
participations in any Guarantied Obligations, to any Person without the consent
of, or notice to, any Guarantor and without releasing, discharging or modifying
any Guarantor’s obligations hereunder. 
Subject to Section 13.8. of the Credit Agreement, each Guarantor
hereby consents to the delivery by the Agent or any Lender to any Assignee or
Participant (or any prospective Assignee or Participant) of any financial or
other information regarding the Borrower or any Guarantor.  No Guarantor may assign or transfer its
obligations hereunder to any Person without the prior written consent of all
Lenders and any such assignment or other transfer to which all of the Lenders
have not so consented shall be null and void.

 

Section 22.  JOINT AND SEVERAL OBLIGATIONS.  THE OBLIGATIONS OF THE GUARANTORS HEREUNDER
SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS THAT IT IS
LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF THE
OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.

 

Section 23.  Amendments.  This Guaranty may not be amended except in writing signed by the
Requisite Lenders (or all of the Lenders if required under the terms of the
Credit Agreement), the Agent and each Guarantor.

 

Section 24.  Payments.  All payments to be made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the Agent
at the Principal Office, not later than 2:00 p.m. on the date of demand
therefor.

 

Section 25.  Notices.  All notices, requests and other communications hereunder shall be
in writing (including facsimile transmission or similar writing) and shall be
given (a) to each Guarantor at its address set forth below its signature
hereto, (b) to the Agent, any Lender or the Swingline Lender at its respective
address for notices provided for in the Credit Agreement, or (c) as to each
such party at such other address as such party shall designate in a written
notice to

 

D-8

 

the
other parties.  Each such notice,
request or other communication shall be effective (i) if mailed, when received;
(ii) if telecopied, when transmitted; or (iii) if hand delivered, when
delivered; provided, however, that any notice of a change of address for notices
shall not be effective until received.

 

Section 26.  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 27.  Headings.  Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.

 

Section 28.  Limitation of Liability.  Neither the Agent nor any Lender, nor any
affiliate, officer, director, employee, attorney, or agent of the Agent or any
Lender, shall have any liability with respect to, and each Guarantor hereby
waives, releases, and agrees not to sue any of them upon, any claim for any
special, indirect, incidental, or consequential damages suffered or incurred by
a Guarantor in connection with, arising out of, or in any way related to, this
Guaranty or any of the other Loan Documents, or any of the transactions
contemplated by this Guaranty, the Credit Agreement or any of the other Loan
Documents.  Each Guarantor hereby
waives, releases, and agrees not to sue the Agent or any Lender or any of the
Agent’s or any Lender’s affiliates, officers, directors, employees, attorneys,
or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Guaranty, the Credit Agreement
or any of the other Loan Documents, or any of the transactions contemplated by
Credit Agreement or financed thereby.

 

Section 29.  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 of 1978, as amended; (ii) a custodian (as defined in such
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.

 

D-9

 

[Signature on Next Page]

 

D-10

 

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

 

	
   

  	
  [GUARANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o
  Kite Realty Group, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopy
  Number:

  	
  (         )

  
	
   

  	
  Telephone
  Number:

  	
  (         )                    

  
							

 

D-11

 

ANNEX I

 

FORM OF ACCESSION AGREEMENT

 

THIS
ACCESSION AGREEMENT dated as of
                        ,
200   , executed and delivered by                                                ,
a
                       
(the “New Guarantor”), in favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in
its capacity as Agent (the “Agent”) for the Lenders under that certain Credit
Agreement dated as of August 31, 2004 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), by and among Kite
Realty Group, L.P. (the “Borrower”), the financial institutions party thereto
and their assignees under Section 13.5. thereof (the “Lenders”), the
Agent, and the other parties thereto, and (b) the Lenders and the Swingline
Lender.

