Document:

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                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into as of
August 1, 2000 by and between AutoNation, Inc. (together with its subsidiaries
and affiliates, the "Company"), and Michael E. Maroone (the "Executive"), an
individual resident of the State of Florida.

                                    RECITALS

         WHEREAS, the Company acquired the Maroone Automotive Group in 1997 and
the Executive has served as a senior executive of the Company since the
acquisition; and

         WHEREAS, the Executive currently serves as the President and Chief
Operating Officer of the Company and the Executive and the Company desire to set
forth herein the terms and conditions of the Executive's employment with the
Company and certain non-competition covenants applicable to Executive.

                               TERMS OF AGREEMENT

         In consideration of the mutual representations, warranties, covenants
and agreements contained in this Agreement, the parties hereto agree as follows:

         1. EMPLOYMENT.

                  (a) EMPLOYMENT PERIOD. Executive shall serve as President and
         Chief Operating Officer of the Company. The period during which the
         Executive shall serve as President and Chief Operating Officer of the
         Company (the "Employment Period") pursuant to the terms of this
         Agreement shall continue from the date hereof until the close of
         business on December 31, 2003, unless earlier terminated pursuant to
         Section 2 of this Agreement.

                  (b) DUTIES AND RESPONSIBILITIES. During the Employment Period,
         the Executive shall have such authority and responsibility and perform
         such duties as are customary to the office the Executive holds or as
         may be assigned to him from time to time at the direction of the
         Company's Board of Directors, Chairman of the Board or Chief Executive
         Officer. During the Employment Period, the Executive's employment shall
         be full time and the Executive shall perform his duties honestly,
         diligently, competently, in good faith and in what he believes to be
         the best interests of the Company and shall use his best efforts to
         promote the interests of the Company.

                  (c) BASE SALARY. In consideration for the Executive's services
         hereunder and the restrictive covenants contained herein, the Executive
         shall be paid an annual base salary of $850,000 (the "Salary") during
         the Employment Period payable in accordance with the Company's
         customary payroll practices, subject to annual adjustment as approved
         by the Compensation Committee of the Company's Board of Directors (the
         "Compensation Committee").

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                  (d) BONUS. For 2000, the Executive has been designated to
         participate in the Company's 1999 Senior Executive Bonus Plan (the
         "Plan"). In accordance with the terms and conditions of the Plan, the
         Executive is entitled to receive an annual performance bonus for 2000
         of 70% of the Salary if the Company meets the performance goal under
         the Plan of earnings per share of $0.90 for fiscal year 2000. After
         2000 and during the Employment Period, the Executive will be entitled
         to continue to participate in the Plan, with bonus eligibility and
         performance objectives as established by the Compensation Committee.

                  (e) BENEFITS. During the Employment Period, the Executive
         shall be entitled to participate in any retirement plans, insurance
         programs and other fringe benefit plans and programs as are from time
         to time established and maintained for the benefit of executives of the
         Company, subject to the provisions of such plans and programs. The
         Executive shall be entitled to four (4) weeks paid vacation each year
         (or such greater amount, if applicable, as may be provided from time to
         time in accordance with Company vacation policy). During the Employment
         Period, the Executive shall be entitled to reasonable use of
         demonstrator vehicles in accordance with applicable Company policies
         related thereto.

                  (f) EXPENSES. In addition to the compensation and benefits
         described above, the Executive shall be reimbursed for all
         out-of-pocket expenses reasonably incurred by him on behalf of or in
         connection with the business of the Company during the Employment
         Period, upon delivery of receipts and pursuant to the reimbursement
         standards and guidelines of the Company.

                  (g) STOCK OPTIONS. The Executive shall receive a sign-on bonus
         grant of an option to purchase 350,000 shares of the Company's common
         stock, effective on the date hereof, at an exercise price of $6.875 per
         share. The Executive shall also receive a grant of an option to
         purchase 500,000 shares of the Company's common stock in connection
         with the Company's annual stock option grant on August 1, 2000, at an
         exercise price of $6.875 per share. The options will be granted
         pursuant to, and governed by, the applicable Company stock option plans
         and the stock option agreements to be entered into by the Executive and
         the Company with respect thereto. The Executive shall be included in
         any other annual stock option grants during the Employment Period (or
         other broad-based stock option grants that include senior executives of
         the Company) at an appropriate level as determined by the Company's
         Compensation Committee.

