Document:

Strategic Alliance Agreement

 

Exhibit 10.27

CONFIDENTIAL

Strategic Alliance Agreement

between

NationsRent, Inc.

and

Lowe’s Companies, Inc.

October 12, 2000

Table of Contents

	 	 	 	 	 
	 	 	TAB

	Strategic Alliance Agreement, dated October 12, 2000
	 	 	1	 
	 
	 	 	 	 
	Exhibit A — Roll out Schedule for 2000 and 2001
	 	 	2	 
	 
	 	 	 	 
	Exhibit B — Operating Matters
	 	 	3	 
	 
	 	 	 	 
	Exhibit C — Form of Lease
	 	 	4	 
	 
	 	 	 	 
	Exhibit D — Competitive Companies
	 	 	5	 
	 
	 	 	 	 
	Exhibit E — List of On-Site Rental Equipment
	 	 	6	 
	 
	 	 	 	 
	Exhibit F — List of On-Site Rental Merchandise
	 	 	7	 
	 
	 	 	 	 
	Exhibit G — Lowe’s Mark
	 	 	8	 
	 
	 	 	 	 
	Exhibit H — Prototypical Plans for On-Site Rental Store
	 	 	9	 
	 
	 	 	 	 
	Exhibit I — Prototypical Signage
	 	 	10	 
	 
	 	 	 	 
	Confidentiality Agreement, dated January 28, 2000
	 	 	11	 

Page 1

 

October 12, 2000

Lowe’s Companies, Inc.

P.O. Box 1111

North Wilkesboro, NC 28656

Re: Strategic Alliance

Gentlemen:

Pursuant to the terms of the Strategic Alliance Letter Agreement, dated as of
April 3, 2000 (the “Pilot Agreement”), between NationsRent, Inc., a
Delaware corporation, through its operating subsidiaries (“NRI”) and
Lowe’s Companies, Inc., a North Carolina corporation, through its operating
subsidiaries, Lowe’s Home Centers, Inc. and Lowe’s HIW, Inc.
(“Lowe’s”), NRI and Lowe’s have tested the concept of operating
equipment rental locations on-site at Lowe’s home improvement stores (the
“On-Site Rental Concept”). NRI and Lowe’s now desire to establish a
long-term strategic alliance to roll-out the On-Site Rental Concept to certain
existing and subsequently opened Lowe’s stores on the following terms and
subject to the following conditions:

	1.	 	ROLL-OUT SCHEDULE. During the Term (as defined in paragraph 5 below), upon
the terms and subject to the conditions of this agreement, Lowe’s grants
to
NRI the right and obligation to, and NRI shall, open and operate equipment
rental stores (“On-Site Rental Stores”) at designated existing and newly
constructed Lowe’s home improvement stores (“Participating Lowe’s
Stores”).
In each calendar quarter during the Term, Lowe’s and NRI shall cooperate
to
develop and review a schedule for constructing and opening On-Site Rental
Stores at Participating Lowe’s Stores on a twelve (12) month rolling
basis,
which schedule shall be reasonably adjusted by the parties based on site
specific conditions. The parties shall develop and finalize such schedule
in good faith and with due consideration for each other’s objectives and
operating parameters and shall exchange appropriate market information
(including trending and indexing of existing store total revenue,
commercial sales revenue, transactions and product category mix) to assist
in developing On-Site Rental Stores in desirable markets. Exhibit A sets
forth a finalized schedule for the remainder of calendar year 2000 and a
preliminary schedule for calendar year 2001, which 2001 schedule will be
finalized as to the number of sites on or before November 1, 2000. The
parties agree that they shall finalize successive schedules six (6) months
in advance of the quarter for which construction shall commence on any
particular On-Site Rental Store. For each calendar year during the Term,
Lowe’s agrees to designate at least 30 Participating Lowe’s Stores in
which
NRI may open and operate On-Site Rental Stores and NRI agrees to operate
at
least 30 On-Site Rental Stores at Participating Lowe’s Stores pursuant to
the agreed upon schedule.

	2.	 	EXCLUSIVITY.

	 	(a)	 	NRI. During the Term and for the period described in paragraph 5(d)
hereof following the termination or expiration of this agreement, NRI
shall not (i) engage in discussions or negotiations or enter into any
agreement with third parties to develop the On-Site Rental Concept,
which shall be deemed to include on-site equipment rental at other
big-box retailers that directly compete with Lowe’s (such as Home
Depot, Wal-Mart, Sears and Home Base), (ii) engage, directly or
indirectly, in the home improvement retailing business, except as
ancillary to its business as presently conducted and except for
e-commerce initiatives, or (iii) advertise for sale at its On-Site
Rental Stores any used rental equipment which is available for sale
(other than through Lowe’s specialty order program) at the respective
Participating Lowe’s Stores or to display “for-sale” signs on any such
used equipment at its On-Site Rental Stores, provided, however, that
nothing shall prohibit NRI from (x) actually selling such used rental
equipment at any On-Site Rental Store, (y) advertising the sale of any
used rental equipment not available for sale at the respective
Participating Lowe’s Store whether at any On-Site Rental Store or any
other NRI store, or (z) displaying a sign at any On-Site Rental Store
no larger than 11 x 17 inches regarding selling used equipment at
other NRI stores that are not On-Site Rental Stores.

Page 2

 

	 	(b)	 	LOWE’S. During the Term and for the period described in paragraph
5(d)
hereof following the termination or expiration of this agreement,
Lowe’s shall not (i) engage in discussions or negotiations, or enter
into any agreement with third parties to develop, or develop on its
own, the On-Site Rental Concept, or (ii) engage directly or indirectly
in the equipment rental business (except for e-commerce initiatives),
which includes without limitation any arrangement with companies
engaged in the equipment rental business such as United Rentals, Inc.
and Hertz Corporation. Notwithstanding the foregoing, for each
calendar year during the Term, Lowe’s shall be permitted to open and
operate (on its own without any third party) up to ten (10) equipment
rental stores at Lowe’s Home Improvement Centers so long as all of the
following conditions have been satisfied: (w) such stores are located
in a metropolitan statistical area (“MSA”) that is not in the top
fifty (50), (x) there is a Home Depot in such MSA that has an
equipment rental program, (y) NRI declines the opportunity to open and
operate an On-Site Rental Store at such Lowe’s Store, after NRI has
had at least six (6) months to evaluate such opportunity, and (z)
during such six-month period, the parties have negotiated in good
faith alternative ways to operate equipment rental at such stores,
including franchising, licensing or management arrangements on terms
and conditions mutually agreed between the parties. In addition,
notwithstanding anything to the contrary in this agreement, the
prohibitions or limitations on Lowe’s operating its own equipment
rental business shall not apply to a Participating Lowe’s Store if at
such store the On-Site Rental Store lease terminates or is not renewed
for any reason.

	3.	 	GENERAL TERMS OF SITES. The parties agree that each On-Site Rental Store
and Participating Lowe’s Store will be operated on the terms set forth on
Exhibit B. In addition, the parties agree that for each On-Site Rental
Store, they will execute a lease in substantially the form of Exhibit C.

	4.	 	CONFIDENTIALITY/PUBLICITY. The parties have executed a confidentiality
agreement dated January 28, 2000, which they agree shall remain in full
force and effect and shall govern any confidential information exchanged
by
the parties pursuant to this agreement. In addition, no press release or
other public announcement related to this agreement or the transactions
contemplated hereby shall be made or issued by either party without the
prior approval of the other party, except as may be required by law or the
listing requirements of a national securities exchange.

	5.	 	Term and Termination.

	 	(a)	 	TERM. Unless terminated earlier pursuant to this paragraph 5, the
term
of this agreement (the “Term”) shall commence on the date hereof and
shall expire on December 31, 2003, provided, that the parties agree
that the Term shall automatically renew for successive three (3) year
terms up to a maximum of five (5) renewal terms, unless either party
gives written notice to the other party of its intention not to renew
this agreement at least ninety (90) days prior to the end of the then
current Term. If one party gives notice of its intention not to renew,
then the other party in its sole discretion may (a) notwithstanding
the exclusivity provisions of paragraph 2 hereof, immediately have
discussions and negotiations and enter into an agreement with any
third party regarding the development of the On-site Rental Concept
(but not actually begin operating any such sites until the expiration
of the exclusivity provisions of paragraph 2 in accordance with
paragraph 5(d)), and (b) at any time prior to March 1 of the calendar
year following the expiration of this agreement, elect to terminate
all of the then outstanding On-Site Rental Store leases, effective one
(1) year following written notice thereof, and thereafter both parties
shall cooperate with the orderly closing and winding up of such
On-Site Rental Stores during such one-year period. Except as set forth
in the prior sentence and except upon a termination described in
paragraph 5(b) hereof, the parties agree that notwithstanding the
termination of this agreement, each On-Site Rental Store lease shall
remain in full force and effect in accordance with its terms.

Page 3

 

	 	(b)	 	TERMINATION. Either party may terminate this agreement (including the
On-Site Rental Store leases as described below) prior to the end of
the Term effective upon written notice to the other party if (i) the
other party is in material breach of its obligations hereunder and
such breach continues uncured for a period of sixty (60) days
following written notice thereof by the non-breaching party to the
breaching party, or (ii) the other party files a petition or answer
(or an involuntary petition, answer, or proceeding is filed) seeking
bankruptcy protection, reorganization or other relief from creditors
generally, or taking advantage of any other insolvency laws, or (iii)
the other party consummates a merger or consolidation with, or sale of
all or substantially all of its assets to, any person or group acting
in concert with or on behalf of certain competitive companies
described on Exhibit D hereto (each a “Competitive Company”) or a
Competitive Company acquires beneficial ownership (as defined in
Section 13(d) of the Securities Exchange Act of 1934, as amended and
the rules promulgated thereunder) of 20% or more of the voting stock
of the other party or the other party elects or appoints one or more
members to its Board of Directors who is an officer, director or
employee of a Competitive Company. Simultaneously, with the
termination of this agreement under paragraph 5(b), the non-breaching
party shall have the right (exercisable only in conjunction with the
termination of this agreement) to terminate all of the On-Site Rental
Store leases effective nine (9) months following the termination of
this agreement, unless such termination event occurs under paragraph
5(b)(iii), in which case the non-breaching party may elect to reduce
such nine (9) month period to two (2) months. Following such nine (9)
month or two (2) month period, as the case may be, NRI shall begin
incurring the hold over rent as set forth in Section 12.9 of the
leases until the premises are vacated and delivered back to Lowe’s in
accordance with the leases. The parties agree that their remedies are
cumulative and that their respective rights to terminate this
agreement are in addition to any other remedies available to them at
law or in equity.

	 	(c)	 	MATERIAL BREACH. The parties agree that a material breach shall
include, but not be limited to, the following events:

	 	i.	 	A material breach of the exclusivity provisions of paragraph 2;

	 	ii.	 	A material breach of the On-Site Rental Store leases representing
at least 10% of all outstanding On-Site rental Store leases;

	 	iii.	 	A material breach of the provisions of Exhibit B as they relate
to at least 10% of all outstanding On-Site Rental Stores or
Participating Lowe’s Stores, as the case may be; and

	 	iv.	 	A material breach of the provisions of paragraph 6(i) hereof.

Page 4

 

	 	(d)	 	SURVIVAL.

	 	i.	 	EXCLUSIVITY. In the event of the expiration of this agreement
pursuant to paragraph 5(a) hereof, the exclusivity provisions of
paragraph 2 shall survive until the earlier of (A) one (1) year
following such expiration and (B) the expiration or earlier
termination of all of the On-Site Rental Store leases. In
addition, if any On-Site Rental Store lease remains in effect
following such one-year period, then the scope of the exclusivity
restrictions contained in paragraph 2 shall be reduced to a
radius of the surrounding trade area for each On-Site Rental
Store, which trade area the parties agree is within a half-hour
drive (at midnight) of such On-Site Rental Store (unless such
store is located in an MSA that is not within the top twenty-five
(25), in which case the trade area for these restrictions shall
be reduced to a radius of twenty-five (25) miles surrounding the
On-Site Rental Store), and as modified, the exclusivity
provisions of paragraph 2 shall remain in effect with respect to
such geographic area until the expiration or earlier termination
of such On-Site Rental Store lease. In addition, in the event of
the termination of this agreement pursuant to paragraph 5(b), the
exclusivity provision of paragraph 2 shall survive only for the
benefit of the non-breaching party and shall only restrict the
breaching party for a period of nine (9) months following the
effective date of the termination of this agreement.

	 	ii.	 	OTHER TERMS. Notwithstanding the expiration or earlier
termination of this agreement, (A) the provisions of paragraph 4
shall survive indefinitely and (B) the provisions of paragraphs 5
and 6 and Exhibit B as they may relate to any particular On-Site
Rental Store shall remain in effect with respect to each On-Site
Rental Store and Participating Lowe’s Store until the expiration
or termination of the lease with respect to such store.

	6.	 	MISCELLANEOUS.

	 	(a)	 	GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the state of New York, without regard to
the choice of law principles applied in the courts of such state.

	 	(b)	 	AMENDMENTS, WAIVERS. No term of this agreement shall be amended,
supplemented, waived or modified except in a written document signed
by each of the parties. No delay or omission in the exercise of any
right or remedy shall be deemed a waiver of any right or remedy. No
waiver shall constitute a waiver of any other provision, breach, right
or remedy, nor shall any waiver constitute a continuing waiver.

	 	(c)	 	INDEMNITY, REMEDIES. Each party agrees to indemnify and hold harmless
the other party from any damage, loss, cost or liability (including
legal fees and the cost of enforcing this indemnity) arising out of or
resulting from any third party claim arising out of or related to a
breach of this agreement. Each party acknowledges that money damages
would be both incalculable and an insufficient remedy for any breach
of paragraphs 2, 4 or 5(d) of this agreement by it and that any such
breach would cause the other party irreparable harm. Accordingly, each
party also agrees that in the event of any breach or threatened breach
of paragraphs 2, 4 or 5(d) of this agreement, the non-breaching party,
in addition to any other remedies at law or in equity, shall be
entitled, without the requirement of posting a bond or other security,
to equitable relief, including injunctive relief and specific
performance. Should any part of this agreement for any reason be
declared by any court of competent jurisdiction to be invalid, such
decision shall not affect the validity of any remaining portion, which
remaining portion shall continue in full force and effect.

	 	(d)	 	SUCCESSORS AND ASSIGNEES. Neither party may assign its rights or
obligations under this agreement without the written consent of the
other party which consent may be withheld in such party’s sole
discretion; provided, however, that this shall not be deemed to
prohibit the merger or consolidation with or into, or sale of all or
substantially all of assets to, any other person or entity This
agreement shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and assigns.

Page 5

 

	 	(e)	 	ENTIRE AGREEMENT. This agreement, together with the exhibits hereto,
the On-Site Rental Store leases executed pursuant to this agreement
and the confidentiality agreement, dated January 28, 2000, constitutes
the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior or contemporaneous agreements,
promises or representations, written or oral, including the Pilot
Agreement. No party is relying upon any representations or promises
other than those set forth herein.

	 	(f)	 	COUNTERPARTS. This agreement may be executed by facsimile and in one
or more counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same instrument.

	 	(g)	 	COMMUNICATIONS. Each party acknowledges that the roll-out schedule
and
operating requirements contemplated by this agreement will require
regular and detailed communication and exchange of information between
the parties. Accordingly, the parties initially designate the
following individuals to lead and coordinate communications: (1) Chief
Marketing Officer, NRI; and (2) Vice President Specialty Sales,
Lowe’s. From time to time after the date hereof, either party may
designate one or more individuals to handle all or certain specific
communications upon prior notice to the other party.

	 	(h)	 	DISPUTE RESOLUTION. The parties will endeavor to resolve disputes
internally in the following manner:

	 	i.	 	Each party will designate a representative in order to attempt to
resolve any disputes between the parties relating to the
strategic alliance. In the event that one of the parties desires
to raise an issue relating to the strategic alliance, that
party’s representative will summarize the issue in writing and
forward the writing to the other party’s representative. The
parties will attempt to resolve the issue within ten (10)
business days after receipt of the writing by negotiating in good
faith to develop a mutually satisfactory solution. The parties
must mutually agree to any resolution by the representatives.

	 	ii.	 	If the representatives are unable to resolve the matter within
ten (10) business days, the issue will be submitted to the Chief
Marketing Officer for NRI and Vice President of Specialty Sales
for Lowe’s (or such other persons as may be designated from time
to time by either party upon prior notice) for resolution within
ten (10) business days. The parties must mutually agree to any
resolution by such officers.

	 	iii.	 	If such officers are unable to resolve the matter within such ten
(10) business day period, then either party may seek recourse
through any other available means.

	 	iv.	 	In order to ensure the efficacy of this provision, each party is
estopped from asserting laches as a result of the other party’s
compliance with this paragraph 6(h). The parties also agree that
any cure period for a material breach shall run concurrently with
this dispute resolution process.

	 	v.	 	Nothing in this agreement is intended to preclude either party
from seeking injunctive or other equitable relief from a court of
competent jurisdiction at any time.

	 	vi.	 	Any and all disputes with respect to an individual lease shall be
governed exclusively by the terms of the applicable lease, unless
such dispute constitutes a material breach of this agreement
under paragraph 5.

Page 6

 

	 	(i)	 	AUTHORITY. Each party represents and warrants that it has the
authority to enter this agreement and perform its obligations
hereunder and that the execution of this agreement does not conflict
with any other agreement to which it is a party.

	 	(j)	 	FORCE MAJEURE. Neither party shall be required to perform any term,
condition, or covenant of this agreement, so long as such performance
is delayed or prevented by acts of God, strikes (other than by vendors
or vendors’ employees), lockouts (other than by vendors or vendors’
employees), material or labor restrictions by any governmental
authority, civil riot, floods, and any other cause not reasonably
within the control of the party and which by the exercise of due
diligence the party is unable, wholly or in part, to prevent or
overcome.

	 	(k)	 	RELATIONSHIP OF THE PARTIES. The parties acknowledge and agree that,
with respect to the commitments and obligations contemplated by this
agreement, the parties are in a strategic alliance. Notwithstanding
the foregoing, the parties acknowledge and agree that no partnership
or joint venture is intended by this agreement and that they are not
agents of each other and that one party cannot legally bind the other.
Accordingly, each party agrees that it shall not order any merchandise
or equipment, incur any indebtedness, enter into any undertaking or
make any commitment in the other party’s name or purporting to be on
the other party’s behalf. Each party agrees that it shall not
represent, suggest or indicate in any way to any of its suppliers,
printers, service companies or other business entities that it is
financially affiliated with, backed, supported, maintained or assisted
by the other party in any manner.

	 	(l)	 	NOTICES. All notices and other communication required under this
agreement shall be in writing and shall be delivered by certified or
registered mail (first class postage pre-paid), by a commercially
recognized guaranteed overnight delivery service, or facsimile
transmission (only if such transmission is confirmed by certified or
registered mail or guaranteed overnight delivery) to Lowe’s at Lowe’s
Companies, Inc., 1605 Curtis Bridge Road, North Wilkesboro, NC 28656,
Fax number 336-658-5074 Attn.: Vice President Specialty Sales, with a
copy to Law Department, 1605 Curtis Bridge Road, Wilkesboro, NC 28697,
Fax number 336-658-7109 and to NRI at NationsRent, Inc., 450 East Las
Olas Boulevard, Fort Lauderdale, FL 33301, Fax number 954-759-5887,
Attn.: Philip V. Petrocelli, Executive Vice President, with a copy to
Joseph H. Izhakoff, Vice President, General Counsel and Secretary, 450
East Las Olas Boulevard, Fort Lauderdale, FL 33301, Fax number
954-759-5838 or to any subsequently designated address. Notice shall
be deemed given on the date sent, if sent by facsimile transmission,
and on the date delivered (or the date of refusal of delivery) if sent
by guaranteed overnight delivery or certified or registered mail.

[Signatures on following page]

Page 7

 

By executing this agreement, each of the undersigned acknowledges and agrees
that this agreement memorializes the principal terms and conditions in which
the
parties will implement the On-Site Rental Concept and constitutes the binding
agreement of such party with respect to the transactions described above.
Except
as otherwise set forth herein, each party will be responsible for its own fees
and costs in negotiating and entering into this transaction and performing its
obligations hereunder.

If you agree to the terms set forth in this agreement, please sign a copy of
this agreement in the space indicated below and return it to me.

Very truly yours,

NATIONSRENT, INC.

	 	 	 
	By: 

Philip V. Petrocelli

Executive Vice President

	 	x

AGREED AND ACCEPTED AS OF THE

DATE FIRST ABOVE WRITTEN

LOWE’S COMPANIES, INC.

	 	 	 
	By: 

Name:

Title:

	 	x

Page 8

 

EXHIBIT A

Roll-Out Schedule for the Fourth Quarter of 2000

9 STORES

ATLANTA MARKET

Stockbridge, GA #512

Cartersville, GA #190

ORLANDO MARKET

West Colonial, FL #642

South Orlando, FL #670

DALLAS FORT WORTH MARKET

East Plano, TX #505

S. Arlington, TX #520

Lewisville, TX #551

Hurst, TX #533

MIAMI/FT. LAUDERDALE

W. Davie, FL #670

Exhibit A

Roll-Out Schedule for 2001 — Preliminary

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Region
	 	# Stores
	 	January
	 	February
	 	 	 	March
	 	April
	 	May
	 	June
	 	July
	 	August
	 	September
	 	October

	Northeast
	 	3	 	 	 	 	 	 	 	 	 	Boston	 	Syracuse	 	 	 	Springfield	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Danvers	 	Auburn	 	 	 	E Springfield	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	#TBD	 	#561	 	 	 	#660	 	 	 	 	 	 	 	 	 	 
	Midwest
	 	7	 	 	 	Indianapolis	 	 	 	Columbus	 	Indianapolis	 	Louisville	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	E Indy #272	 	 	 	SE Columbus	 	S Indy #442	 	E Louisville	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	#3	 	W Indy #275	 	#474	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	N Columbus	 	 	 	SW Louisville	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	#711	 	 	 	#705	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Central
	 	10	 	Austin	 	Dallas/Ft.	 	 	 	Houston	 	Dallas/Ft.	 	Houston	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	NW Austin	 	Worth	 	 	 	Texas City	 	Worth	 	Baytown	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	#590	 	S. Ft Worth	 	 	 	#28	 	Garland	 	#0097	 	Phoenix	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	#525	 	 	 	 	 	 	 	 	 	W Phoenix	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Roundrock	 	Carrolton	 	 	 	Conroe	 	#611	 	Sugarland	 	#1042	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	#778	 	#550	 	 	 	#232	 	W. Plano	 	#511	 	Gilbert	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	#665	 	 	 	#TBD	 	 	 	 	 	 	 	 	 	 	 	 
	West
	 	13	 	Los Angeles	 	Phoenix	 	 	 	Denver	 	Los Angeles	 	Sacramento	 	Denver	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Long Beach	 	Scottsdale	 	 	 	Louisville	 	Irvine #769	 	Folsom	 	Aurora	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	#773	 	#792	 	 	 	#0220	 	Redlands	 	#1087	 	#0102	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Temecula	 	 	 	 	 	Arvada	 	#759	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	#775	 	 	 	 	 	#0340	 	Phoenix	 	 	 	Charlotte	 	Nashville	 	Orlando	 	West Palm	 	Raleigh/
	 
	 	 	 	 	 	 	 	 	 	Northglenn	 	E Chandler	 	 	 	Concord	 	Hermitage	 	Ocala	 	Beach	 	Durham
	 
	 	 	 	 	 	 	 	 	 	#0246	 	#1032	 	 	 	#697	 	#390	 	#440	 	Ft. Pierce	 	Chapel
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Huntersville	 	Madison	 	Altamonte	 	 	#254	 	 	Hill
	Southeast
	 	31	 	Tampa	 	Atlanta	 	Ft	 	. Lauderdale	 	Charlotte	 	Atlanta	 	#489	 	#413	 	Springs	 	Vero Beach	 	 	#487	 
	 
	 	 	 	Brandon	 	Gwinnett	 	E.	 	Oakland Park	 	Pineville	 	Alpharetta	 	 	 	Franklin	 	#604	 	 	#240	 	 	Cary #426
	 
	 	 	 	#573	 	#544	 	 	 	#75	 	#377	 	#615	 	 	 	#532	 	 	 	Jensen	 	 	 	 
	 
	 	 	 	Port Richey	 	Woodstock	 	W.	 	Oakland Park	 	Mooresville	 	Duluth	 	 	 	 	 	 	 	 	#703	 	 	 	 	 
	 
	 	 	 	#724	 	#543	 	 	 	#TI	 	#595	 	#710	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Richmond	 	Raleigh/	 	Ricmond	 	Tampa	 	 	 	 
	 
	 	 	 	 	 	Charlotte	 	 	 	 	 	 	 	Fort Meyers	 	N. Richmond	 	Durham	 	W Richmond	 	Clearwater	 	 	 	 
	 
	 	 	 	 	 	SE Charlotte	 	 	 	 	 	 	 	Ft. Meyers	 	#247	 	N Raleigh	 	#381	 	 	#771	 	 	 	 	 
	 
	 	 	 	 	 	#TBD	 	 	 	 	 	 	 	#582	 	W. Chesterfield	 	#444	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Cape Coral	 	#609	 	W Raleigh	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	#592	 	 	 	#625	 	 	 	 	 	 	 	 	 	 
	Total
	 	64	 	6	 	7	 	 	 	9	 	10	 	10	 	7	 	6	 	3	 	 	4	 	 	 	2	 

Page 9

 

EXHIBIT B

This document is Exhibit B to the Strategic Alliance Letter Agreement, dated
October 12, 2000 (the “Agreement”), between NationsRent, Inc. (“NRI”) and
Lowe’s
Companies, Inc. (“Lowes”). Capitalized terms used herein and not defined have
the meanings assigned to them in the Agreement.