 

WHEREAS,
pursuant to the Credit Agreement, the Agent, the Lenders and the Swingline
Lender have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS,
the Borrower, the New Guarantor, and the existing Guarantors, 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, the Lenders
and the Swingline Lender through their collective efforts;

 

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

 

WHEREAS,
the New Guarantor’s execution and delivery of this Agreement is a condition to
the Agent, the Lenders and the Swingline Lender 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 the New Guarantor, the New Guarantor agrees as
follows:

 

Section 1.  Accession to Guaranty.  The New Guarantor hereby agrees that it is a
“Guarantor” under that certain Guaranty dated as of August 31, 2004 (as
amended, supplemented, restated or otherwise modified from time to time, the
“Guaranty”), made by each Subsidiary of the Borrower a party thereto in favor
of the Agent, the Lenders and the Swingline Lender and assumes all obligations
of a “Guarantor” thereunder, all as if the New Guarantor had been an original
signatory to the Guaranty.  Without
limiting the generality of the foregoing, the New Guarantor hereby:

 

D-12

 

(a)                                  irrevocably and unconditionally guarantees
the due and punctual payment and performance when due, whether at stated
maturity, by acceleration or otherwise, of all Guarantied Obligations (as
defined in the Guaranty);

 

(b)                                 makes to the Agent, the Lenders and the
Swingline Lender as of the date hereof each of the representations and
warranties contained in Section 5 of the Guaranty and agrees to be bound
by each of the covenants contained in Section 6 of the Guaranty; and

 

(c)                                  consents and agrees to each provision set
forth in the Guaranty.

 

SECTION 2.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

Section 3.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given
them in the Credit Agreement.

 

[Signatures on Next Page]

 

D-13

 

IN
WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of
the date first written above.

 

	
   

  	
  [NEW
  GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  c/o
  Kite Realty Group, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopy
  Number:

  	
  (         )

  
	
   

  	
  Telephone
  Number:

  	
  (         )                    

  
							

 

	
  Accepted:

  
	
   

  
	
  WACHOVIA
  BANK, NATIONAL

  ASSOCIATION, as Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

D-14

 

EXHIBIT E

 

FORM OF NOTICE OF BORROWING

 

                           ,
200  

 

Wachovia
Bank, National Association, as Agent

One
Wachovia Center

301
South College Street

Mail
Code:  NC0166

Charlotte,
North Carolina  28288-0166

 

Attention:

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Credit Agreement dated as of August 31, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Kite Realty Group, L.P. (the “Borrower”), the
financial institutions party thereto and their assignees under
Section 13.5. thereof (the “Lenders”), Wachovia Bank, National Association,
as Agent (the “Agent”), and the other parties thereto.  Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.

 

1.                                       Pursuant to Section 2.1.(b) of the
Credit Agreement, the Borrower hereby requests that the Lenders make Revolving
Loans to the Borrower in an aggregate principal amount equal to
$                                  .

 

2.                                       The Borrower requests that such Revolving
Loans be made available to the Borrower on
                       ,
200  .

 

3.                                       The Borrower hereby requests that the
requested Revolving Loans all be of the following Type:

 

[Check one box only]

 

o      Base Rate Loans

o      LIBOR Loans, each with an initial Interest
Period for a duration of:

 

[Check one box only]                   o                  1
month

o            2 months

o            3 months

o            6 months

 

4.                                       The proceeds of this borrowing of Revolving
Loans will be used for the following purpose: 

 

                                                                                                                                    .

 

E-1

 

5.                                       The Borrower requests that the proceeds of
this borrowing of Revolving Loans be made available to the Borrower by
                                                          .

 

The
Borrower hereby certifies to the Agent and the Lenders that as of the date
hereof and as of the date of the making of the requested Revolving Loans and
after giving effect thereto, (a) no Default or Event of Default exists or shall
exist, and (b) the representations and warranties made or deemed made by the Borrower
and each other Loan Party in the Loan Documents to which any of them is a party
are and shall be true and correct in all material respects, except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct on and as of such earlier date) and except for changes in
factual circumstances not prohibited under the Loan Documents. In addition, the
Borrower certifies to the Agent and the Lenders that all conditions to the
making of the requested Revolving Loans contained in Article VI. of the
Credit Agreement will have been satisfied (or waived in accordance with the
applicable provisions of the Loan Documents) at the time such Revolving Loans
are made.

 

If
notice of the requested borrowing of Revolving Loans was previously given by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.1.(b) of the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of
Borrowing as of the date first written above.

 

	
   

  	
  KITE
  REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By: Kite
  Realty Group Trust, its sole General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

E-2

 

EXHIBIT
F

 

FORM
OF NOTICE OF CONTINUATION

 

              ,
200   

 

Wachovia Bank, National Association, as Agent

One Wachovia Center

301 South College Street

Mail Code: 
NC0166

Charlotte, North Carolina  28288-0166

Attention: 
                                    

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement dated as of August 31, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Kite Realty Group, L.P. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 13.5. thereof (the
“Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and
the other parties thereto.  Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.