         2. TERMINATION.

                  (a) DEATH, DISABILITY AND CAUSE. At any time during the
         Employment Period, the Company shall have the right to terminate the
         Employment Period and to discharge the Executive for "Cause" (as
         defined below). Upon any such termination by the Company for Cause, the
         Executive or his legal representatives shall be entitled to that

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         portion of the Salary prorated through the date of termination, and the
         Company shall have no further obligations hereunder. Termination for
         Cause shall mean termination because of: (i) the Executive's breach of
         his covenants contained in this Agreement, (ii) the Executive's failure
         or refusal to perform the duties and responsibilities required to be
         performed by the Executive under the terms of this Agreement, (iii) the
         Executive's negligence or willful misconduct in the performance of his
         duties hereunder, (iv) the Executive's commission of an act of
         dishonesty affecting the Company or the commission of an act
         constituting fraud or a felony, (v) the Executive's commission of an
         act (other than the good faith exercise of his business judgment in the
         exercise of his responsibilities) resulting in material damages to the
         Company; (vi) the Executive's inability to perform his duties and
         responsibilities as provided herein due to his death, or physical or
         mental disability or sickness (1) for more than sixty (60) days
         (whether or not consecutive) during any period of twelve (12)
         consecutive months or (2) reasonably expected to extend for greater
         than two (2) months; or (vii) Executive's violation of Company
         policies. The Company acknowledges that the Executive may resign or
         otherwise terminate his employment with the Company without Good Reason
         (as defined below), provided that (a) the Company shall have no further
         obligations hereunder from and after the end of the Employment Period
         in such event and (b) Executive shall provide reasonable written notice
         to the Company (in no event less than twenty (20) business days) of
         such resignation or termination, shall provide a reasonable transition
         of his duties and responsibilities with the Company and shall
         coordinate with the Company as to the public communication of the
         resignation or termination in order to ensure an orderly transition.

                  (b) WITHOUT CAUSE BY THE COMPANY OR BY EXECUTIVE FOR GOOD
         REASON. At any time during the Employment Period, the Company shall
         have the right to terminate the Employment Period and to discharge the
         Executive without cause effective upon delivery of written notice to
         the Executive. At any time during the Employment Period, the Executive
         shall have the right to terminate the Employment Period for Good Reason
         if, after delivery of written notice to the Company, the Company has
         not cured the circumstances constituting "Good Reason" within ten (10)
         business days. Upon termination of the Employment Period by the Company
         without Cause or by the Executive for Good Reason, or if the Executive
         is not offered continued employment upon mutually agreeable terms at
         the end of the Employment Period, the Executive shall be entitled to
         receive (i) the greater of (A) one year's base Salary or (B) his
         then-current base Salary for the remainder of the term of the
         Employment Period, PLUS (ii) a pro-rated bonus for the year in which he
         is terminated (based on the portion of the year worked) to the
         extent the performance objectives relating thereto are met and the
         bonus is earned, as long as the Executive is in compliance with the
         provisions of Paragraphs 3 and 4 below and the Executive executes a
         reasonable and mutually acceptable severance agreement with the Company
         that includes a release of the Company and a covenant of reasonable
         cooperation on matters Executive is involved with pertaining to the
         Company.

                  "Good Reason" shall mean the occurrence of any of the
         following: (i) a material change by the Company in the Executive's
         duties or responsibilities which would cause

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         Executive's position with the Company to become of materially and
         substantially less responsibility and importance than those associated
         with his duties or responsibilities as of the date hereof; or (ii) a
         material breach of this Agreement by the Company, which breach is not
         cured within ten (10) days after written notice thereof is received by
         the Company.

         3. RESTRICTIVE COVENANTS. The Executive hereby acknowledges that the
Company is as of the date hereof engaged primarily in the sale, leasing,
financing and servicing of new and used vehicles, as well as the provision of
related services and products, such as the sale of parts and accessories,
extended service contracts, aftermarket automotive products and collision repair
services (the "Auto Business"). The Executive further acknowledges that: (i) the
Company may engage in additional related businesses or in separate and distinct
businesses from time to time, (ii) the Company currently engages in its
businesses by means of traditional retail establishments, the Internet and
otherwise and the Company may in the future engage in its businesses by
alternative means, and (iii) the Executive's position with the Company is such
that he will be privy to specific trade secrets, confidential information,
confidential business lists, confidential records, customer goodwill,
specialized training and employees, any or all of which have great and
competitive value to the Company.