	A.	 	Operating Matters

	 	1.	 	OPERATING HOURS. Each On-Site Rental Store shall be operated in a
manner consistent with the retail operations of the related
Participating Lowe’s Store, taking into account the reasonable
operational and business differences between each store. Each On-Site
Rental Store will be open for business during the same days and
similar hours as the respective Participating Lowe’s Store. Lowe’s
will provide to NRI a copy of its current operating schedule for each
Participating Lowe’s Store and timely updates to such schedules as
necessary. Notwithstanding the foregoing, the parties may adjust the
hours of operation for any one or more On-Site Rental Stores upon
mutual agreement of the parties.

	 	2.	 	STAFFING. Each On-Site Rental Store will be staffed by NRI employees
and each Participating Lowe’s Store will be staffed by Lowe’s
employees. Each party shall be independently responsible for their
respective employees and such employees’ compensation, benefits and
insurance. Neither party shall have any obligation, duties,
liabilities or responsibilities with respect to the employees of the
other party. All NRI employees shall wear NRI uniforms, designated by
NRI, at all times while on duty at an On-Site Rental Store. All Lowe’s
employees will wear Lowe’s uniforms, designated by Lowe’s, at all
times while on duty at a Participating Lowe’s Store.

Page 10

 

	 	3.	 	REPORTING. Each party will provide to the other an indexing and
trending of total revenue, commercial sales revenue, transactions and
product category mix attributable to sales from each of its respective
stores involved in the strategic alliance. Such information will be
(a) reported on a weekly basis, and (b) will be made in a form that
will be mutually developed and agreed upon by the parties from time to
time.

	 	4.	 	MERCHANDISE INVENTORY; EQUIPMENT RENTALS. NRI will purchase certain
merchandise inventory at NRI’s negotiated cost from Lowe’s for sale
from the On-Site Rental Stores; provided, however, that if any such
merchandise is not available from Lowe’s, or is not available at a
quality, price or delivery time that is reasonably acceptable to NRI,
NRI may purchase the merchandise from any other source. The parties
agree that Lowe’s cost for such merchandise shall include Lowe’s
standard overhead and inventory carrying charges. Subject to mutually
agreeing to the details, Lowe’s will replenish on a timely basis all
such merchandise inventory that it supplies to NRI. Lowe’s agrees to
use NRI as a preferred provider, or to request that its contractors
and subcontractors use NRI as a preferred provider, to satisfy all of
their equipment rental needs at Lowe’s stores (including for new store
construction, remodeling, refurbishing or otherwise); provided,
however, that if any required equipment is not available from NRI, or
is not available at a quality, price or delivery time that is
reasonably acceptable to Lowe’s or such contractors or subcontractors,
then they may rent such equipment from any other source. In addition,
in connection with Lowe’s development of internal expansion
opportunities, Lowe’s agrees to provide NRI with a good faith
opportunity to participate in such opportunities on terms to be
mutually agreed between the parties.

	 	5.	 	TRANSACTION PROCESSING. NRI will solely control the processing of all
sale and rental transactions at all On-Site Rental Stores.

	 	6.	 	RETURNS. For all merchandise purchased from the On-Site Rental
Stores,
NRI will allow merchandise returns to the On-Site Rental Stores in
accordance with Lowe’s current written return policy, which is:
returns with a receipt receive a cash refund; returns without a
receipt receive merchandise credit. Lowe’s has provided to NRI a copy
of its current return policy and will provide timely updates to the
policy as they occur.

	 	7.	 	TRAINING. NRI and Lowe’s will cooperate in training their respective
employees at the On-Site Rental Stores and Participating Lowe’s Stores
such that all employees will understand: (1) the On-Site Rental
Concept objectives; (2) the culture of the other (i.e., non-employing)
party’s business; (3) the operating standards and procedures of the
other party; and (4) the concept and benefit of promoting customer
referrals between the stores.

Page 11

 

	 	8.	 	STANDARDS; COMPLIANCE WITH LAWS. Both parties will operate their
businesses at the On-Site Rental Stores and Participating Lowe’s
Stores with reasonable care for the safety of persons and property and
in material compliance with all applicable laws, ordinances and
regulations, in their respective reasonable business judgements,
including, but not limited to, laws, regulations, orders and the like
applicable to minimum compensation, fair labor standards, overtime,
equal opportunities for employment, employment records and disclosures
and with any requirements of the insurance policies that apply to the
operations of such stores. Each party shall also (a) only employ
individuals at the On-Site Rental Stores or Participating Lowe’s
Stores, as the case may be, after performing appropriate drug testing
and background checks, in a manner which shall be reasonably
acceptable to the other party; (b) operate its stores in a manner so
as not to detract from the other party’s brand and/or shopping
experience, which requirement includes at a minimum, keeping their
respective store well-lit, the aisles and floors clean and
uncluttered, shelves stocked with merchandise, and the rental
equipment in good condition and repair ; and (c) distribute and
utilize appropriate safety and hazardous materials handling procedures
to ensure not only legal compliance but commercially reasonable risk
management. Lowe’s agrees to allow NRI to use its national vender for
drug testing and background checks, to allow NRI to get the benefit of
Lowe’s pricing on such items. To facilitate coordination of the safety
and hazardous materials management between the Participating Lowe’s
Stores and the On-Site Rental Store, each party shall also include a
Loss Prevention Manager or Specialists of the other party in one or
more of the pre-opening meetings for each On-Site Rental Stores and
Participating Lowe’s Store, as applicable, and place an emergency
procedures manual in each On-Site Rental Store or participating Lowe’s
Store (which shall contain, at a minimum, chemical release and fire
response procedures and NRI’s and Lowe’s emergency contact lists) and
provide a copy of the same to the related other store . In addition,
each party agrees to pay to the proper authorities, and collect or
withhold as appropriate, all sales, use and other taxes required to be
paid, collected or withheld, in connection with the sale/rental of
goods or services through each party’s respective store, the
employment of their respective employees and the ownership or
operation of the real property underlying their respective stores in
accordance with the terms of the applicable lease.

	 	9.	 	NON-SOLICITATION OF EMPLOYEES. During the Term, each party agrees not
to solicit for employment or hire any current or past full-time
employee of the other party if such person has been employed by the
other (on a full-time basis) within the ninety (90) day period prior
to the solicitation and/or offer of employment.

	 	10.	 	PRODUCT MIX. NRI may only offer for rent at the On-Site Rental Stores
the equipment listed on Exhibit E to the Agreement and may only offer
for sale at the On-Site Rental Stores the merchandise listed on
Exhibit F to the Agreement. NRI may offer additional items for rent or
sale at the On-Site Rental Stores with the prior consent of Lowe’s,
which consent shall not be unreasonably withheld, conditioned or
delayed. The parties agree to periodically exchange and review
information regarding product mix at their respective On-Site Rental
Stores and Participating Lowe’s Stores and agree to consider in good
faith adjusting and coordinating their respective product mixes as may
be mutually beneficial to the parties.

	 	11.	 	LOWE’S RENTAL. Lowe’s agrees that Participating Lowe’s Stores shall
not
rent any equipment other than non-commercial grade floor sanders, pressure
washers, carpet cleaners or insulation blowers, and such other items as the
parties may mutually agree from time to time.

Page 12

 

	B.	 	Marketing and Merchandising

	 	1.	 	USE OF MARKS. Lowe’s and NRI agree to cooperate in the promotion and
advertising of the On-Site Rental Stores as set out in the annual
joint marketing plan described in this Agreement. Each party shall
obtain, if necessary, all rights in the respective service marks,
trademarks, trade names and corporate logos used in its business
(collectively “Marks”) that are necessary to implement the annual
joint marketing plan. All uses of the Marks in the annual joint
marketing plan, including any co-branded items, will be subject to
advance review and written approval by the party that uses the Marks
in its business, provided that such approval will not be unreasonably
withheld or delayed. The Marks of the respective parties shall be used
only as set out herein and the use of either party’s Marks without
written approval or use other than as anticipated herein shall
constitute a material breach of this Agreement. Neither party shall
obtain any right whatsoever in the Marks of the other party due to the
use of the other party’s Marks in the annual joint marketing plan. NRI
shall be permitted to use the Lowe’s marks set forth on Exhibit G to
the Agreement for the purpose of identifying the location of its
On-Site Rental Stores.

	 	2.	 	CO-MARKETING EXPENSES. The parties will agree upon an annual joint
marketing plan, which will be reviewed quarterly and revised as
needed. All joint marketing materials will be created and purchased
upon the mutual agreement of the parties. In addition, unless
otherwise agreed, the parties will contribute equally to the cost of
producing joint marketing materials. All other signage, graphics,
handouts and other promotional and advertising material related to the
On-Site Rental Stores will be produced and used at the expense of the
producing party, unless otherwise agreed upon in writing by the
parties. In addition, the parties agree that the in-store promotion
and in-market advertising developed and used by the parties during the
test period pursuant to the Pilot Agreement will continue for each
On-Site Rental Store including the following: (a) Each may produce at
its cost in-store signage, which the other party will display at
strategic locations throughout the respective Participating Lowe’s
Stores and On-Site Rental Stores in accordance with the applicable
in-store planagram book, (which for NRI, is that planagram book dated
September 7, 2000, prepared by NRI and approved by Lowe’s), (b) NRI
may produce at its cost bagstuffers, which Lowe’s will distribute to
Lowe’s customers in shopping bags upon purchase of Lowe’s goods, (c)
NRI may produce at its cost line cards, which Lowe’s will distribute
at strategic locations throughout the Participating Lowe’s Store, (d)
NRI may produce at its cost pocket rental guides, which Lowe’s will
distribute at strategic locations throughout the Participating Lowe’s
Stores, (e) Lowe’s will share in the cost of producing and
distributing co-branded shopping bags to be used at Participating
Lowe’s Stores, (f) Lowe’s may produce at its cost co-branded kiosks
containing sales literature promoting Lowe’s and the On-Site Rental
Stores, which NRI will display at its free-standing equipment rental
stores within the same markets as the On-Site Rental Stores, and (g)
Lowe’s may produce at its cost credit applications, which NRI will
distribute at its On-Site Rental Stores and other NRI stores in the
same market.

	 	3.	 	CUSTOMER DATABASE. During the Term, the parties shall license to each
other on a non-exclusive royalty-free basis their respective
commercial customer databases relating to participating stores and
markets and will permit the other party to use the customer
information contained therein for marketing purposes; provided, that
to the extent either party may not be permitted to transmit such
information to the other for direct marketing purposes, such party
shall cooperate to distribute the other’s marketing materials in a
manner that is permitted.

	 	4.	 	RENTAL RATES. NRI will charge competitive rental rates based on
four-hour, daily, weekly and monthly increments. NRI may change its
rental rates at its sole discretion. In addition, NRI may charge other
fees including late fees, delivery and pick-up fees, fuel charges,
loss and damage waiver charges, and cleaning fees.

	 	5.	 	CREDIT PROGRAMS. Subject to Lowe’s standard credit approval process
and agreements with credit providers, Lowe’s will offer all of its
credit programs to NRI customers in the markets in which NRI operates
On-Site Rental Stores.

Page 13

 

	C.	 	Real Estate and Construction.

	 	1.	 	LEASE FORM. With respect to each On-Site Rental Store, the parties
agree to complete, execute and deliver a lease, substantially in the
form of Exhibit C to the Agreement, at least one hundred and twenty
(120) days prior to the targeted opening date of such store. Lowe’s
shall not be obligated to commence construction on any On-Site Rental
Store until the conditions of Section 1.5 of the fully-executed lease
for the applicable store have been met. In addition, the parties agree
to amend the leases covering the six (6) test stores currently
operating under the Pilot Agreement to extend their terms from six (6)
months to expire on October 31, 2008 and to add two (2) five (5)-year
renewal terms to conform them to the form of lease attached as Exhibit
C to the Agreement.

	 	2.	 	RENT. NRI will pay in a single payment a fixed monthly rent for each
On-Site Rental Store of $4.00 per square foot of interior sales floor
area. In addition, Lowe’s agrees that for the first one hundred twenty
(120) On-Site Rental Stores, rent payments shall not commence until
four (4) months following the Delivery Date of such store as defined
in the form of lease attached as Exhibit C to the Agreement.

	 	3.	 	MINIMUM SQUARE FOOTAGE. All On-Site Rental Stores will have a minimum
of 1,200 square feet of interior sales floor area and approximately
2,000 square feet of exterior storage space. Each On-Site Rental Store
shall be constructed, designed and located substantially in accordance
with the prototypical plans attached as Exhibit H to the Agreement as
modified by site specific conditions. Further, NRI shall be entitled
to install its prototypical signage (subject to applicable laws, codes
and ordinances) in the form attached as Exhibit I to the Agreement. In
connection with each On-Site Rental Store, Lowe’s agrees to construct
the space, at its cost, in accordance with the attached form of lease.

	 	4.	 	TERM. The parties agree that the term of each lease for an On-Site
Rental Store executed during the Term and each renewal term of the
Agreement shall commence in accordance with its terms and shall expire
as follows:

	 	 	 	 	 
	TARGETED OPENING DATE DURING
	 	LEASE EXPIRES OCTOBER 31,

	Agreement Term ending 12/31/03
	 	 	2008	 
	First Renewal ending 12/31/06
	 	 	2011	 
	Second Renewal ending 12/31/09
	 	 	2014	 
	Third Renewal ending 12/31/12
	 	 	2017	 
	Fourth Renewal ending 12/31/15
	 	 	2020	 
	Fifth Renewal ending 12/31/18
	 	 	2023	 

	 	 	 	In addition, each such lease shall have two (2) five (5) year renewal
options that shall only be exercisable if at the time of the exercise
of such renewal option the Agreement is in effect in accordance with
its terms.

	 	5.	 	OTHER FORMATS. During the Term, the parties shall in good faith
explore other formats for the design, size, location and operation of
the On-Site Rental Concept. In addition, the parties shall in good
faith explore co-purchasing and co-marketing opportunities.

Page 14

 

	D.	 	Systems

	 	1.	 	POS SYSTEM. NRI will install and use its own point of sale cash
register/computer system to manage transactions at the On-Site Rental
Stores.

	 	2.	 	NETWORK. NRI will install and use its own voice/data network at the
On-Site Rental Stores.

	 	3.	 	EQUIPMENT. NRI will install and use its own information systems and
telecommunications equipment at the On-Site Rental Stores.

	 	4.	 	TELECOMMUNICATIONS. The parties shall cooperate to integrate the
phone
systems between each On-Site Rental Store and the related
Participating Lowe’s Stores so that each store can transfer incoming
calls to the other.

Page 15

 

EXHIBIT C

TO

STRATEGIC ALLIANCE LETTER AGREEMENT

BY AND BETWEEN

NATIONSRENT, INC.

AND

LOWE’S COMPANIES, INC.

	 	 	 	 	 
	STATE OF ____________
	 	 	 	(LOWES BUILDS)
	

	 	 	 	LEASE AGREEMENT
	

	 	 	 	[SUBLEASE AGREEMENT]
	COUNTY OF ____________

	 	(____________)
	 	Location: ____________

     THIS LEASE AGREEMENT [SUBLEASE AGREEMENT] (“Agreement” or “Lease”),
made and entered into this ___day of ___, ___(“Effective Date”)
by and between LOWE’S HOME CENTERS, INC. a North Carolina corporation with its
principal office and place of business in Wilkes County, North Carolina,
hereinafter known and designated in this Agreement as Landlord, and
NATIONSRENT___, INC., a Delaware corporation with its principal
office and place of business in Broward County, Florida, hereinafter known and
designated in this Agreement as Tenant.

W I T N E S S E T H :

     WHEREAS, Landlord has agreed to lease [ALTERNATE FOR SUBLEASES -
sublease] to Tenant the property hereinafter described under the terms and
conditions hereinafter set out; and

     WHEREAS, it is the desire of both parties, Landlord and Tenant, to
reduce the terms of this Agreement to writing;

     NOW, THEREFORE, for and in consideration of the rental hereinafter set
out and the further consideration of the faithful performance of the conditions
and stipulations listed hereunder on the part of both parties, Landlord does
hereby demise, let and lease to Tenant the following described premises.

ARTICLE 1

PREMISES; LANDLORD’S WORK; DELIVERY DATES; AND CONSTRUCTION COMMENCEMENT

1.1 PREMISES. Landlord is the owner in fee simple of that certain real property
legally described on Exhibit “A” attached hereto and made a part hereof, which
real property is located at: (INSERT ADDRESS, CITY AND STATE)
___, ___,___(“Real Property”). [ALTERNATE FOR
SUBLEASES] LANDLORD IS THE LESSEE OF THAT CERTAIN REAL PROPERTY LEGALLY
DESCRIBED ON EXHIBIT “A” ATTACHED HERETO AND MADE A PART HEREOF, WHICH REAL
PROPERTY IS LOCATED AT: (INSERT ADDRESS, CITY AND STATE)
___, ___,___(“REAL PROPERTY”). LANDLORD HAS
LEASEHOLD TITLE TO THE REAL PROPERTY PURSUANT TO THAT CERTAIN LEASE BY AND
BETWEEN ___(“PRIME LANDLORD”) AND LANDLORD AS THE TENANT
THEREUNDER, DATED AS OF ___, A COPY OF WHICH (WITH FINANCIAL AND
OTHER CONFIDENTIAL INFORMATION REDACTED BY LANDLORD) IS ATTACHED HERETO AS
EXHIBIT “A-1” AND MADE A PART HEREOF (“PRIME LEASE”).

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord certain
premises to be constructed on the Real Property as herein provided, which shall
contain approximately one thousand two hundred (1,200) square feet of interior
sales floor area and that certain area which is approximately two thousand
(2,000) square feet, located on the Real Property and designated “NationsRent
Storage” on the site plan attached as Exhibit “B”, hereinafter referred to as
“NationsRent Storage Area” which premises are to be constructed by Landlord in
the location shown on the site plan attached as Exhibit “B” and made a part
hereof (“Site Plan”), together with the right to use the service drives located
behind the Landlord’s retail facility located on the Real Property (“Landlord’s
Retail Facility”) for deliveries to the NationsRent Storage Area and the right
to use the “Common Areas” (as defined in Article 7 hereof) of the Real Property
for their intended purposes (collectively, the “Premises”). Landlord and Tenant
agree that neither party shall unreasonably block the service drives that are
located behind the Landlord’s Retail Facility, except for temporary periods of
time provided that same does not unreasonably interfere with the other party’s
business or operations. Landlord shall not obstruct or place any property or
other items in that portion of the sidewalk, loading area or driveway directly
in front of Tenant’s Premises or materially block any of Tenant’s signage.
Landlord also grants Tenant the right to use the sidewalks and loading area
directly in front of the Tenant’s Premises for the display of Tenant’s
equipment
and for loading and unloading Tenant’s equipment, provided the same does not
violate any codes, ordinances, regulations, local laws or any reciprocal
easement and operating agreement and covenants recorded with respect to the
Real
Property. Any display of equipment other than directly in front of Tenant’s
Premises or in the NationsRent Storage Area shall be subject to the Landlord’s
prior approval as to duration and location.

1.2 LANDLORD’S WORK. Landlord shall, at the sole cost and expense of Landlord,
construct, improve, and finish out the Premises to a vanilla shell
substantially
in accordance with Exhibit “C” (hereinafter “Landlord’s Work”). Within
thirty (30) days after the Effective Date, Tenant, at Tenant’s sole cost and
expense, shall cause to be prepared and delivered to Landlord for Landlord’s
approval two (2) sets of plans and specifications based upon Tenant’s
prototypical plans and specifications, attached as an exhibit to the Strategic
Alliance Agreement (defined in 8.3 hereof), as same may be modified by site
specific conditions. Within fifteen (15) days of receipt, Landlord shall notify
Tenant of the respects, if any, in which said plans and specifications fail to
meet Landlord’s reasonable approval and Tenant shall promptly make any
revisions
necessary to correct such matters and obtain Landlord’s approval. The
preliminary plans and specifications as approved by Landlord hereunder shall
hereinafter be referred to as the “Final Plans and Specifications”.

Page 16

 

1.3 ESTIMATED DELIVERY DATE/OUTSIDE DELIVERY DATE. The term “Estimated Delivery
Date” shall mean forty-five (45) days after commencement of construction of the
Premises. The term “Outside Delivery Date” shall mean sixty (60) days after
commencement of construction of the Premises.

1.4 DELIVERY DATE. The term “Delivery Date” shall mean the date that (i)
exclusive possession of the Premises is delivered to Tenant with all of
“Landlord’s Work” completed and (ii) all of the contingencies set forth in
Section 2.2 hereof shall have been satisfied or waived in writing by Tenant.
Landlord estimates that the Delivery Date will occur on or before the Estimated
Delivery Date. Landlord agrees to use diligent efforts to deliver possession of
the Premises to Tenant, with Landlord’s Work completed, by the Estimated
Delivery Date and Landlord agrees to apprise Tenant of any delays respecting
the
Delivery Date. If the Delivery Date does not occur on or before the Estimated
Delivery Date, then the Delivery Date shall not occur without Landlord having
provided Tenant with at least fifteen (15) days prior written notice of the
actual Delivery Date. If the Delivery Date has not occurred by the Outside
Delivery Date, for any reason whatsoever, Tenant shall notify Landlord of such
failure and Landlord shall have an additional sixty (60) days to deliver
possession of the Premises to Tenant with Landlord’s Work completed, failing
which Tenant shall have the right and option (in addition to all other remedies
available at law, in equity or hereunder) to terminate this Lease any time
thereafter upon written notice thereof given to Landlord, whereupon the parties
shall be released from all liability hereunder (except for any indemnities
specifically set forth in this Lease as surviving such termination).