 

Pursuant to Section 2.8. of
the Credit Agreement, the Borrower hereby requests a Continuation of a
borrowing of Loans under the Credit Agreement, and in that connection sets
forth below the information relating to such Continuation as required by such
Section of the Credit Agreement:

 

1.                                       The proposed date of such Continuation is
                            ,
200     .

 

2.                                       The aggregate principal amount of Loans
subject to the requested Continuation is
$                                   
and was originally borrowed by the Borrower on
                            ,
200     .

 

3.                                       The portion of such principal amount subject
to such Continuation is
$                                   .

 

4.                                       The current Interest Period for each of the
Loans subject to such Continuation ends on
                            ,
200     .

 

5.                                       The duration of the new Interest Period for
each of such Loans or portion thereof subject to such Continuation is:

 

F-1

 

	
  [Check
  one box only]

  	
  o

  	
  1 month

  
	
   

  	
  o

  	
  2 months

  
	
   

  	
  o

  	
  3 months

  
	
   

  	
  o

  	
  6 months

  

 

The Borrower hereby
certifies to the Agent and the Lenders that as of the date hereof, as of the
proposed date of the requested Continuation, and after giving effect to such
Continuation, no Default or Event of Default exists or will exist.

 

If notice of the requested
Continuation was given previously by telephone, this notice is to be considered
the written confirmation of such telephone notice required by Section 2.8. of
the Credit Agreement.

 

IN WITNESS WHEREOF, the
undersigned has duly executed and delivered this Notice of Continuation as of
the date first written above.

 

	
   

  	
  KITE REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty Group Trust,
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

F-2

 

EXHIBIT
G

 

FORM
OF NOTICE OF CONVERSION

 

              ,
200   

 

Wachovia Bank, National Association, as Agent

One Wachovia Center

301 South College Street

Mail Code: 
NC0166

Charlotte, North Carolina  28288-0166

Attention: 
                                

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement dated as of August 31, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Kite Realty Group, L.P. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 13.5. thereof (the
“Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and
the other parties thereto.  Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.

 

Pursuant to Section 2.9. of
the Credit Agreement, the Borrower hereby requests a Conversion of a borrowing
of Loans of one Type into Loans of another Type under the Credit Agreement, and
in that connection sets forth below the information relating to such Conversion
as required by such Section of the Credit Agreement:

 

1.                                       The proposed date of such Conversion is
                            ,
200     .

 

2.                                       The Loans to be Converted pursuant hereto are
currently:

 

	
  [Check
  one box only]

  	
  o

  	
  Base Rate Loans

  
	
   

  	
  o

  	
  LIBOR Loans

  

 

3.                                       The aggregate principal amount of Loans
subject to the requested Conversion is
$                               
and was originally borrowed by the Borrower on
                            ,
200     .

 

4.                                       The portion of such principal amount subject
to such Conversion is
$                               .

 

 

G-1

 

5.                                       The amount of such Loans to be so Converted
is to be converted into Loans of the following Type:

 

[Check one box only]

 

	
  o

  	
  Base Rate Loans

  
	
  o

  	
  LIBOR Loans, each with an
  initial Interest Period for a duration of:

  

 

	
  [Check
  one box only]

  	
  o

  	
  1 month

  
	
   

  	
  o

  	
  2 months

  
	
   

  	
  o

  	
  3 months

  
	
   

  	
  o

  	
  6 months

  

 

The Borrower hereby
certifies to the Agent and the Lenders that as of the date hereof and as of the
date of the requested Conversion and after giving effect thereto, (a) no
Default or Event of Default exists or will exist (provided the certification
under this clause (a) shall not be made in connection with the Conversion of a
Loan into a Base Rate Loan), and (b) the representations and warranties made or
deemed made by the Borrower and each other Loan Party in the Loan Documents to
which any of them is a party are and shall be true and correct in all material
respects, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances not prohibited under the Loan
Documents.

 

If notice of the requested
Conversion was given previously by telephone, this notice is to be considered
the written confirmation of such telephone notice required by Section 2.9. of
the Credit Agreement.