                  The Executive further acknowledges that (i) in connection with
the acquisition (the "Acquisition") by the Company of the Maroone Automotive
Group pursuant to that certain Merger and Acquisition Agreement dated January
12, 1997 (the "Acquisition Agreement") and (ii) pursuant to an employment
agreement (the "1997 Employment Agreement") entered into as of January 13, 1997
by the Executive in connection with the Acquisition, the Executive agreed to
certain non-competition covenants (including as set forth in Section 5.11 of the
Acquisition Agreement and Section 3 of the 1997 Employment Agreement). In
connection with entering into this Agreement, the Executive and the Company
desire to modify and re-state the Executive's non-competition covenants as set
forth below.

                  The Executive hereby agrees that during the Restricted Period
(as defined below) the Executive shall not, directly or indirectly, anywhere in
the United States (or in any other geographic area outside the United States
where the Company conducts business at any time during Executive's employment
with the Company):

                  (a) participate or engage in or own an interest in, directly
         or indirectly, any individual proprietorship, partnership, corporation,
         joint venture, trust or other form of business entity, whether as an
         individual proprietor, partner, shareholder, joint venturer, officer,
         director, consultant, finder, broker, employee, sales person, trustee,
         independent contractor, or in any manner whatsoever (except for an
         ownership interest not exceeding 1% of a publicly-traded entity), if
         such entity or its affiliates is engaged, directly or indirectly, in
         the Auto Business or any other business of the type and character
         engaged in or competitive with any business conducted by the Company at
         any time during the Executive's employment by the Company on or after
         the date hereof;

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                  (b) employ, or knowingly permit any company or business
         directly or indirectly controlled by him to employ, any person who was
         employed by the Company or any subsidiary or affiliate of the Company
         at or within the prior six (6) months, or in any manner seek to induce
         any such person to leave his or her employment (including, without
         limitation, for or on behalf of a subsequent employer of the
         Executive);

                  (c) solicit any customers to patronize any business directly
         or indirectly in competition with the businesses conducted by the
         Company or any subsidiary or affiliate of the Company at any time
         during the Executive's relationship with the Company; and

                  (d) request or advise any Person who is a customer or vendor
         of the Company or any subsidiary or affiliate of the Company or its
         successors to withdraw, curtail or cancel any such customer's or
         vendor's business with any such entity.

                  As used in this Agreement, the term "Company" shall mean and
include AutoNation, Inc. and all of its affiliates, subsidiaries, successors and
assigns.

                  As used in this Agreement, the term "Restricted Period" shall
have either of the following meanings, as applicable: (i) in the event the
Executive's employment with the Company is terminated (whether by the Company or
the Executive) prior to January 1, 2002, the "Restricted Period" shall commence
on the date hereof and shall end on the two-year anniversary of the last day of
the Executive's employment (PROVIDED, that if the Executive's employment is
terminated by the Company without Cause or by the Executive with Good Reason,
the Restricted Period shall terminate on the one-year anniversary of the last
day of the Executive's employment); and (ii) in the event the Executive's
employment with the Company is terminated (whether by the Company or the
Executive) at any time on or after January 1, 2002 (including after December 31,
2003 if the Executive continues his employment with the Company thereafter), the
"Restricted Period" shall commence on the date hereof and shall end on the
one-year anniversary of the last day of the Executive's employment with the
Company (whether such date of termination occurs on, before or after December
31, 2003).

         4. CONFIDENTIALITY. The Executive acknowledges that he, as a material
inducement to the Company entering into this Agreement, entered into an Employee
Confidentiality Agreement as of the date hereof, a copy of which is attached
hereto as Exhibit "A." The Executive hereby also agrees that he shall not at any
time during his employment with the Company and for a period of five (5) years
thereafter, orally, in writing or otherwise, (i) disparage in any manner the
Company or any of its subsidiaries or affiliates, their respective businesses or
reputations, or the personal or business reputations of their directors,
officers, shareholders or employees, or engage in any disparaging conduct or
make any negative or derogatory statements concerning any of the foregoing, or
(ii) in any way impede, disrupt or interfere with the contracts, agreements,
understandings, communications or relationships of the Company and its
subsidiaries and affiliates with any third party.

         5. ACKNOWLEDGMENTS OF THE PARTIES. The parties agree and acknowledge
that the restrictions contained in Paragraphs 3 and 4 are reasonable in scope
and duration and are

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necessary to protect the Company. If any provision of Paragraphs 3 or 4 as
applied to any party or to any circumstance is adjudged by a court to be invalid
or unenforceable, the same shall in no way affect any other circumstances or the
validity or enforceability of any other provisions of this Agreement. If any
such provision, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court making such determination shall have the power to reduce the duration
and/or area of such provision and/or to delete specific words or phrases and its
reduced form, such provision shall then be enforceable and shall be enforced.
The Executive agrees and acknowledges that the breach of Paragraph 3 or 4 will
cause irreparable injury to the Company, and upon breach of any provision of
such Paragraphs, the Company shall be entitled to injunctive relief, specific
performance or other equitable relief, PROVIDED, HOWEVER, that such remedies
shall in no way limit any other remedies which the Company may have (including,
without limitation, the right to seek monetary damages).