1.5 COMMENCEMENT OF CONSTRUCTION. After (i) approval of the Final Plans and
Specifications; (ii) notice from Tenant of Tenant’s approval and acceptance of
the environmental condition of the Premises; and (iii) receipt from Tenant of
all permits for Landlord’s Work, Landlord shall immediately commence
construction of Landlord’s Work. If Landlord has not commenced the construction
of the Premises in accordance with the Final Plans and Specifications within
sixty (60) days of Landlord’s receipt of all permits and approvals from Tenant
as required above, then, at any time thereafter, but prior to Landlord having
commenced such work, Tenant shall notify Landlord of such failure and Landlord
shall have an additional thirty (30) days to commence Landlord’s Work, failing
which Tenant shall have the right and option (in addition to all other remedies
available at law, in equity or hereunder) to terminate this Lease any time
thereafter upon written notice thereof given to Landlord, whereupon the parties
shall be released from all liability hereunder (except for any indemnities
specifically surviving such termination).

1.6 PUNCH LIST. Tenant’s occupancy of the Premises shall constitute acceptance
thereof. As soon as practicable thereafter after the Delivery Date, Tenant
shall
provide Landlord with a list of items still to be completed by Landlord (the
“Punch List”). Landlord shall, with reasonable diligence, commence to complete
or correct the Punch List items, which shall be completed within a reasonable
time thereafter not to exceed thirty (30) days. Nothing herein shall be deemed
to diminish Landlord’s obligation to make any repairs (including, without
limitation, remedying any latent defects in Landlord’s Work) as required by
Section 5.1 hereof.

ARTICLE 2

TERM AND CONTINGENCIES

     2.1 TERM. The term of this Agreement shall commence (“Commencement
Date”) on the Delivery Date and this Agreement shall continueuntil October 31,
2008, unless sooner terminated in accordance with the provisions of this Lease
or the Strategic Alliance Agreement (as defined in Section 8.3 hereof)
(hereinafter the “Lease Term”). [NOTE: FOR TERMINATION DATES OF LEASES ENTERED
INTO AFTER DECEMBER 31, 2003, REFER TO PARAGRAPH C.4 OF EXHIBIT B TO THE
STRATEGIC ALLIANCE AGREEMENT (AS MORE SPECIFICALLY DEFINED IN ss8.3 HEREOF).]
When the Commencement Date has been determined as provided in this Section 2.1,
Landlord and Tenant shall execute, acknowledge and deliver to each other the
written statement attached hereto as Exhibit “D” specifying the Commencement
Date, the Rent Commencement Date and the expiration of the Lease Term.

Page 17

 

     2.2. CONTINGENCIES. Tenant’s obligation to lease the Premises is
contingent upon, and the Rent and the Lease Term shall not commence until the
satisfaction or waiver of the following conditions:

	 	a)	 	Landlord has delivered to Tenant, to the extent in Landlord’s
possession or control a copy of Landlord’s prior survey on the
Real Property, a copy of the tax bill for the Real Property and a
copy of Landlord’s title policy;

	 	b)	 	Landlord has delivered to Tenant a fully executed Memorandum of
Lease [ALTERNATE FOR SUBLEASES — Sublease] substantially in the
form attached as Exhibit “E” attached hereto;

	 	c)	 	Landlord has delivered to Tenant a duly executed non-disturbance
agreement from its lender (if any) having a lien (security
interest) on the Premises in a form reasonably acceptable to the
parties; and

	 	d)	 	Landlord has delivered contact information for the environmental
consultant or engineer that prepared Landlord’s environmental
report, if any, and Tenant has obtained a reasonably acceptable
reliance letter and/or update from such environmental consultant
or engineer or Tenant has conducted and accepted the results of
its own modified Phase I ESA, and Tenant has approved and
accepted the environmental condition of the Premises.

	 	 	 	[INSERT IF SUBLEASE]:

	 	e)	 	Landlord has delivered to Tenant the Prime Landlord Non-Disturbance
Agreement referenced in Section 12.14 hereof.

     Tenant, its agents and employees, at their own risk and peril shall
have the right to enter the Premises on the Effective Date for purposes of
conducting inspections in accordance with this Lease.

ARTICLE 3

RENT; OPTION PERIODS; AND LATE FEE

     3.1 RENT. Commencing the earlier of: (i) the Commencement Date; or
(ii) the date that Tenant opens for business to the public in the Premises
(“Rent Commencement Date”), Tenant shall pay to Landlord an annual rental
(“Rent”) for the Premises during the initial Lease Term of Four Dollars ($4.00)
per square foot of interior sales floor area which is approximately twelve
hundred (1200) square feet. [NOTE: For the first one hundred and twenty stores,
Rent shall not commence until one hundred and twenty days after the Delivery
Date.] Rent shall be payable in advance on or before the first (1st) of each
month in monthly installments, without abatement (except as provided in
Sections
10.2 and 10.3 hereof and other portions of this Lease with specific abatement
rights), deduction, or offset. After the Commencement Date, Landlord shall
cause
its architect to field measure the interior sales floor area of the Premises
and
prepare a certification of square footage (measuring the square footage of such
area from the exterior of exterior walls and the center point of any shared
walls); such certification to be in a form reasonably acceptable to Tenant.
Appropriate proration of Rent and all other charges payable hereunder shall be
made if the Rent Commencement Date is not on the first day of a calendar month,
or if the date of termination of the Lease is not on the last day of a calendar
month. Tenant shall pay to Landlord together with the payment of Rent, any
sales
or use tax now or hereafter imposed upon the Rent or any other charges payable
by Tenant by the state in which the Premises are located and any agency of the
federal government or any local government.

Page 18

 

     All Rent checks shall be forwarded to:

LOWE’S HOME CENTERS, INC.

Attn: Property Management Dept. (REO)

P. O. Box 1111

North Wilkesboro, NC 28656

     3.2 OPTION PERIODS. Tenant shall have the option and privilege of
extending or renewing this Agreement for two (2) additional period(s) of five
(5) years each, provided the Strategic Alliance Agreement (as defined more
specifically in ss 8.3 hereof) is in effect and has not been terminated or
expired or there are no material defaults hereunder. If Tenant shall fail to
extend the Lease Term as provided herein, then all further option periods shall
automatically terminate and be null and void. Tenant shall, not less than
ninety
(90) days prior to the expiration of the current term, notify Landlord in
writing of its intention to renew this Agreement or exercise said option;
otherwise it will be presumed that Tenant has not exercised its option to
extend
the Lease Term or to renew the Lease Term. In the event Tenant exercises said
option period or periods to extend the term of this Agreement, the Agreement
shall be under the same terms and conditions as herein set out except that
annual Rent shall increase by ten percent (10%) at the beginning of the first
option period over the annual Rent that Tenant was paying in the initial Lease
Term and thereafter, Rent shall increase by ten percent (10%) at the beginning
of each successive option period over the Rent that Tenant was paying for the
previous option period. The reference to the Lease Term, shall hereinafter
refer
to the Lease Term as extended herein.

     3.3 LATE FEE. A late fee of $250.00 shall be due from Tenant to
Landlord for all Rent payments received after the tenth (10th) of each month
and
twelve percent (12%) per annum delinquency charge shall be charged on all Rent
or other monetary payments due from Tenant to Landlord for payments in excess
of
thirty (30) days in arrears.

ARTICLE 4

TAXES

     4.1 TAXES. Landlord shall pay all ad valorem and property taxes on the
Real Property (“Real Estate Taxes”). Real Estate Taxes shall exclude any
income,
excess profits, single business, inheritance, succession, transfer, franchise,
capital or other tax assessments upon Landlord or Landlord’s interest in the
Premises, fine, penalty, cost or interest for any taxes Landlord failed to
timely pay, offsite levies, impact fees or any charges similar to the
foregoing.
Tenant agrees to reimburse Landlord for its proportionate share (as hereinafter
defined) of the Real Estate Taxes assessed for the period from the Commencement
Date through the remainder of the Lease Term within thirty (30) days of
Tenant’s
receipt of a copy of the paid tax receipt. As used in this Lease, Tenant’s
proportionate share shall be calculated by taking one and one-half (1.5) times
the square feet of the interior sales floor area of Tenant’s Premises as set
forth in Section 1.1 (i.e.-approximately 1,800 square feet) and dividing same
by
the square feet of interior sales floor area of all buildings located on the
Real Property.

Page 19

 

ARTICLE 5

IMPROVEMENTS AND REPAIRS; AND TENANT’S PROPERTY

     5.1 IMPROVEMENTS AND REPAIRS. Tenant shall not make structural
improvements or structural alterations to the Premises herein leased without
obtaining the express prior written consent of Landlord, such consent not to be
unreasonably withheld, delayed or conditioned. Tenant shall be permitted to
make
interior, non-structural alterations to the Premises without Landlord’s
consent.
Tenant shall also have the right, without obtaining Landlord’s approval to
perform renovations to the interior of the Premises to convert the Premises
into
a NationsRent store in accordance with the Final Plans and Specifications
previously approved by Landlord, as modified by space and site limitations. All
other alterations shall require the consent of Landlord, which shall not be
unreasonably withheld, delayed or conditioned. Landlord shall reasonably
cooperate with Tenant and assist Tenant in applying for and securing any
permits
and licenses which may be necessary in connection with Landlord’s Work and the
making of any alterations, additions, changes and repairs and upon request from
Tenant, to execute or join in the execution of any application for any such
permits or licenses. After completion of Tenant’s alterations of the Premises,
Tenant shall provide Landlord with a copy of the as built plans and
specifications for such work. Any work, including interior and structural,
performed by Tenant shall be done in a good and workmanlike manner. In the
event
such work results in a claim of lien against Landlord, Tenant shall hold
Landlord harmless from such claim of lien or lien. All persons are put on
notice
of the fact that the Tenant under no circumstances shall have the power to
subject the interest of the Landlord in the Premises to any mechanic’s or
materialman’s lien or liens of any kind. All persons who hereafter, during the
Lease Term, may furnish work, services or materials to the Premises upon the
request or order of the Tenant or any person claiming under, by or through the
Tenant, must look wholly to the interest of the Tenant and not to that of the
Landlord. Tenant covenants and agrees with Landlord that Tenant will not permit
or suffer to be filed or claimed against the interest of the Landlord in the
Premises during the continuance of this Lease, any lien or liens of any kind by
any person claiming under, by, through or against the Tenant; and if any such
lien is claimed or filed, it shall be the duty of the Tenant, within sixty (60)
days after the claim of lien or suit claiming a lien has been filed, to cause
the Premises to be released from such claim, either through payment or through
bonding with corporate surety or through the deposit into court, pursuant to
statute, of the necessary sums of money, or in any other way that will effect
the release of the Landlord’s interest in the Premises from such claim.

     Landlord shall maintain, repair (and replace if required) throughout
the Lease Term, the building structure including the floor (except floor
coverings), roof (including the ceiling if damaged by leakage), exterior walls,
utility lines to the exterior of the Premises, the heating, ventilating and air
conditioning system, the fire sprinkler system and any other building systems
that are shared between the Premises and the adjacent building occupied by
Landlord. Except as provided herein, Tenant shall be responsible for all day to
day cleaning, maintenance and repair of the interior of the Premises,
including,
but not limited to, interior plumbing, interior electrical, fire extinguishers,
security system, window glass, interior walls, ceilings and floor coverings, if
any (including carpet and tiles), and damage by vandals. Landlord shall perform
quarterly maintenance on the heating, ventilation and air conditioning units
servicing the Premises and Tenant shall reimburse Landlord for such maintenance
within forty-five (45) days of receipt of an invoice for same. Landlord shall
reasonably comply with all presently existing and future laws, codes,
regulations and other governmental requirements, including without limitation
the Americans With Disabilities Act requiring changes, alterations or
improvements to the Premises, unless such legal requirement is solely and
directly necessitated by Tenant’s particular manner of use or occupancy of the
Premises. Landlord shall promptly give notice to Tenant of any written notice
in
respect of the Premises from governmental authorities. Tenant may, in good
faith, dispute the validity of any complaint or action taken pursuant to or
under color of any of the foregoing, defend against the same, and in good faith
diligently conduct any necessary proceedings to prevent and avoid any adverse
consequence of the same (provided that Tenant shall not commence any litigation
against a governmental authority with respect to laws, codes, regulations and
other governmental requirements without first obtaining Landlord’s prior
written
approval, which shall not be unreasonably withheld, delayed or conditioned).

Page 20

 

     5.2. TENANT’S PROPERTY. The improvements which are placed on the
Premises by Tenant and which are made a permanent part of said Premises shall
become the property of Landlord. Any personal property, equipment, furniture,
trade fixtures, inventory, construction equipment, trademarked items, exterior
channel letter signs, exterior wall mount signs, designation panels on the
monument or pylon signs (if any), all interior signage, pallet racking, wash
bay, storage trailer located in the NationsRent Storage Area, counters,
shelving, showcases and other movable trade fixtures installed in or on the
Premises by Tenant (collectively, “Tenant’s Property”), shall remain the
property of Tenant. Landlord agrees that Tenant shall have the right, at any
time and from time to time, to remove any and all of Tenant’s Property. Tenant,
at its expense, shall immediately repair any damage occasioned by the removal
of
Tenant’s Property. Tenant shall pay before delinquency all license fees and
public charges levied, assessed or imposed upon its business operation in the
Premises as well as upon Tenant’s Property. From time to time, some or all of
Tenant’s Property may be financed or owned by someone other than Tenant. To the
extent that any of Tenant’s Property is financed or owned by someone other than
Tenant, Landlord agrees that such Tenant’s Property is not Landlord’s property
no matter how the same is affixed to the Premises or used by Tenant and agrees
to recognize the rights of the lender or owner of Tenant’s Property. Landlord
waives any claim arising by way of any Landlord’s lien (whether created by
statute or by contract) or otherwise with respect to Tenant’s Property and
agrees to sign and deliver to any lender, secured creditor or lessor a waiver
of
any lien Landlord may have on Tenant’s Property if required by such lender,
secured creditor or lessor. Tenant shall have the absolute right from time to
time during the Term hereof and without Landlord’s further approval, written or
otherwise, to grant a security interest in Tenant’s interest in this Lease or
in
Tenant’s Property in connection with Tenant’s general credit facility as same
is
amended, renewed or replaced from time to time.

ARTICLE 6

USE; ENVIRONMENTAL; COTENANCY; AND EXCLUSIVE USE

     6.1 USE . In an attempt to provide a planned, unified commercial
development on the Real Property it is expressly agreed that the Premises may
only be used for the operation of an equipment rental, leasing and sales
facility and any similar uses directly related thereto, including, but not
limited to, the business of renting, selling, leasing, distributing, storing
(indoor and outdoor), limited servicing new or used equipment, spare parts and
related supplies to industrial, manufacturing and construction customers and
related general office use. Tenant shall open and operate its equipment rental,
leasing and sales facility in the Premises during the same days and similar
hours as Landlord’s Retail Facility. Tenant shall not make any use of the
Premises which is in violation of any governmental laws, rules or regulations
insofar as they relate to Tenant’s use and occupancy of the Premises. If at any
time during the Lease Term, the zoning use applicable to the Premises should be
changed in such a manner as to require Tenant to cease operating at the
Premises
or to preclude the use and operation of an equipment rental facility on the
Premises, then Tenant may, in addition to all other rights and remedies,
terminate this Lease by giving Landlord thirty (30) days written notice thereof
and in such event Tenant shall be relieved of all liability from and after the
date of termination, (except for any indemnities specifically surviving such
termination). For purposes of Section 365 of the Bankruptcy Code (11 U.S.C.
ss 365), the parties agree that the Real Property constitutes a planned,
unified commercial development or “shopping center”.

Page 21

 

     6.2 ENVIRONMENTAL. Tenant shall not use the Premises for the storage,
use, treatment, or disposal of any Hazardous Materials (defined herein) except
in compliance with Environmental Laws (defined herein). As used herein, the
term
“Hazardous Materials” shall mean any substance or material defined or
designated
as hazardous or toxic waste, hazardous or toxic material, a hazardous or toxic
substance, or other similar term, including, without limitation, asbestos
containing materials, by any federal, state or local environmental health,
safety or similar laws, statutes, rules, regulations or ordinances presently in
effect or which may be promulgated in the future, as such laws, statutes,
rules,
regulations and/or ordinances may be supplemented or amended from time to time
(collectively, “Environmental Laws”). Tenant agrees to indemnify, defend and
hold Landlord and its officers, partners, directors, shareholders, employees
and
agents harmless from any Costs (defined below) which arise during or after the
Term in connection with the presence of Hazardous Materials in the soil,
groundwater, or soil vapor on or under the Premises caused by the acts of
Tenant, its employees, invitees, contractors or agents; provided that this
indemnification shall not include consequential damages or lost profits.
Without
limiting the generality of the foregoing, this indemnification shall survive
the
expiration and/or termination of this Lease regardless of cause.

     Landlord agrees to indemnify, defend and hold Tenant and its officers,
partners, directors, shareholders, employees and agents harmless from any
claims, judgments, damages, fines, penalties, costs (including attorney,
consultant and expert fees actually incurred), liabilities (including sums paid
in settlement of claims) or losses, investigation of site conditions or any
cleanup, remedial, removal or restoration work required by any federal, state
or
local governmental agency or political subdivision (collectively, “Costs”) in
connection with the presence of Hazardous Materials in the soil, groundwater,
or
soil vapor on or under the Real Property either existing prior to the Delivery
Date (“Pre-existing Conditions”) or caused by Landlord, its employees,
invitees,
agents or contractors provided that this indemnification shall not include (i)
consequential damages or lost profits or (ii) costs asserted by employees or
invitees of Tenant relating to Pre-existing Conditions. Without limiting the
generality of the foregoing, this indemnification shall survive the expiration
or earlier termination of this Lease regardless of cause. If during the Lease
Term, any governmental authority requires the investigation, remediation and/or
monitoring of Hazardous Materials at the Real Property and such investigation,
remediation and/or monitoring materially and adversely affects Tenant’s
business
operations or poses a safety threat to Tenant’s employees or customers, then
Tenant shall be entitled to receive an equitable abatement of Rent from the
date
such interference or safety hazard occurs to the date such interference and
safety hazard are no longer present. However, in the event that such material
and adverse affect on Tenant’s business operations or safety hazard continues
for more than ninety (90) days, Tenant shall be entitled to terminate this
Lease
upon written notice to Landlord.

     6.3 CO-TENANCY. Notwithstanding anything to the contrary, the
Commencement Date shall not occur, nor shall Tenant be obligated to pay Rent or
any other charges hereunder until Landlord, operating as “Lowe’s” has opened
and
is operating for business in its entire premises on the Real Property. If
Lowe’s
vacates or ceases business operations in its premises for any reason whatsoever
(other than temporary discontinuances not to exceed one hundred and twenty
(120)
days for remodeling, alterations or restoration work), then either party may
terminate this Lease, whereupon the parties shall be released from all
liability
hereunder except for any indemnities specifically surviving this Lease. Should
Landlord intend to cease operations, Landlord shall provide Tenant with thirty
(30) days prior written notice of same.

     6.4 EXCLUSIVE USE. During the Lease Term, Landlord shall not, nor
shall Landlord permit any other owner, tenant or other occupant of the Real
Property (other than Tenant) to operate an equipment rental facility or to rent
equipment, except that Landlord shall be entitled to rent the equipment as
provided from time to time more specifically described in the Strategic
Alliance
Agreement.

Page 22

 

ARTICLE 7

COMMON AREAS

     7.1 COMMON AREAS. Landlord shall make available (or use commercially
reasonable efforts to cause to be made available) throughout the Lease Term
such
“Common Areas” (including, but not limited to, parking areas, driveways, truck
ways, service drives, service areas, delivery passages, truck-loading areas,
access and egress roads, walkways, footbridges, landscaped and planted areas
and
public rest rooms) as may be shown on the Site Plan or which are otherwise
available for the non-exclusive use of the occupants of the Real Property.
Landlord shall (or shall use commercially reasonable efforts to cause the same
to be done) operate, manage, equip, light, repair, replace and maintain the
Common Areas for their intended purposes in compliance with all laws. In no
event shall use of the Common Areas be conditioned upon payment of parking
charges. Tenant and its officers, employees, agents, customers and invitees
shall have and Landlord hereby grants a non-exclusive easement (in common with
subtenants, licensees, the other occupants of the Real Property and their
employees, agents, customers and invitees) to use the Common Areas for the
intended purposes (e.g., parking, access, ingress and egress). Tenant shall
also
have the right to use Landlord’s trash receptacle inside Landlord’s Retail
Facility and Landlord shall provide Tenant with reasonable access to same
during
Landlord’s regular business hours. Tenant shall pay Landlord, within thirty
(30)
days after receiving written notice, annually each year (and commencing within
one year after the Commencement Date), $1200.00 representing reimbursement to
Landlord for the reasonable costs and expenses incurred by Landlord during each
year of the Lease Term in operating, repairing, maintaining and insuring the
Common Areas of the Real Property.

ARTICLE 8

TENANT DEFAULT; LANDLORD DEFAULT; AND STRATEGIC ALLIANCE AGREEMENT

     8.1 TENANT DEFAULT. It is expressly agreed that if: (i) Tenant shall
neglect to make any payment of Rent when due or any other charges when due
hereunder and shall remain in default for a period of fifteen (15) days after
written notice of same from Landlord (except that with respect to the first
payment of Rent due hereunder, such time period shall be forty-five (45) days
in
order to permit Tenant to set up payments within Tenant’s accounting system) or
(ii) Tenant shall fail to perform any matter or thing herein agreed to be done
and performed by Tenant for a period of thirty (30) days after written notice
of
same from Landlord (or such longer period as may be reasonably necessary to
correct such default if within such thirty (30) day period Tenant shall
commence
cure of such default and thereafter diligently pursue correction thereof)
beyond
any applicable notice or cure period provided therein (each of (i) and (ii)
hereinafter being referred to as a (“Tenant Default”); then in any such events,
Landlord may thereupon declare Tenant’s rights of possession canceled and take
possession of the Premises without prejudice to any other legal remedy it may
have on account of such default to collect Rent from Tenant for the remainder
of
the term of this Agreement.

     In any action by Landlord against Tenant that arises under this Lease,
Landlord shall attempt to mitigate damages by using commercially reasonable
efforts to seek to relet the Premises. Notwithstanding anything to the
contrary,
in no event shall Landlord have the right to accelerate the Rent and other
amounts payable hereunder, or sue Tenant for any consequential, punitive or
incidental damages including, without limitation, any claims for lost profits
and/or lost business opportunity.