 

IN WITNESS WHEREOF, the
undersigned has duly executed and delivered this Notice of Conversion as of the
date first written above.

 

	
   

  	
  KITE REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty Group Trust,
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

G-2

 

EXHIBIT
H

 

FORM
OF NOTICE OF SWINGLINE BORROWING

 

              ,
200   

 

Wachovia Bank, National Association, as Agent

One Wachovia Center

301 South College Street

Mail Code: 
NC0166

Charlotte, North Carolina  28288-0166

Attention: 
                               

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement dated as of August 31, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Kite Realty Group, L.P. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 13.5. thereof (the
“Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and
the other parties thereto.  Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.

 

1.                                       Pursuant to Section 2.2.(b) of the Credit
Agreement, the Borrower hereby requests that the Swingline Lender make a
Swingline Loan to the Borrower in an amount equal to
$                               .

 

2.                                       The Borrower requests that such Swingline
Loan be made available to the Borrower on
                            ,
200     .

 

3.                                       The proceeds of this Swingline Loan will be
used for the following purpose: 
                                                                                                                                   

                                                                                                                                   .

 

4.                                       The Borrower requests that the proceeds of
such Swingline Loan be made available to the Borrower by
                                                                     .

 

The Borrower hereby
certifies to the Agent, the Swingline Lender and the Lenders that as of the
date hereof, as of the date of the making of the requested Swingline Loan, and
after making such Swingline Loan, (a) no Default or Event of Default exists or
will exist, and (b) the representations and warranties made or deemed made by
the Borrower and each other Loan Party in the Loan Documents to which any of
them is a party are and shall be true and correct in all material respects,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct on and as of such earlier date) and except for
changes in factual circumstances not prohibited under the Loan Documents.  In addition, the Borrower certifies to the
Agent and the 

 

H-1

 

Lenders
that all conditions to the making of the requested Swingline Loan contained in
Article VI. of the Credit Agreement will have been satisfied at the time such
Swingline Loan is made.

 

If notice of the requested
borrowing of this Swingline Loan was previously given by telephone, this notice
is to be considered the written confirmation of such telephone notice required
by Section 2.2.(b) of the Credit Agreement.

 

IN WITNESS WHEREOF, the
undersigned has duly executed and delivered this Notice of Swingline Borrowing
as of the date first written above.

 

	
   

  	
  KITE REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty Group Trust,
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

H-2

 

EXHIBIT
I

 

FORM
OF PROPERTY MANAGEMENT CONTRACT ASSIGNMENT

 

[To be Attached]

 

I-1

 

EXHIBIT
J

 

FORM
OF SECURITY DEED

 

[To be Attached]

 

J-1

 

EXHIBIT
K

 

FORM
OF SWINGLINE NOTE

 

	
  $20,000,000

  	
  August
  31, 2004

  

 

FOR VALUE RECEIVED, the
undersigned, KITE Realty Group, L.P., a limited partnership formed under the
laws of the State of Delaware (the “Borrower”), hereby promises to pay to the
order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Swingline Lender”) to its
address at One Wachovia Center, 301 South College Street, Charlotte, North
Carolina  28288, or at such other
address as may be specified in writing by the Swingline Lender to the Borrower,
the principal sum of TWENTY MILLION AND NO/100 DOLLARS ($20,000,000) (or such
lesser amount as shall equal the aggregate unpaid principal amount of Swingline
Loans made by the Swingline Lender to the Borrower under the Credit Agreement),
on the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount owing hereunder, at the rates
and on the dates provided in the Credit Agreement.

 

The date, amount of each
Swingline Loan, and each payment made on account of the principal thereof,
shall be recorded by the Swingline Lender on its books and, prior to any
transfer of this Note, endorsed by the Swingline Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Swingline Lender to make any such recordation or endorsement shall not affect
the obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the Swingline Loans.

 

This Note is the Swingline
Note referred to in the Credit Agreement dated as of August 31, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrower, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”), Wachovia
Bank, National Association, as Agent, and the other parties thereto, and
evidences Swingline Loans made to the Borrower thereunder.  Terms used but not otherwise defined in this
Note have the respective meanings assigned to them in the Credit Agreement.

 

The Credit Agreement
provides for the acceleration of the maturity of this Note upon the occurrence
of certain events and for prepayments of Swingline Loans upon the terms and
conditions specified therein.