         6. NOTICES. All notices requests, demands, claims or other
communications hereunder shall be in writing and shall be deemed given if
delivered by certified or registered mail (first class postage pre-paid), hand
delivery, guaranteed overnight delivery or facsimile transmission if such
transmission is confirmed by certified or registered mail (first class postage
pre-paid) or guaranteed overnight delivery to, the following addresses and
telecopy numbers (or to such other addresses or telecopy numbers which such
party shall designate in writing to the other parties):

         To the Company:

                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Attention:  Chief Executive Officer
                  Telecopy:  (954) 769-6402

         Copy To:

                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Attention:  General Counsel
                  Telecopy:  (954) 769-6340

         To Executive:

                  Michael E. Maroone
                  AutoNation, Inc.
                  110 S.E. 6th Street, 29th Floor
                  Fort Lauderdale, Florida 33301
                  Telecopy: (954) 769-4666

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         Copy To:

                  James E. Kelly, Esq.
                  Williams, Stevens, McCarville & Frizzell, P.C.
                  1920 Liberty Building
                  Buffalo, New York 14202
                  Telecopy: (716) 856-2150

         7. AMENDMENT, WAIVER, REMEDIES. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder preclude the exercise of any other right,
power or privilege. No waiver of any breach of any provision shall be deemed to
be a waiver of any preceding or succeeding breach of the same or other
provision, nor shall any waiver be implied from any course of dealing between
the parties. No extension of time for performance of any obligations or other
acts hereunder or under any other agreement shall be deemed to be an extension
of the time for performance of any other obligations or any other acts. The
rights and remedies of the parties under this Agreement are in addition to all
other rights and remedies, at law or equity, that they may have against each
other.

         8. ASSIGNMENT. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by him. The Company may assign its
rights, together with its obligations hereunder, to any of its affiliates or
subsidiaries, or any successor thereto.

         9. SEVERABILITY; SURVIVAL. In the event that any provision of this
Agreement is found to be void and unenforceable by a court of competent
jurisdiction, then such unenforceable provision shall be deemed modified so as
to be enforceable (or if not subject to modification then eliminated herefrom)
for the purpose of those procedures to the extent necessary to permit the
remaining provisions to be enforced. The provisions of this Agreement (other
than Sections 1 and 2) will survive the termination for any reason of
Executive's relationship with the Company.

         10. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.

         11. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed for all purposes by the laws of the State of Florida applicable to
contracts executed and to be wholly performed within such State.

         12. AGENCY. Nothing herein shall imply or shall be deemed to imply an
agency relationship between the Executive and the Company.

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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                             AUTONATION, INC.

                                             /s/ Michael J. Jackson
                                             -----------------------------------
                                             By:  Michael J. Jackson
                                             Its: Chief Executive Officer

                                             /s/ Michael E. Maroone
                                             -----------------------------------
                                             Michael E. Maroone, individually

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                                                                    EXHIBIT 10.1

                    $100,000,000 (EXPANDIBLE TO $150,000,000)

                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                                   DATED AS OF

                                NOVEMBER 1, 2000

                                      AMONG

                              IRT PROPERTY COMPANY

                             THE BANKS LISTED HEREIN

                                       AND

                              WACHOVIA BANK, N.A.,
                             AS ADMINISTRATIVE AGENT

                           FIRST UNION NATIONAL BANK,
                              AS SYNDICATION AGENT

                                       AND

                     WACHOVIA SECURITIES, INC., AS ARRANGER

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                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

         THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment and
Restatement") is dated as of November 1, 2000 among IRT PROPERTY COMPANY (the
"Borrower"), WACHOVIA BANK, N.A., as Administrative Agent (the "Administrative
Agent"), FIRST UNION NATIONAL BANK, as Syndication Agent (the "Syndication
Agent") and the BANKS listed on the signature pages hereof (collectively, the
"Banks");

                              W I T N E S S E T H :

         WHEREAS, the Borrower, the Banks, the Administrative Agent and the
Syndication Agent executed and delivered that certain Credit Agreement, dated as
of November 1, 1999 (the "Credit Agreement");

         WHEREAS, the Borrower has requested and the Administrative Agent, the
Syndication Agent and the Banks have agreed to amend and restated the Credit
Agreement in accordance with the terms and conditions hereof;

         NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower, the Administrative
Agent, the Syndication Agent and the Banks hereby covenant and agree as follows:

         1.       Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended and restated hereby.

