Document:

Exhibit 10.1

 

FIRST AMENDED AND RESTATED

 

UNSECURED REVOLVING CREDIT AGREEMENT

 

 

AMONG

 

 

AMERIVEST PROPERTIES INC.

 

 

AND

 

 

KEYBANK NATIONAL ASSOCIATION,

 

AS ADMINISTRATIVE AGENT

 

 

KEYBANC CAPITAL MARKETS,

 

AS SOLE LEAD ARRANGER AND BOOK MANAGER

 

AND

 

 

THE LENDERS PARTY HERETO

 

 

TABLE OF CONTENTS

 

	
  §1.

  	
  DEFINITIONS AND RULES OF INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  §1.1

  	
   

  	
  Definitions

  	
   

  
	
   

  	
  §1.2

  	
   

  	
  Rules of Interpretation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §2.

  	
  REVOLVING LOAN FACILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.1

  	
   

  	
  Commitment to Lend

  	
   

  
	
   

  	
  §2.2

  	
   

  	
  The
  Notes

  	
   

  
	
   

  	
  §2.3

  	
   

  	
  Interest on Loans

  	
   

  
	
   

  	
  §2.4

  	
   

  	
  Conversion Options

  	
   

  
	
   

  	
  §2.5

  	
   

  	
  Requests for Loans

  	
   

  
	
   

  	
  §2.6

  	
   

  	
  Funds for Loans

  	
   

  
	
   

  	
  §2.7

  	
   

  	
  Increase in Total Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §3.

  	
  REPAYMENT OF THE LOANS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.1

  	
   

  	
  Maturity

  	
   

  
	
   

  	
  §3.2

  	
   

  	
  Mandatory Repayments of Loan

  	
   

  
	
   

  	
  §3.3

  	
   

  	
  Optional Repayments of Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §4.

  	
  CERTAIN GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.1

  	
   

  	
  Facility Fees

  	
   

  
	
   

  	
  §4.2

  	
   

  	
  Unused
  Fee

  	
   

  
	
   

  	
  §4.3

  	
   

  	
  Agent’s
  Fee

  	
   

  
	
   

  	
  §4.4

  	
   

  	
  Funds for Payments

  	
   

  
	
   

  	
  §4.5

  	
   

  	
  Computations

  	
   

  
	
   

  	
  §4.6

  	
   

  	
  Additional Costs, Etc

  	
   

  
	
   

  	
  §4.7

  	
   

  	
  Capital Adequacy

  	
   

  
	
   

  	
  §4.8

  	
   

  	
  Certificate

  	
   

  
	
   

  	
  §4.9

  	
   

  	
  Breakage Costs

  	
   

  
	
   

  	
  §4.10

  	
   

  	
  Default Interest and Late Charges

  	
   

  
	
   

  	
  §4.11

  	
   

  	
  Inability to Determine LIBOR Rate

  	
   

  
	
   

  	
  §4.12

  	
   

  	
  Illegality

  	
   

  
	
   

  	
  §4.13

  	
   

  	
  Replacement of Lenders

  	
   

  
	
   

  	
  §4.14

  	
   

  	
  Limitation on Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §5.

  	
  NO LIMITATION ON RECOURSE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.1

  	
   

  	
  [Intentionally Omitted.]

  	
   

  
	
   

  	
  §5.2

  	
   

  	
  No Limitation on Recourse

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §6.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.1

  	
   

  	
  Authority; Etc

  	
   

  
	
   

  	
  §6.2

  	
   

  	
  Governmental Approvals

  	
   

  

 

i

 

	
   

  	
  §6.3

  	
   

  	
  Title to Properties; Leases

  	
   

  
	
   

  	
  §6.4

  	
   

  	
  Financial Statements

  	
   

  
	
   

  	
  §6.5

  	
   

  	
  No Material Changes

  	
   

  
	
   

  	
  §6.6

  	
   

  	
  Franchises, Patents, Copyrights, Etc

  	
   

  
	
   

  	
  §6.7

  	
   

  	
  Litigation

  	
   

  
	
   

  	
  §6.8

  	
   

  	
  No Materially Adverse Contracts, Etc

  	
   

  
	
   

  	
  §6.9

  	
   

  	
  Compliance With Other Instruments, Laws,
  Etc

  	
   

  
	
   

  	
  §6.10

  	
   

  	
  Tax
  Status

  	
   

  
	
   

  	
  §6.11

  	
   

  	
  Event of Default

  	
   

  
	
   

  	
  §6.12

  	
   

  	
  Investment Company Act

  	
   

  
	
   

  	
  §6.13

  	
   

  	
  Absence of Financing Statements, Etc

  	
   

  
	
   

  	
  §6.14

  	
   

  	
  [Intentionally Omitted.]

  	
   

  
	
   

  	
  §6.15

  	
   

  	
  Certain Transactions

  	
   

  
	
   

  	
  §6.16

  	
   

  	
  Benefit Plans; Multiemployer Plans;
  Guaranteed Pension Plans

  	
   

  
	
   

  	
  §6.17

  	
   

  	
  Regulations U and X

  	
   

  
	
   

  	
  §6.18

  	
   

  	
  Environmental Compliance

  	
   

  
	
   

  	
  §6.19

  	
   

  	
  Subsidiaries and Affiliates

  	
   

  
	
   

  	
  §6.20

  	
   

  	
  Leases

  	
   

  
	
   

  	
  §6.21

  	
   

  	
  Loan Documents

  	
   

  
	
   

  	
  §6.22

  	
   

  	
  Property

  	
   

  
	
   

  	
  §6.23

  	
   

  	
  OFAC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §7.

  	
  AFFIRMATIVE COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.1

  	
   

  	
  Punctual Payment

  	
   

  
	
   

  	
  §7.2

  	
   

  	
  Maintenance of Office

  	
   

  
	
   

  	
  §7.3

  	
   

  	
  Records and Accounts

  	
   

  
	
   

  	
  §7.4

  	
   

  	
  Financial Statements, Certificates and
  Information

  	
   

  
	
   

  	
  §7.5

  	
   

  	
  Notices

  	
   

  
	
   

  	
  §7.6

  	
   

  	
  Existence; Maintenance of REIT Status;
  Maintenance of Properties

  	
   

  
	
   

  	
  §7.7

  	
   

  	
  Insurance

  	
   

  
	
   

  	
  §7.8

  	
   

  	
  Taxes

  	
   

  
	
   

  	
  §7.9

  	
   

  	
  Inspection of Properties and Books

  	
   

  
	
   

  	
  §7.10

  	
   

  	
  Compliance with Laws, Contracts, Licenses, and Permits

  	
   

  
	
   

  	
  §7.11

  	
   

  	
  Use
  of Proceeds

  	
   

  
	
   

  	
  §7.12

  	
   

  	
  Reserved

  	
   

  
	
   

  	
  §7.13

  	
   

  	
  [Intentionally Omitted.]

  	
   

  
	
   

  	
  §7.14

  	
   

  	
  Interest Rate Protection

  	
   

  
	
   

  	
  §7.15

  	
   

  	
  Further
  Assurance

  	
   

  
	
   

  	
  §7.16

  	
   

  	
  Reserved

  	
   

  
	
   

  	
  §7.17

  	
   

  	
  Environmental Indemnification

  	
   

  
	
   

  	
  §7.18

  	
   

  	
  Response
  Actions

  	
   

  
	
   

  	
  §7.19

  	
   

  	
  Environmental
  Assessments

  	
   

  
	
   

  	
  §7.20

  	
   

  	
  Employee
  Benefit Plans

  	
   

  

 

ii

 

	
   

  	
  §7.21

  	
   

  	
  More
  Restrictive Agreements

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §8.

  	
  CERTAIN
  NEGATIVE COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.1

  	
   

  	
  Restrictions on Indebtedness

  	
   

  
	
   

  	
  §8.2

  	
   

  	
  Restrictions on Liens, Etc

  	
   

  
	
   

  	
  §8.3

  	
   

  	
  Restrictions
  on Investments

  	
   

  
	
   

  	
  §8.4

  	
   

  	
  Merger, Consolidation, Acquisition and
  Disposition of Properties

  	
   

  
	
   

  	
  §8.5

  	
   

  	
  Sale and Leaseback

  	
   

  
	
   

  	
  §8.6

  	
   

  	
  Compliance
  with Environmental Laws

  	
   

  
	
   

  	
  §8.7

  	
   

  	
  Distributions

  	
   

  
	
   

  	
  §8.8

  	
   

  	
  [Intentionally Omitted.]

  	
   

  
	
   

  	
  §8.9

  	
   

  	
  Related
  Companies

  	
   

  
	
   

  	
  §8.10

  	
   

  	
  Equity
  Pledges

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §9.

  	
  FINANCIAL COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.1

  	
   

  	
  Reserved

  	
   

  
	
   

  	
  §9.2

  	
   

  	
  Reserved

  	
   

  
	
   

  	
  §9.3

  	
   

  	
  Total Liabilities to Gross Asset Value

  	
   

  
	
   

  	
  §9.4

  	
   

  	
  Adjusted EBITDA to Interest Expense

  	
   

  
	
   

  	
  §9.5

  	
   

  	
  EBITDA
  to Fixed Charges

  	
   

  
	
   

  	
  §9.6

  	
   

  	
  Minimum Tangible Net Worth

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §10.

  	
  CONDITIONS TO EFFECTIVENESS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.1

  	
   

  	
  Loan
  Documents

  	
   

  
	
   

  	
  §10.2

  	
   

  	
  Good Standing Certificates and Certified Copies

  	
   

  
	
   

  	
  §10.3

  	
   

  	
  By-laws; Resolutions

  	
   

  
	
   

  	
  §10.4

  	
   

  	
  Incumbency Certificate; Authorized Signers

  	
   

  
	
   

  	
  §10.5

  	
   

  	
  Opinions of Counsel Concerning Organization and Loan Documents

  	
   

  
	
   

  	
  §10.6

  	
   

  	
  Payment
  of Fees

  	
   

  
	
   

  	
  §10.7

  	
   

  	
  Compliance Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §11.

  	
  CONDITIONS TO ALL BORROWINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.1

  	
   

  	
  Representations True; No Event of Default; Compliance Certificate

  	
   

  
	
   

  	
  §11.2

  	
   

  	
  No Legal Impediment

  	
   

  
	
   

  	
  §11.3

  	
   

  	
  Governmental Regulation

  	
   

  
	
   

  	
  §11.4

  	
   

  	
  Proceedings and Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §12.

  	
  EVENTS OF DEFAULT; ACCELERATION; ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §12.1

  	
   

  	
  Events of Default and Acceleration

  	
   

  
	
   

  	
  §12.2

  	
   

  	
  Termination
  of Commitments

  	
   

  
	
   

  	
  §12.3

  	
   

  	
  Remedies

  	
   

  
	
   

  	
  §12.4

  	
   

  	
  Distribution
  of Proceeds

  	
   

  

 

iii

 

	
  §13.

  	
  SETOFF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §14.

  	
  THE
  AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §14.1

  	
   

  	
  Authorization

  	
   

  
	
   

  	
  §14.2

  	
   

  	
  Employees and Agents

  	
   

  
	
   

  	
  §14.3

  	
   

  	
  No
  Liability

  	
   

  
	
   

  	
  §14.4

  	
   

  	
  No Representations

  	
   

  
	
   

  	
  §14.5

  	
   

  	
  Payments

  	
   

  
	
   

  	
  §14.6

  	
   

  	
  Holders
  of Notes

  	
   

  
	
   

  	
  §14.7

  	
   

  	
  Indemnity

  	
   

  
	
   

  	
  §14.8

  	
   

  	
  Agent
  as Lender

  	
   

  
	
   

  	
  §14.9

  	
   

  	
  Resignation

  	
   

  
	
   

  	
  §14.10

  	
   

  	
  Notification of Defaults and Events of Default

  	
   

  
	
   

  	
  §14.11

  	
   

  	
  Duties in the Case of Enforcement

  	
   

  
	
   

  	
  §14.12

  	
   

  	
  Bankruptcy

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §15.

  	
  EXPENSES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §16.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §17.

  	
  SURVIVAL OF COVENANTS, ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §18.

  	
  ASSIGNMENT; PARTICIPATIONS; ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §18.1

  	
   

  	
  Conditions to Assignment by Lenders

  	
   

  
	
   

  	
  §18.2

  	
   

  	
  Certain Representations and Warranties;
  Limitations; Covenants

  	
   

  
	
   

  	
  §18.3

  	
   

  	
  Register

  	
   

  
	
   

  	
  §18.4

  	
   

  	
  New
  Notes

  	
   

  
	
   

  	
  §18.5

  	
   

  	
  Participations

  	
   

  
	
   

  	
  §18.6

  	
   

  	
  Pledge
  by Lender

  	
   

  
	
   

  	
  §18.7

  	
   

  	
  No Assignment by Borrower

  	
   

  
	
   

  	
  §18.8

  	
   

  	
  Disclosure

  	
   

  
	
   

  	
  §18.9

  	
   

  	
  Mandatory Assignment

  	
   

  
	
   

  	
  §18.10

  	
   

  	
  Co-Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §19.

  	
  NOTICES,
  ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §20.

  	
  GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §21.

  	
  HEADINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §22.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §23.

  	
  ENTIRE
  AGREEMENT

  	
   

  

 

iv

 

	
  §24.

  	
  WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §25.

  	
  CONSENTS,
  AMENDMENTS, WAIVERS, ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §26.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §27.

  	
  RELATIONSHIP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §28.

  	
  DEALINGS WITH THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §29.

  	
  NO UNWRITTEN AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §30.

  	
  TIME
  OF THE ESSENCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §31.

  	
  RIGHTS OF THIRD PARTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  §32.

  	
  PATRIOT
  ACT

  	
   

  

 

v

 

EXHIBITS

 

	
  EXHIBIT
  A

  	
   

  	
  FORM
  OF REVOLVING CREDIT NOTE

  
	
  EXHIBIT
  B

  	
   

  	
  LOAN
  REQUEST

  
	
  EXHIBIT
  C

  	
   

  	
  COMPLIANCE
  CERTIFICATE

  
	
  EXHIBIT
  D

  	
   

  	
  FORM
  OF ASSIGNMENT AND ACCEPTANCE

  

 

SCHEDULES

 

	
  SCHEDULE 1

  	
   

  	
  LENDERS;
  DOMESTIC AND EURODOLLAR LENDING OFFICES

  
	
  SCHEDULE 1.1

  	
   

  	
  COMMITMENTS

  
	
  SCHEDULE 1.2

  	
   

  	
  [INTENTIONALLY
  OMITTED]

  
	
  SCHEDULE 1.3

  	
   

  	
  RELATED
  COMPANIES & UNCONSOLIDATED ENTITIES

  
	
  SCHEDULE 6.3

  	
   

  	
  PROPERTIES
  NOT OWNED BY THE BORROWER

  
	
  SCHEDULE 6.7

  	
   

  	
  LITIGATION

  
	
  SCHEDULE
  6.15

  	
   

  	
  RELATED
  PARTY TRANSACTIONS

  
	
  SCHEDULE
  6.18

  	
   

  	
  ENVIRONMENTAL
  MATTERS

  
	
  SCHEDULE
  6.22

  	
   

  	
  CONDEMNATION
  PROCEEDINGS

  

 

i

 

FIRST AMENDED AND RESTATED UNSECURED 

REVOLVING CREDIT AGREEMENT

 

This FIRST AMENDED AND RESTATED  UNSECURED
REVOLVING CREDIT AGREEMENT is made as of the 20th day of October,
2004, by and among AMERIVEST PROPERTIES INC.,
a Maryland corporation (the “Borrower”), KEYBANK NATIONAL
ASSOCIATION, a national banking association (“KeyBank”), the other
lending institutions which are listed on Schedule 1 or hereafter become
a party hereto (the “Lenders”), and KEYBANK NATIONAL
ASSOCIATION, as agent for itself and such other lending institutions
(the “Agent”).

 

WHEREAS,
Borrower, Fleet National Bank (“FNB”) and FNB as Agent entered into that
certain Unsecured Revolving Credit Agreement dated as of December 15, 2003, as
amended by that certain First Amendment to Unsecured Revolving Credit Agreement
dated as of March 16, 2004 (collectively, the “Original Credit Agreement”); and

 

WHEREAS, FNB
has assigned its position as a Lender to KeyBank, and FNB has resigned its
position as Agent under the Original Credit Agreement, and KeyBank has been
appointed as the new Agent;

 

WHEREAS,
Borrower has requested that the Lenders amend certain provisions of the
Original Credit Agreement;

 

WHEREAS,
Agent, Borrower and the Lenders desire to amend and restate the Original Credit
Agreement in its entirety;

 

NOW,
THEREFORE, to accomplish these purposes, the Agent, the Borrower and the
Lenders hereby amend and restate the Original Credit Agreement in its entirety
and agree as follows:

 

§1.          DEFINITIONS AND RULES OF
INTERPRETATION

 

§1.1         Definitions.  The following terms shall have the meanings
set forth in this §l or elsewhere in the provisions of this Agreement referred
to below:

 

Adjusted EBITDA.  EBITDA minus the Reserve Amount for all Real
Estate Assets owned by Borrower or any of the Related Companies.

 

Affiliated Lenders.  Any commercial bank which is (i) the parent
corporation of any of the Lenders originally listed on Schedule 1, (ii)
a wholly-owned subsidiary of any of the Lenders or (iii) a wholly-owned
subsidiary of the parent corporation of any of the Lenders.

 

Agent. 
KeyBank National Association acting as agent for the Lenders or any
successor agent.

 

Agent’s Head Office.  The Agent’s head office located at 127 Public
Square, Cleveland, Ohio 44114-1306, or at such other location as the Agent may
designate from time to time.

 

 

Agreement. 
This First Amended and Restated Unsecured Revolving Credit Agreement,
including the Schedules and Exhibits hereto.

 

Agreement Regarding Fees.  The Agreement Regarding Fees of even date
herewith between Borrower and KeyBank.

 

Arranger. 
KeyBank Capital Markets or any successor.

 

Assignment and Acceptance.  See §18.

 

Balance Sheet Date.  June 30, 2004.

 

Borrower. 
As defined in the preamble hereto.

 

Borrowing Date.  The date on which any Loan is made or is to
be made, and the date on which any Loan is converted or continued in accordance
with §2.4.

 

Breakage Costs.  The cost to any Lender of re-employing funds
bearing interest at LIBOR, incurred (or expected to be incurred) in connection
with (i) any payment of any portion of the Loan bearing interest at LIBOR prior
to the termination of any applicable Interest Period, (ii) the conversion of a
LIBOR Loan to any other applicable interest rate on a date other than the last
day of the relevant Interest Period, or (iii) the failure of Borrower to draw
down, on the first day of the applicable Interest Period, any amount as to
which Borrower has elected a LIBOR Loan.

 

Business Day. 
Any day other than a Saturday, Sunday or day which shall be in the State
of Ohio a legal holiday or day on which banking institutions are required or
authorized to close and, in the case of LIBOR Loans, also a day which is a
LIBOR Business Day.

 

Capitalized Leases.  Leases under which the Borrower is the lessee
or obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the Borrower in accordance
with Generally Accepted Accounting Principles.

 

CERCLA. 
See §6.18.

 

Change in Control.  The occurrence of any of the following
events: (A) if during any twelve month period on or after the Closing Date
while any portion of the Loan remains outstanding or Lenders have any
obligation to make further Loans, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any new
directors whose election by the Board of Directors or whose nomination for
election by the shareholders of the Borrower was approved by a vote of at least
a majority of the members of the Board of Directors then in office who either
were members of the Board of Directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board of Directors then
in office; or (B) if there occurs a change of control of the Borrower of a
nature that would be required to be reported in response to Item 1a of Form 8-K
filed pursuant to Section 13 or 15 under the Securities Exchange Act of 1934,
or in any other filing by the Borrower with the

 

2

 

Securities and Exchange
Commission; or (C) if the Borrower or any Related Company consolidates with, is
acquired by, or merges into or with any Person.

 

Closing Date. 
The date upon which this Agreement shall become effective pursuant to
§10 and the initial Loan shall be advanced.

 

Code. 
The Internal Revenue Code of 1986, as amended and in effect from time to
time.

 

Commitment. 
With respect to each Lender, the amount set forth from time to time on Schedule
1.1 hereto as the amount of such Lender’s commitment to make Loans to the
Borrower.

 

Commitment Increase.  An increase in the Total Commitment to not
more than $50,000,000.00 pursuant to §2.7.

 

Commitment Increase Date.  See §2.7(a).

 

Compliance Certificate.  A certificate in the form of Exhibit C
hereto signed by a Responsible Officer setting forth in reasonable detail
computations evidencing compliance with the covenants contained in §9.1 through
§9.6, §8.3(d) and §8.7.

 

Controlled Unconsolidated Entity.  An Unconsolidated Entity to the extent that
the Borrower has the authority to make management decisions on behalf of such
Unconsolidated Entity, or when this term is used with respect to the negative
covenants herein, an Unconsolidated Entity in which the Borrower has the right
or ability to prevent such Unconsolidated Entity from taking the action which
is prohibited by the applicable negative covenant.

 

Conversion Request.  A notice given by the Borrower to the Agent
of its election to convert or continue a Loan in accordance with §2.4.

 

Default. 
See §12.1.

 

Distribution. 
The declaration or payment of any dividend or distribution of cash or
cash equivalents to the shareholders of the Borrower or the limited partners of
any operating partnership in which the Borrower is a general partner.

 

Dollars or $. 
Dollars in lawful currency of the United States of America.

 

Domestic Lending Office.  Initially, the office of each Lender
designated as such in Schedule 1.1 hereto; thereafter, such other office
of such Lender, if any, located within the United States that will be making or
maintaining Prime Rate Loans.

 

EBITDA. 
For any period of calculation and without duplication, net income (loss)
of Borrower for such period (determined in accordance with Generally Accepted
Accounting Principles, before allocations to minority interests and excluding
all amounts attributable to the net income or net losses of Unconsolidated
Entities) plus the sum of the following amounts (but only to the extent
included in determining net income (loss) for such period):  (a) depreciation and amortization
expense of Borrower for such period plus (b) Interest Expense for such
period

 

3

 

plus (c) income tax
expense of Borrower in respect of such period plus (d) extraordinary
losses of Borrower, losses from the sale of assets of Borrower and losses
resulting from forgiveness of debt by Borrower, all for such period minus
(e) extraordinary gains of Borrower and gains from the sale of assets of
Borrower for such period plus (f) any cash dividends or distributions
actually received (and not reinvested) by Borrower from its Unconsolidated
Entities.

 

Effective Date.  The date upon which this Agreement shall
become effective pursuant to §10.