 

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

 

K-1

 

The Borrower hereby waives
presentment for payment, demand, notice of demand, notice of non-payment,
protest, notice of protest and all other similar notices.

 

Time is of the essence for
this Note.

 

IN WITNESS WHEREOF, the
undersigned has executed and delivered this Swingline Note under seal as of the
date first written above.

 

	
   

  	
  KITE REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty Group Trust,
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

K-2

 

SCHEDULE
OF SWINGLINE LOANS

 

This Note evidences
Swingline Loans made under the within-described Credit Agreement to the
Borrower, on the dates and in the principal amounts set forth below, subject to
the payments and prepayments of principal set forth below:

 

	
  Date of Loan

  	
   

  	
  Principal
  Amount

  of Loan

  	
   

  	
  Amount
  Paid or

  Prepaid

  	
   

  	
  Unpaid
  Principal

  Amount

  	
   

  	
  Notation
  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

K-3

 

EXHIBIT
L

 

FORM
OF REVOLVING NOTE

 

	
  $

  	
                           ,
  200    

  

 

 

FOR VALUE RECEIVED, the
undersigned, KITE REALTY GROUP, L.P., a limited partnership formed under the
laws of the State of Delaware (the “Borrower”), hereby promises to pay to the
order of                               
(the “Lender”), in care of Wachovia Bank, National Association, as Agent (the
“Agent”) at Wachovia Bank, National Association, One Wachovia Center, 301 South
College Street, Charlotte, North Carolina 28288, or at such other address as
may be specified in writing by the Agent to the Borrower, the principal sum of
                                       
AND            /100
DOLLARS
($                       )
(or such lesser amount as shall equal the aggregate unpaid principal amount of
Revolving Loans made by the Lender to the Borrower under the Credit Agreement
(as herein defined)), on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount owing
hereunder, at the rates and on the dates provided in the Credit Agreement.

 

The date, amount of each
Revolving Loan made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the Revolving Loans made
by the Lender.

 

This Note is one of the
Revolving Notes referred to in the Credit Agreement dated as of August 31, 2004
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”), by and among the Borrower, the financial institutions
party thereto and their assignees under Section 13.5. thereof (the “Lenders”),
the Agent, and the other parties thereto. 
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.

 

The Credit Agreement
provides for the acceleration of the maturity of this Note upon the occurrence
of certain events and for prepayments of Loans upon the terms and conditions
specified therein.

 

Except as permitted by
Section 13.5.(d) of the Credit Agreement, this Note may not be assigned by the
Lender to any other Person.

 

L-1

 

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

 

The Borrower hereby waives
presentment for payment, demand, notice of demand, notice of non-payment,
protest, notice of protest and all other similar notices.

 

Time is of the essence for
this Note.

 

IN WITNESS WHEREOF, the
undersigned has executed and delivered this Revolving Note under seal as of the
date first written above.

 

	
   

  	
  KITE REALTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty Group Trust,
  its sole General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

L-2

 

SCHEDULE
OF REVOLVING LOANS

 

This Note evidences
Revolving Loans made under the within-described Credit Agreement to the
Borrower, on the dates, in the principal amounts, bearing interest at the rates
and maturing on the dates set forth below, subject to the payments and
prepayments of principal set forth below:

 

	
  Date of Loan

  	
   

  	
  Principal
  Amount

  of Loan

  	
   

  	
  Amount
  Paid or

  Prepaid

  	
   

  	
  Unpaid
  Principal

  Amount

  	
   

  	
  Notation
  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

L-3

 

EXHIBIT
M

 

FORM
OF OPINION OF COUNSEL

 

[LETTERHEAD
OF COUNSEL TO THE LOAN PARTIES]

 

August
      , 2004

 

Wachovia Bank, National Association, as Agent

301 S. College Street, NC0172

Charlotte, North Carolina  20852-4041

 

The
Lenders party to the Credit Agreement

referred to below

 

Ladies and Gentlemen:

 

We have acted as counsel to
Kite Realty Group, L.P., a limited partnership formed under the laws of the
State of Delaware (the “Borrower”) in connection with the negotiation,
execution and delivery of that certain Credit Agreement dated as of August ___,
2004 (the “Credit Agreement”), by and among the Borrower, the financial
institutions party thereto and their assignees under Section 13.5 thereof (the
“Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”), and
the other parties thereto.  We have also
acted as counsel to each of the Guarantors listed on Schedule 1 attached hereto
(the “Guarantors”; together with the Borrower, the “Loan Parties”), in
connection with the Guaranty and the other Loan Documents identified below to
which they are party.  Capitalized terms
not otherwise defined herein have the respective meaning given them in the
Credit Agreement.