Page 23

 

     8.2 LANDLORD DEFAULT. If Landlord shall fail to make any payment
hereunder for more than thirty (30) days after Landlord receives notice of such
failure from Tenant, if Landlord’s representations and warranties in this Lease
fail to be true and correct, or if Landlord shall violate, neglect or fail to
perform or observe any covenant, condition, representation, warranty or
agreement or provision contained herein within thirty (30) days after receipt
by
Landlord of written notice of such failure (or such longer period as may be
reasonably necessary to correct such default if within such thirty (30) day
period Landlord shall commence cure of such default and thereafter pursue
correction thereof then such failure shall constitute an “Landlord Default”
hereunder. The foregoing notice and cure periods shall not be applicable to
specific Lease provisions that provide Tenant with specific rights for Landlord
Defaults. Notwithstanding the foregoing, if in Tenant’s reasonable judgment, an
emergency shall exist, Tenant may cure such default with only reasonable (under
the circumstances) notice to Landlord being required. Upon the occurrence and
continuance of an Landlord Default, Tenant may, at its option and without any
obligation to do so, elect to terminate and cancel this Lease, withhold payment
or performance under the Lease until such time as such Landlord Default is
cured, cure such Landlord Default and set off against the Rent such amounts
expended by Tenant in connection with such cure or, pursue any other remedy now
or hereafter available at law or in equity in the state in which the Premises
are situated. The self-help option given to Tenant in this Section is for the
sole protection of Tenant, and its existence shall not release Landlord from
its
obligation to perform the terms, provisions, covenants and conditions herein
provided to be performed by Landlord or deprive Tenant of any legal rights
which
it may have by reason of any such default by Landlord.

     8.3 STRATEGIC ALLIANCE AGREEMENT. If either party shall fail to cure
an event of default under that certain Strategic Alliance Agreement dated as of
October ___, 2000 by and between Lowe’s Companies, Inc. and NationsRent,
Inc., (“Strategic Alliance Agreement”) within the applicable notice and cure
periods as may be set forth therein, then the non-breaching party shall have
the
rights and remedies as set forth in the Strategic Alliance Agreement for such
event of default.

ARTICLE 9

LIGHTS, HEAT, WATER AND SEWER

     9.1 LIGHTS, HEAT, WATER AND SEWER. During the Lease Term, Tenant shall
pay for all electric, heat and air conditioning system (“HVAC”), water, sewer
and other utility charges accruing by reason of Tenant’s use of the Premises.
To
the extent reasonably possible, the HVAC, water, electric and sprinklers shall
be sub-metered by Landlord, at its sole cost and expense and Landlord shall
cooperate with Tenant in connection with same. If any interruption in utility
service was caused by the acts or omissions of Landlord, its agents, employees
or contractors then there shall be an abatement of Rent and all other charges
payable by Tenant hereunder on a per diem basis for the period that the
interruption continues. Tenant shall have the right upon obtaining Landlord’s
prior written approval (which shall not be unreasonably withheld, delayed or
conditioned), throughout the Lease Term, to install, replace, maintain and use
such additional utility lines, conduits and facilities to service the Premises.
In connection with installing any such utilities, Tenant agrees that same shall
be run through Landlord’s Retail Facility (and not through the parking lot).

Page 24

 

ARTICLE 10

INSURANCE; FIRE OR OTHER CASUALTY; EMINENT

DOMAIN; INDEMNITY BY LANDLORD; AND INDEMNITY BY TENANT

     10.1 INSURANCE.

     (a) Landlord agrees to obtain and maintain, at its expense, during the
Term of this Lease, (and Tenant agrees to obtain and maintain, at its expense,
during the Term of this Lease from and after the Delivery Date) the following
policies of insurance from companies reasonably satisfactory to the other and
containing provisions adequate to fully protect both parties from and against
all expenses, claims, actions, liabilities and losses related to the subjects
covered by the policies of insurance set forth below:

          (i) Worker’s Compensation Insurance covering all costs, benefits and
liability in accordance with the applicable state’s worker’s compensation and
similar laws which may accrue in favor of any person employed by the parties;
and, employer’s liability insurance with a limit of not less than One Million
Dollars ($1,000,000.00);

          (ii) Comprehensive General Liability Insurance (including contractual
liability coverage) in an amount not less than $2,000,000.00 combined single
limit for bodily injury and property damage liability each occurrence;

          (iii) Motor Vehicle Liability Insurance with an Employer’s
Non-Ownership Liability Endorsement in the other party’s name covering all
vehicles used by the parties in connection with the Premises in an amount not
less than One Million Dollars ($1,000,000.00) combined single limit for bodily
injury and property damage each occurrence; and,

     All policies of insurance provided in subparagraph (a) above shall
expressly provide that they shall (i) not be subject to material change or
cancellation without at least thirty (30) days prior written notice to the
other
party, (ii) contain a waiver of subrogation in favor of the other party (when
permitted by applicable state law); and (iii) name the other party as an
additional insured.

     (b) From and after the Delivery Date, Tenant shall also carry
insurance against loss or damage by fire and other risks covered by fire
insurance with extended coverage endorsements in an amount of the insurable
replacement for the Premises, including all property, equipment and merchandise
located therein. Such insurance shall be written by a company of recognized
good
financial standing which is authorized to engage in the insurance business in
the state where the Premises are located. Landlord shall also carry insurance
against loss or damage by fire and other risks covered by fire insurance with
extended coverage endorsements in an amount of the insurable replacement for
the
Landlord’s Retail Facility, including all property, equipment and merchandise
located therein. Tenant shall name Landlord and its mortgagee if any, as an
additional insured on such insurance coverage. All policies of insurance
provided in subparagraph (b) above shall expressly provide that they shall not
be subject to material change or cancellation without at least thirty (30) days
prior written notice to the other party and contain a waiver of subrogation in
favor of the other party (when permitted by applicable state law).

     (c) Landlord shall furnish to Tenant, on or before the Effective Date
(and Tenant shall furnish to Landlord on or before the Delivery Date) or
thereafter, within ten days of written request, a Certificate of Insurance
evidencing the insurance coverages it is required to carry. The parties may
carry any insurance under this Article 10 under blanket insurance policies.

     (d) Tenant acknowledges and agrees that Landlord may self insure or
carry a deductible in the insurance coverage required hereunder of Two Hundred
and Fifty Thousand Dollars ($250,000.00) or such greater amount as Landlord may
elect so long as Landlord or Landlord’s parent’s company’s net worth as
determined by generally accepted accounting principles exceeds One Hundred
Million Dollars ($100,000,000.00).

Page 25

 

     (e) From and after the date of commencement of construction of
Landlord’s Work and through the completion of construction, Landlord shall
procure, at its sole cost and expense, a builder’s risk policy upon all
buildings and site improvements on the Real Property in an amount equal to the
full replacement value of such buildings and site improvements (or Landlord at
its sole option may elect to self insure such improvements as provided in this
Section 10.1(d) above). If during construction of Landlord’s Work, any or all
of
the Premises shall be damaged or destroyed by fire or other casualty, Landlord
shall forthwith proceed to repair such damage in accordance with the Final
Plans
and Specifications.

     10.2 FIRE OR OTHER CASUALTY. From and after the Delivery Date, if any
or all of the Premises shall be damaged or destroyed by fire or other casualty,
Tenant shall forthwith proceed to repair such damage and restore the Premises
to
substantially their condition at the time of such damage or, at Tenant’s
option,
Tenant shall repair, rebuild and restore the Premises in accordance with such
plans and specifications as are then generally in use by Tenant for the
construction of Tenant’s prototypical stores and related structures so long as
the repaired, rebuilt or replaced Premises will have a value not less than its
value just prior to said loss, except Tenant, at its sole cost and expense,
shall repair and restore whatever fixtures, equipment and other personalty it
had installed prior to the damage or destruction.

     Notwithstanding the foregoing, if the Premises shall be “substantially
damaged” (as hereinafter defined) or destroyed by fire or other casualty at any
time during the Lease Term, then Tenant shall have the right to terminate this
Lease. If there shall be a fire or other casualty to Landlord’s Retail Facility
(whether same shall be partially or substantially damaged) and Landlord does
not
rebuild Landlord’s Retail Facility, then either party shall have the right to
terminate this Lease. In the case of damage or destruction to Landlord’s Retail
Facility, Landlord shall provide Tenant written notice within a reasonable time
as to whether it intends to rebuild Landlord’s Retail Facility. In connection
with any termination right hereunder, each party agrees to give the other party
written notice of termination not later than sixty (60) days after such damage
or destruction (or in the case of damage or destruction to Landlord’s Retail
Facility, Tenant shall provide such notice to Landlord within sixty (60) days
of
Tenant’s receipt of Landlord’s written notice as to whether Landlord intends to
rebuild). Upon such termination, the parties shall be relieved of all liability
hereunder except for indemnities that specifically survive termination or
expiration of the Lease. The term “substantially damaged” as used in this
Article, shall mean that the Premises or the rest of the improvements on the
Real Property have been damaged to the extent that the cost of restoration of
the Premises and/or the rest of the improvements on the Real Property (as the
case may be) will exceed a sum constituting fifty percent (50%) of the total
replacement cost of the Premises or the improvements on the Real Property (as
the case may be). Should the Lease be terminated pursuant to this section, then
Landlord shall be entitled to all insurance proceeds and right of recovery
against insurers covering damage.

     Rent and all other charges specified in this Lease shall be abated or
reduced proportionately during any period in which, by reason of such damage or
destruction, there is interference with the operation of the business of Tenant
in the Premises, having due regard to the extent to which Tenant may be
required
to discontinue its business in the Premises, and such abatement or reduction
shall continue for the period commencing with such destruction or damage and
ending with the completion of such work of repair and/or restoration. In the
event of the termination of this Lease pursuant to this Article 10, this Lease,
and the Lease Term, shall cease and come to an end as of the date of such
damage
or destruction. Any Rent or other charges paid in advance by Tenant shall be
promptly refunded by Landlord. It is further understood and agreed that, at
Tenant’s election, the Lease Term shall be extended by up to the number or
days,
if any, during which business shall not have been conducted in the Premises by
reason of such damage or destruction.

Page 26

 

     10.3 EMINENT DOMAIN. In the event of: (i) a taking of the entire
Premises, or a substantial portion as would render the balance of the Premises
not suitable for Tenant’s then current use; or (ii) a taking of all or any
portion of Landlord’s Retail Facility, which results in Landlord permanently
ceasing operations on such Real Property, then this Lease may be terminated at
the option of either party. Such option shall be exercised by giving written
notice of such termination within sixty (60) days after such taking or
conveyance, whereupon this Lease shall forthwith terminate and the Rent shall
be
duly apportioned as of the date of such taking or conveyance. Upon such
termination, Tenant shall surrender to Landlord the Premises and all of
Tenant’s
interest therein under this Lease, and Landlord may re-enter and take
possession
of the Premises or remove Tenant therefrom. The taking of any portion of the
building located on the Premises, fifteen percent (15%) of the then existing
parking area, or the loss or adverse change in rights of access or ingress and
egress as then established shall be considered a substantial taking as would
render the Premises not suitable for Tenant’s then current use. In the event of
a taking of less than the entire Premises or less than a substantial portion as
would render the balance of the Premises not suitable for Tenant’s then current
use, this Lease shall continue in full force and effect. Landlord shall
promptly
perform any repair or restoration work reasonably required to restore the
Premises, insofar as possible, to its former condition, and the Rent owing
hereunder shall be adjusted, if necessary, in such just manner and proportion
as
the part so taken (and its effect on Tenant’s ability to use the remainder of
the Premises) bears to the whole. In the event of taking or conveyance as
described herein, Landlord shall receive the award or consideration for the
lands and improvements so taken; provided, however, that Landlord shall have no
interest in any award made for Tenant’s loss of business or value of its
leasehold interest or for the taking of Tenant’s fixtures or property, or for
Tenant’s relocation expenses. Tenant shall have the option to perform such
restoration and Landlord shall upon Tenant’s election provide the whole of such
award or such portion thereof as may be necessary for Tenant to accomplish the
restoration. Landlord and Tenant shall cooperate with one another in making
claims for condemnation awards.

     10.4 INDEMNITY BY LANDLORD. Landlord shall indemnify, protect, defend
and hold Tenant and its agents and employees harmless from and against all
damages, suits, loss, costs, expenses, claims, causes of action, liabilities,
and injuries, including without limitation reasonable attorney’s, consultant’s
and expert’s fees actually incurred and costs and litigation expenses relating
or resulting from personal injuries, bodily injuries (including death) and from
injury or destruction to tangible property (i) occurring on the Premises as a
result of the acts or omissions of Landlord, its contractors, agents or
employees, (ii) occurring in all other portions of the Real Property outside of
the Premises, except to the extent caused by the negligence or intentional acts
or omissions of Tenant or its agents, contractors or employees, or (iii)
occurring as a result of a breach by Landlord of any of its obligations
hereunder. Landlord shall, at its own expense, defend all actions brought
against Tenant, its agents or employees, for which Landlord is or may be
responsible for indemnification hereunder, with legal counsel reasonably
acceptable to Tenant and if Landlord fails to do so, Tenant (at its option, but
without being obligated to do so) may, at the expense of Landlord and upon
notice to Landlord, defend such actions, and Landlord shall pay and discharge
any and all judgments that arise therefrom. The provisions of this Section 10.4
shall survive the expiration or earlier termination of this Lease.

     10.5 INDEMNITY BY TENANT. Tenant shall indemnify, protect, defend and
hold Landlord and its agents and employees harmless from and against all
damages, suits, loss, costs, expenses, claims, causes of action, liabilities,
and injuries, including without limitation reasonable attorney’s, consultant’s
and expert’s fees actually incurred and costs and litigation expenses relating
or resulting from personal injuries, bodily injuries (including death) and from
injury or destruction to tangible property during the Lease Term from and after
the Delivery Date (i) occurring on the Premises as a result of the acts or
omissions of Tenant, its contractors, agents or employees, (ii) occurring in
all
other portions of the Real Property outside of the Premises caused by the
negligence or intentional acts or omissions of Tenant or its agents,
contractors
or employees, or (iii) occurring as a result of a breach by Tenant of any of
its
obligations hereunder. Tenant shall, at its own expense, defend all actions
brought against Landlord, its agents or employees, for which Tenant is or may
be
responsible for indemnification hereunder, with legal counsel reasonably
acceptable to Landlord and if Tenant fails to do so, Landlord (at its option,
but without being obligated to do so) may, at the expense of Tenant and upon
notice to Tenant, defend such actions, and Tenant shall pay and discharge any
and all judgments that arise therefrom. The provisions of this Section 10.5
shall survive the expiration or earlier termination of this Lease.

Page 27

 

ARTICLE 11

ASSIGNMENT AND SUBLETTING

     11.1 ASSIGNMENT AND SUBLETTING. Tenant shall not have the right to
assign this Lease, sublet the Premises or otherwise transfer its interest in
this Lease to any person or entity except as may be provided in the Strategic
Alliance Agreement, with the exception that Tenant may sublet to a NationsRent
franchisee with Lowe’s prior written approval, such approval not to be withheld
unreasonably. Notwithstanding the foregoing, Tenant shall have the right to
assign this Lease to any company that is controlled by or under the common
control of Tenant.

ARTICLE 12

MISCELLANEOUS PROVISIONS

     12.1 COVENANT OF QUIET ENJOYMENT. Landlord hereby stipulates and
agrees that it is the owner in fee simple of the Premises [ALTERNATE FOR
SUBLEASE: that it has good and indefeasible leasehold title] and that the same
is free and clear of all encumbrances whatsoever. Landlord further covenants
and
agrees with Tenant that Tenant shall have the quiet enjoyment of Premises
during
the Lease Term, free from the adverse claims of all persons, firms and
corporations whatsoever and Landlord will protect Tenant in the full, complete
and absolute possession of the Premises and every part thereof from such claims
arising by, through or under Landlord.

     12.2 SUCCESSORS AND ASSIGNS. The covenants, conditions and agreements
in this Lease shall bind and inure to the benefit of Landlord and Tenant and,
except as otherwise provided in this Lease, their respective heirs, devisees,
executors, administrators, legal representatives, distributees, successors and
assigns.

     12.3 NOTICES. All notices, requests, demands or other communications
which may be or are required or permitted to be served or given hereunder (in
this Section collectively called “Notices”) shall be in writing and shall be
sent by registered or certified mail, return receipt requested, postage
prepaid,
or by a nationally recognized overnight delivery service to Tenant or to
Landlord at the addresses set forth below. Either party may, by Notice given as
aforesaid, change its address for all subsequent Notices. Notices shall be
deemed given when received in accordance herewith.

     To Tenant:

NationsRent, Inc.

Las Olas Centre, Suite 1400

450 East Las Olas Boulevard

Fort Lauderdale, Florida 33301

Attn: Jorge L. Martin, Vice President of Real Estate and Construction

Phone- (954) 759-5804

Fax No.- (954) 759-6920

     With copies to:

NationsRent, Inc.

Attn: Joseph H. Izhakoff, Esq., Vice President and General Counsel

at same address

Page 28

 

     and

Akerman, Senterfitt & Eidson, P.A.

Las Olas Centre II, Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301-4200

Attn: Theresa M. McLaughlin, Esq.

     To Landlord:

Lowe’s Home Centers, Inc.

Attn: Property Management (REO)

P.O. Box 1111, North Wilkesboro, NC 28656

(Highway 268 East, East Dock 28659)

Phone — 336/658-4688

Fax No. — 336/658-3643

Lowe’s Home Centers, Inc.

Attn: Law Department

P.O. Box 1111, Wilkesboro, NC 28656

(Highway 268 East, East Dock 28659)

Phone — 336/658-4688

Fax No. — 336/658-3643

     12.4 RETURN OF PREMISES. Tenant shall return the Premises to Landlord
at the termination of this Agreement in a broom-clean condition and in a good
state of repair with all systems that Tenant was required to maintain under
this
Lease in good working order, reasonable wear and tear, casualty and
condemnation
excepted.

     12.5 WAIVER OF SUBROGATION. Landlord and Tenant hereby release each
other, to the extent of their insurance coverage, from any and all liability
for
any loss or damage caused by fire or any of the extended coverage casualties or
any other casualty insured against or required to be insured hereunder, even if
such fire or other casualty shall be brought about by the fault or negligence
of
the other party, or any persons claiming under such other party; provided,
however, this release shall be in force and effect only with respect to loss or
damage occurring during such time as the releasor’s policies of fire and
extended coverage insurance shall contain a clause to the effect that this
release shall not affect such policies or the right of the releasor to recover
thereunder. Landlord and Tenant agree to include in their casualty insurance
policies a clause permitting this release, so long as the same is obtainable
and
is includible without extra cost, or if such extra cost is chargeable
therefore,
so long as the other party pays such extra cost. If extra cost is chargeable
therefore, each party will advise the other thereof and of the amount thereof,
and the other party, at its election, may pay the same but shall not be
obligated to do so. Except as provided above, nothing contained in this
Agreement shall be deemed to release either party hereto from liability for
damages resulting from the fault or negligence of that party or its agents,
contractors or employees.

     12.6 SIGNAGE. Subject to compliance with local codes and ordinances,
Tenant shall be entitled to install and maintain the identification signs on
the
exterior of the Premises as shown on the prototypical sign exhibit attached as
an exhibit to the Strategic Alliance Agreement. Landlord shall not construct or
permit construction (to the extent same may be controlled by Landlord) of any
improvements on the Real Property that would have a material adverse affect on
the visibility of Tenant’s signage hereunder or the Premises. Tenant shall also
have the right to erect, maintain and install its usual and customary signs and
fixtures in the interior of the Premises. If there is a pylon or monument sign
located on the Real Property (or if one is hereafter erected) and if there are
empty panels on the pylon or monument sign, then Landlord agrees (to the extent
that Landlord has control over the pylon or monument sign or has the ability to
agree to same) that Tenant, at its sole cost and expense shall have the right
to
erect its designation panel on such pylon or monument sign in a position and
size reasonably satisfactory to the parties. All such signage shall be erected
by Tenant at its sole cost and expense and in compliance with applicable law.
Tenant shall coordinate placement of its designation panel on the pylon or
monument sign with Landlord and Landlord shall have the right to approve the
plans and specifications therefor, which approval shall not be unreasonably
withheld, delayed or conditioned.

Page 29

 

     12.7 MISCELLANEOUS. Headings of paragraphs are for convenience only
and shall not be considered in construing the meaning of the contents of such
paragraph. If any term, covenant, or condition of this Agreement or the
application thereof to any person or circumstance shall to any extent be
invalid
or unenforceable, the remainder of this Agreement, or the application of such
term, covenant or condition to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant, or condition of this Agreement shall be valid and be
enforced to the fullest extent permitted by law. Should Landlord or Tenant
institute any legal proceedings against the other for breach of any provisions
herein contained, the prevailing party in such action shall in addition be
entitled to recover its costs and expenses from the losing party including its
reasonable attorney fees actually incurred. The parties agree that in the event
of litigation, trial by jury shall be waived. The singular shall include the
plural, and the masculine or neuter shall include the other. The failure to
enforce any particular provision of this Agreement on any particular occasion
shall not be deemed a waiver by either party of any of its rights hereunder,
nor
shall it be deemed to be a waiver of subsequent or continuing breaches of that
provision. This Lease may be executed in counterparts for the convenience of
the
parties. Each party represents to the other that they have not dealt with a
broker in connection with this Lease. This Lease shall be governed and
construed
in accordance with the laws of the state where the Premises are located. Time
is
of the essence. If either party to this Lease, as the result of any (i)
strikes,
lockouts or labor disputes, (ii) inability to obtain labor or materials or
reasonable substitutes therefor, (iii) acts of God, governmental action,
condemnation, civil commotion, fire or other casualty, or (iv) other conditions
similar to those enumerated herein beyond the reasonable control, other than
financial, of the party obligated to perform, fails punctually to perform any
obligation on its part to be performed under this Lease, then such failure
shall
be excused and not be a breach of this Lease by the party in question, but only
to the extent occasioned by such event. If any right or option of either party
to take any action under or with respect to this Lease is conditioned upon the
same being exercised within any prescribed period of time or at or before a
named date, then such prescribed period of time and such named date shall be
deemed to be extended or delayed, as the case may be, for a period equal to the
period of the delay occasioned by any event described above. Landlord and
Tenant
believe that this Lease is the product of their joint efforts and that it
expresses their agreement, and that it should not be interpreted against either
Landlord or Tenant merely because of their efforts in its preparation.

     12.8 WHOLE AGREEMENT. This written instrument together with the
Strategic Alliance Agreement constitutes the entire agreement between the
parties, and no verbal or other type agreement shall be binding. Any alteration
of this Agreement, as may be made from time to time, shall be in writing and
shall be signed by all the parties hereto or by their respective agents.

     12.9 HOLDOVER BY TENANT. In the event Tenant remains in possession of
the Premises after the expiration of this Lease, and without the execution of a
new lease, then Tenant shall be deemed to be occupying the Premises as a tenant
at will, at two hundred percent (200%) of the Rent that was payable by Tenant
during the last month of the Lease Term, subject to all the other conditions,
provisions and obligations of this Lease, insofar as the same are applicable to
such tenancy.

Page 30

 

     12.10 ESTOPPEL CERTIFICATES. Landlord and Tenant agree at any time and
from time to time, upon not less than thirty (30) days’ prior written request
by
either of them to the other, to execute, acknowledge and deliver to the
requesting party a statement in writing certifying that this Lease is
unmodified
and in full force and effect (or, if there have been modifications, that the
same is in full force and effect as modified, and stating the modifications),
and the date to which the Rent and other charges have been paid in advance, if
any, and whether or not any defaults are in existence as of the date of said
statement, it being intended that any such statement delivered pursuant to this
Section may be relied upon by any prospective purchaser of the fee, or
leasehold, or mortgagee or assignee of any mortgage upon the fee or leasehold
interest in the Premises, or by any assignee of Tenant.