         2.       Restatement. The Credit Agreement as in effect on the date
hereof hereby is incorporated and restated in its entirety, together with the
amendments set forth herein.

         3.       Amendment to Section 1.01. Section 1.01 of the Credit
Agreement hereby is amended by (i) deleting the definitions of "Commitment",
"Consolidated Fixed Charges", "Consolidated EBITDA", "Consolidated Interest
Expense", "Consolidated Total Asset Value", "Consolidated Total Liabilities" and
"Consolidated Total Secured Debt", and substituting the following definitions of
such terms set forth below, and (ii) adding the following definitions of "Bank
Joinder Agreement", "Commitment", "Joint Venture", "Joint Venture Construction
in Progress", "Joint Venture EBITDA", "Joint Venture Net Operating Income",
"Joint Venture Property", "Joint Venture Share" and "New Bank", all of such
definitions to be substituted and added in the appropriate alphabetical order.

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                           "Bank Joinder Agreement" means an agreement in
         substantially the form of Exhibit R, pursuant to which a New Bank
         becomes a Bank hereunder in accordance with the provisions of Section
         2.15.

                           "Commitment" means, with respect to each Bank, (i)
         the amount set forth opposite the name of such Bank on the signature
         pages hereof or in a Bank Joinder Agreement executed and delivered to
         the Administrative Agent pursuant to Section 2.15, and (ii) as to any
         Bank which enters into any Assignment and Acceptance (whether as
         transferor Bank or as Assignee thereunder), the amount of such Bank's
         Commitment after giving effect to such Assignment and Acceptance, in
         each case as such amount may be reduced from time to time pursuant to
         Sections 2.09 and 2.10.

                           "Consolidated EBITDA" means at any time the sum of
         the following, determined on a consolidated basis for the
         Borrower/Parent and each Consolidated Entity, at the end of each Fiscal
         Quarter, for the applicable measuring period: (i) Consolidated Net
         Income (but excluding equity in, and income and losses of, Joint
         Ventures); plus (ii) Consolidated Interest Expense; plus (iii) taxes on
         income; plus (iv) depreciation; plus (v) amortization; plus (vi) other
         non-cash charges, plus Borrower/Parent's Joint Venture Share of Joint
         Venture EBITDA.

                           "Consolidated Fixed Charges" means at any time the
         sum of the following, determined on a consolidated basis for the
         Borrower/Parent and each Consolidated Entity, at the end of each Fiscal
         Quarter, for the Fiscal Quarter just ended: (I) Consolidated Interest
         Expense plus (ii) all Dividends paid, or declared but not yet paid, by
         the Borrower/Parent on a preferred stock; plus (iii) the aggregate
         amount of scheduled principal amortization paid, as reflected on the
         Borrower/Parent's most recent quarterly financial statement submitted
         to the Banks, but excluding any principal payments under this Agreement
         or any other agreement pertaining to revolving Debt permitted under
         Section 5.19 (iii), and excluding any balloon, bullet or similar
         payments on other Debt and (iv) payments on ground leases, plus (iv)
         Borrower's Joint Venture Share of scheduled principal payments of Joint
         Ventures, excluding any balloon, bullet or similar payments on other
         Debt.

                           "Consolidated Interest Expense" for any period means
         interest, whether expensed or capitalized, in respect of Debt of the
         Borrower/Parent and each Consolidated Entity outstanding during such
         period, determined on a consolidated basis for the Borrower or any of
         its Subsidiaries, plus the Borrower's Joint Venture share of interest
         expense of Joint Ventures.

                           "Consolidated Total Asset Value" means, on a
         consolidated basis for the Borrower/Parent and each Consolidated
         Entity, the sum of:

                           (i)      the amount equal to the product of: (x) the
                  quotient of (1) the Net Operating Income for the 3 month
                  period ending on the last day of the Fiscal Quarter just ended
                  prior to the date of determination (excluding percentage rents
                  received during such 3 month period, but including an
                  amortized value for percentage rents received during the
                  current Fiscal Year), from each Property

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                  (other than Property owned by Borrower or any Consolidated
                  Entity for less than three months), divided by (2) 0.0975
                  (which is the capitalization rate); times (y) 4 (which is the
                  annualization factor); plus

                           (ii)     an amount equal to the book value of (A)
                  Construction in Progress plus (B) Properties consisting of
                  unimproved land, as determined on the last day of the Fiscal
                  Quarter just ended; plus