 

Eligible Assignee.  Any of (a) a commercial bank organized under
the laws of the United States, or any State thereof or the District of
Columbia, and having total assets in excess of $1,000,000,000; (b) a savings
and loan association or savings bank organized under the laws of the United
States, or any State thereof or the District of Columbia, and having a net
worth of at least $100,000,000, calculated in accordance with Generally
Accepted Accounting Principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the “OECD”), or a political subdivision of any
such country, and having total assets in excess of $1,000,000,000, provided
that such bank is acting through a branch or agency located in the country in
which it is organized or another country which is also a member of the OECD;
(d) the central bank of any country which is a member of the OECD; (e) an
insurance company and other institutional investor having a net worth of at
least $100,000,000 that, in the reasonable judgment of the Agent, has
substantial experience in real estate lending or investing in loans similar to
the Loans; (f) an investment fund or similar entity having a net worth of at
least $100,000,000 that is engaged in making, purchasing or holding bank loans
or similar extensions of credit and that is managed by an investment advisor
that, in the reasonable judgment of the Agent, has substantial experience in
real estate lending or investing in loans similar to the Loans or (g) an
Affiliated Lender, provided, however that neither the Borrower, any of
the Related Companies or any of the Unconsolidated Entities nor any affiliate
thereof shall be Eligible Assignees.

 

Employee Benefit Plan.  Any employee benefit plan within the meaning
of §3 (3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.

 

Environmental Laws.  See §6.18(a).

 

ERISA. 
The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time.

 

ERISA Affiliate.  Any Person which is treated as a single
employer with the Borrower under §414 of the Code.

 

ERISA Reportable Event.  A reportable event with respect to a
Guaranteed Pension Plan within the meaning of §4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has
not been waived.

 

Eurocurrency Reserve Rate.  For any day with respect to a LIBOR Loan, the
maximum rate (expressed as a decimal) at which any Lender subject thereto would
be required to maintain reserves (a “Eurocurrency Reserve”) under Regulation D
of the Board of Governors of the

 

4

 

Federal Reserve System (or any
successor or similar regulations relating to such reserve requirements) against
“Eurocurrency Liabilities” (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Rate.

 

Event of Default.  See §12.1.

 

Facility Percentage.  With respect to each Lender, the percentage
set forth from time to time on Schedule 1.1 hereto as such Lender’s
percentage of the Total Commitment.

 

Federal Funds Effective Rate.  For any day, the rate per annum (rounded
upward to the nearest one-hundredth of one percent (1/100 of 1%)) announced by
the Federal Reserve Bank of Cleveland on such day as being the weighted average
of the rates on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by such Federal
Reserve Bank in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate.”

 

Fixed Charges. 
With respect to any fiscal period of the Borrower, an amount equal to
the sum of (i) Interest Expense, (ii) regularly scheduled installments of
principal payable with respect to all Indebtedness of Borrower and the Related
Companies, excluding any balloon payments due at the maturity of such
Indebtedness, plus (iii) all dividend payments due to the holders of any
preferred stock of the Borrower.

 

Funds From Operations.  With respect to any fiscal period of the
Borrower, an amount equal to net income (computed in accordance with Generally
Accepted Accounting Principles) from the operation of Real Estate Assets,
excluding gains (or losses) from debt restructuring and sales of property, plus
real estate depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures; provided, however, in the event
that Borrower shall not have owned a Real Estate Asset for the entire previous
four fiscal quarters, then for the purpose of determining the Funds From
Operation with respect to such Real Estate Asset, the net income (computed in
accordance with Generally Accepted Accounting Principles) for such Real Estate
Asset shall be annualized in a manner reasonably acceptable to Agent.  Adjustments for unconsolidated partnerships
and joint ventures will be calculated to reflect funds from operations on the
same basis.

 

Generally Accepted Accounting Principles.  Principles that are (a) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time and (b) consistently
applied with past financial statements of the Borrower adopting the same
principles; provided that a certified public accountant would, insofar as the
use of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in Generally
Accepted Accounting Principles) as to financial statements in which such
principles have been properly applied.

 

Gross Asset Value.  At any date, Borrower’s total assets,
adjusted to add back the accumulated depreciation of its real estate assets,
all as determined in accordance with Generally

 

5

 

Accepted Accounting Principals
as of such date, plus $4,507,557 (which amount represents the difference
between the purchase price and historical net book value of Sheridan Plaza upon
Borrower’s acquisition in 2001).

 

Guaranteed Pension Plan.  Any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

 

Hazardous Substances.  See §6.18(b).

 

Indebtedness. 
All obligations, contingent and otherwise, that in accordance with
Generally Accepted Accounting Principles should be classified upon the
obligor’s balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including, without limitation, all of the following, whether
or not so classified: (a) the Obligations, (b) all debt and similar monetary
obligations, whether direct or indirect; (c) all liabilities secured by any
mortgage, pledge, negative pledge, security interest, lien, negative lien,
charge, or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been assumed;
(d) all guarantees, endorsements and other contingent obligations whether
direct or indirect in respect of indebtedness or obligations of others,
including any liability as the general partner of a partnership, any obligation
to supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness
against loss, through an agreement to purchase goods, supplies, or services for
the purpose of enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, and the obligations to reimburse the issuer in respect
of any letters of credit; and (e) such obligor’s liabilities, contingent or
otherwise of the type set forth in (a) through (d) above, under any joint
venture, limited liability company or partnership agreement.

 

Intangible Assets.  Collectively, (i) the amount (to the extent
reflected in determining Borrower’s total assets) of all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of assets
of a going concern business made within 12 months after the acquisition of such
business) in the book value of any asset (other than real property assets)
owned by Borrower, and (ii) goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry forwards, copyrights,
organization or developmental expenses, deferred financing costs, and other
intangible assets.

 

Interest Expense.  With respect to any fiscal period of the
Borrower, an amount equal to the sum of the following with respect to all
Indebtedness of the Borrower and the Related Companies: (i) total interest
expense, accrued in accordance with Generally Accepted Accounting Principles
plus (ii) all capitalized interest determined in accordance with Generally
Accepted Accounting Principles.  Interest
Expense shall not include any write-off of unamortized financing fees relating
to the Original Credit Agreement.

 

Interest Payment Date.  As to any Prime Rate Loan or LIBOR Loan, the
first day of each calendar month.

 

6

 

Interest Period.  With respect to each Loan, (a) initially, the
period commencing on the Borrowing Date of such Loan and ending on the last day
of one of the periods set forth below, as selected by the Borrower in a Loan
Request or Conversion Request, as applicable, (i) for any Prime Rate Loan, the
day on which such Prime Rate Loan is paid in full or converted to a LIBOR Loan;
and (ii) for any LIBOR Loan, 1, 2 or 3 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:

 

(A)          if any Interest Period with respect to
a LIBOR Loan would otherwise end on a day that is not a LIBOR Business Day,
that Interest Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;

 

(B)           if any Interest Period with respect
to a Prime Rate Loan would end on a day that is not a Business Day, that
Interest Period shall end on the next succeeding Business Day;

 

(C)           if the Borrower shall fail to give
notice as provided in §2.4, the Borrower shall be deemed to have requested a
conversion of the affected LIBOR Loan to a Prime Rate Loan on the last day of
the then current Interest Period with respect thereto;

 

(D)          any Interest Period relating to any
LIBOR Loan that begins on the last LIBOR Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR Business
Day of a calendar month; and

 

(E)           any Interest Period relating to any
LIBOR Loan that would otherwise extend beyond the Maturity Date shall end on
the Maturity Date.

 

Investments. All expenditures made and all
liabilities incurred (contingently or otherwise) for the acquisition of stock,
partnership or membership interests or Indebtedness of, or for loans, advances,
capital contributions or transfers of property to, or in respect of any
guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any Investment
represented by a guaranty shall be taken at not less than the principal amount
of the obligations guaranteed and still outstanding; (b) there shall be
included as an Investment all interest accrued with respect to Indebtedness
constituting an Investment unless and until such interest is paid; (c) there
shall be deducted in respect of each such Investment any amount received as a
return of capital (but only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution); (d) there shall not be
deducted in respect of any Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause (b) may be deducted when
paid; and (e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.

 

7

 

KeyBank. 
See preamble.

 

Lenders. 
KeyBank and the other lending institutions listed from time to time on Schedule
1 hereto and any other Person who becomes an assignee of any rights of a
Lender pursuant to §18 or a Person who acquires all or substantially all of the
stock or assets of a Lender.

 

LIBOR. 
For any LIBOR Loan for any Interest Period, the average rate (rounded
upwards to the nearest 1/16th) as shown in Dow Jones Markets (formerly
Telerate) (Page 3750) at which deposits in U.S. dollars are offered by first
class banks in the London Interbank Market at approximately 11:00 a.m. (London
time) on the day that is two (2) LIBOR Business Days prior to the first day of
such Interest Period with a maturity approximately equal to such Interest
Period and in an amount approximately equal to the amount to which such Interest
Period relates, adjusted for reserves and taxes if required by future
regulations.  If Dow Jones Markets no
longer reports such rate or Agent determines in good faith that the rate so
reported no longer accurately reflects the rate available to Agent in the
London Interbank Market, Agent may select a replacement index.  For any period during which a Reserve
Percentage shall apply, LIBOR with respect to LIBOR Loans shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve
Percentage.

 

LIBOR Business Day.  Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in London,
England.

 

LIBOR Lending Office.  Initially, the office of each Lender
designated as such in Schedule 1.1 hereto; thereafter, such other office
of such Lender, if any, that shall be making or maintaining LIBOR Loans.

 

LIBOR Loans. 
Loans bearing interest calculated by reference to LIBOR.

 

LIBOR Prepayment Fee.  See §3.3(a).

 

Liens. 
See §8.2.

 

Loan Documents.  This Agreement, the Notes, and any and all
other agreements, documents and instruments now or hereafter evidencing,
securing or otherwise relating to the Loans.

 

Loan Request. 
See §2.5.

 

Loans. 
The Loans made or to be made by the Lenders to the Borrower pursuant to
§2.

 

Majority Lenders.  As of any date, the Lenders whose aggregate
Facility Percentages constitute at least fifty-one percent (51%).

 

Material Adverse Effect.  A material adverse effect on (i) any of the
Real Estate, (ii) the business, results of operations or financial condition of
the Borrower and the Related Companies taken as a whole, (iii) the ability of
the Borrower to perform its obligations under the Loan

 

8

 

Documents, or (iv) the validity
or enforceability of any of the Loan Documents or the remedies or material
rights of the Agent or the Lenders thereunder.

 

Maturity Date. 
The earlier of  (i) November 12,
2007 or (ii) such date as the Secured Revolving Credit Agreement may be
terminated and the loans thereunder prepaid, or such earlier date on which the
Loans shall become due and payable pursuant to the terms hereof.

 

Multiemployer Plan.  Any multiemployer plan within the meaning of
§3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

 

Net Offering Proceeds.  All cash proceeds received after the Closing
Date by the Borrower, as a result of the sale of common, preferred or other
classes of stock of the Borrower less customary costs and discounts of issuance
paid by Borrower in connection therewith.

 

Net OP Proceeds.  All cash proceeds received and the fair
market value of all property contributed, after the Closing Date, as a result
of the issuance of any limited partnership interests, limited liability company
interests or other equity interests in any entity that is a Related Company
(such entities being sometimes called “operating partnerships”) less customary
costs and discounts of issuance paid by such operating partnership or Borrower
in connection therewith.

 

Net Operating Income.  With respect to any fiscal period of the
Borrower and with respect to any one or more of the Real Estate Assets, the
total rental and other income from the operation of such Real Estate Assets,
after deducting all expenses and other proper charges incurred by the Borrower
in connection with the operation of such Real Estate Assets during such fiscal
period, including, without limitation, real estate taxes and bad debt expenses,
but before payment or provision for debt service charges, income taxes, and
depreciation, amortization, and other non-cash expenses, all as determined in
accordance with Generally Accepted Accounting Principles except that there
shall be no rent leveling adjustments made when computing Net Operating Income.

 

Notes. 
See §2.2.

 

Obligations. 
All indebtedness, obligations and liabilities of the Borrower to any of
the Lenders and the Agent, individually or collectively, under this Agreement
or any of the other Loan Documents or in respect of any of the Loans or the
Notes or other instruments at any time evidencing any thereof, whether existing
on the date of this Agreement or arising or incurred hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law of otherwise.

 

OFAC. 
Office of Foreign Asset Control of the Department of the Treasury of the
United States of America.

 

Original Credit Agreement.  As defined in the preamble.

 

Outstanding. 
With respect to the Loans, the aggregate unpaid principal thereof as of
any date of determination.

 

9

 

Outstanding Obligations.  As of any date of determination, the sum of
the outstanding principal amount of the Loans.

 

Patriot Act. 
The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, as the same may be
amended from time to time, and corresponding provisions of future laws.

 

PBGC. 
The Pension Benefit Guaranty Corporation created by §4002 of ERISA and
any successor entity or entities having similar responsibilities.

 

Permitted Liens.  Liens, security interests and other
encumbrances permitted by §8.2.

 

Person. 
Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

 

Prepayment Date.  See §3.3.

 

Prime Rate. 
The greater of (a) the variable per annum rate of interest designated
from time to time by KeyBank as its Prime Rate or (b) one percent (1%) in
excess of the Federal Funds Effective Rate. 
The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate being charged to any customer.  Changes in the rate of interest resulting
from changes in the Prime Rate shall take place immediately without notice or
demand of any kind.

 

Prime Rate Loans.  Those Loans bearing interest calculated by
reference to the Prime Rate.

 

Properties. 
All Real Estate Assets, Real Estate, and all other assets, including,
without limitation, intangibles and personalty owned by the Borrower.

 

Real Estate. 
All real property at any time owned, leased (as lessee or sublessee) or
operated by the Borrower, or any of the Related Companies or any Controlled
Unconsolidated Entity.

 

Real Estate Assets.  Those fixed and tangible properties
consisting of land, buildings and/or other improvements owned by the Borrower,
by any of the Related Companies or by any Controlled Unconsolidated Entity at
the relevant time of reference thereto, but excluding all leaseholds other than
leaseholds under ground leases having an unexpired term of 30 years or more.

 

Record. 
The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by any Lender with
respect to any Loan referred to in such Note.

 

Related Companies.  The entities listed and described on Schedule
1.3 hereto, or thereafter, any entity whose financial statements are
consolidated or combined with the Borrower’s pursuant to Generally Accepted
Accounting Principles, or any ERISA Affiliate.

 

10

 

Release. 
See §6.18(c)(iii).

 

Reserve Amount.  With respect to any Real Estate Assets or
group of Real Estate Assets, a normalized annual reserve for capital
expenditures, replacement reserves and leasing costs at the rate of $0.25 per
year per square foot of net leasable area contained in all buildings on such
Real Estate Assets.

 

Reserve Percentage.  For any Interest Period, that percentage
which is specified three (3) Business Days before the first day of such
Interest Period by the Board of Governors of the Federal Reserve System (or any
successor) or any other governmental or quasi-governmental authority with
jurisdiction over Agent or any Lender for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve requirement)
for Agent or any Lender with respect to liabilities constituting of or
including (among other liabilities) Eurocurrency liabilities in an amount equal
to that portion of the Loan affected by such Interest Period and with a
maturity equal to such Interest Period.

 

Responsible Officer.  With respect to the Borrower, any one of its
Chairman, President, Chief Executive Officer, Chief Financial Officer, or
Executive Vice Presidents or Vice Presidents.

 

Secured Revolving Credit Agreement.  The Revolving Credit Agreement dated November
12, 2002 among the Borrower, Fleet National Bank and other lenders party
thereto and Fleet National Bank as Agent, as amended by a First Amendment dated
February 6, 2003 and a Second Amendment dated March 16, 2004 (and with the
interest of Fleet National Bank, individually and as Agent, having been
assigned to KeyBank), and as further amended from time to time, pursuant to
which the lenders party thereto have provided Borrower with a revolving line of
credit in the maximum principal amount of $42,000,000.  Upon consummation of the modification of such
Revolving Credit Agreement by Borrower, KeyBank and the other lenders a party
thereto pursuant to the term sheet from KeyBank to Borrower dated
September 15, 2004, the Secured Revolving Credit Agreement shall be deemed
to be such revolving credit agreement (including any increase in the principal
amount thereof up to $75,000,000.00 as contemplated by such term sheet) as the
same may be further amended from time to time.

 

Subsidiary. 
Any corporation, association, trust, or other business entity of which
the designated parent or other controlling Person shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding Voting Interests.

 

Tangible Net Worth.  At any date, Borrower’s total assets,
adjusted to add back the accumulated depreciation of its real estate assets,
less its Intangible Assets, less its Total Liabilities, all as determined in
accordance with Generally Accepted Accounting Principals as determined as of
such date.

 

Total Commitment.  The sum of the Commitments of the Lenders, as
in effect from time to time.

 

Total Liabilities.  The sum, without duplication of (i) all
consolidated liabilities of the Borrower determined in accordance with the
accounting principles used in the preparation of the

 

11

 

financial statements delivered
pursuant to §7.4, including capital leases, accounts payable, accrued expenses,
mortgage payables, notes payable, senior notes, convertible debentures,
subordinated debentures, and secured or unsecured debt owed to banks or other
financial institutions, (ii) all Indebtedness of the Borrower whether or not so
classified, including, without limitation, all outstanding Loans under this
Agreement, (iii) the balance available for drawing under letters of credit
issued for the account of the Borrower and (iv) Borrower’s Unconsolidated
Entity Percentage of the Indebtedness of all Unconsolidated Entities.

 

Type. 
As to any Loan its nature as a Prime Rate Loan or a LIBOR Loan.

 

Unconsolidated Entity.  As of any date, any Person in whom the
Borrower or any Related Company holds an Investment, and whose financial
results would not be consolidated under Generally Accepted Accounting Principles
with the financial statements of the Borrower, if such statements were prepared
as of such date. Unconsolidated Entities existing on the date hereof are set
forth in Schedule 1.3.

 

Unconsolidated Entity Percentage.  With respect to any Unconsolidated Entity,
the percentage interest of the Borrower or any Related Company in such
Unconsolidated Entity which shall be the greatest of the following: (a) the
relative nominal direct and indirect ownership interest owned by Borrower or
any Related Company (expressed as a percentage) in such Unconsolidated Entity,
(b) the proportion (expressed as a percentage) of Borrower’s relative
contingent liability for the Indebtedness of such Unconsolidated Entity to that
entity’s total Indebtedness, or (c) the relative and indirect economic interest
owned by Borrower or any Related Company (calculated as a percentage) in such
Unconsolidated Entity determined in accordance with the applicable provisions
of the declaration of trust, articles or certificate of incorporation, articles
of organization, partnership agreement, limited liability operating agreement,
joint venture agreement or other applicable organizational document of such
Unconsolidated Entity.

 

Voting Interests.  Stock or similar ownership interests, of any class
or classes (however designated), the holders of which are at the time entitled,
as such holders, (a) to vote for the election of a majority of the directors
(or persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.

 

§1.2         Rules
of Interpretation.

 

(a)           A reference to any document or
agreement shall include such document or agreement as amended, modified or
supplemented from time to time in accordance with its terms and the terms of
this Agreement.

 

(b)           The singular includes the plural and
the plural includes the singular.

 

(c)           A reference to any law includes any
amendment or modification to such law.

 

12

 

(d)           A reference to any Person includes
its permitted successors and permitted assigns.

 

(e)           Accounting terms not otherwise
defined herein have the meanings assigned to them by Generally Accepted
Accounting Principles applied on a consistent basis by the accounting entity to
which they refer and, except as otherwise expressly stated, all use of
accounting terms with respect to the Borrower shall reflect the consolidation
of the financial statements of Borrower and the Related Companies.

 

(f)            The words “include”, “includes” and
“including” are not limiting.

 

(g)           All terms not specifically defined
herein or by Generally Accepted Accounting Principles, which terms are defined
in the Uniform Commercial Code as in effect in Georgia, have the meanings
assigned to them therein.

 

(h)           Reference to a particular “§” refers
to that section of this Agreement unless otherwise indicated.

 

(i)            The words “herein”, “hereof”,
“hereunder” and words of like import shall refer to this Agreement as a whole
and not to any particular section or subdivision of this Agreement.

 

(j)            The words “so long as any Loan or
Note is outstanding” shall mean so long as such Loan or Note is not indefeasibly
paid in full in cash.

 

§2.          REVOLVING LOAN FACILITY.

 

§2.1         Commitment
to Lend.  Subject
to the provisions of §2.5 and the other terms and conditions set forth in this
Agreement, each of the Lenders severally agrees to lend to the Borrower and the
Borrower may borrow, repay, and reborrow from time to time between the
Effective Date and the Maturity Date upon notice by the Borrower to the Agent
given and approved by the Agent in accordance with §2.5, such sums as are
requested by the Borrower up to a maximum aggregate principal amount of
Outstanding Obligations (after giving effect to all amounts requested) at any
one time equal to such Lender’s Commitment, provided that the sum of the
Outstanding Obligations (after giving effect to all amounts requested) shall
not at any time exceed the Total Commitment. The Loans shall be made pro rata
in accordance with each Lender’s Facility Percentage and the Lenders shall at
all times immediately adjust inter se
any inconsistency between each Lender’s outstanding principal amount and each
Lender’s Commitment.  Each request for a
Loan hereunder shall constitute a representation and warranty by the Borrower
that the conditions set forth in §10 or §11 (whichever is applicable) have been
satisfied in all material respects on the date of such request and will be
satisfied on the proposed Borrowing Date of the requested Loan, provided that
the making of such representation and warranty by Borrower shall not limit the
right of any Lender not to lend upon a determination by the Majority Lenders
that such conditions have not been satisfied.

 

§2.2         The Notes.  The Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A
hereto (each a “Note”), and completed with appropriate insertions.  One or more Notes shall be payable to the
order of each Lender in an

 

13

 

aggregate principal
amount equal to such Lender’s Commitment. The Borrower irrevocably authorizes
each Lender to make or cause to be made, at or about the time of the Borrowing
Date of any Loan or at the time of receipt of any payment of principal on such
Lender’s Note, an appropriate notation on such Lender’s Record reflecting the
making of such Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Loans set forth on such Lender’s Record shall (absent
manifest error) be prima facie evidence of the principal amount thereof owing
and unpaid to such Lender, but the failure to record, or any error in so
recording, any such amount on the Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due. Upon receipt of an affidavit of
an officer of any Lender as to the loss, theft, destruction or mutilation of
its Note or any other security document which is not of public record, and, in
the case of any such loss, theft, destruction or mutilation, upon cancellation
of such Note or other security document, Borrower will issue, in lieu thereof,
a replacement Note or other security document in the same principal amount
thereof and otherwise of like tenor.

 

§2.3         Interest
on Loans.

 

(a)           Each Prime Rate Loan shall bear
interest for the period commencing with the Borrowing Date thereof and ending
on the last day of the Interest Period with respect thereto at the rate per
annum equal to 2.75% above the Prime Rate.

 

(b)           Each LIBOR Loan shall bear interest
for the period commencing with the Borrowing Date thereof and ending on the
last day of the Interest Period with respect thereto at the rate per annum
equal to 3.50% above LIBOR determined for such Interest Period.

 

(c)           The Borrower unconditionally promises
to pay interest on each Loan in arrears on each Interest Payment Date with
respect thereto.

 

§2.4         Conversion
Options.