     12.11 SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. Tenant shall,
upon Landlord’s request, subordinate this Lease in the future to any first lien
placed by Landlord upon the Premises, or the Real Property or building of which
the Premises forms a part, with an institutional first mortgagee, provided that
such lender executes and delivers to Tenant a non-disturbance agreement in form
reasonably acceptable to Tenant, providing that this Lease shall not terminate,
so long as Tenant is not in default under this Lease, as a result of the
foreclosure of such lien, or conveyance in lieu thereof, and Tenant’s rights
under this Lease shall continue in full force and effect and its possession
shall be undisturbed, except in accordance with the provisions of this Lease.
Tenant will, upon request of the lien holder, be a party to such an agreement,
and will agree that, if such lien holder succeeds to the interest of Landlord,
Tenant will recognize said lien holder (or successor in interest of the lien
holder) as its landlord under the terms of this Lease.

     12.12 SATELLITE DISH. Landlord hereby grants Tenant the right to
install, maintain and replace from time to time a satellite dish or similar
antennae device (hereinafter “Satellite Dish”) on the roof of the Premises (or
if elected by Landlord or necessary for better reception, on the roof of
Landlord’s Retail Facility) for Tenant’s sole and exclusive use, subject to the
following: (a) applicable governmental laws; (b) the right of Landlord to
supervise any roof penetrations; and (c) compliance with the conditions of any
roof bond maintained by Landlord on the Premises. Tenant shall be responsible
for the repair of any damage to any portion of the Premises caused by Tenant’s
installation, use or removal of the Satellite Dish. The Satellite Dish shall
remain the exclusive property of Tenant, and Tenant shall have the right to
remove same at any time during the Lease Term. Tenant shall protect, defend,
indemnify and hold harmless Landlord from and against any and all claims,
damages, liabilities, costs or expenses of every kind and nature (including
without limitation reasonable attorney fees actually incurred) imposed upon or
incurred by or asserted against Landlord arising out of Tenant’s installation,
maintenance, use or removal of the Satellite Dish.

[INSERT FOR SUBLEASES]:

     12.13 PRIME LEASE. Tenant acknowledges that this Lease is subject and
subordinate to the Prime Lease; provided, however, that Landlord shall deliver
to Tenant a Consent, Estoppel and Non-Disturbance Agreement in a form
reasonably
acceptable to Tenant (the “Prime Landlord Non-Disturbance Agreement”) executed
by Landlord and the Prime Landlord on or before the Delivery Date. If Landlord
shall not have obtained the Prime Landlord Non-Disturbance Agreement on or
before the Delivery Date, then at any time thereafter, but prior to Landlord
having obtained the Prime Landlord Non-Disturbance Agreement, Tenant shall have
the right to terminate this Lease by giving Landlord written notice thereof.

Page 31

 

     Landlord represents and warrants to Tenant that:

     (a) The Prime Lease is in full force and effect, and that no default
exists (nor is there any fact or condition which with notice or lapse of time
may become a default) thereunder, and that all Rent payments under the Prime
Lease are current;

     (b) Landlord shall not amend, modify or terminate the Prime Lease, or
fail to exercise any option or right thereunder, or grant its consent where
required thereunder, to the extent that same would adversely affect Tenant’s
rights and entitlements under this Lease or its use or enjoyment of the
Premises, without Tenant’s prior written consent;

     (c) Landlord shall not violate or breach any of the material terms, covenants
or
agreements on its part to be performed under the Prime Lease that would
adversely affect Tenant’s rights under this Lease or Tenant’s business or
operations on the Premises;

     (d) Landlord shall promptly, upon written request of Tenant, use its
reasonable efforts to enforce the full compliance by the Prime Landlord of its
obligations under the Prime Lease to the extent that same affects Tenant’s use
and enjoyment of the Premises;

     (e) Should Landlord purchase the Premises, then this Lease shall
continue as a direct lease between Landlord and Tenant on the terms and
conditions contained in this Lease; and

     (f) Landlord shall indemnify, protect, defend and hold Tenant and its
agents, employees and directors harmless from and against any and all damages,
suits, loss, costs, expenses, claims, causes of action, liabilities, including,
without limitation, reasonable attorneys’ fees actually incurred and costs and
litigation expenses relating or resulting from (i) termination of the Prime
Lease for any reason other than Tenant’s default thereunder (and all damages,
suits, loss, costs, expenses, claims, causes of action, liabilities and
attorneys’ fees actually incurred by Tenant in connection with any such
termination), or (ii) breach by Landlord of any of its obligations under the
Prime Lease. Landlord shall, at its own expense, defend all actions brought
against Tenant, its agents or employees, for which Landlord is responsible for
indemnification hereunder, with legal counsel reasonably acceptable to Tenant
and, if Landlord fails to do so, Tenant (at its option, but without being
obligated to do so) may, at the expense of Landlord and upon notice to
Landlord,
defend such actions and Landlord shall reimburse Tenant for all such costs and
expenses. The provisions of this subparagraph shall survive the expiration or
early termination of this Lease or the Prime Lease and shall continue to remain
an obligation of Landlord for the term of this Lease and all renewals and
extensions thereof, even if this Lease or the Prime Lease is assigned, sublet,
or the Premises is purchased or in any way transferred.

     [FOR LEASES IN THE STATE OF FLORIDA ONLY] : 12.14 RADON. Radon is a
naturally occurring radioactive gas that when accumulated in a building in
sufficient quantities may present health risks to persons who are exposed to it
over time. Levels of radon that exceed federal and state guidelines have been
found in buildings in Florida. Additional information regarding Radon or Radon
testing may be obtained from your County Public Health unit.

     IN WITNESS WHEREOF, the parties have hereunto set their hand and seal
in duplicate the day and year first above written.

Page 32

 

	 	 	 
	Signed, Sealed and Delivered

	 	NATIONSRENT _______________, INC.
	 
	 	 
	In the Presence of:
	 	 
	 
	 	 
	PRINT NAME OF WITNESS BELOW:

	 	By: 

Name: Jorge L. Martin, as Vice President of Real

Estate and Construction
	 
	 	 
	PRINT NAME OF WITNESS BELOW:
	 	 
	 
	 	 
	

	 	(CORPORATE SEAL)
	 
	 	 
	

	 	LOWE’S HOME CENTERS, INC.
	 
	 	 
	By:

PRINT NAME OF WITNESS BELOW:

	 	By:

David E. Shelton

Senior Vice President
	 
	 	 
	PRINT NAME OF WITNESS BELOW:
	 	 
	 
	 	 
	

	 	ATTEST:
	 
	 	 
	

	 	

	 
	 	 
	

	 	

Assistant Secretary

(CORPORATE SEAL)

Page 33

 

EXHIBIT LIST

	 	 	 
	Exhibit “A”

	 	Legal Description of Real Property
	 
	 	 
	

	 	[ALTERNATE FOR SUBLEASES: Exhibit A-1 Prime Lease]
	 
	 	 
	Exhibit “B”

	 	Site Plan (Note: show outline of NationsRent
store; “NationsRent Storage”)
	 
	 	 
	Exhibit “C”

	 	Landlord’s Work
	 
	 	 
	Exhibit “D”

	 	Acknowledgment of Landlord and Tenant
	 
	 	 
	Exhibit “E”

	 	Memorandum of Lease
	 
	 	 

Page 34

 

EXHIBIT “A”

LEGAL DESCRIPTION OF REAL PROPERTY

Page 35

 

EXHIBIT “B”

SITE PLAN

Page 36

 

EXHIBIT “C”

LANDLORD’S WORK

A. Landlord agrees to do all work required of Landlord hereunder (“Landlord’s
Work”) at its sole cost and expense and in accordance with the Final Plans and
Specifications, which Landlord’s Work shall include, without limitation, all of
the following:

     (1) The Premises shall be substantially completed in accordance with
the Final Plans and Specifications, with all utility services, equipment and
systems therein fully operational.

     (2) The Premises shall be delivered to Tenant by Landlord in a neat
and clean condition, lien free and free of all tenants and occupants.

     (3) The paving and striping of parking areas and installation of light
standards shall be substantially completed; in addition, such street, storm
drainage, traffic signalization, and other offsite improvements required for
the
Premises to open for business and Tenant to receive the “Certificate of
Occupancy” (as defined in Paragraph E below) shall be substantially completed.

     (4) All signage which Landlord is required to construct pursuant to
the Final Plans and Specifications and shall be installed and all wiring and
electrical connections therefor completed and in working order, and all
governmental permits and approvals required for the installation of Tenant’s
building sign(s) shall have been obtained.

     (5) The Premises shall be in full compliance with all laws, codes,
regulations and other governmental requirements including, without limitation,
the “Americans with Disabilities Act,” and Tenant shall be in a position to
receive the Certificate of Occupancy from the appropriate municipal authority
for the use and occupancy of the Premises.

The term “substantially complete” or “substantially completed” or words of
similar import used herein to describe a work of improvement shall mean that
the
particular work of improvement has been completed in accordance with the Final
Plans and Specifications, excepting only minor “punch list” items, the
completion, repair or correction of which do not have a material, adverse
effect
on the use and/or occupancy of the building or other improvement and, in the
case of the Premises, will also not materially hinder or delay Tenant’s
fixturization and preparation of the Premises for Tenant’s intended use
thereof.

Page 37

 

B. Landlord and Tenant agree that any material changes to the Final Plans and
Specifications shall require the prior written approval of Tenant. Tenant shall
further be entitled to make changes to the Final Plans and Specifications
(“Change Orders”) after same have been fully approved by all parties hereto,
provided that (i) Tenant shall be responsible for the reasonable increased cost
of construction, if any, which is occasioned by such revisions; (ii) if any
such
revisions delay completion of Landlord’s Work, then the Delivery Date shall be
extended day for each day completion of Landlord’s Work is delayed by reason of
such revisions. In connection with any Change Orders, prior to implementing
same, Landlord shall provide Tenant with an estimate of the cost of the Change
Order and the time that the Delivery Date will be delayed. The cost of the
Change Order shall be the lesser of the actual cost to implement same or the
estimate provided by Landlord hereunder. Any change to the Final Plans and
Specifications that results in a cost savings to Landlord shall be netted
against any Change Orders which increased the cost of construction. The
reconciliation of the Change Orders shall be made within forty-five (45) days
of
the Delivery Date and paid for by Tenant within thirty days after receipt by
Tenant of such reconciliation. Change Orders which have not been approved in
writing by Tenant shall be permitted or allowed hereunder, except for minor
changes in Landlord’s Work made by Landlord (which Tenant has received prior
written notice of ) due to field conditions which do not increase the cost of
Landlord’s Work, delay the Estimated Delivery Date of the Premises to Tenant or
decrease the quality of Landlord’s Work hereunder.

C. Tenant shall, at its own sole expense, obtain all governmental permits,
approvals, authorizations and entitlement required for performance of
Landlord’s
Work and occupancy of the Premises for the purposes permitted under the terms
of
this Lease (collectively “Permits”). It is understood that Landlord shall be
solely responsible for payment of any and all fees, tariffs, taxes or other
charges, howsoever denominated, which may be levied or assessed by any
governmental or quasi-governmental agency or utility company in connection with
issuance of such Permits, including, without limitation, utility connection,
impact and school fees; provided, however, the term “Permits” as used herein
shall not include Tenant’s business licenses, which shall be obtained by Tenant
at its expense. Tenant shall furnish to Landlord all Permits after issuance of
same. Landlord shall cooperate with Tenant in making application for and
obtaining such Permits.

D. Notwithstanding (i) the delivery by Landlord to Tenant of an architect’s
certificate of completion and (ii) Landlord’s tender of delivery of possession
of the Premises, Landlord’s Work shall not be deemed substantially complete,
the
Delivery Date shall not be deemed to have occurred, Tenant shall have no
obligation to accept possession of the Premises and in such event of Tenant’s
election not to accept the Premises Tenant shall not be obligated to pay Rent
or
any other charge or amount that is payable under this Lease, until a final and
unconditional certificate of occupancy (or its equivalent) has been issued
(“Certificate of Occupancy”).

E. Notwithstanding Section D above, if Tenant in its sole discretion elects to
open for business to the public prior to the issuance of a Final Certificate of
Occupancy, then Rent and any other charge or amount that is payable under this
Lease shall accrue and be due and payable by Tenant during any such periods in
which there is no material interference with Tenant’s occupancy of the Premises
or the conduct of its business operations therein by reason of the action of
governmental authority which results from the absence of the Final Certificate
of Occupancy.

Tenant’s election to open for business prior to issuance of the
Final Certificate of Occupancy or prior to substantial completion of Landlord’s
Work shall not be construed as a waiver of Landlord’s obligation to complete
Landlord’s Work.

F. Tenant shall have the right to come onto the Premises in order to observe
the
performance of Landlord’s Work, take measurements and commence Tenant’s
preparation of the premises for Tenant’s occupancy, even while Landlord is
completing Landlord’s Work, but such entry by Tenant shall be at Tenant’s sole
risk and shall not be deemed a waiver of Landlord’s obligation fully to
complete
Landlord’s Work. Any such entry and work performed by Tenant prior to the
Delivery Date shall be performed in a manner which does not materially
interfere
with the completion of Landlord’s Work. Landlord and Tenant agree, to the
extent
reasonably possible, to coordinate their work in the Premises to the end that
Landlord’s Work may be completed on the earliest date reasonably practicable.

G. Landlord shall unconditionally guarantee all work performed by or for
Landlord in the construction of Landlord’s Work against defective workmanship
and materials for the period of one (1) year from the commencement of the Lease
Term. Landlord shall assign to Tenant any and all guarantees of workmanship and
materials which it may receive, and Landlord shall use its best efforts to
enforce unexpired, non-assignable warranties and guarantees at Tenant’s request
and on Tenant’s behalf, but such assignment shall not relieve Landlord of any
obligations provided in this Lease.

Page 38

 

EXHIBIT “D”

ACKNOWLEDGMENT OF LANDLORD AND TENANT

Landlord and Tenant acknowledge and confirm the following:

	 	 	 
	1. The Commencement Date
“Effective Date”):

	 	

	 
	 	 
	2. The Rent Commencement Date:

	 	

	 
	 	 
	3. Lease Expiration Date:

	 	

	 
	 	 
	4. Rent:
	 	 
	 
	 	 
	LANDLORD:

a(n) 

Print Name: 

Print Title: 

Date: 

	 	TENANT:

NATIONSRENT __________________________,

a Delaware 

Print Name: 

Print Title: 

Date: 

Page 39

 

EXHIBIT “E”

PREPARED BY AND RETURN TO:

Theresa M. McLaughlin, Esq.

Akerman, Senterfitt & Eidson, P.A.

Las Olas Centre II, Suite 1600

350 East Las Olas Boulevard

Fort Lauderdale, Florida 33301-4200

SPACE ABOVE THIS LINE FOR

RECORDER’S USE

City and State: ____________

Address of Premises: _____________

MEMORANDUM OF LEASE

     This is a Memorandum of Lease by and between LOWE’S HOME CENTERS, INC.
hereinafter called “Landlord” with an address of: Lowe’s Home Centers, Inc.
Attn: Property Management (REO) P.O. Box 1111, North Wilkesboro, NC 28656
(Highway 268 — East Dock 28659) and NATIONSRENT___, INC., a Delaware
corporation with an address of Las Olas Centre, Suite 1400, 450 East Las Olas
Boulevard, Fort Lauderdale, Florida 33301, hereinafter called “Tenant”.

Landlord has granted Tenant a lease which includes, among others, the following
provisions:

	1.	 	Date of Lease: ______________________, 2000.

	2.	 	Description of Premises: Approximately one thousand two hundred
(1200)
square feet of interior sales floor area located next to Landlord’s
retail facility situate on the real property .................
described on Exhibit “A” attached hereto (“Real Property”).

	3.	 	Commencement Date: ______________________.

	4.	 	Term: Five (5) years after the Commencement Date.

	5.	 	Renewal Option(s): Three (3) five (5) year renewal options.

	6.	 	The Lease contains the following provisions:

	 	 	During the Lease Term, Landlord shall not, nor shall Landlord permit
any other owner, ........... tenant or other occupant of the Real
Property (other than Tenant) to operate an equipment rental facility
or to rent equipment (except for limited amounts of equipment
that Landlord may rent pursuant to the Lease).

	 	 	All persons are put on notice of the fact that the Tenant under no
circumstances shall have the power to subject the interest of the
Landlord in the Premises to any mechanic’s or materialman’s lien
or liens of any kind. All persons who hereafter, during the Lease
Term, may furnish work, services or materials to the Premises
upon the request or order of the Tenant or any person claiming
under, by or through the Tenant, must look wholly to the interest
of the Tenant and not to that of the Landlord. Tenant covenants
and agrees with Landlord that Tenant will not permit or suffer to
be filed or claimed against the interest of the Landlord in the
Premises during the continuance of this Lease, any lien or liens
of any kind by any person claiming under, by, through or against
the Tenant; and if any such lien is claimed or filed, it shall be
the duty of the Tenant, within sixty (60) days after the claim of
lien or suit claiming a lien has been filed, to cause the
Premises to be released from such claim, either through payment
or through bonding with corporate surety or through the deposit
into court, pursuant to statute, of the necessary sums of money,
or in any other way that will effect the release of the
Landlord’s interest in the Premises from such claim.

Page 30

 

     The purpose of this Memorandum of Lease is to give record notice of
the Lease and of the rights created thereby, all of which are hereby confirmed.

     IN WITNESS WHEREOF the parties have executed this Memorandum of Lease
as of the dates set forth in their respective acknowledgments.

	 	 	 
	Witnesses:

Print Name: 

	 	LOWE’S HOME CENTERS, INC.

a North Carolina corporation
	 
	 	 
	Print Name: 

LANDLORD:

	 	By: 

Name: 

Title: 

	 	 	 	 	 	 	 
	STATE OF ____________

COUNTY OF ____________

	 	)

)

)

	 	ss
	 	 

     The foregoing instrument was acknowledged before me this ___day of
___, 2000 by ___as ___of Lowe’s Home Centers,
Inc. a North Carolina corporation, on behalf of the corporation. He/she is
personally known to me or has produced a driver’s license as identification.

	 	 	 
	 

	 	

NOTARY PUBLIC

Print Name 

Commission No.: 

My Commission Expires: 

[NOTARIAL SEAL]

Page 41

 

	 	 	 
	Witnesses:

Print Name: 

	 	TENANT:

NATIONSRENT _______________, INC.,

a Delaware corporation
	 
	 	 
	Print Name: 

	 	By: 

Name: 

Title: 

	 	 	 	 	 	 	 
	STATE OF FLORIDA

COUNTY OF BROWARD

	 	)

)

)

	 	ss
	 	 

     The foregoing instrument was acknowledged before me this ___day of
___, 2000 by ___as ___of NationsRent___,
Inc., a Delaware corporation, on behalf of the corporation. He/she is
personally
known to me or has produced a driver’s license as identification.

	 	 	 
	 

	 	

NOTARY PUBLIC

Print Name 

Commission No.: 

My Commission Expires: 

[NOTARIAL SEAL]

Page 42

 

EXHIBIT A

LEGAL ESCRIPTION OF REAL PROPERTY

Page 43

 

EXHIBIT D

COMPETITIVE COMPANIES

Competitive Companies for Lowe’s means:

1. Home Depot

2. Sears

3. Wal-Mart

4. Menards

5. Costarama

Competitive Companies for NRI means:

1. United Rentals

2. Hertz Corporation/Ford Motor

3. Atlas Copco/RSC/Prime

4. Caterpillar Corporation

5. SunState/John Deere

Page 44

 

EXHIBIT E

Exhibit E List of On-Site Rental Equipment The rental equipment on the attached
list may be located at an On-Site Rental Store. In addition, the parties agree
that NationsRent may offer, for rent from an On-Site Store an equipment which
is
located at MatopmsRent’s other non-Lowe’s rental stores.

	 	 	 
	Category
	 	Item

	Air
	 	3-Way Adapter - 1/4"
	Air
	 	Air Coil Roofing Nailer*
	Air
	 	Air Finish Nailer*
	Air
	 	Air Framing Nailer
	Air
	 	Bostich Prod. Video and Prod. Lit.
	Air
	 	4 CFM Air Comp-Elec
	Air
	 	14 CFM Air Comp-Gas
	Air
	 	Emglo Prod. Video and Prod. Lit
	Air
	 	Accoustical ceiling hopper
	Alum. Brake
	 	10' Heavy Duty Aluminum Brake
	Alum. Brake
	 	Tapco Prod. Video and Prod. Lit.
	Auger
	 	1 Man Auger
	Auger
	 	Little Beaver to General Adptr 13/8 Hex
	Auger
	 	Little Beaver Product Video and Prod. Lit.
	Auger
	 	Two Man Auger
	Auger
	 	4"x 36" Standard Pengo Auger Bit
	Auger
	 	6"x 36" Standard Pengo Auger Bit
	Auger
	 	8" x 36" Standard Pengo Auger Bit
	Auger
	 	12" x 36" Standard Pengo Auger Bit
	Banding
	 	Steel Strapping ST3/8 x.015
	Banding
	 	Banding Machine
	Banding
	 	Strapping Seals 5000 EA /Ctn
	Banding
	 	Steel Strap Tool
	Blower
	 	Lawn Blower - WB
	Blower
	 	Leaf Blower
	Blower
	 	Back Pack Blower
	Blower
	 	Stihl Full Line Product Video and Literature
	Carpet
	 	Carpet Extractor
	Carpet
	 	Upholstery Cleaning Kit for PFX3S
	Carpet
	 	Carpet Powr-Spot Plus
	Carpet
	 	Pwr-Flite Carpet Care Video and Prod. Lit.
	Carpet
	 	Knee Kicker
	Carpet
	 	Seaming Iron
	Carpet
	 	Carpet Tape 66'
	Carpet
	 	Carpet Trimmer
	Carpet
	 	Carpet Trimmer Blade 5/Pkg.
	Carpet
	 	Rug Stretcher
	Cart
	 	Drywall Cart
	Cart
	 	Hand Cart
	Cart
	 	Appliance Carts
	Cart
	 	4 Wheel Flat Carts
	Cart
	 	Piano Dollies 2/pr.
	Compaction
	 	1200# Narrow Plate Cmp
	Compaction
	 	Jumping Jack 4-cycle
	Compaction
	 	2000# Plate Compactor
	Compaction
	 	Multiquip Compaction Prod. Video and Lit.
	Concrete
	 	Concrete Vibrator 2HP10'long 13/8"Head
	Concrete
	 	RL6 Roto Lever for Bull Float
	Concrete
	 	8" x 48" Magnesium Bull Float
	Concrete
	 	72" Push Button Float Handle, 13/4"
	Dehumidifier
	 	Dehumidifier
	Drain
	 	Closet auger drain cleaner
	Drain
	 	50' Sewer Snake - Elec
	Drain
	 	X-tra DN Tool Set for Model E(DN-10,11,12)
	Drain
	 	100' Cont. Swr Snake - Elec
	Drain
	 	X-tra Tool Set for Mdl R(A-1DC,14DC,U-3H,HDD-7)
	Drain
	 	25' Elec Sewer Snake
	Drain
	 	25' Electric Sewer Snake Case
	Drain
	 	Rplcmnt Head For 3/8" Cable on Model S
	Drain
	 	Electric Eel Laminated Prod. Usage Sheet
	Drill
	 	Deck Screw Gun w/ Magazine, Ext.& Case
	Drill
	 	#8 Deck Screw 2 1/2" Drill Pt Sq. Dr. 1000/bx
	Drill
	 	#8 Deck Screw 3" Drill Pt Sq. Dr. 1000/box
	Drill
	 	#2 Sq. Drive Bit 140mm (For Deck Gun)
	Drill
	 	1/2" Right Angle Drill (electricians)
	Drill
	 	3/4" Electric Roto Hmr/Drill Comb. SDS
	Drill
	 	Screw Shooter
	Drill
	 	Hand Held Core Drill DM 100D/DR100LT
	Drill
	 	Dia. Core Bit 2"
	Drill
	 	Dia. Core Bit 2 1/2"
	Drill
	 	Dia. Core Bit 3"
	Drill
	 	Dia Core Bit 4"
	Fan
	 	30" Floor Fan - Elec. Direct Drive
	Fan
	 	Turbo Fan (carpet dryer)