                           (iii)    an amount equal to the acquisition cost of
                  improved Properties owned by Borrower or any Consolidated
                  Entity less than three months, as determined on the last day
                  of the Fiscal Quarter just ended; plus

                           (iv)     an amount equal to the sum of all
                  unrestricted balances on deposit with banks ore other
                  financial institutions and all restricted cash held by a
                  Qualified intermediary on behalf of the Borrower/Parent or any
                  Guarantor; plus

                           (v)      for any Subsidiary which is not a Wholly
                  Owned Subsidiary, an amount equal to the book value of the
                  Ownership Percentage of such Subsidiary, as shown on the
                  Borrower/parent's balance sheet; plus

                           (vi)     without duplication, the book value of all
                  other Consolidated Tangible Assets, plus

                           (vii)    the amount equal to the product of: (x) the
                  quotient of the Joint Venture Share of (1) Joint Venture Net
                  Operating Income for the 3 month period ending on the last day
                  of the Fiscal Quarter just ended prior to the date of
                  determination (excluding percentage rents received during such
                  3 month period, but including an amortized value for
                  percentage rents received during the current Fiscal Year),
                  from each Joint Venture Property (other than Property owned by
                  Borrower or any Consolidated Entity for less than three
                  months), divided by (2) 0.0975 (which is the capitalization
                  rate); times (y) 4 (which is the annualization factor); plus

                           (viii)   an amount equal to the Joint Venture Share
                  of book value of (A) Joint Venture Construction In Progress
                  plus (B) Joint Venture Properties consisting of unimproved
                  land, as determined on the last day of the Fiscal Quarter just
                  ended; plus

                           (ix)     an amount equal to the Joint Venture Share
                  of the acquisition cost of improved Joint Venture Properties
                  owned by Borrower or any Consolidated Entity less than three
                  months, as determined on the last day of the Fiscal Quarter
                  just ended; plus

                           (x)      without duplication, an amount equal to the
                  Joint Venture Share of the book value of the sum of the
                  following: (a) the total assets of each Joint

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                  Venture, as set forth or reflected on the most recent balance
                  sheet of each Joint Venture, prepared in accordance with GAAP,
                  less (b) all assets which would be treated as intangible
                  assets for balance sheet presentation purposes under GAAP,
                  including, without limitation, goodwill (whether representing
                  the excess of cost over book value of assets acquired, or
                  otherwise), trademarks, tradenames, copyrights, patents and
                  technologies, and unamorized debt discount and expense.

                           "Consolidated Total Liabilities" means the total
         liabilities of the Borrower/Parent and the Consolidated Subsidiaries,
         on a consolidated basis (including liabilities on account of Dividends,
         whether paid or declared but not yet paid), plus the aggregate amount
         of Debt Guaranteed by the Borrower/Parent, the Guarantors and the
         Subsidiaries (other than the debt of any of them), plus (iii) the
         Borrower/Parent's Joint Venture Share of the aggregate amount of Debt
         of all Joint Ventures at the end of the Borrower's most recent Fiscal
         Quarter.

                           "Consolidated Total Secured Debt" shall mean all Debt
         of the Borrowers/Parent and the Consolidated Entities consisting of (i)
         capitalized leases, (ii) money borrowed or the deferred purchase price
         of real property which is also secured by a Mortgage on any real
         property owned by the Borrower/parent or any Consolidated Entity; and
         (iii) Guarantees of the Borrower/parent or any Consolidated Entity of
         Debt of any other Person which is secured by a Mortgage on an asset of
         the Borrower/Parent or such Consolidated Entity, plus the
         Borrower/Parent's Joint Venture Share of the aggregate amount of Debt
         of all Joint Ventures which is secured by a Mortgage on any real
         property owned by such Joint Venture.

                           "Joint Venture" means a Person (i) whose primary
         business is the development or ownership of Shopping Center Properties,
         (ii) in which the Borrower or any of its Consolidated Subsidiaries owns
         a legal and beneficial ownership interest and (iii) whose accounts at
         any date are not consolidated with those of the Borrower in its
         consolidated financial statements as of such date in accordance with
         GAAP.

                           "Joint Venture Construction In Progress" means
         Construction In Progress with respect to any Joint Venture Property.

                           "Joint Venture EBITDA" means at any time the sum of
         the following, determined for each Joint Venture, at the end of each
         Fiscal Quarter, for the applicable measuring period: (i) Joint Venture
         Net Income; plus (ii) interest expense (whether expensed or
         capitalized); plus (iii) taxes on income; plus (iv) depreciation; plus
         (v) amortization; plus (vi) other non-cash charges.