 

In these capacities, we have
reviewed executed copies of the following:

 

(a)                                  the Credit Agreement;

 

(b)                                 the Notes;

 

(c)                                  the Guaranty; and

 

(d)                                 [list other applicable Loan Documents].

 

The documents and instruments set forth in
items (a) through (d) above are referred to herein as the “Loan Documents”.

 

In addition to the
foregoing, we have reviewed the [articles or certificate of incorporation,
by-laws, declaration of trust, partnership agreement and limited liability
company operating 

 

M-1

 

agreement,
as applicable,] of each Loan Party and certain resolutions of the board of
trustees or directors, as applicable, of each Loan Party (collectively, the
“Organizational Documents”) and have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records, and other instruments, and made such other investigations of
law and fact, as we have deemed necessary or advisable for the purposes of
rendering this opinion.  In our
examination of documents, we assumed the genuineness of all signatures on
documents presented to us as originals (other than the signatures of officers
of the Loan Parties) and the conformity to originals of documents presented to
us as conformed or reproduced copies.

 

Based upon the foregoing,
and subject to all of the qualifications and assumptions set forth herein, we
are of the opinion that:

 

1.             The Borrower is a limited partnership, duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has the power to execute and deliver, and to perform its obligations under,
the Loan Documents to which it is a party, to own and use its assets, and to
conduct its business as presently conducted. 
The Borrower is qualified to transact business as a foreign
                                   
in the following jurisdictions: 
                                              .

 

2.             Each Guarantor is a [corporation, trust, partnership or
limited liability company, as applicable,] duly organized or formed, validly
existing and in good standing under the laws of the State of its organization
or formation and has the power to execute and deliver, and to perform its
obligations under, the Loan Documents to which it is a party, to own and use
its assets, and to conduct its business as presently conducted.  Each Guarantor is qualified to transact
business as a foreign [corporation, trust, partnership or limited liability
company, as applicable,] in the indicated jurisdictions set forth on Schedule I
attached hereto.

 

3.             Each Loan Party has duly authorized the execution and
delivery of the Loan Documents to which it is a party and the performance by
such Loan Party of all of its obligations under each such Loan Document.

 

4.             Each Loan Party has duly executed and delivered the Loan
Documents to which it is a party.

 

5.             Each Loan Document is a valid and binding obligation of
each Loan Party which is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as such enforceability may be
limited by:  (a) applicable bankruptcy,
insolvency, reorganization, moratorium, arrangement or similar laws relating to
or affecting the enforcement of creditors’ rights generally and (b) the fact that
equitable remedies or relief (including, but not limited to, the remedy of
specific performance) are subject to the discretion of the court before which
any such remedies or relief may be sought.

 

6.             The execution and delivery by each Loan Party of the
Loan Documents to which it is a party do not, and if each Loan Party were now
to perform its obligations under such Loan Documents, such performance would
not, result in any:

 

M-2

 

(a)           violation of such Loan Party’s
Organizational Documents;

 

(b)           violation of any existing federal or
state constitution, statute, regulation, rule, order, or law to which such Loan
Party or its assets are subject;

 

(c)           breach or violation of or default
under, any agreement, instrument, indenture or other document evidencing any
indebtedness for money borrowed or any other material agreement to which, to
our knowledge, such Loan Party is bound or under which a Loan Party or its
assets is subject;

 

(d)           creation or imposition of a lien or
security interest in, on or against the assets of such Loan Party under any
agreement, instrument, indenture or other document evidencing any indebtedness
for money borrowed or any other material agreement to which, to our knowledge,
such Loan Party is bound or under which a Loan Party or its assets is subject;
or

 

(e)           violation of any judicial or
administrative decree, writ, judgment or order to which, to our knowledge, such
Loan Party or its assets are subject.