Page 45

 

	 	 	 
	Category
	 	Item

	Floor
	 	Pneumatic Hardwood Floor Nailer
	Floor
	 	Manual Hardwood Floor Nailer
	Floor
	 	PowerNail "How To" Video and Prod. Lit.
	Floor
	 	Wedges For All Stones & Scarifiers
	Floor
	 	Floor Grinder - Elec. 2-EC
	Floor
	 	Grinder Start Up Packs Dyma-Serts
	Floor
	 	Edco Floor Prep. Prod. Video and Prod. Lit.
	Floor
	 	Floor Stripper Blades
	Floor
	 	Floor Stripper Blades
	Floor
	 	Floor Stripper Blades
	Floor
	 	Floor Stripper Blades
	Floor
	 	Floor Stripper - Electric
	Floor
	 	Tile Cutter-Manual-Large
	Floor
	 	Tile Cutter-Manual-Small
	Floor
	 	Tile Cutter-Carbide Cutting Wheel Replcmnt
	Floor
	 	Door Planer 3" (Electric)
	Floor
	 	Door Planer Replacmnt Blade
	Floor Polisher
	 	17" Floor Maint.w/Sdg Atchmt & Brush Drv.
	Floor Polisher
	 	Scrape-Away Tool
	Floor Polisher
	 	17" Blue Driver Brush w/Clutch Plate
	Generator
	 	3000 Watt Generator
	Generator
	 	6000 Watt Generator
	Generator
	 	Wheel Kit for 6000 Watt Generator
	Generator
	 	Multiquip Gen Set Video and Prod. Lit
	Grinder
	 	4 1/2" Mini Grinder w/Guard Assy.
	Grinder
	 	7" Body Grinder w/Guard Assy.
	Hammer
	 	Electric Breaker w/2 Wheel Transport Cart
	Hammer
	 	2" Roto / Demo Hammer
	Hammer
	 	1 1/2" Roto / Demo Hammer
	Hammer
	 	Electric Chipping Hammer
	Heat gun
	 	Heat Gun Kit
	Heaters
	 	Infra-red style Heater (Seasonal*)
	Heaters
	 	70,000 BTU Kerosene Heater (seasonal*)
	Heaters
	 	110,000 BTU Kerosene Heater (seasonal*)
	Heaters
	 	150,000 BTU Kerosene Heater (seasonal*)
	Heaters
	 	Master Product Video and Prod. Lit.
	Hoist
	 	Portable Material Hoist
	Hoist
	 	Pallet Jack
	Hoist
	 	2 Ton Chain fall w/ 20' Lift
	Hoist
	 	12 Ton Hydraulic Jack
	Hoist
	 	1 1/2 Ton Floor Jack
	Hoist
	 	18" Extension
	Hoist
	 	Drywall Lift
	Hoist
	 	Adjustable Roof Jacks 2/pr., 10/case min.
	Hoist
	 	Pump Jacks 2/pr.
	Hoist
	 	Pump Jack Bracket 2/pr.
	Ladder
	 	8' Fiberglass Step Ladder
	Ladder
	 	12' Fiberglass Step Ladder
	Ladder
	 	14' Aluminum Step Ladder
	Ladder
	 	24' Fiberglass Ext. Ladder
	Ladder
	 	32' Fiberglass Ext. Ladder
	Ladder
	 	40" Fiberglass Ext. Ladder
	Ladder
	 	Alumium Ladder Jacks 2/pr
	Lawn
	 	Gas Lawn Edger Double Belt Drive
	Lawn
	 	48" T/P Lawn Roller
	Lawn
	 	Thatcher w/ Bag
	Lawn
	 	Thatcher w/ seeder Drop Box
	Lawn
	 	Bluebird "How To" Video and Prod. Lit
	Lawn
	 	Walk Behind Bed Edger
	Lawn
	 	Dog Fence Tines for Brown Bed Edger
	Lawn
	 	24" Gas Lawn Plugger - SP/Honda
	Lawn
	 	Sod Cutter
	Lawn
	 	Ryan "How To" Video and Prod.Lit
	Lawn
	 	Weed Eater Curved Shaft (Loop Handle)
	Lawn
	 	Weed Eater FS46/85 X-tra 25-2 Head Only
	Lawn
	 	Weed Eater Straight Shaft (Bike Handle)
	Lawn
	 	Weed Eater FS46/85 Spool/String Repcmnt
	Lawn
	 	Weed Eater FS85 8 Teeth Brush Blade
	Lawn
	 	Billy Goat Lawn Vacuum
	Lawn
	 	Walk Behind Brush Cutter
	Lawn
	 	24" Electric Hedge Trimmer
	Lawn
	 	2 cycle 6-8' Tree pruner w/ rephnt saw chains
	Lawn
	 	Replacement Guide Bar for HT75
	Lawn
	 	Replacement Chain for HT75
	Lawn
	 	18" Gas Hedge Trimmer
	Lawn
	 	Walk Behd Lawn Mwr-Push/ Honda 21 Bag
	Lawn
	 	Lawn Fertilizer Spreader/Broadcast Combo

Page 46

 

	 	 	 
	Category
	 	Item

	Light Tower
	 	500 watt Quartz Light Stand
	Light Tower
	 	500 watt Quartz Light Stand bulb only Linoleum Roller 100#
	Linoleum Roller
Loading Ramp
	 	8'x 29" Alum. Loading Ramp 1200# Cap.
	Loading Ramp
	 	8'x 10" Folding Alum. Loading Ramp/Pr., 1000#
	Magnet
	 	Walk Behind Magnet - 30"
	Misc
	 	3' Messuring wheel
	Misc
	 	Metal Detector
	Misc.
	 	Garrett Metal Detect. Video and Prod. Lit.
	Mixer
	 	Cement Mixer - Elec / 4 cu ft.
	Paint
	 	Airless Paint Spayer(w/ comp. nozzle asst.)*
	Paint
	 	Airless Paint Sprayer 395STPro Tip Only
	Paint
	 	Airless Paint Sprayer 395STPro Tip Only
	Paint
	 	Airless Paint Sprayer 395STPro Tip Only
	Paint
	 	Hero Wonder Wash, 25-5oz pkg.
	Paint
	 	Hero Draw String Bag Pump Sock 24/pkg
	Paint
	 	Hero ASM Gun Filter-50 Mesh White
	Paint
	 	Hero Coro-Chek, 48-1 oz. Bottle
	Paint
	 	Graco"How To" Video and Prod. Lit.
	paint
	 	Parking lot stripper (Manual)
	Pressure Washer
	 	3000 PSI  Press. Washer
	Pressure Washer
	 	2000 PSI Press. Washer Hand Carry*
	Pressure Washer
	 	18' Wand Extension
	Pressure Washer
	 	3.0 nozzles (1 ea. 0,15,25,40)
	Pressure Washer
	 	4.0 nozzles (1 ea. 0,15,25,40)
	Pressure Washer
	 	House and Deck Wash 1 gal
	Pressure Washer
	 	House and Deck Wash 1 qt.
	Pressure Washer
	 	Mi-T-M "How To" Video and Prod. Lit
	Pump
	 	Waterbed Pump
	Pump
	 	3/4" Puddle Sucker Pump
	Pump
	 	Simer Prod. Video and Prod. Literature
	Pump
	 	2" Gas trash pump w/ Honda
	Pump
	 	2" Elect Sub Pump
	Pump
	 	2" Gas Cent Pump
	Pump
	 	Tsurumi Prod. Video and Prod. Literature
	Sander
	 	Orbital Floor Sander HTF-2
	Sander
	 	Orbital Flr Sdr HTF Red Finish Pad
	Sander
	 	Orbital Flr Sdr HTF 4 1/2 x 15 3/4 40G Paper
	Sander
	 	Orbital Flr Sdr HTF 4 1/2 x 15 3/4 80G Paper
	Sander
	 	Orbital Flr Sdr HTF 4 1/2 x 15 3/4 120G Paper
	Sander
	 	Hrwd Floor Edger HT7-2
	Sander
	 	Hrwd Fir Edgr HT7-2/HTF Dust Bag -Paper
	Sander
	 	Hrwd Floor Sander HT8-1.2 8"
	Sander
	 	Hrwd Fr Sdr HT8-1.2 8" Dust Bag paper
	Sander
	 	Hdwd Flr Sdr HT8-1.2 8" Paper Clmp Scrw (2)
	Sander
	 	Rentlink Full Line "How To" Video and Prod. Lit.
	Sander
	 	Belt Sander 4 x 24
	Sander
	 	Drywall Sander (Porter Cable 7800)
	Saw
	 	7 1/4" Circular Saw
	Saw
	 	7 1/4" Circular Saw Blade 24T Carb.
	Saw
	 	Jig Saw
	Saw
	 	Sawzall w/Case
	Saw
	 	14" Electric Cut-off Saw w/ case
	Saw
	 	Sliding Compound Miter Saw 10"
	Saw
	 	10" Compond Miter Saw Blade
	Saw
	 	Portable-Band Saw Deep Cut 44 7/8 w/case
	Saw
	 	16" Chain Saw
	Saw
	 	Replcmnt Chain for 026-16 Chainsaw
	Saw
	 	Replcmnt Guide Bar for 026-16 Chainsaw
	Saw
	 	20" Chain Saw
	Saw
	 	Replcmnt Chain for 039-20
	Saw
	 	Replcmnt Guide Bar for 039-20
	Saw
	 	12" Cut-off Saw
	Saw
	 	Cart & Attach Kit For Stihl TS-400 Cut-off Saw
	Saw
	 	Depth Wheel for TS-400 Cart
	Saw
	 	14" Cut-Off Saw
	Saw
	 	Helmet Woodsman 6000
	Saw
	 	2 cycle oil Mix 6.4 oz ( 2 1/2 gal. mix @50:1)
	Saw
	 	2 cycle oil Mix 12.8 oz (5 gal. mix @ 50:1)
	Saw
	 	Bar & Chain Oil 1 Gal. 12/ Case
	Saw
	 	Masonary Saw Stand
	Saw
	 	Mini-Con Floor Saw 14" Guard(000063)
	Saw
	 	14" Masonry Saw -Honda Gas PS 1455
	Saw
	 	14" Masonry Saw-Electric 11 Ov PS 1411 S
	Saw
	 	Diamond Blade Measuring Tool
	Saw
	 	Tile Saw w/ Stand & Cutting Pkg. PT-1075
	Saw
	 	Extra 8" Tile Saw Diamond Blade, Superlok Xtra
	Saw
	 	Drain Plug Replacement for Tile Saw
	Saw
	 	Diamond Bld MS5 14 x.1 10 xl (Dri Brick/Block)
	Saw
	 	Dia.Bld DCX 12 x.1 10 x 1/20mm (Conc.TS-400)
	Saw
	 	Dia.Bld. DCX 14 x.1 10 x 1/20mm (Conc.TS-400)
	Saw
	 	Dia.Bld Blue 250V 14 x.125 xl (Conc. Wlk Bhd.)
	Saw
	 	Dia. Bld Red 450V 14 x .125 xl (Asp. Ovly Wlk Bhd)
	Saw
	 	Dia. Bld EH-5 12x .110 xl/20mm (TS-400 Econ.)
	Saw
	 	Dia. Bld EH-5 14x .110 xl/20mm (TS-400 Econ.)
	Saw
	 	Extra G100 Water Pump for PT-1075 Tile Saw
	Saw
	 	Target Prod. Video and Prod. Literature

Page 47

 

	 	 	 
	Category
	 	Item

	Scaffolding
	 	Multi-Purpose Scaffolding Pkg Complete
	Scaffolding
	 	12" x 24' Alumium Pick 500# Cap. 2-man
	Scaffolding
	 	12" x 16' Alumium Pick 500# Cap. 2-man
	Shoring
	 	Shoring Pole 6' 1111-111 4"
	Stud Gun
	 	Stud Driver (27 Cal.) Strip Ld, Low Vel. 496
	Stud Gun
	 	Remington "How To"Video and Prod. Lit.
	Surveying
	 	Transit w/ Tripod & Stick 20X
	Surveying
	 	Rotating Beam Laser W/Detector
	Surveying
	 	Visable Beam Laser Level w/Ceiling Kit
	Surveying
	 	Spectra Precision'How To" Video and Prod. Lit.
	Threading
	 	1/8" - 2" Pipe Cutter 2A
	Threading
	 	2" - 4" Pipe Cutter 4S
	Threading
	 	E.M.T. Bender 1" B1712
	Threading
	 	Soil Pipe Cutter Rachet 6" Cap.Mode1226
	Threading
	 	Pipe Die & Ratchet. 12R
	Threading
	 	Elec Pipe Threader w/ Dies 600 Power Drive Pkg.
	Threading
	 	Pipe Vise 460E
	Tiller
	 	Front Tine Gas Mini Tiller Light Duty
	Tiller
	 	Front Tine Tiller
	Tiller
	 	Rear Tine Tiller
	Traffic
	 	Barricades w/ Lights
	Traffic
	 	Traffic Cone 18"
	Traffic
	 	Traffic Cone 28"
	Trencher
	 	12" Walk Behind Trencher 5.5 Honda
	Trowel
	 	36' 'Trowel Machine w/ Finish blades
	Trowel
	 	Quick Pitch Handle For Trowel Machine
	Truck
	 	F-150 1/2 ton truck w/ Frm hitch, AM, Bed Liner
	Vacuum
	 	Large Wet / Dry Vac 20Gal Poly
	Wallpaper
	 	Wallpaper Table-Cutting
	Wallpaper
	 	Wallpaper Steamer - HTW-5
	Wallpaper
	 	Wallpaper HD Perforator
	Welder
	 	Arc Wldr Gas Pwd 140 Amp* Blue Star 3500
	Welder
	 	Cart for 3500 Miller Welder
	Wrench
	 	3/4" Elec Impact Wrench
	Wrench
	 	3/4" Impt Deep Skt Set w/ Tray
	Wrench, Impact
	 	1/2" Elec Impact Wrench
	Wrench, Impact
	 	1/2" Impact socket Set w/Tray
	Wrench
	 	18" Pipe Wrench
	Wrench
	 	24" Pipe Wrench
	Wrench
	 	36" Pipe Wrench
	Wrench
	 	Large Chain Wrench
	Wrench
	 	18" Bolt Cutter
	Wrench
	 	24" Bolt Cutter
	Wrench
	 	36" Bolt Cutter
	 
	 	Exception: 1 only 3/4" electric Impact
	 
	 	All Small equipment should be w/ Honda power

Page 48

 

Large Equipment Category

	 	 	 
	Category
	 	Item

	Air Tools
	 	Air Chipping Hammer
	Air Tools
	 	30# Air Hammer 1 1/8" shank
	Air Tools
	 	60# Air Hammer 11/8" Shank
	Air Tools
	 	90# Air Hammer 1 1/8" shank
	Air Compressor
	 	100 CFM towable compressor
	Air Tools
	 	Ingersoll Rand Air Tool Prod. Lit.
	AWP
	 	One Man Personal Lift, 30'
	AWP
	 	JLG Prod. Safety Video and Applic. Prod. Lit
	Backhoe
	 	Mini-backhoe Gas, Worklights, Stabl. Guard
	Backhoe
	 	Allmand Prod. Video and Prod. Lit
	Buggy
	 	16 cu ft. Ride-on Conc Buggy Dual Foam Tires
	Chipper
	 	25hp Kohler Autofeed w/ Trailer
	Chipper
	 	Vermeer Chipper Prod. Videp and Prod. Lit.
	Compaction
	 	R2000 Roller
	Mini Excavator
	 	Rops/Rubber/MDD T3", 16" Bucket/OW 3220, 15.7hp
	Mini Excavator
	 	Melroe Bobcat Mini Excav. Video and Prod. Lit
	Mini Excavator
	 	Rops/Rubber/MDD 5', 12" Bucket, OW 1667, 8hp Yanmar
	Mini Excavator
	 	Takeuchi Mini Excav. Prod. Video and Prod. Lit.
	Light Tower
	 	6000 watt 4-bulb diesel
	Log Splitter
	 	Log Splitter - Tow, Vertical 25Ton
	Log Splitter
	 	Maxim Log Splitter Video and Prod. Lit.
	Mixer
	 	2" ball Hitch
	Mixer
	 	2" ball Hitch
	Mixer
	 	7 cu ft. Mortar Mixer- Gas
	Mixer
	 	Multiquip. Mixer Video and Prod. Lit.
	Mixer
	 	Cement Mixer - Gas / 6 cu. Ft.
	Saw
	 	14hp / 14"/18" Pac IV Floor Saw drivematic
	Skid Steer
	 	46hp Diesel Op 1500# 66" Low Profile Bucket Hydra
	Skid Steer
	 	Bolt on Tooth Bar for Low Profile Bckt
	Skid Steer
	 	Melroe Bobcat Skidsteer Video and Prod. Lit.
	Straw Blower
	 	Straw Blower 18Hp Kohler
	Straw Blower
	 	Trailer w/2" Ball For TGM
	Straw Blower
	 	TGMI Straw Blwr. Prod. Video and Lit.
	Stump Grinder
	 	Compact Stump Grinder
	Stump Grinder
	 	Stump Grinder Prod. Video and Lit.
	Trailer
	 	Tandem Axle 14'2 5/16" Cuppler Hydrl. Brakes
	Trailer
	 	Single Axle Tilt 10'2" Cuppler Hydrl. Brakes
	Trailer
	 	Trencher Trailer with Fold Down Ramp 2" ball
	Trencher
	 	11 hp Honda 24" Boom 4" cutters
	Trencher
	 	Vermeer Trencher Video and Prod. Lit.

Page 49

 

EXHIBIT F

List of On-Site Merchandise

The merchandise on the attached list may be located at an On-Site Rental Store.
In addition, the parties agree that NationsRent may process for sale from an
On-Site Rental Store any merchandise which is located at NationsRent’s other
non-Lowe’s rental stores

Description

SAFETY GLASSES 70SV-000 BLK/SIL/CL

SAFETY GLASSES 70SV-002BLK/SIL/TIN

SAFETY GLASSES 70US-000 R/W/B /CL

SAFETY GLASSES 70US-002 R/W/B/TINT

SAFETY GLASSES 70SB-000 BLUE/CL

SAFETY GLASSES 70SB-002 BLUE/TINT

SAFETY GLASSES 43MB-000 BLACK/CL

SAFETY GLASSES 43MB-002 BLACK/TIN

SAFETY GLASSES 43SB-000 BLUE/CL

SAFETY GLASSES 43SB-002 BLUE/TINT

SAFETY GLASSES 43US-000 R/W/B/CL

SPINNER RACK FOR SAFETY GLASSES

SAFETY GLASSES 43US-002 R/W/B/TINT

SAFETY GLASSES NECK CORD BALK

15132 HARD HAT RATCHET WHITE

87039 EAR PLUG CORDED

28083 DUST MASKS DBL STRAP

87038 EAR PLUG UNCORDED

10468 GOGGLES

15133 HARD HAT YELLOW RATCHET

28076 DUST MASKS SINGLE STRAP

RATCHET STRAP 2 X 20

RUBBER STRAP 9”

RUBBER STRAP 15”

RUBBER STRAP 21”

RUBBER STRAP 31”

RATCHET STRAP 1” X 10 W / S HOOKS

RATCHET STRAP 1” X 16’W / S HOOKS

WELDING HELMET W/LENS 30001

ROD WELD 1/8” FLEETWELD 37 5# 6013

ROD WELD 5/32” FLEETWELD 37 5# 601

ROD WELD1/8” JET-LH 78MR IN 5# 701

ROD WELD 5/32“JET-LH 78MR 5# 7018

BLADE DOOR PLANER REPLCMNT, PA1201

BLADE MITER SAW 10” BB 1060M

BLADE, CIRCULAR SAW 7 1/4” BB724

TILE SAW BLADE, 8“X.065X5/8, SUPERLOK X-TRA 79017ONRI

51121 RUBBER GLOVES

72221 LEATHER GLOVES SPLIT PALM

14001 JERSEY GLOVE BROWN MENS

76101 WELDERS GLOVE

THREADING OIL, QT. 632-41590

BAR & CHAIN OIL, 1 QT. STIHL, 0781-516-5803

676RC RECIPROCATING BLADE EA

YPAHC1220 12 X 1/8 X20MM CON ABR B

Page 50

 

YPAHM1220 12 X 1/8 X20MM MET ABR B

YPAHC1420 14 X 1/8 X20MM CON ABR B

YPAHM1420 14 X 1/8 X20MM MET ABR B

YDC75941(27)7 XI/4X5/8 GND DISC CO

YDC75940(27)7 Xl/4X5/8 GND DISC ME

YS43385 SANDING DISC 17” 20GRT.

YS28475 SANDING DISC. 17” 36GRT.