                           "Joint Venture Net Operating Income" means Net
         Operating Income, but determined solely with respect to Joint Venture
         Properties.

                           "Joint Venture Property" means a Property which is
         owned by a Joint Venture.

                           "Joint Venture Share" means, with respect to any
         Joint Venture, the percentage of legal and beneficial ownership
         interest in such Joint Venture held by the Parent or by any of its
         Consolidated Subsidiaries.

                                       5
<PAGE>   6
                           "New Bank" has the meaning set forth in Section 2.15.

         4.       New Section 2.15. A new Section 2.15 hereby is added to the
Credit Agreement, as follows:

                           SECTION 2.15 EXPANSION OF FACILITY.

                           At the request of the Borrower, the aggregate amount
         of the Commitments may be increased at any time prior to the
         Termination Date to an aggregate amount not in excess of $150,000,000
         without any amendment to this Agreement and without consent of the
         Banks, by an increase in the Commitment of any existing Bank and/or the
         execution and delivery by any new Bank which has been approved by the
         Borrower and the Administrative Agent (a "New Bank") of a Bank Joinder
         Agreement. On the effective date of such increase by an existing Bank
         or such joinder: (i) the Administrative Agent shall notify all other
         Banks thereof, including the name, notice address and amount of
         Commitment of each New Bank, if applicable; (ii) if a New Bank is being
         added, the Borrower shall execute and deliver to the Administrative
         Agent, for re-delivery to the New Banks, as appropriate, a Syndicated
         Loan Note payable to each New Bank in the amount of its Commitment, and
         a new Money Market Loan Note payable to each New Bank in the amount of
         the Money Market Facility Limit, after giving effect to such joinder;
         and (iii) if a New Bank is being added, each New Bank shall purchase
         from each other Bank a pro rata participation in such other Bank's
         existing Syndicated Loans (but not its Money Market Loans), including
         in any right of payment pursuant to Section 8.05 with respect thereto,
         so that, after giving effect thereto, each Bank (including each New
         Bank) will have risk for such existing Loans equal to its pro rata
         share of the Commitments, after giving effect to the Commitment of each
         New Bank. Loans made after the effective date of such joinder shall not
         be subject to the foregoing, and the New Bank shall fund its ratable
         share thereof in accordance with its commitment.

         5.       Amendment to Section 9.06(a). Section 9.06(a) hereby is
deleted in its entirety and the following is substituted therefor:

                           (a)      Any provision of this Agreement, the Notes
                  or any other Loan Documents may be amended or waived if, but
                  only if, such amendment or waiver is in writing and is signed
                  by the Borrower and the Required Banks (and, if the rights or
                  duties of the Administrative Agent are affected thereby, by
                  the Administrative Agent); provided that, no such amendment or
                  waiver shall, unless signed by all Banks, (i) change the
                  Commitment of any Bank or subject any Bank to any additional
                  obligation, (ii) reduce the principal of or the rate of
                  interest on any Loan or any fees (other than fees payable to
                  the Administrative Agent) hereunder, (iii) change the date
                  fixed for any payment of principal of or interest on any Loan
                  or any fees hereunder, (iv) reduce the amount of principal,
                  interest or fees due on any date fixed for the payment
                  thereof, (v) change the percentage of the Commitments or of
                  the aggregate unpaid principal amount of the Notes, or the
                  percentage of Banks, which shall be required for the Banks or
                  any of them to take any action under this Section or any other
                  provision of this Agreement, (vi)

                                       6
<PAGE>   7

                  change the manner of application of any payments made under
                  this Agreement or the Notes, (vii) release or substitute all
                  or any substantial part of the collateral (if any) held as
                  security for the Loans, (viii) release any Guarantee given to
                  support payment of the Loans, (ix) change the definition of
                  "Borrowing Base" or (x) change the provisions of Section
                  6.01(l)(i).

         6.       Substitution of Certain Schedules to Exhibit F (Compliance
Certificate). Exhibit F to the Credit Agreement hereby is amended by deleting
Schedules 2 through 6, inclusive, and Schedule 8 thereof in their entirety, and
substituting therefor Schedules 2 through 6, inclusive, and Schedule 8 attached
hereto.

         7.       New Exhibit R. Exhibit R attached hereto hereby is added as
Exhibit R to the Credit Agreement.

         8.       Extension of Termination Date. Pursuant to Section 2.06(b) of
the Credit Agreement, the Termination Date hereby is extended to November 1,
2003.