 

7.             The execution, delivery and performance by each Loan
Party of each Loan Document to which it is a party, and the consummation of the
transactions thereunder, do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any Governmental
Authority of the United States of America or the States of
                    ,
                    or
                    .

 

8.             To our knowledge, there are no judgments outstanding
against any of the Loan Parties or affecting any of their respective assets,
nor is there any litigation or other proceeding against any of the Loan Parties
or its assets pending or overtly threatened, could reasonably be expected to
have a materially adverse effect on (a) the business, assets, liabilities,
condition (financial or otherwise), results of operations or business prospects
of the Borrower or any other Loan Party or (b) the validity or enforceability
of any of the Loan Documents.

 

9.             None of the Loan Parties is, or, after giving effect to
any Loan will be, subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or the Investment Company Act of
1940 or to any federal or state statute or regulation limiting its ability to
incur indebtedness for borrowed money.

 

10.           No transfer, mortgage, intangible, documentary stamp or
similar taxes are payable by the Agent or the Lenders to the States of
[Florida, Texas, Illinois or Indiana] or any political subdivision thereof in
connection with (a) the execution and delivery of the Loan Documents or (b) the
creation of the Indebtedness and the other Obligations evidenced by any of the
Loan Documents.

 

11.           Assuming that Borrower applies the proceeds of the Loans
as provided in the Credit Agreement, the transactions contemplated by the Loan
Documents do not violate the 

 

M-3

 

provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System of the United States of America.

 

12.           The consideration to be paid to the Agent and the Lenders
for the financial accommodations to be provided to the Loan Parties pursuant to
the Credit Agreement does not violate any law of the States of
                    
or
                    
relating to interest and usury.

 

This opinion is limited to
the laws of the States of
                    ,
                    
and
                    
and the federal laws of the United States of America, and we express no
opinions with respect to the law of any other jurisdiction.

 

[Other Customary
Qualifications/Assumptions/Limitations]

 

This opinion is furnished to
you solely for your benefit in connection with the consummation of the
transactions contemplated by the Credit Agreement and may not be relied upon by
any other Person, other than an Assignee of a Lender, or for any other purpose
without our express, prior written consent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF LAW FIRM]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  A Partner

  	
   

  

 

M-4

 

SCHEDULE
1

 

Guarantors

 

	
  Name

  	
   

  	
  Jurisdiction
  of Formation

  	
   

  	
  Jurisdictions
  of Foreign

  Qualification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

M-5

 

EXHIBIT
N

 

FORM
OF COMPLIANCE CERTIFICATE

 

              ,
200   

 

Wachovia Bank, National Association, as Agent

One Wachovia Center

301 South College Street

Mail Code: 
NC0166

 

Charlotte, North Carolina  28288-0166

Each
of the Lenders Party to the Credit Agreement referred to below

 

Ladies and Gentlemen:

 

Reference is made to that
certain Credit Agreement dated as of August 31, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Kite Realty Group, L.P. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 13.5. thereof (the
“Lenders”), Wachovia Bank, National Association, as Agent (the “Agent”) and the
other parties thereto.  Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.

 

Pursuant to Section 9.3. of
the Credit Agreement, the undersigned hereby certifies to the Agent and the
Lenders (not in his/her individual capacity but solely as an officer of the
Borrower) as follows:

 

(1)           The undersigned is the
                                                 
of the Borrower.

 

(2)           The undersigned has examined the books and records of the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.

 

(3)           To the best of the undersigned’s knowledge, no Default or
Event of Default exists [if such is not the
case, specify such Default or Event of Default and its nature, when it occurred
and whether it is continuing and the steps being taken by the Borrower with
respect to such event, condition or failure].

 

(4)           To the best of the undersigned’s knowledge, the
representations and warranties made or deemed made by the Borrower and the
other Loan Parties in the Loan Documents to which any is a party, are true and
correct in all material respects on and as of the date hereof except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct on and 

 

N-1

 

as
of such earlier date) and except for changes in factual circumstances not
prohibited under the Loan Documents.

 

(5)           Attached hereto as Schedule 1 are reasonably detailed
calculations establishing whether or not the Borrower and its Subsidiaries were
in compliance with the covenants contained in Sections 10.1. and 10.2. of the
Credit Agreement.

 

IN WITNESS WHEREOF, the
undersigned has executed this certificate as of the date first above written.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

N-2

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