YS51561 C SANDING DISC. 17” 100GRT

YAGS2M GRINDING STONE 24GRT

YPAHC14 14 X 1/8 X 1 CONC ABR BLAD

YPASC14316 14 X 3/16 X 1 CON ABR B

YS28405 8 X 19 1/2 20GRT SANDPAPER

YPAHC12 12 X 1/8 X 1 CONC ABR BLAD

YPAHM14 14 X 1/8 X 1 MET ABR BLADE

060AFC FLARED CUP STONES 6”

YS28406 8X19 1/2 36GRT. SANDPAPER

YS28423 7 X 7/8 20GRT.SANDING DISC

YS28424 7 X 7/8 36GRT. SANDING DIS

YSI1966C 8 X 191/2 100GRT SANDPAPE

YS11922C 7 X 7/8 100GRT SANDING DI

YS51562C SANDING DISC 17” 80GRT

YDC75908(27)41/2X1/8X7/8 GND DIS C

YDC75910 (27)41/2Xl/8X7/8 GND DIS

YS10103C SANDING BELT 80G 4 x 24

YS10106C SANDING BELT 100G 4 x 24

DRYWALL SANDING DISC 100G PORTER CABLE 78105 5/BOX

DRYWALL SANDING DISC 120G PORTER CABLE 78125 5/BOX

DRYWALL SANDING DISC 150G PORTER CABLE 78155 5/BOX

PAD, ORBITAL SANDER, RED, 01768

YPABB 14 14” ABR BLD FOR BRICK/BLOCK SAW

RATCHET BINDER 3/8” GRD70 48360

3/8 X 16’ CHAIN ASSEMBLY WITH HOOK

DRILL BIT 3/16 X 8 SDS MASONRY HC2013

DRILL BIT 1/4 X 14 SDS MASONRY HC2045

DRILL BIT 3/8 X 12 SDS MASONRY HC2064

DRILL BIT 1/2 X 12 SDS MASONRY HC2084

DRILL BIT 5/8 X 18 SDS MASONRY HC2107

DRILL BIT 3/4 X 18 SDS MASONRY HC2127

DRILL BIT 1/2 X 13 SDS MAX MASONRY HC5010

DRILL BIT 1/2 X 21 SDS MAX MASONRY HC5011

DRILL BIT 3/4 X 21 SDS MAX MASONRY HC5031

DRILL BIT 7/8 X 21 SDS MAX MASONRY HC5041

DRILL BIT 1 X 13 SDS MAX MASONRY HC5050

DRILL BIT 1 X 21 SDS MAX MASONRY HC5051

DRILL BIT 1 1/8 X 15 SDS MAX MASON HC5060

DRILL BIT 1 1/2 X 23 SDS MAX MASON HC5091

05208 50’12/3 NRI 50’ BRANDED EXT. CORD

FUEL CAN 2GAL RED TYPE ONE W/SPOUT

FUEL CAN 5GAL RED TYPE ONE W/SPOUT

FUEL CAN FUNNEL 9” FOR METAL CANS

1949 SPRAYER CURRING COMPOUND 3GAL

TRAILER CONNECT ADAPT 6WRD TO FLT****

TRAILER CONN ADAPT 7WRV TO 6WRD****

BALL LONG SHANK CBH2A 2” -3/4 SNK****

BALL LONG SHANK CBH3A 2"-1“SNK****

BALL LONG SHANK CBH5A 25/16"-1“SNK****

BENT PIN W/CLIP 17002 5/8****

PINTLE DUPLEX WITH 2” BALL DPH-200****

PINTLE DUPLEX W/25/16 BALL DPH-251****

PINTLE MT PLATE 12 PLT/9 SNK RE651

636RP RECIPROCATING BLADE EA

634R RECIPROCATING BLADE EA

606R RECIPROCATING BLADES EA

61OR RECIPROCATING BLADES EA

614R RECIPROCATING BLADES EA

618R RECIPROCATING BLADE EA

624R RECIPROCATING BLADE EA

Page 51

 

656R RECIPROCATING BLADE EA

81OR RECIPROCATING BLADE EA

818R RECIPROCATING BLADE EA

956R RECIPROCATING BLADE EA

156R RECIPROCATING BLADE EA

1lOR RECIPROCATING BLADE EA

BANDSAW BLD. 44 7/8 14TPI BIMET. 80114-138-EW1014

BANDSAW BLADE 44 7/8 18TPI BIMET. 80112-138-EW1418

BLADE, BRUSH 8 TEETH FOR FS85, STIHL 4001-713-3803

2” MALE ADAPTER x FEM. NPT

2” CAM & GROOVE GASKET

2” SHORT SHANK COUPLING

3/4” UNIV. 2-LUG HOSE END

3/4” UNIV. 2-LUG MALE END

3/4” UNIV. 2-LUG FEM. END

3/4” TRIPLE CONNECTOR

UNIV. 2-LUG GASKETS

2” ROUND HOLE STRAINER

2” SQUARE HOLE STRAINER

3/8“HOSE-13/16” BAND SIZE C.P.CLAM

3/4” HOSE-13/8” BAND SIZE C.P.CLAM

CENTER PUNCH TOOL

AM13841 3/8“BODY-1/4FPT AIR FITTING

1/4” NIPPLE 3/8” FPT FITTING.

3/8” NIPPLE 3/8” FPT FITTING

3/8“x50’300RR,CPLD 1/4“Q.D.AIR HOS

3/4“x50 20OPSI R CPL UNV2 BAN JACK

2“x50’ GR’Y DISCH’G, CPLD 2” C&E

2“x20’ EPDM, CPLD 2“C &2“PN S HOS

4819 ADPT PUSH BUTTON W MALE THREA

4820 FEM THD ADPT FOR PUSH BTN HAN

MEASURE WHEEL, KESON RR318N

NAIL, FRAMING 3 1/4 x .121 57BS 12BP

NAIL, FINISH 15GA. 1 1/4” 57BF3G

NAIL, FINISH 15GA. 1 1/2” 57BF4G

NAIL, FINISH 15GA. 2” 57BF6G

NAIL, FINISH 15GA. 2 1/2” 57BF8G

NAIL, FRAMING 2-3/8” x.1 13 RI 57BS8BR

NAIL, FRAMING 2-3/8” x .113 57BS8MGR

NAIL, FRAMING 3 x .121 57BS l OMGR

NAIL, FRAMING 3 x .121 PLAIN 57BS l OBP

NAIL, FRAMING 3 1/4 x .121 57BS12MGR

NAIL, COIL ROOFING 1 1/4” 58JCRI14

NAIL, COIL ROOFING 1 1/2” 58JCRI12

DECK SCREW, 2 1/2” (1000BX), 48-30-3042

DECK SCREW 3” (1000BX), 48-30-3043

HARDWOOD FLOOR NAIL, 2”, HANDIPAK 1000/PKG

BIT, #2 SQ. DRIVE 140MM, DECK SCREW GUN,48-30-1527

CHAIN, REPLCMNT, FOR STIHL HT-75,12”, 61PMN-44

MARKING PAINT YELL 20OZ W-BASE 380

MARKING PAINT ORAN 20OZ W-BASE 380

MARKING PAINT WHITE 20 W-BASE 3901

MARKING PAINT RED 20OZ W-BASE 3610

MARKING PAINT BLUE 20OZ W-BASE 362

MARKING PAINT GREEN 20 W-BASE 3630

MARKING PAINT PINK 20OZ W-BASE 361

MARKING WAND LONG K7096

S32001 POWER WASH CLEANER/DEGREASE

K7140 WHITE TRAFFIC MARKING PAINT

K7141 YELLOW TRAFFIC MARKING PAINT

ASPHALT CUTTER 1 X 4 1/4 SNK 5“BLD

ASPHALT CUTTER 11/8 X 6 SNK 5” BLD

CLAY SPADE 1 X 41/4 SHANK 51/2” BL

Page 52

 

CLAY SPADE 11/8 X 6 SHANK 51/2” BL

BUSHING TOOL 1 X 41/2 SNK 16 PT

BUSHING TOOL 11/8 X 61/2 SNK 16 PT

MOIL POINT 1 X 41/4 SNK X 14 U.C.

MOIL POINT 1 1/8 X 6 SNK X 14 U.C.

CHISELS NARROW 1 X 41/4 X 14 U.C.

CHISEL NARROW 11/8 X 6 X 14 U.C.

CHISEL 3” — 1 X 41/4 X 14 U.C.

CHISEL 3"-11/8 X 6 X 14 U.C.

CHISEL NARROW 12” W/OVAL COLLAR

MOIL POINT 12” W/OVAL COLLAR

CHISEL 2"- 12” W/OVAL COLLAR

BUSHING TOOL 12” W/OVAL COLLAR

RETAINER SPRING

CHISEL NARROW 12” LONG SDS MAX

CHISEL NARROW 18” LONG SDS

MAX MOIL POINT 12” LONG SDS MAX

MOIL POINT 18” LONG SDS MAX

CHISEL 2” WIDE 12” LONG SDS MAX

CHISEL 3” WIDE 12” LONG SDS MAX

BUSHING TOOL SDS MAX

CLAY SPADE HS 1922 SDS MAX

GROUND ROD DRIVER HS 1924 SDS MAX

GRADE ROD 16’ IN INCHES 06-816C

GRADE ROD 16’ IN l0THS 06-816

POWER HEAD PADS 18” BLACK

POWER HEAD PADS 18” GREEN

POWER HEAD PADS 18” BLUE

POWER HEAD PADS 18” WHITE

FLOOR POWR KARE CLEANER 1Fl

CARPET CLEANER LOW FOAM 128 OZ. KPI

FLOOR STRIPPER GALLON 2F 1

FLOOR BASE GALLON 3F1

FLOOR HARDTOP GALLON 4F 1

FLOOR RESTORER GALLON RF1

POWER HEAD PADS 18” RED

TROWEL BLADE 36” COMBO BOLT ON

TROWEL BLADE 36” COMBO SPRING MNT

REMINGTON STRIP LOAD 27 CAL.#3 GREEN 78757

REMINGTON STRIP LOAD 27 CAL.#4 YELLOW 78758

REMINGTON STRIP LOAD 27 CAL. #5 RED 78759

CARPET HEAT SEAL TAPE 66”, 24-217-B8

HOUSE & DECK WASH, 1 GAL., AW-4034-0026

HOUSE & DECK WASH, 1 QT., AW-4034-0025

CARPET SPOT REMOVER PLUS, KS-32

CARPET EXTRACTOR KOLD POWR, 1 GAL. KP1

STUD DRIVER NAIL3” 100BOX #58053

STUD DRIVER NAIL 1 “25/BLISTER PKG.. 097179-01

STUD DRIVER NAIL1 1/2” 25/BLISTER PKG.097180-01

STUD DRIVER NAIL2 1/2” 25/BLISTER PKG. 097181-01

CLEANER/DEGREASER, POWER WASHER SPRAYON 01207-0401

CARPET CLEANER LOW FOAM 32 OZ. KPQ

CARPET CLEANER LOW FOAM 32 OZ. KPQ

YS101000 SANDING BELT 36G 4 x 24

BAG, DUST, PAPER FOR RENTLINK HT-7 EDGER, 07040

BAG, DUST, PAPER FOR ORBITAL/DRUM SANDER, 07039

PAINT SPRAYER PUMP SOCK DRAW STRING BAG

CARPET TRIM3,4ER REPLCMNT BLADES, 5PKG. 15-399-B7

CHAIN, REPLCMNT, FOR STM 026-16”, 33RM2-60,

CHAIN, REPLCMNT, FOR STIHL 039-20”, 33RM2-72,

AUTO CUT REPLCMNT HEAD STIHL FS46/85,4002-710-2191

STRING SPOOL REPLCMNT STIHL FS46/85,4002-710-4313

Page 53

 

EXHIBIT G

Lowe’s Mark

Lowe’s Home Improvement Warehouse

Improving Home Improvement [Logo]

Lowe’s Commercial
Services [Logo]

The One Stop Pro Shop] [Logo]

Page 54

 

EXHIBIT H

Prototypical Plans for
Chase Rental Store

[Blueprint and proposed
floorplan for layout of NationsRent stores at Lowe’s locations.]

Page 55

 

EXHIBIT I

Prototypical Signage

[List of Prototype
Signage Products Samples of NationsRent signs, displays, art
and banners to be displayed within NationsRent stores at Lowe’s
locations.]

Page 56

 

January 28, 2000

Lowe’s Companies, Inc.

P.O. Box 1111

North Wilkesboro, North Carolina 28656

Gentlemen:

In connection with our mutual consideration of a possible strategic partnership
(the “Relationship”) involving NationsRent, Inc. (“Nations”) and Lowe’s
Companies, Inc. (“Lowe’s”) pursuant to which Nations may establish and operate
an equipment rental location on-site in, adjacent to or on an outparcel of,
Lowe’s’ stores (the “On-Site Rental Concept”), Nations and Lowe’s will be
exchanging certain business, financial and other information. As a condition
to exchanging such information, Nations and Lowe’s agree to treat
confidentially such information and any additional information including all
notes, analyses, compilations, studies or other documents that either Nations,
Lowe’s, or their respective agents or representatives (including attorneys)
furnishes to the other or its employees, agents, advisors, current and
prospective lenders and investors, affiliates or representatives (all of the
foregoing collectively referred to as “Representatives”) or that either it or
any of its Representatives develop on the basis of such information, whether
furnished on or after the date of this letter, whether prepared by the
recipient or its Representatives, which contain or otherwise reflect such
information (collectively the “Evaluation Material”).

The terms “Nations”, “Lowe’s”, “recipient” and “party” shall include their
subsidiaries, affiliates and Representatives. This letter is referred to as
the “Agreement”.

The term “Evaluation Material” does not include information that (i) is or
becomes generally available to the public other than as a result of a
disclosure by the recipient, (ii) was available to the recipient on a
non-confidential basis prior to its disclosure to the recipient by Nations or
Lowe’s, or (iii) becomes available to the recipient on a non-confidential basis
from a source other than Nations or Lowe’s provided that such source is not
bound by a confidentiality agreement with the provider of the information, its
representatives or agents, or that the source is not otherwise prohibited from
transmitting the information to the recipient by a contractual, legal or
fiduciary obligation.

 

 

Lowe’s Companies, Inc.

January 28, 2000

Page 2

It is understood that any recipient of information may only disclose the
Evaluation Material to those Representatives who require such material for the
purpose of evaluating a possible Relationship, provided that such
Representatives shall be informed by the recipient of the confidential nature
of the Evaluation Material. The parties agree that the Evaluation Material
received by them will be kept confidential by them and will not be disclosed to
any party or used for any purpose other than evaluating a possible
Relationship, except with the specific prior written consent of the provider of
the Evaluation Materials or as expressly permitted by these terms.

Without the prior written consent of the provider of the Evaluation Material,
the recipient will not disclose to any person (i) that the Evaluation Material
has been made available to it or that it has inspected any portion of the
Evaluation Material, (ii) that Nations and Lowe’s are considering a possible
Relationship, or (iii) any of the proposed conditions or other facts with
respect to any possible Relationship, except that either party may make such
disclosure as it believes in good faith are required by law or the requirements
of any listing agreement with a national securities exchange. The term
“person” as used in this letter shall be broadly interpreted to include without
limitation any corporation, company, partnership, group or individual.

In the event that either Nations or Lowe’s is requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Evaluation
Material provided by the other party to this Agreement, it is agreed that such
party receiving a request will prove the other party to this Agreement with
prompt notice of such request so that it may seek an appropriate protective
order, other appropriate remedy, and/or waive compliance with the provisions of
this Agreement. In the event that such protective order or other remedy is not
obtained, or that Nations or Lowe’s grants a waiver, the recipient may furnish
that portion (and only that portion) of the Evaluation Material which, in the
written opinion of the recipient’s counsel, the recipient is legally compelled
to disclose. Furthermore, the recipient will exercise its best efforts to
obtain reliable assurance that confidential treatment will be accorded any
Evaluation Material so furnished.

Upon the written request of the provider of the Evaluation Material, each party
will promptly deliver all documents or other matter furnished by the provider,
which collectively constitutes Evaluation Material, together with all copies,
extracts or compilations in the possession of the recipient or certify to the
other party the destruction of such materials.

As a conditions to the exchange of the Evaluation Material and the execution of
this Agreement, for a period of three (3) months from the date hereof: (i)
Lowe’s agrees not to engage in the equipment rental business or to, directly or
indirectly, implement (or engage in discussions regarding) the On-Site Rental
Concept with any other provider of equipment rental services and (ii) Nations
agrees not to, directly or indirectly, implement (or engage in discussions
regarding) the On-Site Rental Concept with any other home improvement retailer
or engage in the business of home improvement retaining other than ancillary to
its business as currently conducted.

Each party agrees to indemnify and hold harmless that other party from any
damage, loss, cost or liability (including legal fees and the cost of enforcing
this indemnity) arising out of or resulting

 

 

Lowe’s Companies, Inc.

January 28, 2000

Page 3

from any breach of this Agreement, including any unauthorized use or disclosure
by it of the Evaluation Material.

Each party also acknowledges that money damages would be both incalculable and
an insufficient remedy for any breach of this Agreement by it and that such
breach would cause the other party irreparable harm. Accordingly, each party
also agrees that in the event of any breach or threatened breach of this
Agreement, the non breaching party, in addition to any other remedies at law or
in equity, shall be entitled, without requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific
performance.

This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without regard to the conflicts of law
provisions thereof. This Agreement contains the entire understanding of the
parties with respect to its subject matter and supersedes all prior oral or
written agreements and understandings between the parties with respect to such
subject matter.

It is understood and agreed that no failure or delay by either party in
exercising any right, power or privilege shall operate as a waiver of this
Agreement, nor shall any single or partial exercise preclude any other or
further exercise of any right, power or privilege under this Agreement.

The invalidity or unenforceability of any provision of this Agreement shall not
affect the availability or enforceability of any other provisions, which shall
be separable and remain in full force and effect.

If you concur with all provisions under this Agreement, please sign and return
one copy of this letter, which will constitute our agreement and that of Lowe’s
with respect to this subject matter.

Very truly yours,

NationsRent, Inc.

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	
 	 	 
	

	 	Name:	 	 
	

	 	Title	 	 

CONFIRMED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN.

Lowe’s Companies, Inc.

	 	 	 	 	 
	By:<PAGE>
                                                                    EXHIBIT 10.1

SILICON VALLEY BANK

                              AMENDED AND RESTATED
                          LOAN AND SECURITY AGREEMENT

Borrower:  CYPRESS COMMUNICATIONS, INC.
           CYPRESS COMMUNICATIONS OPERATING COMPANY, INC.
Address:   15 Piedmont Center, Suite 100
           Atlanta, Georgia 30305

Date:      March 17, 2004

         THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is entered into
on the above date between SILICON VALLEY BANK ("Silicon"), whose address is
3003 Tasman Drive, Santa Clara, California 95054 and with a loan production
office located at 3343 Peachtree Road, NE, Suite 312, Atlanta, Georgia 30326
and the borrower(s) named above (jointly and severally, the "Borrower"), whose
chief executive office is located at the above address ("Borrower's Address").
The Schedule to this Agreement (the "Schedule") shall for all purposes be
deemed to be a part of this Agreement, and the same is an integral part of this
Agreement. (Definitions of certain terms used in this Agreement are set forth
in Section 8 below.)

                                    RECITALS

         A. Silicon and Borrower have entered into that certain Loan and
Security Agreement dated as of July 12, 2002 (the "Original Closing Date"),
which Loan and Security Agreement was amended by that certain Loan Modification
Agreement dated as of February   , 2003 by and between Borrower and Silicon
and by that certain Loan Modification Agreement dated as of September   , 2003
by and between Borrower and Silicon (collectively, the "Original Loan
Agreement"). Pursuant to the Original Loan Agreement, Silicon agreed to make
certain loans including, the "Revolving Facility" described therein, and other
financial accommodations to Borrower.

         B. Repayment of all indebtedness of Borrower under the Original Loan
Agreement is unconditionally guaranteed by U.S. Realtel, Inc. (the "Guarantor")
pursuant to an Unconditional Guaranty dated as of July 12, 2002 (the
"Guaranty").

         C. Borrower has requested and Silicon has agreed pursuant to this
Agreement to (i) to make an Equipment Term Loan to Borrower in the principal
amount of One Million Dollars ($1,000,000), and (ii) amend and restate the
Original Loan Agreement in its entirety.

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Silicon and Borrower agree that
the Original Loan Agreement is amended and restated in its entirety as follows:

                                      -1-

<PAGE>
 SILICON VALLEY BANK            AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
-------------------------------------------------------------------------------

           1.     LOANS.

         1.1  LOANS.  Silicon will make revolving loans, issue letters of
credit, and provide cash management services to Borrower (the "Revolving Loans")
and make an equipment term loan (the "Equipment Term Loan" and together with the
Revolving Loans, the "Loans"), in amounts determined by Silicon in its good
faith business judgment, up to the amounts (the "Credit Limit") shown on the
Schedule, provided no Default or Event of Default has occurred and is
continuing, and subject to deduction of Reserves for accrued interest and such
other Reserves as Silicon deems proper from time to time in its good faith
business judgment.  Amounts advanced under the Revolving Loans, may be repaid
and readvanced from time to time.  Advances under the Equipment Term Loan may
not be readvanced.

         1.2  INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rates shown on the Schedule, except where expressly set forth to
the contrary in this Agreement. Interest shall be payable monthly, on the last
day of the month.  Interest may, in Silicon's discretion, be charged to
Borrower's loan account, and the same shall thereafter bear interest at the same
rate as the other Loans.  Silicon may, in its discretion, charge interest to
Borrower's Deposit Accounts maintained with Silicon.

         1.3   OVERADVANCES.  Except as set forth in Section 1.6 with respect to
any Permitted Overadvance, if at any time or for any reason the total of all
outstanding Revolving Loans and all other monetary Obligations exceeds the
Credit Limit (an "Overadvance"), Borrower shall immediately pay the amount of
the excess to Silicon, without notice or demand. Without limiting Borrower's
obligation to repay to Silicon the amount of any Overadvance, Borrower agrees to
pay Silicon interest on the outstanding amount of any  Overadvance, on demand,
at the Default Rate.

         1.4   FEES.  Borrower shall pay Silicon the fees shown on the Schedule,
which are in addition to all interest and other sums payable to Silicon and are
not refundable.

         1.5   LOAN REQUESTS.  To obtain a Loan, Borrower shall make a request
to Silicon by facsimile or telephone.  Loan requests received after 12:00 Noon
(Pacific time) will not be considered by Silicon until the next Business Day.
Silicon may rely on any telephone request for a Loan given by a person whom
Silicon believes is an authorized representative of Borrower, and Borrower will
indemnify Silicon for any loss Silicon suffers as a result of that reliance.

         1.6   PERMITTED OVERADVANCE/THE PURCHASE TRANSACTION.  Some portion or
all of the initial advance under the Revolving Loans was used by Borrower to
close on the acquisition of certain assets (the "Acquired Assets") pursuant to
that certain Asset Purchase Agreement dated on or about May 31, 2002 by and
among Borrower, Intermedia Communications, Inc., Shared Technologies Fairchild,
Inc., Shared Technologies Fairchild Telecom, Inc., MCI Worldcom Communications,
Inc. and Worldcom, Inc. (as amended from time to time, the "Purchase
Agreement").  In connection with the Purchase Agreement Transaction, Borrower
was permitted to create Overadvances (each a "Permitted Overadvance" and
collectively, the "Permitted Overadvances"), provided that at the time of each
Permitted Overadvance the following conditions are met to Silicon's
satisfaction: (a) no Event of Default or Default shall have occurred and be
continuing; (b) each Permitted Overadvance shall be fully secured by cash on
deposit with and assigned to Silicon and (c) the amount of any Permitted
Overadvance will not cause the maximum principal amount of all Loans to
exceed Ten Million Dollars ($10,000,000).

         1.7   LETTERS OF CREDIT.  At the request of Borrower, Silicon may, in
its good faith business judgment, issue letters of credit for the account of
Borrower, in form and substance satisfactory to Silicon in its sole discretion
(collectively, "Letters of Credit").  The aggregate face amount of all Letters
of Credit from time to time outstanding shall not exceed the amount shown on the
Schedule (the "Letter of Credit Sublimit"), and shall be reserved against
Revolving Loans with would otherwise be available hereunder, and in the event at
any time there are insufficient Revolving Loans available to Borrower for such
reserve, Borrower shall deposit and maintain with Silicon cash collateral in an
amount at all times equal to such deficiency, which shall be held as Collateral
for all purposes of this Agreement.  Borrower shall pay all bank charges
(including  charges of Silicon) for the issuance of Letters of Credit, together
with such additional fee as Silicon's letter of credit department shall charge
in connection with the issuance of the Letters of Credit. Any payment by Silicon
under or in connection with a Letter of Credit shall constitute a Revolving Loan
hereunder on the date such payment is made. Each Letter of Credit shall have an
expiry date no later than thirty (30) days prior to the Maturity Date.  Borrower
hereby agrees to indemnify and hold Silicon harmless from any loss, cost,
expense, or liability, including payments made by Silicon, expenses, and
reasonable attorneys' fees incurred by Silicon arising out of or in connection
with any Letters of Credit.  Borrower agrees to be bound by the regulations and
interpretations of the issuer of any Letters of Credit guarantied by Silicon and
opened for Borrower's account or by Silicon's interpretations of any Letter of
Credit issued by Silicon for Borrower's account, and Borrower understands and
agrees that Silicon shall not be liable for any error, negligence, or mistake,
whether of omission or commission, in following Borrower's instructions or those
contained in the Letters of Credit or any modifications, amendments, or
supplements thereto.  Borrower understands that Letters of Credit may require
Silicon to

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indemnify the issuing bank for certain costs or liabilities arising out of
claims by Borrower against such issuing bank. Borrower hereby agrees to
indemnify and hold Silicon harmless with respect to any loss, cost, expense, or
liability incurred by Silicon under any Letter of Credit as a result of
Silicon's indemnification of any such issuing bank. The provisions of this Loan
Agreement, as it pertains to Letters of Credit, and any other Loan Documents
relating to Letters of Credit are cumulative.