 

(a)           The Borrower may elect from time to
time to convert any outstanding Loan to a Loan of another Type, provided that
(i) with respect to any such conversion of a LIBOR Loan to a Prime Rate Loan,
the Borrower shall give the Agent at least three (3) Business Days, prior
written notice of such election; (ii) with respect to any such conversion of a
LIBOR Loan into a Prime Rate Loan, such conversion shall only be made on the
last day of the Interest Period with respect thereto; (iii) subject to the
further proviso at the end of this section and subject to §2.4(b) and §2.4(d)
hereof with respect to any such conversion of a Prime Rate Loan to a LIBOR
Loan, the Borrower shall give the Agent at least three (3) LIBOR Business Days,
prior written notice of such election and (iv) no Loan may be converted into a
LIBOR Loan when any Default or Event of Default has occurred and is continuing.
On the date on which such conversion is being made, each Lender shall take such
action as is necessary to transfer its Facility Percentage of such Loans to its
Domestic Lending Office or its LIBOR Lending Office, as the case may be. All or
any part of outstanding Loans of any Type may be converted as provided herein, provided
further that each Conversion Request relating to the conversion of a Prime Rate
Loan to a LIBOR Loan shall be for an amount equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall be irrevocable by the
Borrower.

 

14

 

(b)           Any Loans of any Type may be
continued as such upon the expiration of an Interest Period with respect
thereto by compliance by the Borrower with the notice provisions contained in
§2.4(a); provided that no LIBOR Loan may be continued as such when any Default
or Event of Default has occurred and is continuing but shall be automatically
converted to a Prime Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or Event of
Default of which the officers of the Agent active upon the Borrower’s account
have actual knowledge.

 

(c)           In the event that the Borrower does
not notify the Agent of its election hereunder with respect to any Loan, such
Loan shall be automatically converted to a Prime Rate Loan at the end of the
applicable Interest Period.

 

(d)           The Borrower may not elect to convert
a Prime Rate Loan to a LIBOR Loan pursuant to §2.4(a) or elect to continue a
LIBOR Loan pursuant to §2.4(b) if, after giving effect thereto, there would be
greater than five (5) LIBOR Loans outstanding. 
Any Loan Request for a LIBOR Loan that would create greater than five
(5) LIBOR Loans outstanding shall be deemed to be a Conversion Request for a
Prime Rate Loan.

 

§2.5         Requests
for Loans.  The
Borrower shall give to the Agent written notice in the form of Exhibit B
hereto of each Loan requested hereunder (a “Loan Request”) no less than (a) one
(1) Business Day prior to the proposed Borrowing Date of any Prime Rate Loan and
(b) three (3) LIBOR Business Days prior to the proposed Borrowing Date of any
LIBOR Loan.  Each such notice shall
specify (i) the principal amount of the Loan requested, (ii) the proposed
Borrowing Date of such Loan, (iii) the Interest Period for such Loan, and (iv)
the Type of such Loan, and shall be accompanied by a Compliance Certificate
based on the most recent certificate delivered pursuant to §7.4(d) with updated
calculations evidencing compliance with the covenants contained in §9.3 through
§9.6 hereof after giving effect to such requested Loan.  Within one (1) Business Day after receipt of
a Loan Request, the Agent shall provide to each of the Lenders by facsimile a
copy of such Loan Request and accompanying Compliance Certificate and each
Lender shall, within 24 hours thereafter, notify the Agent if it believes that
any of the conditions contained in §11 of this Agreement has not been met or
waived.  If such a notice is given the
Majority Lenders shall promptly determine whether all of the conditions
contained in §11 of this Agreement have been met or waived.  If no such notice is given by any Lender or
if following such notice the Majority Lenders determine that the conditions
contained in §11 have been met or waived, each of the Lenders shall be
obligated to fund its Facility Percentage of the requested Loans.  Each such Loan Request shall be irrevocable
and binding on the Borrower and the Borrower shall be obligated to accept the
Loan requested from the Lenders on the proposed Borrowing Date.  Each Loan Request shall be in a minimum
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.

 

§2.6         Funds
for Loans.

 

(a)           Subject to §2.5 and the other
provisions of this Agreement, not later than 11:00 a.m. (Cleveland time) on the
proposed Borrowing Date of any Loans, each of the Lenders will make available
to the Agent, at the Agent’s Head Office, in immediately available funds, the
amount of such Lender’s Facility Percentage of the amount of the requested
Loans.  Upon receipt from each Lender of
such amount, and upon receipt of the documents required by §§10 or 11

 

15

 

(whichever is applicable)
and the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Loans made available to the Agent by the Lenders.  The failure or refusal of any Lender to make
available to the Agent at the aforesaid time and place on any Borrowing Date the
amount of its Facility Percentage of the requested Loans shall not relieve any
other Lender from its several obligation hereunder to make available to the
Agent the amount of such other Lender’s Facility Percentage of any requested
Loans but shall not obligate any other Lender or Agent to fund more than its
Facility Percentage of the requested Loans or to increase its Facility
Percentage.

 

(b)           The Agent may, unless notified to the
contrary by any Lender prior to a Borrowing Date, assume that such Lender has
made available to the Agent on such Borrowing Date the amount of such Lender’s
Facility Percentage of the Loans to be made on such Borrowing Date, and the
Agent may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrower a corresponding amount.  If any Lender makes available to the Agent
such amount on a date after such Borrowing Date, such Lender shall pay to the
Agent on demand an amount equal to the product of (i) the average computed for
the period referred to in clause (iii) below, of the Federal Funds Effective
Rate during each day included in such period, times (ii) the amount of such
Lender’s Facility Percentage of such Loans, time (iii) a fraction, the
numerator of which is the number of days or portion thereof that elapsed from
and including such Borrowing Date to the date on which the amount of such
Lender’s Commitment Percentage of such Loans shall become immediately available
to the Agent, and the denominator of which is 365.  A statement of the Agent submitted to such
Lender with respect to any amounts owing under this paragraph shall be prima
facie evidence of the amount due and owing to the Agent by such Lender.  If such Lender does not pay such corresponding
amount upon the Agent’s demand therefor, the Agent will promptly notify the
Borrower, and the Borrower shall promptly pay such corresponding amount to the
Agent.  The Agent shall also be entitled
to recover from the Borrower interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower to the date such corresponding amount is recovered by the
Agent at a per annum rate equal to the applicable rate for such Loan.

 

§2.7         Increase
in Total Commitment.

 

(a)           Provided that no Default or Event of
Default has occurred and is continuing, the Borrower shall have the one-time
option to request an increase in the Total Commitment to not more than
$50,000,000.00 by written notice to the Agent (the amount of such requested increase
is the “Commitment Increase”), provided that any such increase must become
effective on or before December 31, 2005. 
Upon receipt of such notice, the Agent shall consult with Arranger and
shall notify the Borrower of the amount of facility fees to be paid to any
Lenders who provide an additional Commitment in connection with such increase
in the Total Commitment.  If the Borrower
agrees to pay the facility fees so determined, then the Agent shall send a
notice to all Lenders (the “Additional Commitment Request Notice”) informing
them of the Borrower’s request to increase the Total Commitment and of the
facility fees to be paid with respect thereto. 
Each Lender who desires to provide an additional Commitment upon such
terms shall provide Agent with a written commitment letter specifying the
amount of the additional Commitment by which it is willing to provide prior to
such deadline as may be specified in the Additional Commitment Request
Notice.  If the requested increase is

 

16

 

oversubscribed then the
Agent and the Arranger shall allocate the Commitment Increase among the Lenders
who provide such commitment letters on such basis as the Agent and the Arranger
shall determine in their sole discretion. 
If the additional Commitments so provided are not sufficient to provide
the full amount of the Commitment Increase requested by the Borrower, then the
Agent may, but shall not be obligated to, invite one or more Eligible Assignees
to become a Lender and provide an additional Commitment.  The Agent shall provide all Lenders with a
notice setting forth the amount, if any, of the additional Commitment to be
provided by each Lender and the revised Commitment Percentages which shall be
applicable after the effective date of the Commitment Increase specified
therein (the “Commitment Increase Date”).

 

(b)           On the Commitment Increase Date the
outstanding principal balance of the Loans shall be reallocated among the
Lenders such that after the Commitment Increase Date the outstanding principal
amount of Loans owed to each Lender shall be equal to such Lender’s Commitment
Percentage (as in effect after the Commitment Increase Date) of the outstanding
principal amount of all Loans.  On the
Commitment Increase Date those Lenders whose Commitment Percentage is
increasing shall advance the funds to the Agent and the funds so advanced shall
be distributed among the Lenders whose Commitment Percentage is decreasing as
necessary to accomplish the required reallocation of the outstanding
Loans.  The funds so advanced shall be
Prime Rate Loans until converted to LIBOR Loans which are allocated among all
Lenders based on their Commitment Percentages. 
To the extent such reallocation results in certain Lenders receiving
funds which are applied to LIBOR Loans prior to the last day of the applicable
Interest Period, then the Borrower shall pay to the Agent for the account of
the affected Lenders the LIBOR Prepayment Fee which shall be determined
separately for each such Lender in the manner set forth in §3.3.

 

(c)           Upon the effective date of each
increase in the Total Commitment pursuant to this §2.7 the Agent may
unilaterally revise Schedule 1.1 and the Borrower shall execute and deliver to
the Agent new Notes for each Lender whose Commitment has changed so that the
principal amount of such Lender’s Note shall equal its Commitment.  The Agent shall deliver such replacement
Notes to the respective Lenders in exchange for the Notes replaced thereby which
shall be surrendered by such Lenders. 
Such new Notes shall provide that they are replacements for the
surrendered Notes and that they do not constitute a novation, shall be dated as
of the Commitment Increase Date and shall otherwise be in substantially the
form of the replaced Notes.  Within five
(5) days of issuance of any new Notes pursuant to this §2.7(d), the Borrower
shall deliver an opinion of counsel, addressed to the Lenders and the Agent,
relating to the due authorization, execution and delivery of such new Notes and
the enforceability thereof, in form and substance substantially similar to the
opinion delivered in connection with the first disbursement under this
Agreement. The surrendered Notes shall be canceled and returned to the
Borrower.

 

§3.          REPAYMENT
OF THE LOANS.

 

§3.1         Maturity.  The Borrower unconditionally promises to pay
on the Maturity Date, and there shall become absolutely due and payable on the
Maturity Date, all of the Loans outstanding on such date, together with any and
all accrued and unpaid interest and charges thereon.

 

17

 

§3.2         Mandatory
Repayments of Loan. 
If at any time the sum of the Outstanding Obligations exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of such excess
to the Agent for the respective accounts of the Lenders for application to the
Loans.  Borrower further covenants and
agrees that, notwithstanding anything to the contrary contained herein (if
anything), at least one (1) time during each calendar year during the term of
this Agreement, Borrower shall cause the outstanding balance of the Loans to
not exceed $20,000,000.00 for a period of not less than thirty (30) consecutive
days, and if necessary to comply with the foregoing, the Borrower shall repay
such amount of the Loans (and accrued and unpaid interest thereon and other
amounts payable hereunder (including all amount payable in connection with such
prepayment)) such that there shall be a balance hereunder of not more than
$20,000,000.00 for such period.

 

§3.3         Optional
Repayments of Loans.

 

(a)           The Borrower shall have the right, at
its election, to repay the outstanding amount of the Loans, as a whole or in
part, on any Business Day, without penalty or premium; provided that the full
or partial prepayment of the outstanding amount of any LIBOR Loans made
pursuant to this §3.3 may be made only on the last day of the Interest Period
relating thereto, except as set forth below in this §3.3. The Borrower shall
give the Agent no later than 10:00 a.m., Cleveland time, at least two (2)
Business Days’ prior written notice of any prepayment pursuant to this §3.3 of
any Prime Rate Loans and four (4) LIBOR Business Days, notice of any proposed
repayment pursuant to this §3.3 of any LIBOR Loans, specifying the proposed
date of payment of Loans and the principal amount to be paid.  The Agent shall promptly notify each Lender
of the principal amount of such payment to be received by such Lender. Each
such partial prepayment of the Loans shall be in an integral multiple of
$1,000,000 and, to the extent requested by the Agent, shall be accompanied by
the payment of all charges outstanding on all Loans and of accrued interest on
the principal repaid to the date of payment. The principal payments so received
shall be applied first to the principal of Prime Rate Loans and then to the
principal of LIBOR Loans. 
Notwithstanding anything contained herein to the contrary, the Borrower
may make a full or partial prepayment of a LIBOR Loan on a date other than the
last day of the Interest Period relating thereto, if all optional prepayments
(in whole or in part) on such Loans shall be accompanied by, and the Borrower
hereby promises to pay, the Breakage Costs.

 

(b)           Borrower understands, agrees and
acknowledges the following:  (i) no
Lender has any obligation to purchase, sell and/or match funds in connection
with the use of the LIBOR Rate as a basis for calculating the rate of interest
on a LIBOR Loan; (ii) the LIBOR Rate is used merely as a reference in
determining such rate; and (iii) Borrower has accepted the LIBOR Rate as a
reasonable and fair basis for calculating such rate and any Breakage
Costs.  Borrower further agrees to pay
the Breakage Costs, if any, whether or not a Lender elects to purchase, sell
and/or match funds.

 

§4.          CERTAIN GENERAL PROVISIONS.

 

§4.1         Facility
Fees.  On the
Closing Date, and on other dates specified in the Agreement Regarding Fees, the
Borrower shall pay to KeyBank the fees with respect to the Loan in the

 

18

 

amounts specified in the
Agreement Regarding Fees.  All such fees
shall be fully earned when paid and nonrefundable under any circumstances.

 

§4.2         Unused Fee.  The Borrower shall pay to the Agent for the
accounts of the Lenders in accordance with their respective Facility
Percentages an Unused Fee calculated at the rate of 0.75% per annum on the
daily amount by which the Total Commitment exceeds the Outstanding Obligations
for each calendar month.  The Unused Fee
shall be payable monthly in arrears on or before the third Business Day of each
calendar month for the immediately preceding calendar month commencing on the
first such date following the date hereof, with a final payment on the Maturity
Date or any earlier date on which the Commitments shall terminate.

 

§4.3         Agent’s Fee.  The Borrower shall pay to the Agent, for the
Agent’s own account, an annual Agent’s fee as provided in the Agreement
Regarding Fees.  The Agent’s fee shall be
payable quarterly in arrears on the first day of each calendar quarter for the immediately
preceding calendar quarter or portion thereof. 
The Agent’s fee shall also be paid upon the Maturity Date or earlier
termination of the Commitments.  The
Agent’s fee for any partial quarter shall be prorated.

 

§4.4         Funds
for Payments.

 

(a)           All payments of principal, interest,
closing fees, commitment fees and any other amounts due hereunder (other than
as provided in §4.1, §4.6 and §4.7) or under any of the other Loan Documents,
and all prepayments, shall be made to the Agent, for the respective accounts of
the Lenders, at the Agent’s Head Office, in each case in Dollars in immediately
available funds.

 

(b)           All payments by the Borrower
hereunder and under any of the other Loan Documents shall be made without
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory liens, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding.  If
any such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the Borrower
shall pay to the Agent, for the account of the Lenders or (as the case may be)
the Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Lenders or the Agent to receive the same net amount
which the Lenders or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly
to the Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.

 

§4.5         Computations.  All computations of interest on the Loans and
of other fees to the extent applicable shall be made on the basis of  360-day year and the actual number of days
elapsed. Except as otherwise provided in the definition of the term “Interest
Period” with respect to LIBOR Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be

 

19

 

extended to the next
succeeding Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. The outstanding
amount of the Loans as reflected on the Records from time to time shall (absent
manifest error) be considered correct and binding on the Borrower unless within
thirty (30) Business Days after receipt by the Agent or any of the Lenders from
Borrower of any notice by the Borrower of such outstanding amount, the Agent or
such Lender shall notify the Borrower to the contrary.

 

§4.6         Additional
Costs, Etc.  If any
present or future applicable law (which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Lender or the Agent by any central bank or
other fiscal, monetary or other authority, whether or not having the force of
law), shall:

 

(a)           subject any Lender or the Agent to
any tax, levy, impost, duty, charge, fee, deduction or withholding of any
nature with respect to this Agreement, the other Loan Documents, such Lender’s
Commitment or the Loans (other than taxes based upon or measured by the income
or profits of such Lender or the Agent), or

 

(b)           materially change the basis of
taxation (except for changes in taxes on income or profits) of payments to any
Lender of the principal of or the interest on any Loans or any other amounts
payable to any Lender under this Agreement or the other Loan Documents, or

 

(c)           impose or increase or render
applicable (other than to the extent specifically provided for elsewhere in
this Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or Loans by, or
commitments of an office of any Lender, or

 

(d)           impose on any Lender any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, the Loans, the Commitment, or any class of Loans or commitments of
which any of the Loans or the Commitment forms a part;

 

and the result
of any of the foregoing is

 

(i)            to increase the cost to such Lender
of making, funding, issuing, renewing, extending or maintaining any of the
Loans or such Lender’s Commitment, or

 

(ii)           to reduce the amount of principal,
interest or other amount payable to such Lender or the Agent hereunder on
account of the Commitments or any of the Loans, or

 

(iii)          to require such Lender or the Agent to
make any payment or to forego any interest or other sum payable hereunder, the
amount of which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed received by such
Lender or the Agent from the Borrower hereunder,

 

20

 

then, and in
each such case, the Borrower will, upon demand made by such Lender or (as the
case may be) the Agent at any time and from time to time and as often as the
occasion therefor may arise, pay to such Lender or the Agent, to the extent
permitted by law, such additional amounts as will be sufficient to compensate
such Lender or the Agent for such additional cost, reduction, payment or
foregone interest or other sum.

 

§4.7         Capital
Adequacy.  If any
present or future law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) or the interpretation
thereof by a court or governmental authority with appropriate jurisdiction
affects the amount of capital required or expected to be maintained by banks or
bank holding companies and any Lender or the Agent determines that the amount
of capital required to be maintained by it is increased by or based upon the
existence of the Loans made or deemed to be made pursuant hereto, then such
Lender or the Agent may notify the Borrower of such fact, and the Borrower
shall pay to such Lender or the Agent from time to time on demand, as an
additional fee payable hereunder, such amount as such Lender or the Agent shall
determine in good faith and certify in a notice to the Borrower to be an amount
that will adequately compensate such Lender or the Agent in light of these
circumstances for its increased costs of maintaining such capital. Each Lender
and the Agent shall allocate such cost increases among its customers in good
faith and on an equitable basis.

 

§4.8         Certificate.  A certificate setting forth any additional
amounts payable pursuant to §§4.6 or 4.7 and a brief explanation of such
amounts which are due, submitted by any Lender or the Agent to the Borrower,
shall be prima facie evidence that such amounts are due and owing.

 

§4.9         Breakage
Costs.  Borrower
shall pay all Breakage Costs incurred from time to time by any Lender upon
demand within fifteen (15) days from receipt of written notice from Agent, or
such earlier date as may be required by this Agreement.

 

§4.10       Default
Interest and Late Charges.  During any period when an Event of Default
has occurred and is continuing, or after the Maturity Date or after judgment
has been rendered on any Note, Borrower’s right to select LIBOR Loans shall
cease and the unpaid principal of all Loans shall, at the option of each Lender
bear interest at a rate which is four (4) percentage points per annum greater
than that which would otherwise be applicable to Prime Rate Loans. If the
entire amount of any required principal and/or interest is not paid in full
within ten (10) days after the same is due, Borrower shall pay to the Agent a
late fee equal to five percent (5%) of the required payment.

 

§4.11       Inability
to Determine LIBOR Rate. 
In the event, prior to the commencement of any Interest Period relating
to any LIBOR Loan, the Agent shall reasonably determine that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower) to the
Borrower. In such event (a) any Loan Request or Conversion Request with respect
to LIBOR Loans shall be automatically withdrawn and shall be deemed a request
for Prime Rate Loans, (b) each LIBOR Loan will automatically, on the last day
of the then current Interest Period thereof, become a Prime Rate Loan, and (c)
the obligations of the Lenders to make LIBOR Loans shall be suspended until the
Agent reasonably determines

 

21

 

that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrower.

 

§4.12       Illegality.  Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBOR Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower and thereupon (a) the Commitment of such Lender
to make LIBOR Loans or convert Loans of another Type to LIBOR Loans shall
forthwith be suspended and (b) the LIBOR Loans then outstanding shall be
converted automatically to Prime Rate Loans on the last day of each Interest
Period applicable to such LIBOR Loans or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay to the Agent for
the account of such Lender, upon demand, any additional amounts necessary to
compensate such Lender for any costs incurred by such Lender in making any
conversion in accordance with this §4.12, including any interest or fees
payable by such Lender to lenders of funds obtained by it in order to make or
maintain its LIBOR Loans hereunder. If, at any time, the rate of interest,
together with all amounts which constitute interest and which are reserved,
charged or taken by the Lenders as compensation for fees, services or expenses
incidental to the making, negotiating or collection of the Loans or the other
Obligations, shall be deemed by any competent court of law, governmental agency
or tribunal to exceed the maximum rate of interest permitted to be charged by
any Lender to Borrower under applicable law, then, during such time as such
rate of interest would be deemed excessive, that portion of each sum paid
attributable to that portion of such interest rate that exceeds the maximum
rate of interest so permitted shall be deemed a voluntary prepayment of
principal without penalty (including, without limitation, prepayment fees
required pursuant to §3.3(a) hereof).  As
used herein, the term “applicable law” shall mean the law in effect as of the
date hereof, provided, however, that in the event there is a change in the law
which results in a higher permissible rate of interest, then this Agreement and
the Notes shall be governed by such new law as of its effective date.

 

§4.13       Replacement
of Lenders.  If any
of the Lenders shall make a notice or demand upon the Borrower pursuant to
§4.6, §4.7, or §4.12 based on circumstances or laws which are not generally
applicable to the Lenders organized under the laws of the United States or any
State thereof, the Borrower shall have the right to replace such Lender with an
Eligible Assignee selected by the Borrower and approved by the Agent.  In such event the assignment shall take place
on a date set by the Agent at which time the assigning Lender and the Eligible
Assignee shall enter into an Assignment and Acceptance as contemplated by §18.1
(and clause (d) thereof shall not be applicable) and the assigning Lender shall
receive from the Eligible Assignee a sum equal to the outstanding principal
amount of the Loans owed to the assigning Lender together with accrued interest
thereon plus all other amounts then due to the assigning Lender hereunder.

 

§4.14       Limitation
on Interest. 
Notwithstanding anything in this Agreement to the contrary, all
agreements between the Borrower and the Lenders and the Agent, whether now
existing or hereafter arising and whether written or oral, are hereby limited
so that in no contingency, whether by reason of acceleration of the maturity of
any of the Obligations or otherwise, shall the interest contracted for, charged
or received by the Lenders exceed the maximum amount permissible under
applicable law.  If, from any
circumstance whatsoever, interest would otherwise by payable to the Lenders in
excess of the maximum lawful amount, the interest payable to the Lenders shall
be reduced to the maximum amount permitted under

 

22

 

applicable law; and if
from any circumstance the Lenders shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations,
such excess shall be refunded to the Borrower. 
All interest paid or agreed to be paid to the Lenders shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law.  This
section shall control all agreements between the Borrower and the Lenders and
the Agent.

 

§5.          NO LIMITATION ON RECOURSE.

 

§5.1         [Intentionally
Omitted.]

 

§5.2         No
Limitation on Recourse. 
The Obligations are full recourse obligations of the Borrower and all of
its Real Estate Assets and other properties and assets shall be available for
the indefeasible payment in full in cash and performance of the Obligations.