         9.       Restatement of Representations and Warranties. The Borrower
hereby restates and renews each and every representation and warranty heretofore
made by it in the Credit Agreement and the other Loan Documents as fully as if
made on the date hereof and with specific reference to this Amendment and
Restatement and all other loan documents executed and/or delivered in connection
herewith.

         10.      Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Loan Documents
shall be and remain in full force and effect, and shall constitute the legal,
valid, binding and enforceable obligations of the Borrower. The amendments
contained herein shall be deemed to have prospective application only, unless
otherwise specifically stated herein.

         11.      Ratification. The Borrower hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Credit
Agreement and the other Loan Documents effective as of the date hereof.

         12.      Counterparts. This Amendment and Restatement 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 to be
an original and all of which counterparts, taken together, shall constitute but
one and the same instrument.

         13.      Section References. Section titles and references used in this
Amendment and Restatement shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.

         14.      No Default. To induce the Agent and the Banks to enter into
this Amendment and Restatement and to continue to make advances pursuant to the
Credit Agreement, the Borrower hereby acknowledges and agrees that, as of the
date hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of the Borrower arising out of or with respect to
any of the Loans or other obligations of the Borrower owed to the Banks under
the Credit Agreement.

                                       7
<PAGE>   8

         15.      Further Assurances. The Borrower agrees to take such further
actions as the Agent shall reasonably request in connection herewith to evidence
the amendments herein contained.

         16.      Governing Law. This Amendment and Restatement shall be
governed by and construed and interpreted in accordance with, the laws of the
State of Georgia.

         17.      Conditions Precedent. This Amendment and Restatement shall
become effective only upon execution and delivery (i) of this Amendment and
Restatement by each of the parties hereto, and (ii) of the Consent and
Reaffirmation of Guarantors at the end hereof by each of the Guarantors.

                       [SIGNATURES COMMENCE ON NEXT PAGE]

                                       8
<PAGE>   9

         IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Syndication Agent and each of the Banks has caused this Amendment and
Restatement to be duly executed, under seal, by its duly authorized officer as
of the day and year first above written.

                                   IRT PROPERTY COMPANY (SEAL)
                                   as Borrower

                                   By: /s/ James G. Levy
                                      -----------------------------------------
                                      Title: James G. Levy
                                             Executive Vice President and
                                             Chief Financial Officer

                                   WACHOVIA BANK, N.A.
                                   as Administrative Agent and as a Bank
                                   (SEAL)

                                   By:
                                      -----------------------------------------
                                      Title:

                                   FIRST UNION NATIONAL BANK,
                                   as Syndication Agent and as a Bank    (SEAL)

                                   By:
                                      -----------------------------------------
                                      Title:

                                   AMSOUTH BANK, as a Bank               (SEAL)

                                   By:
                                      -----------------------------------------
                                      Title:

                                   SOUTHTRUST BANK, as a Bank            (SEAL)

                                   By:
                                      -----------------------------------------
                                      Title:

                                       9
<PAGE>   10

                                   SUNTRUST BANK (formerly SunTrust Bank,
                                   Atlanta), as a Bank                   (SEAL)

                                   By:
                                      -----------------------------------------
                                      Title:

                                       10
<PAGE>   11

                     CONSENT AND REAFFIRMATION OF GUARANTORS

Each of the undersigned (i) acknowledges receipt of the foregoing Amendment and
Restatement to Credit Agreement (the "Amendment and Restatement"), (ii) consents
to the execution and delivery of the Amendment and Restatement by the parties
thereto and (iii) reaffirms all of its obligations and covenants under the
Guaranty Agreement dated as of November 1, 1999 executed by it, and agrees that
none of such obligations and covenants shall be affected by the execution and
delivery of the Amendment and Restatement. This Consent and Reaffirmation 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 to be an original and all of which counterparts, taken together, shall
constitute but one and the same instrument.

                                 IRT CAPITAL CORPORATION II_____(SEAL)

                                 By: /s/ Thomas H. McAuley
                                     --------------------------------
                                     Thomas H. McAuley
                                     President

                                 IRT PARTNERS L.P.             (SEAL)

                                      By: IRT Property Company, general partner

                                      By: /s/ James G. Levy
                                         --------------------------------------
                                         James G. Levy
                                         Executive Vice President and Chief
                                         Financial Officer

                                 IRT MANAGEMENT COMPANY                  (SEAL)

                                      By: /s/ James G. Levy
                                         --------------------------------------
                                         James G. Levy
                                         Treasurer

                                 IRT ALABAMA, INC.                       (SEAL)

                                      By: /s/ James G. Levy
                                         --------------------------------------
                                         James G. Levy
                                         Treasurer

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