 

§6.          REPRESENTATIONS AND WARRANTIES.

 

The Borrower
represents and warrants to the Agent and each of the Lenders as of the Closing
Date and as of the date of each Loan hereunder as follows.

 

§6.1         Authority; Etc.

 

(a)           Organization; Good Standing.  The Borrower (i) is a Maryland corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland, (ii) has all requisite power to own its properties and conduct
its business as now conducted and as presently contemplated, and (iii) to the
extent required by law is in good standing as a foreign entity and is duly
authorized to do business in the State of Colorado and in each other
jurisdiction where such qualification is necessary except where a failure to be
so qualified in such other jurisdiction would not have a Material Adverse
Effect. Each Related Company is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
the State of its formation, has all requisite power to own its properties and
conduct its business as presently contemplated and is duly authorized to do
business in the State in which the property owned by it is located and in each
other jurisdiction where such qualification is necessary.

 

(b)           Authorization.  The execution, delivery and performance of
this Agreement and the other Loan Documents to which the Borrower is to become
a party and the transactions contemplated hereby and thereby (i) are
within the authority of the Borrower, (ii) have been duly authorized by
all necessary proceedings on the part of the Borrower, (iii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which the Borrower is subject or any judgment,
order, writ, injunction, license or permit applicable to the Borrower and
(iv) do not conflict with any provision of its charter documents or bylaws
of, or any agreement or other instrument binding upon, the Borrower or to which
any of its properties are subject.

 

23

 

(c)           Enforceability.  Assuming due authorization, execution and
delivery by all other parties thereto, the execution and delivery of this
Agreement and the other Loan Documents to which the Borrower is or is to become
a party will result in valid and legally binding obligations of the Borrower
enforceable against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors’ rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.

 

§6.2         Governmental
Approvals.  The
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which the Borrower is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained.

 

§6.3         Title to Properties; Leases.

 

(a)           The Borrower or a Related Company
holds good and clear record and marketable (or indefeasible, with respect to
Real Estate located in Texas) fee simple or leasehold title, as applicable, to
the Real Estate, subject to no rights of others, including any mortgages,
conditional sales agreements, title retention agreements, liens or encumbrances
except for the Permitted Liens.

 

(b)           Except as indicated on Schedule
6.3 hereto, the Borrower owns all of the properties reflected in the
balance sheet of the Borrower as of the Balance Sheet Date or acquired since
that date (except properties sold or otherwise disposed of in the ordinary
course of business since that date), subject to no rights of others, including
any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.

 

§6.4         Financial
Statements.  The
following financial statements have been furnished to each of the Lenders.

 

(a)           A balance sheet of the Borrower as of
the Balance Sheet Date, and a statement of income, statement of changes in
shareholders’ equity and statement of cash flows for the fiscal year then
ended, accompanied by an auditor’s report prepared without qualification. Such
balance sheet and statements of income, of changes in shareholders’ equity and
of cash flows have been prepared in accordance with Generally Accepted
Accounting Principles and fairly present the financial condition of the
Borrower in all material respects as of the close of business on the date
thereof and the results of operations, changes in shareholders’ equity and cash
flows for the fiscal year then ended. There are no contingent liabilities of
the Borrower as of such date involving material amounts, known to the officers
of the Borrower not disclosed in said balance sheet and the related notes
thereto.

 

(b)           A balance sheet and a statement of
income, statement of changes in shareholders, equity and statement of cash
flows of the Borrower for each of the fiscal quarters of the Borrower ended since
the Balance Sheet Date certified by Borrower’s chief financial

 

24

 

officer to have been
prepared in accordance with Generally Accepted Accounting Principles consistent
with those used in the preparation of the annual audited statements delivered
pursuant to paragraph (a) above and to fairly present the financial condition
of the Borrower in all material respects as of the close of business on the
dates thereof and the results of operations, of changes in shareholders’ equity
and of cash flows for the fiscal quarters then ended (subject to year-end
adjustments). There are no contingent liabilities of the Borrower as of such
dates involving material amounts, known to the officers of the Borrower, not
disclosed in such balance sheets and the related notes thereto.

 

§6.5         No
Material Changes. 
Since the Balance Sheet Date, there has occurred no material adverse
change in the financial condition or assets or business of the Borrower as
shown on or reflected in the balance sheet of the Borrower as of the Balance
Sheet Date, or the statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had a Material
Adverse Effect.

 

§6.6         Franchises,
Patents, Copyrights, Etc. 
The Borrower possesses (either directly or through the Related
Companies) all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others, including all Permits.

 

§6.7         Litigation.  Except as listed and described on Schedule
6.7 hereto, there are no actions, suits, proceedings or investigations of
any kind pending or, to Borrower’s knowledge, threatened against the Borrower
or any of the Related Companies before any court, tribunal or administrative
agency or board that, if adversely determined, might, either in any case or in
the aggregate, have a Material Adverse Effect or materially impair the right of
the Borrower or any of the Related Companies to carry on business substantially
as now conducted by it, or result in any material liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
balance sheet of the Borrower.

 

§6.8         No
Materially Adverse Contracts, Etc.  The Borrower is not subject to any charter,
trust or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a Material Adverse
Effect. The Borrower is not a party to any contract or agreement that has or is
expected, in the judgment of the Borrower’s officers, to have a Material
Adverse Effect. None of the Related Companies is subject to any charter, trust
or other legal restriction, or any judgment, decree, order, rule or regulation
that has or is expected in the future, in the judgment of the Borrower’s
officers, to have a Material Adverse Effect. None of the Related Companies is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower’s officers, to have any Material Adverse Effect.

 

§6.9         Compliance
With Other Instruments, Laws, Etc.  Neither the Borrower nor any Related Company
is in violation of any provision of its charter documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could have a
Material Adverse Effect.

 

25

 

§6.10       Tax Status.  The Borrower (a) has made or filed all
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all taxes and
other governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings, and (c) has set aside on its books
reserves reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply.  There are no delinquent taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no basis for any such
claim.

 

§6.11       Event
of Default.  No
Default or Event of Default has occurred and is continuing.

 

§6.12       Investment
Company Act. 
Neither the Borrower nor any Related Company is an “investment company”,
or an “affiliated company” or a “principal underwriter” of an “investment
company”, as such terms are defined in the Investment Company Act of 1940.

 

§6.13       Absence
of Financing Statements, Etc.  There is no financing statement, security
agreement, chattel mortgage, real estate mortgage, equipment lease, financing
lease, option, encumbrance or other document existing, filed or recorded with
any filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien or encumbrance on, or
security interest in, any property of the Borrower, except Permitted Liens.

 

§6.14       [Intentionally
Omitted.]

 

§6.15       Certain
Transactions. 
Except as set forth on Schedule 6.15 hereto, none of the officers
or employees of the Borrower is presently a party to any transaction with the
Borrower or any Related Company (other than for services as employees, officers
and trustees), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, trustee or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, trustee
or any such employee or natural Person related to such officer, trustee or
employee or other Person in which such officer, trustee or employee has a
direct or indirect beneficial interest has a substantial interest or is an
officer or trustee.

 

§6.16       Benefit
Plans; Multiemployer Plans; Guaranteed Pension Plans.  As of the date hereof as to any Multiemployer
Plan or Guaranteed Pension Plan, neither the Borrower nor any ERISA Affiliate
maintains or contributes to any Multiemployer Plan or Guaranteed Pension Plan.
To the extent that Borrower or any ERISA Affiliate hereafter maintains or
contributes to any Employee Benefit Plan or Guaranteed Pension Plan, it shall
at all times do so in compliance with §7.20 hereof.

 

§6.17       Regulations
U and X.  No
portion of any Loan shall be used, in whole or in part, for the purpose of
purchasing or carrying any “margin security” or “margin stock” as such terms
are used in Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224. 
The Borrower is not engaged, and the Borrower will not engage,

 

26

 

principally or as one of
its important activities, in the business of extending credit for the purpose
of purchasing or carrying any “margin security” or “margin stock” as such terms
are used in Regulations T, U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 220, 221 and 224.

 

§6.18       Environmental
Compliance.  To the
best of Borrower’s knowledge, Borrower makes the following representations and
warranties:

 

(a)           Except as may be set forth on Schedule
6.18 attached hereto, none of the Borrower, any of the Related Companies or
any operator of the Real Estate or any portion thereof, or any operations
thereon is in violation, or alleged material violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters (hereinafter collectively referred to as the “Environmental Laws”),
including without limitation, those arising under the Resource Conservation and
Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment, including, without limitation, the environmental statutes,
regulations, orders and decrees of the States in which any of the Real Estate
may be located, which violation involves the Real Estate or would have a
Material Adverse Effect.

 

(b)           Except as set forth on Schedule 6.18
attached hereto, none of the Borrower or the Related Companies has received
written notice from any third party including, without limitation any federal,
state or local governmental authority, (i) that it has been identified by the
United States Environmental Protection Agency (“EPA”) as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986) ; (ii) that any hazardous
waste, as defined by 42 U.S.C. §9601(5), any hazardous substances as defined by
42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C.
§9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws (“Hazardous Materials”)
which it has generated, transported or disposed of have been found at any site
at which a federal, state or local agency or other third party has conducted or
has ordered that the Borrower or any of the Related Companies conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any third party’s incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Materials.

 

(c)           Except as set forth on Schedule
6.18 attached hereto, (i) no portion of the Real Estate has been used for
the handling, processing, storage or disposal of Hazardous Materials except in
material compliance with applicable Environmental Laws; and except as set forth
on Schedule 6.18, no underground tank or other underground storage
receptacle for Hazardous Materials is located on any portion of the Real
Estate; (ii) in the course of any activities conducted by the Borrower, any of
the Related Companies or the operators of the Real Estate, no Hazardous
Materials have been generated or are being used on the Real Estate except in
material compliance with applicable Environmental Laws; (iii) there has been no
present, or to

 

27

 

the best of Borrower’s
knowledge past, releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping (a “Release”)
or threatened Release of Hazardous Materials on, upon, into or from the Real
Estate; (iv) to the best of Borrower’s knowledge, there have been no Releases
on, upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come to be
located on, and which would have a material adverse effect on the value of,
such Real Estate; and (v) to the best of Borrower’s knowledge, any Hazardous
Materials that have been generated on any of the Real Estate have been
transported off-site only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws,
which transporters and facilities have been and are, to the best of the
Borrower’s knowledge, operating in material compliance with such permits and
applicable Environmental Laws. Notwithstanding that any representation
contained herein may be limited to the knowledge of the Borrower, any such
limitation shall not affect the covenants specified in §7.10 or elsewhere in
this Agreement.

 

§6.19       Subsidiaries
and Affiliates. 
The Borrower has no Subsidiaries except for the Related Companies listed
on Schedule 1.3. The Borrower is not a partner in any partnership and is
not a member of any limited liability company, other than the Unconsolidated
Entities listed on Schedule 1.3.

 

§6.20       Leases.  Upon request from Agent the Borrower will
deliver to the Agent a rent roll for each parcel of Real Estate which shall
accurately and completely sets forth all relevant information with respect to
the leases, the rents payable by tenants, and a description of any tenant
improvements or work to be done, furnished or paid for by the landlord, or
credited or allowed to a tenant.

 

§6.21       Loan
Documents.  All of
the representations and warranties of the Borrower made in the other Loan
Documents or any document or instrument delivered or to be delivered to the
Agent or the Lenders pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects.

 

§6.22       Property.  All of the Borrower’s, the Related Companies’
and the Controlled Unconsolidated Entities’ properties are in good repair and
condition, subject to ordinary wear and tear. 
The Borrower has completed or caused to be completed an appropriate
investigation of the environmental condition of each such property as of the
later of the date of the Borrower’s, the Related Companies’ or the Controlled
Unconsolidated Entities’ purchase thereof or the date upon which such property
was last security for Indebtedness of such Person, including preparation of a
“Phase I” report and, if appropriate, a “Phase II” report, in each case
prepared by a recognized environmental engineer in accordance with customary
standards which discloses that such property is not in violation of the
representations and covenants set forth in this Agreement, unless such
violation has been disclosed in writing to the Agent and remediation actions
satisfactory to Agent are being taken. 
There are no unpaid or outstanding real estate or other taxes or
assessments on or against any property of the Borrower, the Related Companies
or the Controlled Unconsolidated Entities which are payable by such Person
(except only real estate or other taxes or assessments, that are not yet due
and payable).  Except as set forth in Schedule
6.22 hereto, there are no pending eminent domain proceedings against any
property of the

 

28

 

Borrower, the Related
Companies or the Controlled Unconsolidated Entities or any part thereof, and,
to the knowledge of the Borrower, no such proceedings are presently threatened
or contemplated by any taking authority which may individually or in the
aggregate have any materially adverse effect on the business or financial
condition of the Borrower.  To Borrower’s
knowledge after due inquiry and investigation none of the property of Borrower,
the Related Companies or the Controlled Unconsolidated Entities is now damaged
or injured as a result of any fire, explosion, accident, flood or other
casualty in any manner which individually or in the aggregate would have any
materially adverse effect on the business or financial condition of the
Borrower.

 

§6.23       OFAC.  The Borrower is not (and will not be) a
person with whom any Lender is restricted from doing business under OFAC
(including, those Persons named on OFAC’s Specially Designated and Blocked
Persons list) or under any statute, executive order (including the September
24, 2001 Executive Order Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism), or other
governmental action and is not and shall not engage in any dealings or
transactions or otherwise be associated with such persons.  In addition, Borrower hereby agrees to
provide to the Lenders any additional information that a Lender deems necessary
from time to time in order to ensure compliance with all applicable laws
concerning money laundering and similar activities.

 

§7.          AFFIRMATIVE COVENANTS OF THE
BORROWER.

 

Borrower
covenants and agrees as follows, so long as any Loan or Note is outstanding or
the Lenders have any obligations to make Loans:

 

§7.1         Punctual
Payment.  The
Borrower will unconditionally duly and punctually pay the principal and
interest on the Loans and all other amounts provided for in the Note, this
Agreement, and the other Loan Documents all in accordance with the terms of the
Note, this Agreement and the other Loan Documents.

 

§7.2         Maintenance
of Office.  The
Borrower will maintain its chief executive office at 1780 S. Bellaire Street,
Suite 100, Denver, CO 80222 or at such other place in the United States of
America as the Borrower shall designate upon written notice to the Agent to be
delivered within fifteen (15) days of such change, where notices, presentations
and demands to or upon the Borrower in respect of the Loan Documents may be
given or made.

 

§7.3         Records
and Accounts.  The
Borrower will (a) keep true and accurate (in all material respects) records and
books of account in which full, true and correct entries (in all material
respects) will be made in accordance with Generally Accepted Accounting
Principles and (b) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation and amortization of its properties,
contingencies, and other reserves.

 

§7.4         Financial
Statements, Certificates and Information.  The Borrower will deliver to each of the
Lenders:

 

(a)           as soon as practicable, but in any
event not later than ninety (90) days after the end of each fiscal year of the
Borrower, the audited balance sheet of the Borrower at the end of such year,
and the related audited statement of income, statement of changes in
shareholders,

 

29

 

equity and statement of
cash flows for such year, each setting forth in comparative form the figures
for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with Generally Accepted Accounting Principles,
and accompanied by an auditor’s report prepared without qualification by or by
an independent certified public accountant reasonably acceptable to the Agent;

 

(b)           as soon as practicable, but in any
event not later than forty-five (45) days after the end of each of the first
three (3) fiscal quarters of the Borrower, copies of the unaudited balance
sheets of the Borrower as at the end of such quarter, and the related unaudited
statement of income, statement of changes in shareholders’ equity and statement
of cash flows for the portion of the Borrower’s fiscal year then elapsed, all
in reasonable detail and prepared in accordance with Generally Accepted
Accounting Principles, together with a certification by the principal financial
or accounting officer of the Borrower that the information contained in such
financial statements fairly presents the financial position of the Borrower on
the date thereof (subject to year-end adjustments);

 

(c)           as soon as practicable, but in any
event no later than forty-five (45) days after the end of each fiscal quarter
of the Borrower, the Borrower will provide the Agent with, for each parcel of
Real Estate: (i) a rent roll dated as of the end of such fiscal quarter in form
reasonably satisfactory to the Agent, (ii) a statement of the Net Operating
Income for each parcel of Real Estate for such fiscal quarter and year to date
and (iii) after the last quarter of each year, a detailed statement of all
income and expenses for each parcel of Real Estate for such year;

 

(d)           simultaneously with the delivery of
the financial statements referred to in subsections (a) and (b) above, a
Compliance Certificate;

 

(e)           as soon as practicable, but in any
event not later than ninety (90) days after the end of each fiscal year of the
Borrower, and to the extent not previously provided pursuant to this §7.4,
copies of the Form 10-K statement filed with the Securities and Exchange
Commission (“SEC”) for such fiscal year, and as soon as practicable, but in any
event not later than forty-five (45) days after the end of each fiscal quarter,
copies of the Form 10-Q statement filed with the SEC for such fiscal quarter,
provided that in either case if the SEC has granted an extension for the filing
of such statements, Borrower shall deliver such statements to the Agent
simultaneously with the filing thereof with the SEC;

 

(f)            promptly following the filing or
mailing thereof, copies of all other material of a financial nature filed with
the SEC, and each Lender will be included on Borrower’s mailing list so that it
will receive copies of all press releases issued by the Borrower;

 

(g)           as soon as practicable, but in any
event not later than sixty (60) days prior to the beginning of each fiscal year
of the Borrower a cash flow budget for the Borrower and a property budget for
each parcel of Real Estate for such fiscal year; and

 

(h)           from time to time such other financial
data and information as the Agent may reasonably request;

 

30

 

§7.5         Notices.

 

(a)           Defaults.  The Borrower will promptly notify the Agent
in writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting a Default or an Event of Default under this
Agreement) under any note, evidence of Indebtedness, indenture or other
obligation to which or with respect to which the Borrower or any of the Related
Companies is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence of
Indebtedness to accelerate the maturity thereof, the Borrower shall forthwith
give written notice thereof to the Agent and each of the Lenders, describing
the notice or action and the nature of the claimed default.

 

(b)           Environmental Events.  The Borrower will promptly notify the Agent
in writing of any of the following events: (i) upon Borrower’s obtaining
knowledge of any violation of any Environmental Law regarding any Real Estate
or Borrower’s operations which violation could have a Material Adverse Effect;
(ii) upon Borrower’s obtaining knowledge of any potential or known Release, or
threat of Release, of any Hazardous Substance at, from, or into any Real Estate
which it reports in writing or is reportable by it in writing to any
governmental authority and which is material in amount or nature or which could
materially affect the value of such Real Estate; (iii) upon Borrower’s receipt
of any notice of violation of any Environmental Laws or of any Release or
threatened Release of Hazardous Substances, including a notice or claim of
liability or potential responsibility from any third party (including without
limitation any federal, state or local governmental officials) and including
notice of any formal inquiry, proceeding, demand, investigation or other action
with regard to (A) Borrower’s or any Person’s operation of any Real Estate to
the extent it may result in a Material Adverse Effect, (3) contamination on,
from or into any Real Estate to the extent it may result in a Material Adverse
Effect, or (C) investigation or remediation of off-site locations at which
Borrower or any of its predecessors are alleged to have directly or indirectly
disposed of Hazardous Substances; or (iv) upon Borrower’s obtaining knowledge
that any expense or loss has been incurred by such governmental authority in
connection with the assessment, containment, removal or remediation of any
Hazardous Substances with respect to which Borrower or any of the Related
Companies may be liable or for which a lien may be imposed on any Real Estate
to the extent such liability may result in a Material Adverse Effect.

 

(c)           Notification of Claims.  The Borrower will, immediately upon becoming
aware thereof, notify the Agent in writing of any setoff, claims (including,
with respect to any of the Real Estate, environmental claims), withholdings or
other defenses which could have a Material Adverse Effect.

 

(d)           Notice of Litigation and Judgments.  The Borrower will give notice to the Agent in
writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting any of the Real Estate or affecting the Borrower or any of the
Related Companies or to which the Borrower or any of the Related Companies is
or is to become a party involving an uninsured claim (or as to which the
insurer reserves rights) against the Borrower or any of the Related Companies
that at the time of giving of notice could reasonably be expected to have a
Materially Adverse Effect, and stating the nature and status of such litigation
or proceedings. The Borrower will give notice to the Agent, in writing, in form
and detail reasonably satisfactory to the Agent, within ten (10) days of

 

31

 

any judgment not covered
by insurance, final or otherwise, against the Borrower or any Related Company
in an amount in excess of $50,000.

 

§7.6         Existence;
Maintenance of REIT Status; Maintenance of Properties.  The Borrower will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence as
a Maryland corporation and its status as a self administered real estate
investment trust under the Code. The Borrower will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence of
each Related Company.  Borrower will
comply in all material respects with all applicable rules and regulations of
the SEC relating to its publicly held stock. Borrower will continue to have its
stock listed on one of the major stock exchanges in the United States, and will
comply in all material respects with all applicable rules of the stock exchange
where the stock is so listed. The Borrower will do or cause to be done all
things necessary to preserve and keep in full force all of its rights and
franchises which in the judgment of the Borrower may be necessary to properly
and advantageously conduct the businesses being conducted by it, or by any of
the Related Companies. The Borrower will continue to engage primarily in the
businesses now conducted by it and in related businesses.

 

§7.7         Insurance.  With respect to the properties and businesses
of Borrower and the Related Companies, the Borrower will maintain or cause to
be maintained insurance with financially sound and reputable insurers against
such casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent.

 

§7.8         Taxes.  The Borrower will pay real estate taxes,
other taxes, assessments and other governmental charges against the Real Estate
before the same become delinquent, and will duly pay and discharge, or cause to
be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its other
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its properties;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Borrower
will pay all such taxes, assessments, charges, levies or claims forthwith upon
the commencement of proceedings to foreclose any lien that may have attached as
security therefor. Promptly after payment of real estate taxes, other taxes,
assessments and other governmental charges against the Real Estate, Borrower
will provide evidence of such payments to the Agent, in the form of receipted
tax bills or other form reasonably acceptable to the Agent.

 

§7.9         Inspection
of Properties and Books. 
The Borrower shall permit the Lenders, through the Agent’s or any
Lender’s other designated representatives, at the Borrower’s expense to visit
and inspect any of the Real Estate or any of Borrower’s offices, to examine the
books of account of the Borrower and the Related Companies (and to make copies
thereof and extracts therefrom) and to discuss the affairs, finances and
accounts of the Borrower with, and to be advised as to the same by, its
officers, all at such reasonable times and intervals as the Agent or any Lender
may reasonably request.

 

32

 

§7.10       Compliance
with Laws, Contracts, Licenses, and Permits.  The Borrower will comply, and will cause all
Related Companies to comply, with (a) all applicable laws and regulations now
or hereafter in effect wherever its business is conducted, including all
Environmental Laws, (b) the provisions of all applicable partnership
agreements, charter documents and by-laws, (c) all agreements and instruments
to which it is a party or by which it or any of its Real Estate Assets may be
bound including any leases, and (d) all applicable decrees, orders, and
judgments. If at any time any Permit from any governmental Person shall become
necessary or required in order that the Borrower may fulfill or be in
compliance with any of its obligations hereunder or under any of the Loan
Documents, the Borrower will promptly take or cause to be taken all reasonable
steps within the power of the Borrower to obtain such authorization, consent,
approval, permit or license and furnish the Agent and the Lenders with evidence
thereof.

 

§7.11       Use of Proceeds.  Subject to the provisions of §2.5 hereof, the
proceeds of the Loans shall be used by the Borrower for making Investments
permitted by §8.3, and for working capital and other purposes consistent with
the covenants contained herein.

 

§7.12       Reserved.

 

§7.13       [Intentionally
Omitted.]

 

§7.14       Interest
Rate Protection.  Borrower shall
maintain in effect interest rate caps, swaps or other interest hedging
contracts with counterparties and in form and substance reasonably satisfactory
to the Agent covering such portion of Borrower’s variable rate debt as may be
required by the Agent.

 

§7.15       Further
Assurance.  The Borrower will
cooperate with the Agent and the Lenders and execute such further instruments
and documents and perform such further acts as the Agent and the Lenders shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.

 

§7.16       Reserved.

 

§7.17       Environmental
Indemnification.  The
Borrower covenants and agrees that it will indemnify and hold the Agent and
each Lender harmless from and against any and all claims, expense, damage, loss
or liability incurred by the Agent or any Lender (including all reasonable
costs of legal representation incurred by the Agent or any Lender, but
excluding, as applicable, for the Agent or a Lender any claim, expense, damage,
loss or liability as a result of the gross negligence or willful misconduct of
the Agent or such Lender) relating to (a) any Release or threatened Release of
Hazardous Substances on any Real Estate; (b) any violation of any Environmental
Laws with respect to conditions at any Real Estate or the operations conducted
thereon; or (c) the investigation or remediation of off-site locations at which
the Borrower or its predecessors are alleged to have directly or indirectly
disposed of Hazardous Substances. It is expressly acknowledged by the Borrower
that this covenant of indemnification shall survive any modification, release
or discharge of any or all of the Loan Documents or the payment of the Loans
and shall inure to the benefit of the Agent and the Lenders, and their
successors and assigns.

 

33

 

§7.18       Response Actions.  The Borrower covenants and agrees that if any
Release or disposal of Hazardous Substances shall occur or shall have occurred
on any Real Estate, the Borrower will cause the prompt containment and removal
of such Hazardous Substances and remediation of such Real Estate as necessary
to comply with all Environmental Laws or to preserve the value of such Real
Estate.

 

§7.19       Environmental Assessments.  If the Agent in its good faith judgment,
after discussion with the Borrower, has reason to believe that the
environmental condition of any Real Estate has deteriorated, after reasonable
notice by the Agent, whether or not a Default or an Event of Default shall have
occurred, the Agent may, from time to time, for the purpose of assessing and
ensuring the value of such Real Estate, obtain one or more environmental
assessments or audits of such Real Estate prepared by an independent engineer
or other qualified consultant or expert approved by the Agent to evaluate or
confirm (i) whether any Hazardous Substances are present in the soil or water
at such Real Estate and (ii) whether the use and operation of such Real Estate
complies with all Environmental Laws. Environmental assessments may include
without limitation detailed visual inspections of such Real Estate including,
without limitation, any and all storage areas, storage tanks, drains, dry wells
and leaching areas, and the taking of soil samples, surface water samples and
ground water samples, as well as such other investigations or analyses as the
Agent deems appropriate. All such environmental assessments shall be at the
sole cost and expense of the Borrower.

 

§7.20       Employee Benefit
Plans.

 

(a)           Representation.  The Borrower and its ERISA Affiliates do not
currently maintain or contribute to any Guaranteed Pension Plan or
Multiemployer Plan.

 

(b)           Notice.  The Borrower will obtain the consent of the
Agent, which consent shall not be unreasonably withheld, conditioned or
delayed, prior to the establishment of any Employee Benefit Plan or Guaranteed
Pension Plan by the Borrower or any ERISA Affiliate.

 

(c)           In General.  Each Employee Benefit Plan maintained by the
Borrower or any ERISA Affiliate will be operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting prohibited
transactions.

 

(d)           Terminability of Welfare Plans.  With respect to each Employee Benefit Plan
maintained by the Borrower or an ERISA Affiliate which is an employee welfare
benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA, the Borrower, or
the ERISA Affiliate, as the case may be, has the right to terminate each such
plan at any time (or at any time subsequent to the expiration of any applicable
bargaining agreement) without liability other than liability to pay claims
incurred prior to the date of termination.

 

(e)           Multiemployer Plans.  Without the consent of the Agent, the
Borrower will not enter into, maintain or contribute to, any multiemployer
Plan.

 

(f)            Unfunded or Underfunded
Liabilities.  The Borrower will not,
at any time, have accruing unfunded or underfunded liabilities with respect to
any Employee Benefit Plan, 

 

34

 

Guaranteed Pension Plan or
Multiemployer Plan, or permit any condition to exist under any Multiemployer
Plan that would create a withdrawal liability.

 

§7.21       More
Restrictive Agreements. 
Without limiting the terms of §8.1, should the Borrower enter into or
modify any agreements or documents pertaining to any existing or future
Indebtedness, which agreements or documents include covenants (whether
affirmative or negative), warranties, representations, defaults or events of
default (or any other provision which may have the same practical effect as any
of the foregoing) which are individually or in the aggregate more restrictive
against the Borrower than those set forth herein or in any of the other Loan
Documents, the Borrower shall promptly notify the Agent and, if requested by
Majority Lenders, the Borrower, the Agent and the Majority Lenders shall
promptly amend this Agreement and the other Loan Documents to include some or
all or such more restrictive provisions as determined by the Majority Lenders
in their sole discretion. 
Notwithstanding the foregoing, this §7.21 shall not apply to covenants
in agreements or documents relating to Indebtedness that relate only to
specific Real Estate that is collateral for such Indebtedness.

 

§8.          CERTAIN NEGATIVE COVENANTS OF THE BORROWER.

 

The Borrower
covenants and agrees as follows, so long as any Loan or Note is outstanding or
the Lenders have any obligation to make any Loans:

 

§8.1         Restrictions on
Indebtedness.  The Borrower will not,
and the Borrower will not permit any of the Related Companies or any Controlled
Unconsolidated Entity to create, incur, assume, guarantee or become or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:

 

(a)           Indebtedness arising under the
Secured Revolving Credit Agreement or under any of the Loan Documents;

 

(b)           current liabilities of the Borrower
incurred in the ordinary course of business but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an
open account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;

 

(c)           Indebtedness in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be required
to be made in accordance with the provisions of §7.8;

 

(d)           Indebtedness in respect of judgments
or awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in respect of
which the Borrower shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;

 

(e)           endorsements for collection, deposit
or negotiation and warranties of products or services, in each case incurred in
the ordinary course of business;

 

35

 

(f)            Indebtedness of Borrower or the
Related Companies to the extent the same does not create a violation of §9.3,
§9.4 or §9.5 and is subject to terms and conditions consistent with
conventional commercial real estate lending practices, provided that upon the
creation or assumption of any such Indebtedness in an amount exceeding
$5,000,000 Borrower shall provide the Agent with a notice describing the terms
of such Indebtedness and the security therefor and a Compliance Certificate
with updated calculations reflecting such Indebtedness.

 

§8.2         Restrictions
on Liens, Etc.  The
Borrower will not, and the Borrower will not permit any Related Company or
Controlled Unconsolidated Subsidiary to, (a) create or incur or agree not to
create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest
of any kind upon any of its assets or properties of any character, or upon the
rents, income or profits therefrom; (b) suffer to exist for a period of more
than thirty (30) days after the same shall have been incurred any Indebtedness
(not permitted by §8.1(c)) or claim or demand against it that if unpaid might
by law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (c) sell, assign, pledge or otherwise
transfer any rents, issues, profits, accounts, contract rights, general
intangibles, chattel paper or instruments relating to any of its assets or
properties of any character other than in connection with the sale of the Real
Estate to which they pertain as permitted hereunder (collectively, “Liens”);
provided that the Borrower may create or incur or suffer to be created or
incurred or to exist:

 

(i)            liens to secure taxes, assessments
and other governmental charges in respect of obligations not overdue, the
Indebtedness with respect to which is permitted by §8.1(c);

 

(ii)           deposits or pledges made in
connection with, or to secure payment of, workers compensation, unemployment
insurance, old age pensions or other social security obligations;

 

(iii)          liens in respect of judgments or
awards, the Indebtedness with respect to which is permitted by §8.1(d);

 

(iv)          liens of carriers, warehousemen,
mechanics and materialmen, and other like liens in existence less than 60 days
from the date of creation thereof in respect of obligations not overdue, the
Indebtedness with respect to which is permitted by §8.1(c);

 

(v)           encumbrances consisting of leases,
easements, rights of way, covenants, restrictions on the use of real property
and defects and irregularities in the title thereto;  and other minor liens or encumbrances none of
which in the opinion of the Borrower interferes materially with the use of the
property affected in the ordinary conduct of the business of the Borrower, and
which matters (x) do not individually or in the aggregate have a materially
adverse effect on the use or value of the Real Estate and (xx) do not make
title to such property unmarketable by the conveyancing standards in effect
where such property is located; and

 

(vi)          liens on Real Estate to secure the
Indebtedness permitted by §8.1(f).

 

36

 

§8.3         Restrictions
on Investments.  The Borrower
will not, and will not permit any of the Related Companies or any Controlled
Unconsolidated Entity to make or permit to exist or to remain outstanding any
Investment except Investments in:

 

(a)           marketable direct or guaranteed
obligations of the United States of America that mature within one (1) year
from the date of purchase by the Borrower;

 

(b)           demand deposits, certificates of
deposit, bankers acceptances and time deposits of United States banks having
total assets in excess of $1,000,000,000;

 

(c)           securities commonly known as
“commercial paper” issued by a corporation organized and existing under the
laws of the United States of America or any state thereof that at the time of
purchase have been rated and the ratings for which are not less than “P 1” if
rated by Moody’s Investors Services, Inc., and not less than “A 1” if rated by
Standard and Poor’s;

 

(d)           Investments in office properties (but
not including office properties that are under construction) consistent with
Borrower’s business plan submitted to the Agent prior to the date hereof and
Investments in the following categories so long as the aggregate amount of each
of the following categories of Investments does not exceed the specified
percentage of Gross Asset Value set forth in the following table and so long as
the aggregate amount, without duplication, of all Investments described in such
categories does not exceed, at any time, fifteen percent (15%) of Gross Asset
Value:

 

	
  Category
  of Investment

  	
   

  	
  Maximum
  Percentage of Gross Asset Value

  
	
  Real Estate Assets that are not office
  buildings or office parks

  	
   

  	
  5%

  
	
  Unconsolidated
  Entities primarily engaged in either the business of ownership of real estate
  located in the United States

  	
   

  	
  10%

  
	
  Undeveloped land

  	
   

  	
  5%

  
	
  Mortgages and notes receivable

  	
   

  	
  5

  

 

§8.4         Merger,
Consolidation, Acquisition and Disposition of Properties.

 

(a)           The Borrower will not, and will not
permit any of the Related Companies or any Controlled Unconsolidated Entity to
become a party to any merger or consolidation, or agree to or effect any stock
acquisition, or enter into any partnership or joint venture other than
partnerships or joint ventures relating to Unconsolidated Entities to the
extent allowed by §8.3(d).

 

(b)           [Intentionally Omitted.]

 

(c)           Borrower will not, and will not
permit any of the Related Companies or any Controlled Unconsolidated Entity to
acquire or sell or otherwise dispose of Real Estate Assets pursuant to a single
transaction or a series of related transactions if the aggregate price or 

 

37

 

other consideration exceeds
$5,000,000 unless prior to such acquisition, sale or transfer, the Borrower
shall provide the Agent with a notice describing the terms of such transaction
and a Compliance Certificate with updated calculations reflecting such
transaction, and, if the aggregate price or other consideration for an
acquisition of Real Estate Assets exceeds $30,000,000, unless prior to such
acquisition, the Borrower shall have obtained the consent of the Majority
Lenders.

 

(d)           The Borrower shall not transfer any
assets to any of the Related Companies or any Unconsolidated Entity, and shall
not make any other material changes to the structure of its corporate
organization or the manner in which it operates its business, except with the
prior written consent of the Agent.

 

§8.5         Sale and
Leaseback.  The Borrower will not
enter into any arrangement, directly or indirectly, whereby the Borrower shall
sell or transfer any property owned by it in order then or thereafter to lease
such property or lease other property that the Borrower intends to use for
substantially the same purpose as the property being sold or transferred. The
Borrower will not permit any of the Related Companies or any Controlled
Unconsolidated Entity to enter into any such arrangement.

 

§8.6         Compliance
with Environmental Laws. 
The Borrower will not do, and will not permit any of the Related
Companies or any Controlled Unconsolidated Entity to do, any of the following:
(a) use any of the Real Estate or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Materials except for
immaterial amounts of Hazardous Materials used in the routine maintenance and
operation of the Real Estate and in compliance with applicable law, (b) cause
or permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Materials except in material
compliance with Environmental Laws, (c) generate any Hazardous Materials on any
of the Real Estate except in material compliance with Environmental Laws, or
(d) conduct any activity at any Real Estate or use any Real Estate in any
manner so as to cause a Release.

 

§8.7         Distributions.  Beginning with the fiscal quarter ending
March 31, 2005, Borrower shall not permit the total Distributions by it during
such fiscal quarter to exceed ninety-five percent (95%) of Funds From
Operations during such period.  For each
fiscal quarter after March 31, 2005, such test shall measure Distributions
and Funds From Operations from January 1, 2005 through the end of the
applicable fiscal quarter until a period of four consecutive fiscal quarters
has elapsed, in which event the test in this §8.7 shall be measured on a
rolling four-quarter basis.  Such
limitations on Distributions may be exceeded to the extent necessary for the
Borrower to maintain its REIT status provided that the Borrower provides the Agent
with a letter from its accountants or attorneys setting forth the basis for
computation of the amount of such necessary excess Distributions.  During any period, including without
limitation, at any time prior to March 31, 2005 when any Default or Event of
Default has occurred and is continuing the total Distributions by the Borrower
will not exceed the minimum amount necessary for the Borrower to maintain its
REIT status.

 

§8.8         [Intentionally
Omitted.]

 

38

 

§8.9         Related
Companies.  The Borrower will not
amend the articles of incorporation or bylaws or other organizational documents
of any of the Related Companies other than as may be required by any lender in
connection with the incurrence of Indebtedness permitted under §8.1.  Borrower will not, directly or indirectly,
make or permit to be made, by voluntary or involuntary means, any sale,
assignment, transfer, disposition, mortgage, pledge, hypothecation or
encumbrance of its interest in any Related Company or Unconsolidated Entity or
any dilution of its interest in any Related Company or Unconsolidated Entity.

 

§8.10       Equity Pledges.  Notwithstanding anything in this Agreement to
the contrary, Borrower will not, and the Borrower will not permit any Related
Company or Controlled Unconsolidated Subsidiary to, create or incur or suffer
to be created or incurred any Lien on any legal, equitable or beneficial
interest of Borrower in any Related Company or Controlled Unconsolidated Entity
if (a) all or any portion of the Indebtedness secured by such Lien is recourse
to Borrower, or (b) the Real Estate owned by such Related Company or
Controlled Unconsolidated Entity is collateral for the Secured Revolving Credit
Agreement or any successor facility thereto.

 

§9.          FINANCIAL COVENANTS OF THE BORROWER.

 

The Borrower
covenants and agrees as follows, so long as any Loan or Note is outstanding or
any Lender has any obligation to make any Loan:

 

§9.1         Reserved.

 

§9.2         Reserved.

 

§9.3         Total
Liabilities to Gross Asset Value.  The Borrower will not permit Total Liabilities
to exceed seventy percent (70%) of Gross Asset Value, calculated as of the end
of each fiscal quarter through and including the fiscal quarter ending
June 30, 2005.  Beginning with the
fiscal quarter ending September 30, 2005, the Borrower will not permit
Total Liabilities to exceed sixty-five percent (65%) of Gross Asset Value,
calculated as of the end of each fiscal quarter.

 

§9.4         Adjusted
EBITDA to Interest Expense. 
The Borrower will not permit the ratio of its Adjusted EBITDA to
Interest Expense to be less than 1.5 to 1.0 for any period of two fiscal
quarters annualized, calculated as of the end of each fiscal quarter through
and including the fiscal quarter ending June 30, 2005.  Beginning with the fiscal quarter ending
September 30, 2005, the Borrower will not permit the ratio of its Adjusted
EBITDA to Interest Expense to be less than 1.75 to 1.0 for any period of two
fiscal quarters annualized, calculated as of the end of each fiscal quarter.

 

§9.5         EBITDA to
Fixed Charges.  The
Borrower will not permit the ratio of its EBITDA to Fixed Charges to be less
than 1.35 to 1.0 for any period of two fiscal quarters annualized, calculated
as of the end of each fiscal quarter through and including the fiscal quarter
ending June 30, 2005.  Beginning
with the fiscal quarter ending September 30, 2005, the Borrower will not
permit the ratio of its EBITDA to Fixed Charges to be less than 1.5 to 1.0 for
any period of two fiscal quarters annualized, calculated as of the end of each
fiscal quarter.

 

39

 

§9.6         Minimum
Tangible Net Worth.  The
Borrower will not at any time permit its Tangible Net Worth to be less than the
sum of $75,000,000, plus 75% of Net Offering Proceeds after the Closing Date,
plus 100% of Net OP Proceeds after the Closing Date.

 

§10.        CONDITIONS TO EFFECTIVENESS.

 

This Agreement
shall become effective when each of the following conditions precedent have
been satisfied:

 

§10.1       Loan Documents.  Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed original of its Note
prior to or on the Closing Date.

 

§10.2       Good
Standing Certificates and Certified Copies.  The Agent shall have received (i) a
Certificate of Good Standing for the Borrower from the State of Maryland and a
certificate of qualification for the Borrower to do business from the State of
Colorado, and (ii) a copy of the Borrower’s Articles of Incorporation
certified by the Maryland Secretary of State.

 

§10.3       By-laws;
Resolutions.  All action on the
part of the Borrower necessary for the valid execution, delivery and
performance by the Borrower of this Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Agent shall have been provided to the
Agent. The Agent shall have received from the Borrower true copies of its by-laws
and the resolutions adopted by its Board of Directors authorizing the
transactions described herein, each certified by its secretary to be true and
complete and in effect on the Closing Date.

 

§10.4       Incumbency
Certificate; Authorized Signers. 
The Agent shall have received from the Borrower an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Borrower and giving the name and bearing a specimen signature of each
Responsible Officer.

 

§10.5       Opinions of
Counsel Concerning Organization and Loan Documents.  The Agent shall have received favorable
opinions addressed to the Lenders and the Agent and dated as of the Closing
Date, in form and substance reasonably satisfactory to the Lenders and the
Agent from Borrower’s counsel, which opinion may rely on opinions from other
law firms approved by the Lenders as to matters of law applicable in the
various states where the Borrower is organized.

 

§10.6       Payment of Fees.  The Borrower shall have paid to the Agent the
fees pursuant to §4.1 and shall have paid all other expenses as provided in §15
hereof then outstanding.

 

§10.7       Compliance
Certificate.  The Agent shall
have received a Compliance Certificate showing compliance with §8.3(d), and §9.3
through §9.6 as of June 30, 2004 and for the fiscal periods ending thereon.

 

40

 

§11.        CONDITIONS TO ALL BORROWINGS.

 

The
obligations of the Lenders to make any Loan, whether on or after the Closing
Date shall also be subject to the satisfaction of the following conditions
precedent:

 

§11.1       Representations
True; No Event of Default; Compliance Certificate.  Each of the representations and warranties of
the Borrower contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true and correct in all material respects as of the date as
of which they were made and shall also be true and correct in all material
respects at and as of the time of the making of such Loan, with the same effect
as if made at and as of that time (except to the extent of changes resulting
from transactions contemplated or permitted by this Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and except to the extent
that such representations and warranties relate expressly to an earlier date);
the Borrower shall have performed and complied with all terms and conditions
herein required to be performed by it or prior to the Borrowing Date of such
Loan; and no Default or Event of Default shall have occurred and be continuing
on the date of any Loan Request or on the Borrowing Date of such Loan; and
Agent shall have received a Compliance Certificate with computations evidencing
compliance with the covenants contained in §9.1 through §9.6 hereof after
giving effect to such requested Loan.

 

§11.2       No Legal
Impediment.  No change shall have
occurred in any law or regulations thereunder or interpretations thereof that
in the reasonable opinion of any Lender would make it illegal for such Lender
to make such Loan.

 

§11.3       Governmental
Regulation.  Each Lender shall
have received such statements in substance and form reasonably satisfactory to
such Lender as such Lender shall require for the purpose of compliance with any
applicable regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System.

 

§11.4       Proceedings
and Documents.  All proceedings
in connection with the transactions contemplated by this Agreement, the other
Loan Documents and all other documents incident thereto shall be reasonably
satisfactory in substance and in form to the Agent, and the Lenders shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Agent may reasonably request.

 

§12.        EVENTS OF DEFAULT; ACCELERATION; ETC.

 

§12.1       Events
of Default and Acceleration.  If
any of the following events (“Events of Default” or, if the giving of notice or
the lapse of time or both is required, then, prior to such notice or lapse of
time, “Defaults”) shall occur:

 

(a)           the Borrower shall fail to pay any
principal of the Loans when the same shall become due and payable;

 

(b)           the Borrower shall fail to pay any
interest on the Loans or any other sums due hereunder or under any of the other
Loan Documents within five (5) days after the same shall become due and
payable;

 

41

 

(c)           the Borrower shall fail to comply
with any of its covenants contained in §3.2, §7.5, §7.6, §7.7, §7.8, §8 or §9
hereof;

 

(d)           the Borrower shall fail to perform
any other term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this §12) for thirty
(30) days after written notice of such failure from Agent to the Borrower;

 

(e)           any representation or warranty of the
Borrower in this Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection with this
Agreement, shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated, provided, however, that with
respect to the representations and warranties of the Borrower contained in
§6.18 and §6.22, if the condition or event making the representation and
warranty false is capable of being cured by the Borrower, no enforcement action
has been commenced against the Borrower or the applicable Real Estate on
account of such condition or event nor is the applicable Real Estate subject to
risk of forfeiture due to such condition or event, and the Borrower promptly
commences the cure thereof after the Borrower’s first obtaining knowledge of
such condition or event, the Borrower shall have a period of thirty (30) days
after the date that the Borrower first obtained knowledge of such condition or
event during which the Borrower may cure such condition or event (or, if such condition
or event is not reasonably capable of being cured within such thirty (30) day
period, such additional period of time as may be reasonably required in order
to cure such condition or event but in any event such period shall not exceed
six (6) months from the date that the Borrower first obtained knowledge of such
condition or event), and no Event of Default shall exist hereunder during such
thirty (30) day or additional period so long as the Borrower continuously and
diligently pursues the cure of such condition or event and the other conditions
to such cure period have not changed;

 

(f)            the Borrower, any of the Related
Companies or any Controlled Unconsolidated Entity shall fail to pay at
maturity, or within any applicable period of grace, any Indebtedness, or shall
fail to observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing Indebtedness for
such period of time as would permit (assuming the giving of appropriate notice
if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof, and in any event, such failure
shall continue for thirty (30) days, unless the aggregate amount of all such
defaulted Indebtedness plus the amount of any unsatisfied judgments described
in paragraph (i) of this §12.1 is less than $5,000,000.00;

 

(g)           any of the Borrower, any of the
Related Companies or any Controlled Unconsolidated Entity shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of any substantial part of its properties or shall
commence any case or other proceeding under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against any such Person and such Person shall indicate its
approval thereof, consent thereto or acquiescence therein;

 

42

 

(h)           a decree or order is entered
appointing any such trustee, custodian, liquidator or receiver or adjudicating
the Borrower, any of the Related Companies or any Controlled Unconsolidated Entity
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of the
Borrower, any of the Related Companies or any Controlled Unconsolidated Entity
in an involuntary case under federal bankruptcy laws as now or hereafter
constituted;

 

(i)            there shall remain in force,
undischarged, unsatisfied and unstayed, for more than thirty days, whether or
not consecutive, any uninsured final judgment against the Borrower, any of the
Related Companies or any Controlled Unconsolidated Entity that, with other
outstanding uninsured final judgments, undischarged, against the Borrower, any
of the Related Companies or any Controlled Unconsolidated Entity plus the
amount of any defaulted Indebtedness under paragraph (f) of this §12.1, exceeds
in the aggregate $5,000,000.00;

 

(j)            if any of the Loan Documents or any
material provision of any Loan Documents shall be unenforceable, cancelled,
terminated, revoked or rescinded otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or approval of the
Agent, or any action at law, suit or in equity or other legal proceeding to
make unenforceable, cancel, revoke or rescind any of the Loan Documents shall
be commenced by or on behalf of the Borrower, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;

 

(k)           the Borrower, any of the Related
Companies or any Controlled Unconsolidated Entity shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any
assets of the Borrower;

 

(l)            the Borrower shall fail to pay,
observe or perform any term, covenant, condition or agreement contained in any
agreement, document or instrument evidencing, securing or otherwise relating to
any Indebtedness of the Borrower to any Lender (other than the Obligations)
and/or relating to any Permitted Lien (other than the Obligations) within any
applicable period of grace provided for in such agreement, document or
instrument;

 

(m)          [Intentionally Omitted];

 

(n)           any “Event of Default”, as defined in
any of the other Loan Documents, shall occur; or

 

(o)           Any two or more of William Atkins,
Charles Knight and John Greenman shall cease to be a senior executive officer
of the Borrower and the Board of Directors of the Borrower shall not, within
six months thereafter, hire a substitute officer who has been approved by the
Majority Lenders, with each Lender having the right to approve or disapprove
any proposed successor in its sole reasonable discretion;

 

(p)           a Change of Control shall occur
without the prior written consent of all Lenders;

 

43

 

(q)           any “Event of Default” as defined in
the Secured Revolving Credit Agreement shall occur;

 

then, and in
any such event, so long as the same may be continuing, the Agent may, and upon
the request of the Majority Lenders shall, by notice in writing to the Borrower
declare all amounts owing with respect to this Agreement, the Notes and the
other Loan Documents to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of any Event of Default specified in §§12.1(g) or
12.1(h), all such amounts shall become immediately due and payable
automatically and without any requirement of notice from the Agent or action by
the Majority Lenders.

 

§12.2       Termination of Commitments.  If any one or more Events of Default
specified in §12.1(g) or §12.1(h) shall occur, any unused portion of the
Commitments hereunder, shall forthwith terminate and the Lenders shall be
relieved of all obligations to make Loans to the Borrower.  If any other Event of Default shall have
occurred and be continuing, the Agent, upon the election of the Majority
Lenders, may by notice to the Borrower terminate the unused portion of the
Commitments hereunder, and upon such notice being given such unused portion of
the Commitments hereunder shall terminate immediately and the Lenders shall be
relieved of all further obligations to make Loans. No termination of such
Lender’s Commitment hereunder shall relieve the Borrower of any of the
Obligations or any of its existing obligations to such Lender arising under other
agreements or instruments.

 

§12.3       Remedies.  In case any one or more of the Events of
Default shall have occurred, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to §12.1, the Agent, on behalf
of the Lenders may, with the consent of the Majority Lenders, proceed to
protect and enforce the rights and remedies of the Agent and the Lenders under
this Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the obligations are
evidenced, including to the full extent permitted by applicable law the obtaining
of the ex parte appointment of a receiver and, if any amount shall have become
due, by declaration or otherwise, to proceed to enforce the payment thereof or
any other legal or equitable right of such Lender. No remedy herein conferred
upon any Lender or the Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.  Notwithstanding the provisions of this
Agreement providing that the Loans may be evidenced by multiple Notes in favor
of the Lenders, the Lenders acknowledge and agree that only the Agent may
exercise any remedies arising by reason of a Default or Event of Default.

 

§12.4       Distribution of
Proceeds.  In the event
that, during the continuance of any Default or Event of Default, the Agent or
any Lender as the case may be, receives any monies in connection with the
enforcement of any of the Loan Documents, or otherwise with respect to the
realization upon any of the assets of the Borrower, such monies shall be
distributed for application as follows:

 

44

 

(a)           First, to the payment of, or (as the
case may be) the reimbursement of the Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by the
Agent, for the exercise, protection or enforcement by the Agent of all or any
of the rights, remedies, powers and privileges of the Agent or the Lenders
under this Agreement or any of the other Loan Documents or in support of any
provision of adequate indemnity to the Agent against any taxes or liens which
by law shall have, or may have, priority over the rights of the Agent to such
monies;

 

(b)           Second, to all other Obligations in
such order or preference as the Majority Lenders may determine; provided,
however, that (i) distributions in respect of such other Obligations shall
include, on a pari passu basis, the Agent’s fee payable pursuant to §4.3, and
(ii) in the event that any Lender shall have wrongfully failed or refused
to make an advance under §2.6 and such failure or refusal shall be continuing,
advances made by other Lenders during the pendency of such failure or refusal
shall be entitled to be repaid as to principal and accrued interest in priority
to the other Obligations described in this subsection (b), and
distributions in respect of such Obligations shall be made among the Lenders
pro rata in accordance with each Lender’s respective Facility Percentage; and
provided, further, that the Agent may in its discretion make proper allowance
to take into account any Obligations not then due and payable;

 

(c)           Third, upon payment and satisfaction
in full or other provisions for payment in full satisfactory to the Lenders and
the Agent of all of the Obligations, and to the payment of any obligations
required to be paid pursuant to applicable laws applicable to such enforcement;
and

 

(d)           Fourth, the excess, if any, shall be
returned to the Borrower or to such other Persons as are legally entitled
thereto.

 

§13.        SETOFF.

 

Borrower
hereby grants to each Lender, a continuing lien, security interest and right of
setoff as security for all liabilities and obligations to such Lender
hereunder, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of such Lender or in transit to it.  At any time, without demand or notice (any
such notice being expressly waived by Borrower), any Lender may, WITH THE PRIOR
APPROVAL OF THE AGENT, setoff the same or any part thereof and apply the same
to any liability or obligation of Borrower hereunder  even though unmatured and regardless of the
adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT
TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each other
Lender that (a) if an amount to be set off is to be applied to Indebtedness of
the Borrower to such Lender, other than Indebtedness evidenced by the Notes
held by such Lender, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness 

 

45

 

evidenced by all such Notes
held by such Lender, and (b) if such Lender shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim evidenced by the Notes held by such
Lender by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the
Note or Notes held by such Lender any amount in excess of its ratable portion
of the payments received by all of the Lenders with respect to the Notes held
by all of the Lenders, such Lender will make such disposition and arrangements
with the other Lenders with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise as shall
result in each Lender receiving in respect of the Notes held by it its
proportionate payment as contemplated by this Agreement; provided that if all
or any part of such excess payment is thereafter recovered from such Lender,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.  Notwithstanding the foregoing, no Lender
shall exercise a right of setoff if such exercise would limit or prevent the
exercise of any other remedy or other recourse against the Borrower.

 

§14.        THE
AGENT.

 

§14.1       Authorization.  The Agent is authorized to take such action
on behalf of each of the Lenders and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent.  The obligations of Agent hereunder are primarily
administrative in nature, and nothing contained in this Agreement or any of the
other Loan Documents shall be construed to constitute the Agent as a trustee
for any Lender or to create any agency or fiduciary relationship.  Agent shall act as the contractual
representative of the Lenders hereunder, and notwithstanding the use of the
term “Agent”, it is understood and agreed that the Agent shall not have any
fiduciary duties or responsibilities to any Lender by reason of this Agreement
or any other Loan Document and is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. 
The Borrower and any other Person shall be entitled to conclusively rely
on a statement from the Agent that it has the authority to act for and bind the
Lenders pursuant to this Agreement and the other Loan Documents.

 

§14.2       Employees
and Agents.  The Agent may
exercise its powers and execute its duties by or through employees or agents
and shall be entitled to take, and to rely on, advice of counsel concerning all
matters pertaining to its rights and duties under this Agreement and the other
Loan Documents. The Agent may utilize the services of such Persons as the Agent
in its sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.

 

§14.3       No Liability.  Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or 

 

46

 

error of judgment whatsoever,
except that the Agent or such other Person, as the case may be, may be liable
for losses due to its willful misconduct or gross negligence as determined by a
court of competent jurisdiction after the exhaustion of all applicable appeal
periods.

 

§14.4       No
Representations.  The Agent shall
not be responsible for the execution or validity or enforceability by or
against Borrower of this Agreement, the Notes, any of the other Loan Documents
or any instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf
of the Borrower, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or
in any instrument at any time constituting, or intended to constitute,
collateral security for the Notes. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
condition of the Borrower or its Subsidiaries or any other Person.  Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender, and
based upon such information and documents as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender, based
upon such information and documents as it deems appropriate at the time,
continue to make its own credit analysis and decisions in taking or not taking action
under this Agreement and the other Loan Documents.  Agent’s counsel has only represented Agent
and KeyBank in connection with the Loan Documents and the only attorney-client
relationship or duty of care is between Agent’s counsel and Agent or KeyBank.
Each Lender has been independently represented by separate counsel on all
matters regarding the Loan Documents and the granting and perfecting of liens
in the Collateral.

 

§14.5       Payments.

 

(a)           A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of any
Lender shall constitute a payment to such Lender subject to the pro rata rights
to repayment based upon the Facility Percentage of each Lender. The Agent
agrees, promptly after the Agent’s receipt of good funds as determined in
accordance with Agent’s customary practices, to distribute to each Lender such
Lender’s pro rata share of payments received by the Agent for the account of
the Lenders except as otherwise expressly provided herein or in any of the
other Loan Documents.

 

(b)           If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it in liability,
it may refrain from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and distributed
by the Agent is to be repaid, each Person to whom any such distribution shall
have been made shall either repay to the Agent 

 

47

 

its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.

 

(c)           Notwithstanding anything to the
contrary contained in this Agreement or any of the other Loan Documents, any
Lender that fails (i) to make available to the Agent its pro rata share of any
Loan or (ii) to comply with the provisions of §12 and §13  with respect to making dispositions and
arrangements with the other Lenders, where such Lender’s share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Lenders, in each case as, when and
to the full extent required by the provisions of this Agreement, or to adjust
promptly such Lender’s outstanding principal and its pro rata Facility
Percentage as provided in §2.7 hereof, shall be deemed delinquent (a “Delinquent
Lender”) and shall be deemed a Delinquent Lender until such time as such
delinquency is satisfied.  A Delinquent
Lender shall be deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Loans, interest, fees or otherwise,
to the remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans.  The Delinquent Lender hereby authorizes the
Agent to distribute such payments to the nondelinquent Lenders in proportion to
their respective pro rata shares of all outstanding Loans.  In addition to the rights and remedies that
may be available to the Agent at law and in equity, a Defaulting Lender’s right
to participate in the administration of the Loan Documents, including, without
limitation, any rights to consent to or direct any action or inaction of the
Agent pursuant to this Agreement or otherwise, or to be taken into account in
the calculation of Majority Lenders or any matter requiring approval of all of
the Lenders, shall be suspended while such Lender is a Defaulting Lender.  A Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Lenders, the
Lenders’ respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency. 
The provisions of this Section shall apply and be effective regardless
of whether an Event of Default occurs and is then continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary or
(ii) any instruction of Borrower as to its desired application of
payments.  The Agent shall be entitled to
(i) withhold or set off, and to apply to the payment of the obligations of
any Delinquent Lender any amounts to be paid to such Delinquent Lender under
this Agreement, and (ii) bring an action or suit against such Delinquent
Lender in a court of competent jurisdiction to recover the defaulted
obligations of such Delinquent Lender and, to the extent such recovery would
not fully compensate the Lenders for the Delinquent Lender’s breach of this
Agreement, to collect damages.  In
addition, the Delinquent Lender shall indemnify, defend and hold Agent and each
of the other Lenders harmless from and against any and all claims, actions,
liabilities, damages, costs and expenses (including attorneys’ fees and expenses),
plus interest thereon at the Default rate of interest set forth in §4.10, for
funds advanced by Agent or any other Lender on account of the Delinquent Lender
or any other damages such Persons may sustain or incur by reason of or as a
direct consequence of the Delinquent Lender’s failure or refusal to abide by
its obligations under this Agreement.

 

§14.6       Holders of
Notes.  The Agent may deem and
treat the payee of any Note as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.

 

48

 

§14.7       Indemnity.  The Lenders ratably agree hereby to indemnify
and hold harmless the Agent from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Agent has not been reimbursed by the
Borrower as required by §15), and liabilities of every nature and character
arising out of or related to this Agreement, the Notes, or any of the other
Loan Documents or the transactions contemplated or evidenced hereby or thereby,
or the Agent’s actions taken hereunder or thereunder, except to the extent that
any of the same shall be directly caused by the Agent’s willful misconduct or
gross negligence as determined by a court of competent jurisdiction after the
exhaustion of all applicable appeal periods.

 

§14.8       Agent as Lender.  In its individual capacity, KeyBank shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes as it would have were it not also the Agent.

 

§14.9       Resignation.  The Agent may resign at any time by giving
thirty (30) days prior written notice thereof to the Lenders and the
Borrower.  Upon any such resignation, the
Majority Lenders shall have the right to appoint a successor Agent.  Unless a Default or Event of Default shall have
occurred and be continuing, appointment of such successor Agent shall be
subject to the reasonable approval of the Borrower.  If no successor Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the giving of notice of resignation or the
Borrower has disapproved or failed to approve a successor agent within such
period, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a financial institution having a rating of not
less than A2/P2 or its equivalent by Standard & Poor’s Corporation. 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 hereunder. After any
retiring Agent’s resignation, the provisions of this Agreement and the other
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.

 

§14.10     Notification
of Defaults and Events of Default.  Each Lender hereby agrees that, upon learning
of the existence of a Default or an Event of Default, it shall promptly notify
the Agent thereof. The Agent hereby agrees that upon receipt of any notice
under this §14.10 it shall promptly notify the other Lenders of the existence
of such Default or Event of Default.

 

§14.11     Duties in the
Case of Enforcement.  In
case one of more Events of Default have occurred and shall be continuing, and
whether or not acceleration of the obligations shall have occurred, the Agent
shall, if (a) so requested by the Majority Lenders and (b) the Lenders have
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Loan Documents and exercise all or any legal and
equitable and other rights or remedies as it may have. The Majority Lenders may
direct the Agent in writing as to the method and the extent of any such
exercise, the Lenders hereby agreeing to indemnify and hold the Agent harmless
from all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, provided that the Agent need not comply with
any such direction to the extent that the Agent 

 

49

 

reasonably believes the Agent’s
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction or would subject to the Agent to civil liability.

 

§14.12     Bankruptcy.  In the event a bankruptcy or other insolvency
proceeding is commenced by or against Borrower, the Agent shall have the sole
and exclusive right to file and pursue a joint proof claim on behalf of all
Lenders.  Each Lender irrevocably waives
its right to file or pursue a separate proof of claim in any such proceedings.

 

§15.        EXPENSES.

 

The Borrower
agrees to pay (a) any taxes (including any interest and penalties in respect
thereto) payable by the Agent or any of the Lenders (other than taxes based
upon the Agent’s or any Lender’s net income), including any intangibles taxes
in connection with the Loan Documents, or other taxes payable on or with
respect to the transactions contemplated by this Agreement, including any taxes
payable by the Agent or any of the Lenders after the Closing Date (the Borrower
hereby agreeing to indemnify the Lenders with respect thereto), (b) the
reasonable fees, expenses and disbursements of the Agent’s counsel or any local
counsel to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments mentioned
herein, each closing hereunder, and amendments, modifications, approvals,
consents or waivers hereto or hereunder, (c) the reasonable fees, costs,
expenses and disbursements of the Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein, (d) the fees, costs, expenses and disbursements
of the Agent incurred in connection with the syndication and/or participation
of the Loans, (e) all reasonable out-of-pocket expenses (including reasonable
attorneys’ fees and costs, which attorneys may be employees of any Lender or
the Agent and the fees and costs of appraisers, engineers, investment bankers,
surveyors or other experts retained by the Agent or any Lender in connection
with any such enforcement proceedings) incurred by any Lender or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or the administration thereof after the
occurrence of a Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or “workout” of the Loans), and (ii)
any litigation, proceeding or dispute whether arising hereunder or otherwise,
in any way related to the Agent’s or the Lender’s relationship with the
Borrower, any Controlled Unconsolidated Entity or any of the Related Companies,
(f) all reasonable fees, expenses and disbursements of the Agent incurred in
connection with UCC searches, UCC filings or mortgage recordings, (g) all
reasonable costs incurred by the Agent in the future in connection with its
inspection of the Real Estate, and (h) the reasonable fees, costs, expenses and
disbursements of the Agent incurred in connection with the granting of any
collateral by the Borrower, including, without limitation, the costs incurred
by the Agent in connection with its inspection of such collateral, and the fees
and disbursements of the Agent’s counsel. The covenants of this §15 shall
survive payment or satisfaction of payment of amounts owing with respect to the
Notes.

 

§16.        INDEMNIFICATION.

 

The Borrower
agrees to indemnify and hold harmless the Agent and the Lenders and the
shareholders, directors, agents, officers, subsidiaries, and affiliates of the
Agent and the Lenders and any Person that controls the Agent or any Lender from
and against any and all claims, 

 

50

 

actions or causes of action and
suits whether groundless or otherwise, and from and against any and all
liabilities, losses, settlement payments, obligations, damages and expenses of
every nature and character arising out of this Agreement or any of the other
Loan Documents or the transactions contemplated hereby or which otherwise arise
in connection with the financing including, without limitation except to the
extent caused by the gross negligence or willful misconduct of a Lender or the
Agent as determined by a court of competent jurisdiction after the exhaustion
of all applicable appeal periods (but such limitation on indemnification shall
only apply to the Agent or Lender that is being grossly negligent or committing
willful misconduct), (a) any actual or proposed use by the Borrower of the
proceeds of any of the Loans, (b) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the Borrower,
(c) the Borrower entering into or performing this Agreement or any of the other
Loan Documents or (d) with respect to the Borrower and its respective
properties, the violation of any Environmental Law, the Release or threatened
Release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death, personal
injury or damage to property), (e) any cost, claim liability, damage or expense
in connection with any harm the Borrower may be found to have caused in the
role of a broker, in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred
in connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Lenders and the Agent shall each
be entitled to select their own separate counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees
and expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this §16 are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The provisions of this
§16 shall survive the repayment of the Loans and the termination of the
obligations of the Lenders hereunder and shall continue in full force and
effect as to the Lenders so long as the possibility of any such claim, action,
cause of action or suit exists under applicable law, rule or regulation.

 

§17.        SURVIVAL OF COVENANTS, ETC.

 

All covenants,
agreements, representations and warranties made herein, in the Notes, in any of
the other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrower pursuant hereto shall be deemed to have been relied upon
by the Lenders and the Agent, notwithstanding any investigation heretofore or
hereafter made by it, and shall survive the making by the Lenders of the Loans,
as herein contemplated, and shall continue in full force and effect so long as
any amount due under this Agreement or the Notes or any of the other Loan
Documents remains outstanding or the Lenders have any obligation to make any
Loans. The indemnification obligations of the Borrower provided herein and the
other Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Lenders hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
delivered to the Agent or any Lender at any time executed on behalf of the
Borrower pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower
hereunder.

 

51

 

§18.        ASSIGNMENT; PARTICIPATIONS; ETC.

 

§18.1       Conditions
to Assignment by Lenders. 
Except as provided herein, each Lender may assign to one or more
Eligible Assignees all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of its Facility Percentage and
the same portion of the Loans at the time owing to it, and the Notes held by
it); provided that (a) the Agent shall have given its prior written consent to
such assignment except that such consent shall not be needed with respect to an
assignment from a Lender to one of its Affiliated Lenders, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement, (c) each
assignment shall be in an amount of not less than $3,000,000 that is a whole
multiple of $1,000,000, (d) each Lender shall either assign its entire
Commitment or shall retain, free of any such assignment, an amount of its
Commitment of not less $3,000,000 and (e) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the form of Exhibit
D hereto (an “Assignment and Acceptance”) , together with any Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (ii) the assigning Lender shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to in
§18.3, be released from its obligations under this Agreement.

 

§18.2       Certain Representations and
Warranties; Limitations; Covenants.  By executing and delivering an Assignment and
Acceptance, the parties to the assignment thereunder confirm to and agree with
each other and the other parties hereto as follows: (a) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, the
assigning Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto;
(b) the assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower or any other
Person primarily or secondarily liable in respect of any of the obligations of
any of their obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto or the
validity or enforceability or priority of any lien or any Collateral; (c) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in §6.4 and §7.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the assigning
Lender, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and collateral decisions in taking or not taking action under this
Agreement, (e) such assignee represents and warrants that it is an Eligible
Assignee; (f) such assignee appoints and authorizes the Agent to take such
action as “Agent” on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms 

 

52

 

hereof or thereof, together
with such powers as are reasonably incidental thereto; (g) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender;
and (h) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance.

 

§18.3       Register.  The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
“Register”) for the recordation of the names and addresses of the Lenders and
the Facility Percentages of, and principal amount of the Loans owing to the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and 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 shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. 
Upon each such recordation, the assigning Lender agrees to pay to the
Agent a registration fee in the sum of $2,500.00.  The Agent may amend Schedules 1 and 1.1
hereof to reflect the recording of any such assignments.

 

§18.4       New Notes.  Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each Note
subject to such assignment, the Agent shall (a) record the information
contained therein in the Register, and (b) give prompt notice thereof to the
Borrower and the Lenders (other than the assigning Lender). Within five (5)
Business Days after receipt of such notice, the Borrower, at its own expense,
shall execute and deliver to the Agent, in exchange for each surrendered Note,
a new Note to the order of such Eligible Assignee in an amount equal to the
amount assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained some portion of its Loans
hereunder, a new Note to the order of the assigning Lender in an amount equal
to the amount retained by it hereunder. Such new Notes shall provide that they
are replacements for the surrendered Notes and that they do not constitute a
novation, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. The surrendered Notes shall be cancelled and returned to
the Borrower.

 

§18.5       Participations.  Each Lender may sell participations to one or
more banks or other entities in a portion of such Lender’s rights and
obligations under this Agreement and the other Loan Documents not to exceed
forty-nine percent (49%) of its Facility Percentage; provided that (a) the
Agent shall have given its prior written consent to such participation, except
that any Lender may sell participations to its Affiliated Lenders without such
consent, (b) each such participation shall be in an amount of not less than
$3,000,000 that is a whole multiple of $1,000,000, (c) any such sale or
participation shall not affect the rights and duties of the selling Lender
hereunder to the Borrower and the Lender shall continue to exercise all
approvals, disapprovals and other functions of a Lender, (d) such participation
shall not entitle such participant to any rights or privileges under this
Agreement or the Loan Documents, including, without limitation, the right to
approve waivers, amendments or modifications, (e) such participant shall have
no direct rights against the Borrower except the rights granted to the Lenders
pursuant to §13, (f) such sale is effected in accordance with all applicable
laws, (g) such 

 

53

 

participant shall not be a
Person controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by, the Borrower, any Related Company
or any Unconsolidated Entity or any affiliate thereof, and (h) no participant
shall have the right to grant further participations or assign its rights,
obligations or interests under such participation to other Persons without the
prior written consent of the Agent.

 

§18.6       Pledge by
Lender.  Any Lender may at any
time pledge or assign all or any portion of its interest and rights under this
Agreement (including all or any portion of its Note) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. §341. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other Loan
Documents.

 

§18.7       No
Assignment by Borrower.  The
Borrower shall not assign or transfer any of its rights or obligations under
any of the Loan Documents without the prior written consent of each of the
Lenders.

 

§18.8       Disclosure.  The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.

 

§18.9       Mandatory
Assignment.  In the event
Borrower requests that certain amendments, modifications or waivers be made to
this Agreement or any of the other Loan Documents which request is approved by
Agent but is not approved by one or more of the Lenders (any such
non-consenting Lender shall hereafter be referred to as the “Non-Consenting
Lender”), then, within thirty (30) days after Borrower’s receipt of notice of
such disapproval by such Non-Consenting Lender, Borrower shall have the right
as to such Non-Consenting Lender, to be exercised by delivery of written notice
delivered to the Agent and the Non-Consenting Lender within thirty (30) days of
receipt of such notice, to elect to cause the Non-Consenting Lender to transfer
its Commitment.  The Agent shall promptly
notify the remaining Lenders that each of such Lenders shall have the right,
but not the obligation, to acquire a portion of the Commitment, pro rata based
upon their relevant Facility Percentages, of the Non-Consenting Lender (or if
any of such Lenders does not elect to purchase its pro rata share, then to such
remaining Lenders in such proportion as approved by the Agent).  Upon any such purchase of the Commitment of
the Non-Consenting Lender, the Non-Consenting Lender’s interests in the
Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase, and the Non-Consenting Lender shall promptly
execute and deliver any and all documents reasonably requested by Agent to surrender
and transfer such interest, including, without limitation, an Assignment and
Acceptance substantially in the form attached hereto as Exhibit D
and such Non-Consenting Lender’s original Note. 
The purchase price for the Non-Consenting Lender’s Commitment shall
equal any and all amounts outstanding and owed by Borrower to the
Non-Consenting Lender, including principal and all accrued and unpaid interest
or fees, plus any applicable prepayment fees which would be owed to such
Non-Consenting Lender if the Loans were to be repaid in full on the date of
such purchase of the Non-Consenting Lender’s Commitment (provided that Borrower
may pay the amount of any interest, fees or other amounts (other than
principal) owed to such Non-Consenting Lender).

 

54

 

§18.10     Co-Agents.  The Arranger shall not have any additional
rights or obligations under the Loan Documents, except for those rights, if
any, as a Lender.

 

§19.        NOTICES, ETC.

 

Except as
otherwise expressly provided in this Agreement, all notices and other
communications made or required to be given pursuant to this Agreement or the
Notes shall be in writing and shall be delivered in hand, mailed by United
States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, telefax or telex and
confirmed by delivery via courier or postal service, addressed as follows:

 

(a)           if to the Borrower, at 1780 S.
Bellaire Street, Suite 515, Denver, CO 80222 Attention:  Chief Financial Officer, Telefax No.
303-296-7353 or at such other address for notice as the Borrower shall last
have furnished in writing to the Agent; and

 

(b)           if to the Agent, at 400 Perimeter
Center Terrace, N.E., Suite 900, Atlanta, Georgia 30346, Attn: Dan
Stegemoeller, Vice President, Telefax No. 770-804-6443 and to KeyBank National
Association, 127 Public Square, Cleveland, Ohio 44114-1306, Real Estate Capital
Services or such other address for notice as the Agent shall last have
furnished in writing to the Borrower.

 

(c)           if to any Lender, at such Lender’s
address set forth on such Lender’s signature page, or such other address for
notice as such Lender shall have last furnished in writing to the Person giving
the notice.

 

Any such
notice or demand shall be deemed to have been duly given or made and to have
become effective (i) if delivered by hand, overnight courier or facsimile to a
responsible officer of the party to which it is directed, at the time of the
receipt thereof by such officer or the sending of such facsimile (as evidenced
by confirmation of successful transmission) and (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third Business Day
following the mailing thereof.

 

§20.        GOVERNING LAW; CONSENT TO JURISDICTION
AND SERVICE.

 

THIS AGREEMENT
AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  BORROWER AGREES THAT ANY SUIT BY IT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
ONLY IN THE COURTS OF THE STATE OF GEORGIA OR ANY FEDERAL COURT SITTING THEREIN
AND BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT FOR ANY
SUIT BY AGENT OR ANY LENDER AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN §19. BORROWER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS 

 

55

 

BROUGHT IN AN INCONVENIENT
FORUM. IN ADDITION TO THE COURTS OF THE STATE OF GEORGIA OR ANY FEDERAL COURT
SITTING THEREIN, THE AGENT OR ANY LENDER MAY BRING ACTION(S) FOR ENFORCEMENT ON
A NONEXCLUSIVE BASIS WHERE ANY COLLATERAL OR ASSETS OF BORROWER EXIST AND THE
BORROWER CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN §19.

 

§21.        HEADINGS.

 

The captions
in this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.

 

§22.        COUNTERPARTS.

 

This Agreement
and any amendment hereof may be executed in several counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one instrument.
In proving this Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement is
sought.

 

§23.        ENTIRE AGREEMENT.

 

This Agreement
and the Loan Documents is intended by the parties as the final, complete and
exclusive statement of the transactions evidenced by this Agreement and the
Loan Documents.  All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Agreement and the Loan Documents,
and no party is relying on any promise, agreement or understanding not set
forth in this Agreement and the Loan Documents. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated, except as
provided in §25.

 

§24.        WAIVER OF JURY TRIAL AND CERTAIN DAMAGE
CLAIMS.

 

THE BORROWER,
THE AGENT AND EACH LENDER HEREBY MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF AGENT OR THE LENDERS RELATING TO
THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE
THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES 

 

56

 

OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES.  BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR LENDERS TO PROVIDE THE COMMITMENTS AND MAKE THE LOANS.

 

§25.        CONSENTS, AMENDMENTS, WAIVERS, ETC.

 

Except as
otherwise expressly provided in this Agreement, any consent or approval
required or permitted by this Agreement may be given, and any term of this
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower of any terms of this
Agreement or such other instrument 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 Majority Lenders.  Notwithstanding
the foregoing, none of the following may occur without the written consent of
each Lender:  a decrease in the rate of interest
on and the term of the Notes; except as provided in §2.7, an increase in the
amount of the Commitments of the Lenders; a forgiveness, reduction or waiver of
the principal of any unpaid Loan or any interest thereon or fee payable to the
Lenders under the Loan Documents; the postponement of any date fixed for any
payment of principal of or interest on the Loan; an extension of the Maturity
Date; a change in the manner of distribution of any payments to the Lenders or
the Agent; the release of the Borrower; an amendment of the definition of
Majority Lenders or of any requirement for consent by all of the Lenders; any
modification to require a Lender to fund a pro rata
share of a request for an advance of the Loan made by the Borrower other than
based on its Facility Percentage; an amendment to this §25; or an amendment of
any provision of this Agreement or the Loan Documents which requires the
approval of all of the Lenders or the Majority Lenders to require a lesser
number of Lenders to approve such action. 
Notwithstanding the foregoing, Agent may unilaterally in its discretion grant
Borrower a waiver of the covenant in §3.2 for a period not to exceed ninety
(90) days, provided that such waiver may only be granted once in any calendar
year.  No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon.  The provisions of §14 may not
be amended without the written consent of the Agent.  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.  No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand in similar or
other circumstances.

 

§26.        SEVERABILITY.

 

The provisions
of this Agreement are severable, and if any one clause or provision hereof
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
then such invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not in any manner affect
such clause or provision in any other jurisdiction, or any other clause or
provision of this Agreement in any jurisdiction.

 

57

 

§27.        RELATIONSHIP.

 

Neither the
Agent nor any Lender has any fiduciary relationship with or fiduciary duty to
the Borrower arising out of or in connection with the Agreement or the other
Loan Documents or the transactions contemplated hereunder and thereunder, and
the relationship between each Lender and the Borrower is solely that of a
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.

 

§28.        DEALINGS WITH
THE BORROWER.

 

The Agent, the
Lenders and their affiliates may accept deposits from, extend credit to and
generally engage in any kind of banking, trust or other business with the
Borrower or any of its affiliates or Subsidiaries regardless of the capacity of
the Agent or the Lenders hereunder.  The
Lenders acknowledge that, pursuant to such activities, KeyBank or its
Affiliates may receive information regarding such Persons (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.

 

§29.        NO UNWRITTEN AGREEMENTS.

 

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

§30.        TIME OF THE ESSENCE.

 

Time is of the
essence with respect to each and every covenant, agreement and obligation of
the Borrower under this Agreement and the other Loan Documents.

 

§31.        RIGHTS OF THIRD PARTIES.

 

(a)           This Agreement and the other Loan
Documents are made and entered into for the sole protection and legal benefit
of the Borrower, the Lenders, and the Agent, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.

 

(b)           All conditions to the performance of
the obligations of the Agent and the Lenders under this Agreement, including
the obligation to make Loans, are imposed solely and exclusively for the
benefit of the Agent and the Lenders and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that the Agent and the Lenders will refuse to make advances
of proceeds of the Loan in the absence of strict compliance with any or all
thereof and no other Person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Agent and the Lenders at any time if in their sole
discretion they deem it desirable to do so.

 

58

 

§32.        PATRIOT ACT.

 

Each Lender
and the Agent (for itself and not on behalf of any Lender) hereby notifies
Borrower and Guarantors that, pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies
Borrower, which information includes names and addresses and other information
that will allow such Lender or the Agent, as applicable, to identify Borrower
in accordance with the Patriot Act.

 

[SIGNATURES
BEGIN ON FOLLOWING PAGE]

 

59

 

IN WITNESS
WHEREOF, the undersigned have duly executed this Agreement as a sealed
instrument as of the date first set forth above.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  AMERIVEST
  PROPERTIES INC., a Maryland 

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John B. Greenman

  	
   

  
	
   

  	
  Name: John B. Greenman

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION, as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Stegemoeller

  	
   

  
	
   

  	
  Name: Dan Stegemoeller

  
	
   

  	
  Title: Vice President

  

 

60

 

Lender
Signature Page

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dan Stegemoeller

  	
   

  
	
   

  	
  Name: Dan Stegemoeller

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Commitment:

  	
  $40,000,000

  
	
   

  	
   

  
	
  Facility
  Percentage:

  	
  100%

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  KeyBank National Association

  
	
   

  	
  400 Perimeter Center Terrace,
  N.E.

  
	
   

  	
  Suite 900

  
	
   

  	
  Mailcode: GA-03-40-0900

  
	
   

  	
  Atlanta, Georgia 30346

  
	
   

  	
  Attn: Dan Stegemoeller

  
	
   

  	
  Fax: (770) 804-6443

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  KeyBank National Association

  
	
   

  	
  127 Public Square

  
	
   

  	
  Cleveland, Ohio 44114-1306

  
	
   

  	
  Attn: Real Estate Capital Services

  
	
   

  	
  Fax: (       )

  	
   

  	
   

  
					

 

61

 

EXHIBIT A

 

FORM OF REVOLVING CREDIT NOTE

	
  No.
          

  	
  [Date]

  
	
  [Amount]

  	
   

  

 

FOR VALUE
RECEIVED, the undersigned, AMERIVEST PROPERTIES INC., a Maryland corporation
(the “Borrower”), promises to pay, without offset or counterclaim,  to the order of [Name of Lender]
(hereinafter, together with its successors in title and assigns, called the
“Lender”) at the head office of KeyBank National Association, as Agent (the
“Agent”) at 127 Public Square, Cleveland, Ohio 44114-1306 or at such other
address as Agent may specify, the principal sum of [Amount in Words][Amount in
Numbers] or, if less, the aggregate unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to the First Amended and Restated
Unsecured Revolving Credit Agreement dated as of October 20, 2004 among the
Lender, the Borrower,  the other lending
institutions named therein and the Agent, as amended from time to time (the
“Credit Agreement”).  Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to them in the Credit Agreement.  Unless
otherwise provided herein, the rules of interpretation set forth in §1.2 of the
Credit Agreement shall be applicable to this Note.

 

The Borrower
also promises to pay (a) principal from time to time at the times provided in
the Credit Agreement and (b) interest from the date hereof on the principal amount
from time to time unpaid at the rates and times set forth in the Credit
Agreement and in all cases in accordance with the terms of the Credit
Agreement.  Late charges and other
charges and default rate interest shall be paid by Borrower in accordance with
the terms of the Credit Agreement.  The
entire outstanding principal amount of this Note, together with all accrued but
unpaid interest thereon, shall be due and payable in full on the Maturity Date.  The Lender may endorse the record relating to
this Note with appropriate notations evidencing advances and payments of
principal hereunder as contemplated by the Credit Agreement.

 

This Note is
issued pursuant to, is entitled to the benefits of, and is subject to the
provisions of the Credit Agreement.  The
principal of this Note is subject to prepayment in whole or in part in the
manner and to the extent specified in the Credit Agreement.  The principal of this Note, the interest
accrued on this Note and all other Obligations of the Borrower are full recourse
obligations of the Borrower, and all of its Real Estate Assets, and its other
properties shall be available for the payment and performance of this Note, the
interest accrued on this Note, and all of such other Obligations.  In case an Event of Default shall occur and
be continuing, the entire unpaid principal amount of this Note and all of the
unpaid interest accrued thereon may become or be declared due and payable in
the manner and with the effect provided in the Credit Agreement.

 

Notwithstanding
anything in this Note to the contrary, all agreements between the Borrower and
the Lenders and the Agent, whether now existing or hereafter arising and
whether written or oral, are hereby limited so that in no contingency, whether
by reason of acceleration of the maturity of any of the Obligations or
otherwise, shall the interest contracted for, charged or received by the
Lenders exceed the maximum amount permissible under applicable law.  If, from 

 

A-1

 

any circumstance whatsoever,
interest would otherwise by payable to the Lenders in excess of the maximum
lawful amount, the interest payable to the Lenders shall be reduced to the
maximum amount permitted under applicable law; and if from any circumstance the
Lenders shall ever receive anything of value deemed interest by applicable law
in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal balance of the
Obligations and to the payment of interest or, if such excessive interest
exceeds the unpaid balance of principal of the Obligations, such excess shall
be refunded to the Borrower.  All
interest paid or agreed to be paid to the Lenders shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law.  This
section shall control all agreements between the Borrower and the Lenders and
the Agent.

 

The Borrower
and all endorsers hereby waive presentment, demand, protest and notice of any
kind in connection with the delivery, acceptance, performance and enforcement
of this Note, and also hereby assent to extensions of time of payment or
forbearance or other indulgences without notice.

 

This Note and the obligations of the Borrower hereunder shall be
governed by and interpreted and determined in accordance with the laws of the
State of Georgia (excluding the laws applicable to conflicts or choice of
law).  The Borrower has waived its right
to a jury trial with respect to any action or claim arising out of this Note
pursuant to §24 of the Credit Agreement.

 

IN WITNESS
WHEREOF, the Borrower has caused this Note to be duly executed in its name as
an instrument under seal on the date first above written.

 

	
  WITNESS:

  	
  AMERIVEST
  PROPERTIES INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (CORPORATE
  SEAL)

  	
   

  
							

 

A-2

 

EXHIBIT B

 

LOAN REQUEST

 

[Date]

 

KeyBank National
Association, as Agent

400 Perimeter Center
Terrace, Suite 900

Atlanta, Georgia  30346

 

Re:                               Loan Request under First Amended and Restated Unsecured Revolving
Credit Agreement dated as of October 20, 2004

 

Ladies and Gentlemen:

 

Pursuant to
§2.5 of the First Amended and Restated Unsecured Revolving Credit Agreement
dated as of October 20, 2004, among you, certain other Lenders and us (the
“Credit Agreement”), we hereby request that the Lenders make a Loan as follows:

 

(i)            Principal amount requested: $

 

(ii)           Proposed Borrowing Date:

 

(iii)          Interest Period:

 

(iv)          Type:

 

This Loan
Request is submitted pursuant to, and shall be governed by, and subject to
satisfaction of, the terms, conditions and provisions set forth in §2.5 of the
Credit Agreement.

 

The
undersigned hereby further certifies to you that it is in compliance with the
covenants specified in §9.3 through §9.6 of the Credit Agreement, and will
remain in compliance with such covenants after the making of the requested
Loan, as evidenced by a Compliance Certificate in the form of Exhibit C
to the Credit Agreement of even date herewith delivered to you simultaneously
with this Loan Request.

 

We also
understand that this request obligates us to accept the requested Loan on such
date. All terms defined in the Credit Agreement and used herein without
definition shall have the meanings set forth in §1.1 of the Credit Agreement.

 

B-1

 

The
undersigned hereby certifies to you, in accordance with the provisions of §11.1
of the Credit Agreement, that the representations and warranties contained in
the Credit Agreement and in each document and instrument delivered pursuant to
or in connection therewith were true in all material respects as of the date as
of which they were made, are also true in all material respects at and as of
the date hereof, and will also be true in all material respects at and as of
the proposed Borrowing Date of the Loan requested hereby, in each case except
as otherwise permitted pursuant to the provisions of §11.1 the Credit
Agreement, and no Default or Event of Default has occurred and is continuing.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  AMERIVEST
  PROPERTIES INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					

 

B-2

 

EXHIBIT C

 

COMPLIANCE
CERTIFICATE UNDER

FIRST AMENDED AND RESTATED UNSECURED 

REVOLVING CREDIT AGREEMENT DATED AS OF OCTOBER 20, 2004

 

The
undersigned, a Responsible Officer of AMERIVEST PROPERTIES INC. (the
“Borrower”), hereby certifies on behalf of the Borrower as of the date hereof
the following:

 

1.             No Defaults.  I have read a copy of the First Amended and
Restated Unsecured Revolving Credit Agreement dated as of October 20, 2004
(the “Credit Agreement”) among the Borrower, KeyBank National Association, the
other lending institutions party thereto, and KeyBank National Association, as
Agent. Terms used herein and not otherwise defined herein shall have the
meanings set forth in §1.1 of the Credit Agreement. No Event of Default is
continuing in the performance or observance of any of the covenants, terms or
provisions of the Credit Agreement or any of the other Loan Documents.  Without limiting the foregoing, the Borrower
has not taken any actions which are prohibited by the negative covenants set
forth in §8 of the Credit Agreement. 
Attached hereto as Appendix I are all relevant calculations
needed to determine whether the Borrower is in compliance with §9.1 through
§9.6, inclusive, and §8.3(d) and §8.7 of the Credit Agreement as of the end of
the most recently completed fiscal quarter (except that in the case of
Compliance Certificates delivered pursuant to §2.5, §8.1(f), §8.4(c), or §11.1,
the calculations determining compliance with §9.3 have been computed on a pro
forma basis after giving effect to the proposed transaction).

 

2.             No Material Changes, Etc.  Except as disclosed on Appendix II
hereto, since the [date of most recent financial statements furnished to the
Agent and the Lenders], there have occurred no materially adverse changes in
the financial condition or business of the Borrower as shown on or reflected in
the balance sheet of the Borrower as at such date other than (a) changes in the
ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Borrower and (b) changes resulting from the making of the Loans and the
transactions contemplated by the Credit Agreement.

 

3.             No Materially Adverse Contracts,
Etc.  The Borrower is not subject to
any charter, corporate, or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected, in the reasonable judgment
of the Borrower’s officers, in the future to have a materially adverse effect
on the Borrower.  The Borrower is not a
party to any contract or agreement that has or is expected, in the reasonable
judgment of the Borrower ‘s officers, to have a materially adverse effect on
the Borrower.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERIVEST PROPERTIES INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					

 

C-1

 

AMERIVEST PROPERTIES

APPENDIX I TO COVENANT COMPLIANCE CERTIFICATE

based on QE ____________________

 

	
  CORPORATE COVENANTS

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
  Corporate Leverage (Section 9.3 in Credit
  Agreement)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  Total Assets
  on Balance Sheet

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Real Estate
  Depreciation plus $4,507,557

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  GROSS ASSET
  VALUE (a+b)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
  Total Liabilities
  on Balance Sheet

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
  Contingent
  Liabilities not already on B.S.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
  Borrower’s %
  of unconsolidated entity liabilities

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
  TOTAL
  LIABILITIES as defined (d + e + f)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TOTAL LIABILITIES TO GAV:

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
  (cannot exceed 70% through June 30, 2005, and cannot exceed 65%
  thereafter))

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
  Corporate Interest Coverage (Section 9.4 in
  Credit Agreement)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  EBITDA (last
  2 Quarters annualized)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Company S.F.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Reserve
  Amount PSF

  	
   

  	
   

  	
   

  	
  $

  	
  0.25

  	
   

  
	
  d.

  	
  Total
  Reserve (bxc)

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  e.

  	
  Adjusted
  EBITDA (a-d)

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  f.

  	
  Interest
  Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
  Capitalized
  Interest

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  h.

  	
  Total
  Interest Exp. (g+h)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  i.

  	
  Adj. EBITDA
  to Int.Exp. (e/h)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (cannot be less than 1.50x through June 30, 2005, and cannot be less
  than 1.75x thereafter)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
  Corporate Fixed Charge Coverage (Section
  9.5 in Credit Agreement)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  EBITDA
  last 2 Qtrs annualized (= 2a.)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Interest
  Expense (= 2h.)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  principal
  payments

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
  preferred
  dividends

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
  Fixed
  Charges (b + c + d)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
  EBITDA/Fixed
  Charges (a/e)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (cannot be less than 1.35x through June 30, 2005 and cannot be less
  than 1.5x thereafter)

  	
   

  	
   

  	
   

  	
   

  	
   

  
										

 

C-2

 

	
  (4)

  	
  Minimum Tangible Net Worth (Section 9.6 in
  Credit Agreement)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  GAV (= 1c.)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Intangible
  Assets

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Total
  Liabilities (= 1d.)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  d.

  	
  Net Worth
  (a-b-c)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  e.

  	
  Net Offering
  Proceeds after Closing Date

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  f.

  	
  multiplied
  by 75%

  	
   

  	
   

  	
   

  	
  75

  	
  %

  
	
  g.

  	
  e x f

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  h.

  	
  Net OP
  Proceeds after Closing Date

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  i.

  	
  multiplied
  by 100%

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
  j.

  	
  h x j

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
  k.

  	
  Tangible Net
  Worth (d+g+j)

  	
   

  	
   

  	
   

  	
  —

  	
   

  
	
   

  	
  (cannot be less than $75mm + 75% of Net Offering Proceeds and 100% of
  OP Proceeds raised after Closing Date)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (5)

  	
  Permitted Investments (Section 8.3(d) of
  Credit Agreement)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Covenant*

  	
   

  	
  Actual

  	
   

  
	
  a.

  	
  R.E. Assets
  that are not office bldgs or off. parks

  	
   

  	
  5

  	
  %

  	
   

  	
   

  
	
  b.

  	
  Unconsolidated
  Entities

  	
   

  	
  10

  	
  %

  	
   

  	
   

  
	
  c.

  	
  Undeveloped
  Land

  	
   

  	
  5

  	
  %

  	
   

  	
   

  
	
  d.

  	
  Mortgages
  and Notes Receivable

  	
   

  	
  5

  	
  %

  	
   

  	
   

  
	
  e.

  	
  Total
  Investments

  	
   

  	
  n/a

  	
   

  	
   

  	
   

  
	
  f.

  	
  MAXIMUM
  PERMITTED INVESTMENTS

  	
   

  	
  15

  	
  %

  	
   

  	
   

  
	
   

  	
  * as a percent of GAV (= 1c)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
  Total Distributions (Section 8.7 of Credit
  Agreement

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  a.

  	
  total
  distributions for the last four quarters

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  FFO for the
  last four quarters

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  95% of b.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a. cannot exceed c. commencing March 31, 2005

  	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

C-3

 

EXHIBIT D

 

FORM OF

ASSIGNMENT AND ACCEPTANCE

 

Dated

Reference is
made to the First Amended and Restated Unsecured Revolving Credit Agreement
dated as of October 20, 2004 (as amended and in effect from time to time,
the “Agreement”), among AmeriVest Properties, Inc., a Maryland corporation (the
“Borrower”), KeyBank National Association, the other Lenders and KeyBank
National Association as agent (the “Agent”) for itself and the other Lenders.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Agreement.

 

                           
(the “Assignor”) and                               
(the “Assignee”) agree as follows:

 

1.             The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, as of the Effective Date (as hereinafter defined) a portion of the
Assignor’s rights and obligations under the Agreement which relates to $                                
of the Assignor’s Commitment and a Facility Percentage of              %
of all Loans outstanding as of the Effective Date.

 

2.             The Assignor (i) represents that as
of the date hereof, its Commitment (without giving effect to this Assignment or
any other assignments by Assignor effective on the Effective Date (the
“Simultaneous Assignments”)) is $
                      
and its Facility Percentage with respect thereto is  %, and the outstanding balance of its
Loans (unreduced by any assignments thereof pursuant to this Assignment or the
Simultaneous Assignments) is $                              ;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement, the other
Loan Documents or any other instrument or document furnished pursuant thereto,
other than that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any
adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
of its Subsidiaries or any other person which may be primarily or secondarily
liable in respect of any of the Obligations or any of their obligations under
the Agreement or the other Loan Documents or any other instrument or document
delivered or executed pursuant thereto; (iv) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (v) represents
and warrants that to the best of Assignor’s knowledge no Event of Default has
occurred and is continuing on the date hereof; and (vi) attaches the $                            
Note delivered to it under the Agreement and requests that the Borrower
exchange such Note for new Notes executed by Borrower and payable to each of
the Assignor and/or to the assignees pursuant to the Simultaneous Assignments
and the Assignee as follows:

 

D-1

 

	
  Notes Payable to

  the Order of:

  	
   

  	
  Amount of Note

  	
   

  
	
  [Name of Assignor or assignees pursuant
  Simultaneous Assignments]

  	
   

  	
  [$          )]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Name of Assignee]

  	
   

  	
  [$          )]

  	
   

  

 

3.             The Assignee (i) represents and
warrants that it is legally authorized to enter into this Assignment and
Acceptance; (ii) confirms that it has received a copy of the Agreement,
together with copies of the most recent financial statements delivered pursuant
to §§6.4 and 7.4 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it will, independently and without
reliance upon the Assignor, any other Lender or the Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions and review and analysis of the value of any
Properties in taking or not taking action under the Agreement; (iv) represents,
warrants and confirms that it is an Eligible Assignee; (v) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers as are reasonably incidental thereto pursuant to the terms of the
Agreement and the other Loan Documents; and (vi) agrees that it will perform
all the obligations which by the terms of the Agreement are required to be
performed by it as a Lender in accordance with the terms of the Agreement.

 

4.             The effective date for this
Assignment and Acceptance shall be                                    
(the “Effective Date”). Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance and recording in
the Register by the Agent.  This
Assignment and Acceptance may be executed in several counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one
instrument. In proving this Assignment and Acceptance it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.

 

5.             Upon such acceptance and recording,
from and after the Effective Date, (i) the Assignee shall be a party to the
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder, and (ii) the Assignor shall,
with respect to that portion of its interest under the Agreement assigned
hereunder relinquish its rights and be released from its obligations under the
Agreement.

 

6.             Upon such acceptance and recording,
from and after the Effective 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 for periods prior to the Effective Date
by the Agent or with respect to the making of this assignment directly between
themselves.

 

7.             THIS ASSIGNMENT AND ACCEPTANCE IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.

 

D-2

 

IN WITNESS
WHEREOF, intending to be legally bound, each of the undersigned has caused this
Assignment and Acceptance to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.

 

	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

D-3EXHIBIT 10.1

 

NATURAL GAS SYSTEMS, INC.

 

Registrable Common Stock at $2.00 per Share

 

SUBSCRIPTION AGREEMENT

 

1.                                      Subscription:

 

(a)                                  The
undersigned (individually and/or collectively, the “Participant”) hereby
applies to become a participant in the registrable common stock (the “Shares”
or the “Common Stock”) of NATURAL GAS SYSTEMS, INC., a Nevada corporation (“NGS”
or the “Company”), in accordance with the terms and conditions of this
Subscription Agreement (the “Subscription”). 
The Company is offering up to 8,000,000 shares of Common Stock in this
offering, subject to the right of the Company to sell such lesser number of
shares of Common Stock as the Company may, in its sole discretion, deem
necessary or advisable.  The subscription
period will begin on June 11, 2004 and will terminate at 11:59 p.m., Eastern
time, on August 31, 2004, unless terminated or extended by the Company (which
termination or extension may be effected without notice) for up to an
additional 60 days.  The purchase and
sale of the Shares shall occur as soon as practicable after the execution of
this Subscription by the Company and each of the Participants.  On such date, the Company will deliver or
cause to be delivered one or more physical certificates representing the Shares
purchased by each Subscriber.

 

(b)                                 Before this subscription for participation in
the Shares is considered, the Participant must complete, execute and deliver to
the Company the following:

 

(i)                                     This Subscription;

 

(ii)                                  The Certificate of Accredited Investor Status
attached hereto as Exhibit A;

 

(iii)                               The NGS Registration Rights Agreement; and

 

(iv)                              The Participant’s check or wire transfer in
the amount of $                                    .

 

(c)                                  Participant hereby subscribes for                     
Shares at a purchase price of TWO DOLLARS ($2.00) per share.

 

(d)                                 This Subscription is irrevocable by the
Participant.

 

(e)                                  This Subscription is not transferable or
assignable by the Participant.

 

(f)                                    This Subscription shall be deemed to be
accepted only when this Subscription has been executed by an authorized officer
of the Company.  The deposit of
Participant’s check or wire transfer funds will not be deemed an acceptance of
this Subscription.

 

(g)                                 This Subscription may be rejected in whole or
in part by the Company in its sole discretion. 
In the event this Subscription is rejected in its entirety by the
Company, all funds (without interest) and documents tendered by the Participant
shall be returned.  In the event that
this Subscription is rejected in part by the Company, the Company shall return
to the Participant the part of the payment relating to such rejected portion
without interest.  The Company shall have
the right to allocate Shares

 

 

among Participants in any manner it may
desire; provided, that no Participant shall be obligated to purchase more than
the number of Shares set forth in Section 1(c) above without such Participant’s
prior written consent.

 

(h)                                 Participant understands that separate
Subscriptions will be executed with other Participants for the remainder of the
Shares to be sold in this offering.

 

(i)                                     Placement agents and broker dealers, including  Laird Q. Cagan, registered representative of
Chadbourn Securities, Inc. (an NASD
broker-dealer), may be paid commissions in an amount up to but not to exceed
(i) selling commissions from the Company up to eight percent (8%) of the
aggregate proceeds from the sale of the Shares, and (iii) warrants to purchase
up to eight percent (8%) of the aggregate number of Shares sold in the
offering, exercisable for seven years at an exercise price equal to the
Offering Price, with a net exercise (“cashless exercise”) provision.

 

(j)                                     Until the registration statement contemplated
by the NGS Registration Rights Agreement is declared effective, Participant
hereby agrees not to, and will cause its affiliates not to, enter into any “put
equivalent position” as such term is defined in Rule 16a-1 under the Securities
Exchange Act of 1934, as amended, or short sale position with respect to the
Common Stock.

 

2.                                      Representations by
Participant.  In consideration of the Company’s acceptance
of participation, I make the following representations and warranties to the
Company, to its principals, and to participating broker-dealers, if any,
jointly and severally, which warranties and representations shall survive any
acceptance of my participation in the Shares:

 

(a)                                I have had the opportunity to ask questions
and receive any additional information from persons acting on behalf of the
Company to verify my understanding of the terms thereof and of the Company’s
business and status thereof, and that no oral information furnished to the
undersigned or my advisors in connection with my participation in the Shares
has been in any way inconsistent with other documentary information provided.

 

(b)                             I acknowledge that I have not seen, received,
been presented with, or been solicited by any leaflet, public promotional
meeting, newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to my participation in the Shares.

 

(c)                              The Shares are being purchased for my own
account for long-term investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the
meanings of the Securities Act of 1933, as amended (the “Securities Act”), and
any applicable state securities laws.  No
other person or entity will have any direct or indirect beneficial interest in,
or right to, the Shares.  I or my agents
or investment advisors have such knowledge and experience in financial and
business matters relating to an investment of this type that will enable me to
utilize the information made available to me in connection with the
participation in the Shares to evaluate the merits and risks of participation
and to make an informed investment decision.

 

(d)                             I understand that (A) the Shares (1) have not
been registered under the Securities Act or any state securities laws, (2) will
be issued in reliance upon an exemption from the registration and prospectus
delivery requirements of the Securities Act pursuant to Section 4(2) and/or
Regulation D thereof and (3) will be issued in reliance upon exemptions from
the registration and prospectus delivery requirements of state securities laws
which relate to private offerings, and (B) I must therefore bear the economic
risk of such investment indefinitely unless a subsequent disposition thereof is
registered under

 

 

the Securities Act and applicable state
securities laws or is exempt therefrom. 
I further understand that such exemptions depend upon, among other
things, the bona fide nature of my investment intent as expressed herein.  Pursuant to the foregoing, I acknowledge that
the certificates representing the Shares acquired pursuant to this Subscription
shall bear a restrictive legend substantially as follows:

 

“THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR
SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)
REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OR (II) AN OPINION OF COUNSEL,
WHICH OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY TO THE COMPANY, HAS
BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE SHARES MAY BE
TRANSFERRED WITHOUT SUCH REGISTRATION.”

 

(e)                                  I acknowledge that I have been advised that:

 

(i)                                     The Shares offered hereby have not been
approved or disapproved by the Securities and Exchange Commission (“SEC”) or
any state securities commission nor has the SEC or any state securities
commission passed upon the accuracy or adequacy of any representations by the
Company.  Any representation to the
contrary is a criminal offense.

 

(ii)                                  In making an investment decision, I must rely
on my own examination of the Company and the terms of the offering of the
Shares, including the merits and risks involved.  The Shares have not been recommended by any
federal or state securities commission or regulatory authority.  Furthermore, the foregoing authorities have
not confirmed the accuracy or determined the adequacy of any
representation.  Any representation to
the contrary is a criminal offense.

 

(iii)                               The Shares are “Restricted Securities” within
the meaning of Rule 144 under the Securities Act, are subject to restrictions
on transferability and resale and may not be transferred or resold except as
permitted under the Securities Act and applicable state securities laws,
pursuant to registration or exemption therefrom.

 

(f)                                  Other than the rights specifically set forth
in the NGS Registration Rights Agreement, I represent, warrant and agree that
the Company and the officers of the Company (the “Company’s Officers”) are
under no obligation to register or qualify the participation in the Shares
under the Securities Act or under any state securities law, or to assist the
undersigned in complying with any exemption from registration and
qualification.

 

(g)                               I represent that I am an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act and I
have executed the Certificate of Accredited Investor Status, attached hereto as
Exhibit A.

 

(h)                               I understand that the participation in the
Shares is illiquid, cannot be readily sold as there will not be a public market
for them and that I may not be able to sell or dispose of my participation in
the Shares, or to utilize the Shares as collateral for a loan.  I understand that the purchase of the Shares
is a speculative investment and involves substantial risks and that I could lose
my entire investment in the

 

 

Shares.  I must not purchase
participation in the Shares unless I have liquid assets sufficient to assure
myself that such purchase will cause me no undue financial difficulties and
that I can still provide for my current and possible personal contingencies,
and that the commitment herein for participation in the Shares, combined with
other investments of mine, is reasonable in relation to my net worth.

 

(i)                                 I understand that my right to transfer my
participation in the Shares will be restricted against transfers unless the
transfer is not in violation of the Securities Act, the Nevada Securities Law,
and any other applicable state securities laws (including investment suitability
standards), that the Company will not consent to a transfer of participation in
the Shares unless the transferee represents that such transferee meets the
financial suitability standards required of an initial participant and that the
Company has the right, in its absolute discretion, to refuse to consent to such
transfer.

 

(j)                                 I have been advised to consult with my own
attorney or attorneys regarding all legal matters concerning an investment in
the Company and the tax consequences of participation in the Shares, and have
done so, to the extent I consider necessary.

 

(k)                              I acknowledge that the tax consequences to me
of investing in the Company will depend on my particular circumstances, and
neither the Company, the Company’s officers, any other investors, nor the
partners, shareholders, members, managers, agents, officers, directors,
employees, affiliates or consultants of any of them, will be responsible or
liable for the tax consequences to me of an investment in the Company.  I will look solely to and rely upon my own
advisers with respect to the tax consequences of this investment.

 

(l)                                 I acknowledge that I have made the decision
to invest in the Shares solely on the basis of the information set forth in the
Company’s Private Placement Memorandum (the “Memorandum”), dated June 11, 2004,
included herewith, and that no officer, director, or other person affiliated
with the Company has given me any information or made any representations, oral
or written, other than as provided in the Memorandum, on which I have relied
upon in deciding to invest in the Shares, including without limitation, any
information with respect to future operations of the Company or the economic
returns which may accrue as a result of the purchase of the Shares.

 

(m)                           All information which I have provided to the
Company concerning myself, my financial position and my knowledge of financial
and business matters is truthful, accurate, correct and complete as of the date
set forth herein.  I agree to furnish the
Company such other information as the Company may reasonably request in order
to verify the accuracy of the information contained herein and agree to notify
the Company immediately of any material change in the information provided
herein that occurs prior to the Company’s acceptance of this Subscription.

 

(n)                                 I and my affiliates do not have, and during
the 30 day period prior to the date of this Subscription, I and my affiliates
have not entered into, any “put equivalent position” or short sale positions
with respect to the Common Stock.

 

(o)                                 If I am not a United States person, I hereby
represent that I have satisfied myself as to the full observance of the laws of
my applicable jurisdiction in connection with any invitation to subscribe for
the Shares or any use of this Subscription, including (i) the legal
requirements within such jurisdiction for the purchase of the Shares, (ii) any
foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Shares. My subscription
and payment for, and my continued beneficial ownership of the Shares, will not
violate any applicable securities or other laws of such jurisdiction.

 

 

3.                                      Agreement to Indemnify
Company.  I hereby agree to indemnify and hold harmless
the Company, its principals, the Company’s officers, directors and attorneys,
from any and all damages, costs and expenses (including actual attorneys’ fees)
which they may incur (i) by reason of my failure to fulfill any of the terms
and conditions of participation, (ii) by reason of my breach of any of my
representations, warranties or agreements contained herein; (iii) with respect
to any and all claims made by or involving any person, other than me
personally, claiming any interest, right, title, power or authority in respect
to my participation.  I further agree and
acknowledge that these indemnifications shall survive any sale or transfer, or
attempted sale or transfer, of any portion of my participation.

 

4.                                      Subscription Binding on
Heirs, etc.  This Subscription, upon acceptance by the
Company, shall be binding upon the heirs, executors, administrators, successors
and assigns of the Participant.  If the
undersigned is more than one person, the obligations of the undersigned shall
be joint and several and the representations and warranties shall be deemed to
be made by and be binding on each such person and his heirs, executors,
administrators, successors, and assigns.

 

5.                                      Execution Authorized.  If
this Subscription is executed on behalf of a corporation, partnership, trust or
other entity, the undersigned has been duly authorized and empowered to legally
represent such entity and to execute this Subscription and all other
instruments in connection with participation in the Shares and the signature of
the person is binding upon such entity.

 

6.                                      Adoption of Terms and
Provisions.  The Participant hereby adopts, accepts and
agrees to be bound by all the terms and provisions hereof.

 

7.                                      Governing Law.  This
Subscription shall be construed in accordance with the laws of the State of
Nevada.

 

8.                                      Counsel.  The
Participant hereby acknowledges that the Company and its counsel, Steven D.
Lee, Attorney-At-Law., represent the interests of the Company and not those of
the Participant in any agreement (including this Subscription) to which the
Company is a party.

 

9.                                      Investor Information:

 

 

	
  (The information below
  should be consistent with the form of ownership selected below.)

  
	
   

  	
   

  
	
  Name (please print):

  	
   

  	
   

  
	
   

  	
   

  
	
  If entity named above

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  
	
  Social Security or
  Taxpayer I.D. Number:

  	
   

  	
   

  
	
   

  
	
  Business Address
  (including zip code):

  	
   

  
	
   

  	
   

  
	
   

  
	
  Business Phone: 

  	
   

  	
   

  
	
   

  
	
  Business Fax: 

  	
   

  	
   

  
	
   

  
	
  Residence Address
  (including zip code):

  	
   

  
														

 

 

	
  Residence Phone:

  	
   

  	
   

  

 

All communications to be sent
to:

 

	
   

  	
   

  	
  Business or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Residence
  Address

  

 

 

Please
indicate below the form in which you will hold title to your interest in the
Shares.  PLEASE CONSIDER CAREFULLY.  ONCE YOUR SUBSCRIPTION IS ACCEPTED, A CHANGE
IN THE FORM OF TITLE CON­STI­TUTES A TRANSFER OF THE INTEREST IN THE SHARES AND
MAY THEREFORE BE RESTRICTED BY THE TERMS OF THIS SUBSCRIPTION, AND MAY RESULT
IN ADDITIONAL COSTS TO YOU.  Subscribers
should seek the advice of their attorneys in deciding in which of the forms
they should take ownership of the interest in the Shares, because different
forms of ownership can have varying gift tax, estate tax, income tax, and other
consequences, depending on the state of the inves­tor’s domicile and his or her
particular personal circumstances.

 

	
   

  	
   

  	
  INDIVIDUAL OWNERSHIP (one
  signature required)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JOINT TENANTS WITH RIGHT
  OF SURVIVORSHIP AND NOT AS TENANTS IN COMMON (both or all parties must sign)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMMUNITY PROPERTY (one
  signature required if interest held in one name, i.e., managing spouse; two
  signatures required if interest held in both names)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANTS IN COMMON (both or
  all parties must sign)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GENERAL PARTNERSHIP (fill
  out all documents in the name of the PARTNERSHIP, by a PARTNER authorized to
  sign, and include a copy of the Partnership Agreement)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIMITED PARTNERSHIP (fill
  out all documents in the name of the LIMITED PARTNERSHIP, by a GENERAL
  PARTNER autho­rized to sign, and include a copy of the Limited Partnership
  Agreement and any other document showing that the investment is authorized)

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIMITED LIABILITY COMPANY
  (fill out all documents in the name of the LIMITED LIABILITY COMPANY, by a
  member authorized to sign, and include a copy of the LIMITED LIABILITY
  COMPANY’s Operating Agreement and any other documents necessary to show the
  investment is authorized.)

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CORPORATION (fill out all documents in the name of the CORPORATION,
  by the President or other officer authorized to sign, and include a copy of
  the Corporation’s Articles and certified Corporate Resolution authorizing the
  signature)

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRUST (fill out all
  documents in the name of the TRUST, by the Trustee, and include a copy of the
  instrument creating the trust and any other documents necessary to show the
  investment by the Trustee is authorized. The date of the trust must appear on
  the Notarial where indicated.)

  
	
   

  
	
   

  

 

 

Subject to acceptance by the Company, the undersigned has completed
this Subscription Agreement to evidence his/her subscription for participation
in the Shares of the Company, this        day
of                    ,
2004, at                            ,
                                         .

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Participant

  

 

 

The Company has accepted this subscription as
of the                day of                          , 2004.

 

 

	
   

  	
  NATURAL
  GAS SYSTEMS, INC.,

  
	
   

  	
  a
  Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Print:

  	
   

  
				

 

 

Exhibit
A

 

CERTIFICATE OF ACCREDITED INVESTOR STATUS

 

Except as may
be indicated by the undersigned below, the undersigned is an “accredited
investor,” as that term is defined in Regulation D under the Securities Act of
1933, as amended (the “Securities Act”). 
The undersigned has checked the box below indicating the basis on which
he is representing his status as an “accredited investor”:

 

o                                    a
bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934, as amended (the “Securities Exchange Act”); an insurance company
as defined in Section 2(13) of the Securities Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of that Act; a small business investment
company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of
its employees, and such plan has total assets in excess of $5,000,000; an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such Act, which is either a bank, savings and
loan association, insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are “accredited
investors”;

 

o                                    a
private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

 

o                                    an
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;

 

o                                    a
natural person whose individual net worth, or joint net worth with the
undersigned’s spouse, at the time of this purchase exceeds $1,000,000;

 

o                                    a
natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with the undersigned’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

 

o                                    a
trust with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
person who has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the prospective
investment; or

 

o                                    an
entity in which all of the equity holders are “accredited investors” by virtue
of their meeting one or more of the above standards.

 

o                                    an
individual who is a director or executive officer of Natural Gas Systems, Inc.

 

 

IN WITNESS
WHEREOF, the undersigned has executed this Certificate of Accredited Investor
Status effective as of                                    ,
2004.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of
  Participant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

 

[Signature Page to Certificate of Accredited Investor Status]

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