         1.8 CASH MANAGEMENT/ACH SERVICES. Borrower may use up to One Hundred
Thousand Dollars ($100,000) of the Revolving Loans for Lender's cash management
services, which may include merchant services, direct deposit of payroll,
business credit card, and check cashing services identified in various cash
management services agreements related to such services (the "Cash Management
Services").  Such aggregate amounts utilized under the Cash Management Services
Sublimit will at all times reduce the amount otherwise available to be borrowed
under the Revolving Loans.  Any amounts Silicon pays on behalf of Borrower or
any amounts that are not paid by Borrower for any Cash Management Services will
be treated as Loans and will accrue interest at the Prime Rate in effect from
time to time, plus two percent (2.00%) per annum.

         1.9 EQUIPMENT TERM LOAN. At the request of Borrower, Silicon will make
equipment term loans to Borrower (the "Equipment Term Loans"), in amounts up to
the Equipment Term Loan Sublimit shown on the Schedule, provided no Default or
Event of Default has occurred and is continuing.  Equipment Term Loans shall be
repaid in accordance with the Schedule.  The aggregate amount of outstanding
Equipment Term Loans will reduce the amount otherwise available to be borrowed
under the Revolving Loans, prior to and until the Debt Service Coverage Change
Date (as hereinafter defined).  From and after the Debt Service Change Date,
the aggregate amount of outstanding Equipment Term Loans will no longer reduce
the amount otherwise available to be borrowed under the Revolving Loans.

         1.10 INTER-COMPANY DEBT, CONTRIBUTION. Without implying any limitation
on the joint and several nature of the Obligations,  Silicon agrees that
notwithstanding any other provision of this Agreement, the Persons included in
the term "Borrower" may create reasonable inter-company indebtedness between or
among the Persons included in the term "Borrower" with respect to the
allocation of the benefits and proceeds of the Loans and Letters of Credit
under this Agreement.  The Persons included in the term "Borrower" agree among
themselves, and Silicon consents to that agreement, that each such Person shall
have rights of contribution from all of the such Persons to the extent such
Person incurs Obligations in excess of the proceeds of the Loans received by,
or allocated to purposes for the direct benefit of, such Person.  All such
indebtedness and rights shall be, and are hereby agreed by the Persons included
in the term "Borrower" to be, subordinate in priority and payment to the
indefeasible repayment in full in cash of the Obligations, and, unless Silicon
agrees in writing otherwise, shall not be exercised or repaid in whole or in
part until all of the Obligations have been indefeasibly paid in full in cash.
Each Person included in the term "Borrower" agrees that all of such
inter-company indebtedness and rights of contribution are part of the
Collateral and secure the Obligations.  Each Person included in the term
"Borrower" hereby waives all rights of counter claim, recoupment and offset
between or among themselves arising on account of that indebtedness and
otherwise.  No Person included in the term "Borrower" shall evidence the
inter-company indebtedness or rights of contribution by note or other
instrument, and shall not secure such indebtedness or rights of contribution
with any lien or security.

         1.11 BORROWERS ARE INTEGRATED GROUP.

         (i) Each Person included in the term "Borrower" hereby represents and
warrants to Silicon that each of them will derive benefits, directly and
indirectly, from each Letter of Credit and from each Loan, both in their
separate capacity and as a member of the integrated group to which each such
Person belongs and because the successful operation of the integrated group is
dependent upon the continued successful performance of the functions of the
integrated group as a whole, because (i) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise would be
obtainable by such Persons individually, and (ii) the additional administrative
and other costs and reduced flexibility associated with individual financing
arrangements which would otherwise be required if obtainable would substantially
reduce the value to such Persons of the financing.

         (ii) Each Person included in the term "Borrower" hereby represents and
warrants that all of the representations and warranties contained in this
Agreement are true and correct on and as of the date hereof as if made on and as
of such date, both before and after giving effect to this Agreement, and that no
Event of Default or Default has occurred and is continuing or exists or would
occur or exist after giving effect to this Agreement.

         1.12 PRIMARY OBLIGATIONS. The obligations and liabilities of each
Person included in the term "Borrower", as guarantor under this paragraph
shall be primary, direct and immediate, shall not be subject to any
counterclaim, recoupment, set off, reduction or defense based upon any claim
that such Person may have against any one or more of the other Persons included
in the term "Borrower", Silicon and/or any other guarantor and shall not be
conditional or contingent upon pursuit or

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enforcement by Silicon of any remedies it may have against Persons included in
the term "Borrower" with respect to this Agreement, whether pursuant to the
terms thereof or by operation of law.  Without limiting the generality of the
foregoing, Silicon shall not be required to make any demand upon any of the
Persons included in the term "Borrower", or to sell the Collateral or otherwise
pursue, enforce or exhaust its or their remedies against the Persons included
in the term "Borrower" or the Collateral either before, concurrently with or
after pursuing or enforcing its rights and remedies hereunder.  Any one or more
successive or concurrent actions or proceedings may be brought against each
Person included in the term "Borrower" under this paragraph, either in the same
action, if any, brought against any one or more of the Persons included in the
term "Borrower" or in separate actions or proceedings, as often as Silicon may
deem expedient or advisable.  Without limiting the foregoing, it is
specifically understood that any modification, limitation or discharge of any
of the liabilities or obligations of any one or more of the Persons included in
the term "Borrower", any other guarantor or any obligor under any of the
Financing Documents, arising out of, or by virtue of, any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law initiated by or against any one or  more of the Persons
included in the term "Borrower", in their respective capacities as borrowers and
guarantors under this paragraph, or under any of the Financing Documents shall
not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the
liability of each Borrower under this paragraph in any manner whatsoever, and
this paragraph shall remain and continue in full force and effect.  It is the
intent and purpose of this paragraph that each Person included in the term
"Borrower" shall and does hereby waive all rights and benefits which might
accrue to any other guarantor by reason of any such proceeding, and the Persons
included in the term "Borrower" agree that they shall be liable for the full
amount of the obligations and liabilities under this paragraph regardless of,
and irrespective to, any modification, limitation or discharge of the liability
of any one or more of the Persons included in the term "Borrower", any other
guarantor or any obligor under any of the Loan Documents, that may result from
any such proceedings.

                 2.   SECURITY INTEREST. To secure the payment and performance
of all of the Obligations when due, Borrower hereby grants to Silicon a
security interest in all of the following (collectively, the "Collateral"): all
right, title and interest of Borrower in and to all of the following, whether
now owned or hereafter arising or acquired and wherever located: all Accounts;
all Inventory;  all Equipment; all Deposit Accounts; all General Intangibles
(including without limitation all intellectual property); all Investment
Property; all other property; and any and all claims, rights and interests in
any of the above, and all guaranties and security for any of the above, and all
substitutions and replacements for, additions, accessions, attachments,
accessories, and improvements to, and proceeds (including proceeds of any
insurance policies, proceeds of proceeds and claims against third parties) of,
any and all of the above, and all Borrower's books relating to any and all of
the above.

                 3.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

    In order to induce Silicon to enter into this Agreement and to make Loans,
Borrower represents and warrants to Silicon as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants, throughout the
term of this Agreement and until all Obligations have been paid and performed
in full:

        3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower is and will continue to
be, duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.  Borrower is and will continue to be
qualified and licensed to do business in all jurisdiction in which any failure
to do so would result in a Material Adverse Change.  The execution , delivery
and performance by Borrower of this Agreement, and all other documents
contemplated hereby (1) have been duly and validly authorized, (ii) are
enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), and (iii) do not violate Borrower's articles or certificate
of incorporation, or Borrower's by-laws, or any law or any material agreement
or instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any agreement or instrument which is binding upon Borrower or its
property.

        3.2 NAME; TRADE NAMES AND STYLES.  The name of Borrower set forth in
the heading to this Agreement is its correct name.  Listed in the
Representations are all prior names of Borrower and all of Borrower's present
and prior trade names.  Borrower shall give Silicon 30 days' prior written
notice before changing its name or doing business under any other name.
Borrower has complied, and will in the future comply, in all material respects,
with all laws relating to the conduct of business under a fictitious business
name, except where the failure to so comply would not reasonably be expected to
result in a Material Adverse Change.

         3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL.  The address set forth
in the heading to this Agreement is Borrower's chief executive office. In
addition, Borrower has places of business only at the locations set forth in the
Representations.

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Borrower will give Silicon at least 30 days prior written notice before opening
any additional place of business or changing its chief executive office,
except that Borrower may maintain sales offices in the ordinary course of
business at which not more than a total of $10,000 fair market value of
Equipment is located.

        3.4 TITLE TO COLLATERAL; PERFECTION; PERMITTED LIENS.

                  (a) Borrower is now, and will at all times in the future be,
the sole owner of all the Collateral, except for items of Equipment which are
leased to Borrower. The Collateral now is and will remain free and clear of any
and all liens, charges, security interests, encumbrances and adverse claims,
except for Permitted Liens. Silicon now has, and will continue to have, a
first-priority perfected and enforceable security interest in all of the
Collateral, subject only to the Permitted Liens, and Borrower will at all times
defend Silicon and the Collateral against all claims of others.

                  (b) Borrower has set forth in the Representations all of
Borrower's Deposit Accounts, and Borrower will give Silicon five Business Days
advance written notice before establishing any new Deposit Accounts and will
cause the institution where any such new Deposit Account is maintained to
execute and deliver to Silicon a control agreement in form sufficient to perfect
Silicon's security interest in the Deposit Account and otherwise satisfactory to
Silicon in its good faith business judgment. Nothing herein limits any
requirements which may be set forth in the Schedule as to where Deposit Accounts
will be maintained.

                  (c) In the event that Borrower shall at any time after the
date hereof have any commercial tort claims against others, which it is
asserting or intends to assert, and in which the potential recovery exceeds
$100,000, Borrower shall promptly notify Silicon thereof in writing and provide
Silicon with such information regarding the same as Silicon shall request
(unless providing such information would waive the Borrower's attorney-client
privilege). Such notification to Silicon shall constitute a grant of a security
interest in the commercial tort claim and all proceeds thereof to Silicon, and
Borrower shall execute and deliver all such documents and take all such actions
as Silicon shall request in connection therewith.

                  (d) Whenever any Equipment or Inventory is located in a
warehouse or other premises in which any third party has an interest, Borrower
shall, whenever requested by Silicon, use its best efforts to cause such third
party to execute and deliver to Silicon, in form acceptable to Silicon, such
waivers and subordinations as Silicon shall specify in its good faith business
judgment. Borrower will keep in full force and effect, and will comply with all
material terms of, any lease of real property where any of the Collateral now or
in the future may be located.

         3.5 MAINTENANCE OF COLLATERAL.  Borrower will maintain the Collateral
in good working condition (ordinary wear and tear excepted), and Borrower will
not use the Collateral for any unlawful purpose. Borrower will immediately
advise Silicon in writing of any material loss or damage to the Collateral.

         3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with GAAP.

         3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial
statements now or in the future delivered to Silicon have been, and will be,
prepared in conformity with GAAP and now and in the future will fairly present
the results of operations and financial condition of Borrower, in accordance
with GAAP, at the times and for the periods therein stated. Between the last
date covered by any such statement provided to Silicon and the date hereof,
there has been no Material Adverse Change.

         3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has
timely filed, and will timely file, all required tax returns and reports, and
Borrower has timely paid, and will timely pay, all foreign, federal, state and
local taxes, assessments, deposits and contributions now or in the future owned
by Borrower. Borrower may, however, defer payment of any contested taxes,
provided that Borrower (i) in good faith contests Borrower's obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies Silicon in writing of the commencement of, and any
material development in, the proceedings, and (iii) posts bonds or takes any
other steps required to keep the contested taxes from becoming a lien upon any
of the Collateral. Borrower is unaware of any claims or adjustments proposed for
any of Borrower's prior tax years which could result in additional taxes
becoming due and payable by Borrower. Borrower has paid, and shall continue to
pay all amounts necessary to fund all present and future pension, profit sharing
and deferred compensation plans in accordance with their terms, and Borrower has
not and will not withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any
such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or
its successors or any other governmental agency.

         3.9 COMPLIANCE WITH LAW. Borrower has, to the best of its knowledge,
complied, and will comply, in all material respects, with all provisions of all
foreign, federal, state and local laws and regulations applicable to Borrower,
including, but not

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limited to, those relating a Borrower's ownership of real or personal property,
the conduct and licensing of Borrower's business, and all environmental matters.

         3.10  LITIGATION.  There is no claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower's knowledge) threatened against
or affecting Borrower in any court or before any governmental agency (or any
basis therefor known to Borrower) which could reasonably be expected to result,
either separately or in the aggregate, in any Material Adverse Change.
Borrower will promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted against
Borrower involving any single claim of $100,000 or more, or involving
$200,000 or more in the aggregate.

         3.11  USE OF PROCEEDS.  All proceeds of all Loans shall be used solely
for lawful business purposes and may be used in connection with the Purchase
Agreement Transaction. Borrower is not purchasing or carrying any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System) and no part of the proceeds of any Loan will be used to purchase carry
any "margin stock" or to extend credit to others for the purpose of purchasing
or carrying any "margin stock."

         3.12  PURCHASE AGREEMENT TRANSACTION.  Silicon has received true and
correct photocopies of the Purchase Agreement and each of the other Purchase
Agreement Documents, executed, delivered and/or furnished on or before the
Original Closing Date in connection with the Purchase Agreement Transaction.
Neither the Purchase Agreement nor any of the other Purchase Agreement Documents
have been modified, changed, supplemented, canceled, amended or otherwise
altered or affected, except as otherwise disclosed to Silicon in writing on or
before the Original Closing Date. The Purchase Agreement Transaction has been
effected, closed and consummated pursuant to, and in accordance with, the terms
and conditions of the Purchase Agreement and with all applicable laws.

                  4.  ACCOUNTS.

         4.1  REPRESENTATIONS RELATING TO ACCOUNTS.  Borrower represents and
warrants to Silicon as follows: Each Account with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made, (i)
represent an undisputed bona fide existing unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services, or the non-exclusive licensing of Intellectual Property,
in the ordinary course of Borrower's business, and (ii) meet the Minimum
Eligibility Requirements set forth in Section 8 below.

         4.2  REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE.
Borrower represents and warrants to Silicon as follows: All statements made and
all unpaid balances appearing in all invoices, instruments and other documents
evidencing the Accounts are and shall be true and correct and all such invoices,
instruments and other documents and all of Borrower's books and records are and
shall be genuine and in all respects what they purport to be. All sales and
other transactions underlying or giving rise to each Account shall comply in all
material respects with all applicable laws and governmental rules and
regulations. To the best of Borrower's knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all
Accounts are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.

         4.3  SCHEDULES AND DOCUMENTS RELATING TO ACCOUNTS.  Borrower shall
deliver to Silicon transaction reports and schedules of collections, as provided
in the Schedule, on Silicon's standard forms; provided, however, that Borrower's
failure to execute and deliver the same shall not affect or limit Silicon's
security interest and other rights in all of Borrower's Accounts, nor shall
Silicon's failure to advance or lend against a specific Account affect or limit
Silicon's security interest and other rights therein. If requested by Silicon,
Borrower shall furnish Silicon with copies (or, at Silicon's request, originals)
of all contracts, orders, invoices, and other similar documents, and all
shipping instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Accounts, and Borrower warrants the genuineness of all of the foregoing.
Borrower shall also furnish to Silicon an aged accounts receivable trial balance
as provided in the Schedule. In addition, Borrower shall deliver to Silicon, on
its request, the originals of all instruments, chattel paper, security
agreements, guarantees and other documents and property evidencing or securing
any Accounts, in the same form as received, with all necessary indorsements, and
copies of all credit memos.

         4.4  COLLECTION OF ACCOUNTS.  Borrower shall have the right to collect
all Accounts, unless and until a Default or an Event of Default has occurred and
is continuing. Whether or not an Event of Default has occurred and is
continuing, Borrower shall hold all payments on, and proceeds of, Accounts in
trust for Silicon, and Borrower shall immediately deliver all such payments and
proceeds to Silicon in their original form, duly endorsed, to be applied to the
Obligations in such order as Silicon shall determine. All proceeds of Collateral
shall be deposited by Borrower into a lockbox account, or such other "blocked
account" as Silicon may specify, pursuant to a blocked account agreement in such
form as Silicon may specify in its good faith business judgement.

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         4.5 REMITTANCE OF PROCEEDS. All proceeds arising from the disposition
of any Collateral shall be delivered, in kind, by Borrower to Silicon in the
original form in which received by Borrower not later than the following
Business Day after receipt by Borrower, to be applied to the Obligations in
such order as Silicon shall determine; provided that, if no Default or Event of
Default has occurred and is continuing, Borrower shall not be obligated to
remit to Silicon the proceeds of the sale of worn out or obsolete Equipment
disposed of by Borrower in good faith in an arm's length transaction for an
aggregate purchase price of $100,000 or less (for all such transactions in any
fiscal year). Borrower agrees that it will not commingle proceeds of Collateral
with any of Borrower's other funds or property, but will hold such proceeds
separate and apart from such other funds and property and in an express trust
for Silicon. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Agreement.

         4.6 DISPUTES. Borrower shall notify Silicon promptly of all disputes
or claims relating to Accounts. Borrower shall not forgive (completely or
partially), compromise or settle any Account for less than payment in full
(than customary credits and discounts given in the ordinary course of
business), or agree to do any of the foregoing, except that Borrower may do so,
provided that: (i) Borrower does so in good faith, in a commercially reasonable
manner, in the ordinary course of business, and in arm's length transactions,
which are reported to Silicon on the regular reports provided to Silicon; (ii)
no Default or Event of Default has occurred and is continuing; and (iii) taking
into account all such discounts, settlements and forgiveness, the total
outstanding Revolving Loans will not exceed the Credit Limit.

         4.7 RETURNS. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower, Borrower
shall promptly determine the reason for such return and promptly issue a credit
memorandum to the Account Debtor in the appropriate amount. In the event any
attempted return occurs after the occurrence and during the continuance of any
Event of Default, Borrower shall hold the returned Inventory in trust for
Silicon, and immediately notify Silicon of the return of the Inventory.

         4.8 VERIFICATION. Silicon may, from time to time, verify directly with
the respective Account Debtors the validity, amount and other matters relating
to the Accounts, by means of mail, telephone or otherwise, either in the name
of Borrower or Silicon or such other name as Silicon may choose.

         4.9 NO LIABILITY. Silicon shall not be responsible or liable for any
shortage or discrepancy in, damage to, or loss or destruction of, any goods, the
sale or other disposition of which gives rise to an Account, or for any error,
act, omission, or delay of any kind occurring in the settlement, failure to
settle, collection or failure to collect any Account, or for settling any
Account in good faith for less than the full amount thereof, nor shall Silicon
be deemed to be responsible for any of Borrower's obligations under any contract
or agreement giving rise to an Account. Nothing herein shall, however, relieve
Silicon from liability for its own gross negligence or willful misconduct.

         5. ADDITIONAL DUTIES OF BORROWER.

         5.1 FINANCIAL AND OTHER COVENANTS. Borrower shall at all times comply
with the financial and other covenants set forth in the Schedule.

         5.2 INSURANCE. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require and that are customary and in accordance with standard
practices for Borrower's industry and locations, and Borrower shall provide
evidence of such insurance to Silicon. All such insurance policies shall name
Silicon as an additional loss payee, and shall contain a lenders loss payee
endorsement in form reasonably acceptable to Silicon. Upon receipt of the
proceeds of any such insurance, Silicon shall apply such proceeds in reduction
of the Obligations as Silicon shall determine in its good faith business
judgment, except that, provided no Default or Event of Default has occurred and
is continuing. Silicon shall release to Borrower insurance proceeds with
respect to Equipment totaling less than $100,000, which shall be utilized by
Borrower for the replacement of the Equipment with respect to which the
insurance proceeds were paid. Silicon may require reasonable assurance that the
insurance proceeds so released will be so used. If Borrower fails to provide or
pay for any insurance, Silicon may, but is not obligated to, obtain the same at
Borrower's expense. Borrower shall promptly deliver to Silicon copies of all
material reports made to insurance companies.

         5.3 REPORTS. Borrower, at its expense, shall provide Silicon with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Silicon shall from time to time specify in
its good faith business judgement.

         5.4 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and
on one Business Day's notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower's books and
records. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have

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the right to disclose any such information to its auditors, regulatory agencies,
and attorneys, and pursuant to any subpoena or other legal process. The
foregoing inspections and audits shall be at Borrower's expense and the charge
therefor shall be $750 per person per day (or such higher amount as shall
represent Silicon's then current standard charge for the same), plus reasonable
out of pocket expenses.

         5.5  NEGATIVE COVENANTS.  Except as may be permitted in the Schedule,
Borrower shall not, without Silicon's prior written consent (which shall be a
matter of its good faith business judgment), do any of the following: (i) merge
or consolidate with another corporation or entity; (ii) acquire any assets,
other than the Acquired Assets, except in the ordinary course of business; (iii)
enter into any other transaction outside the ordinary course of business; (iv)
sell or transfer any Collateral, except for the sale of finished Inventory in
the ordinary course of Borrower's business, and except for the sale of obsolete
or unneeded Equipment in the ordinary course of business; (v) store any
Inventory or other Collateral with any warehouseman or other third party, unless
such Collateral is subject to a lien waiver from such warehouseman or third
party in form and substance satisfactory in all respects to Bank; (vi) sell any
Inventory on a sale-or-return, guaranteed sale, consignment, or other contingent
basis; (vii) make any loans of any money or other assets; (viii) incur any debts
other than Permitted Debt; (ix) guarantee or otherwise become liable with
respect to the obligations of another party or entity; (x) pay or declare any
dividends on Borrower's stock (except) for dividends payable solely in stock of
Borrower); (xi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower's stock; (xii) make any change in Borrower's capital
structure which would result in a Material Adverse Change; or (xiii) engage,
directly or indirectly, in any business other than the businesses currently
engaged in by Borrower or reasonably related thereto; or (xiv) dissolve or elect
to dissolve. Transactions permitted by the foregoing provisions of this Section
are only permitted if no Default or Event of Default would occur as a result of
such transaction. Notwithstanding the requirements of Sections 5.5 (ii) or (vii)
above, Borrower may make loans to eBuilding Solutions, Inc. ("ESI") in a maximum
principal amount of Four Hundred Fifty Thousand Dollars ($450,000)(the "ESI
Loans"). Bank further agrees that the indebtedness evidenced by the ESI loans
may be converted by Borrower into equity in ESI.

         5.6  LITIGATION COOPERATION.  Should any third-party suit or
proceeding be instituted by or against Silicon with respect to any Collateral
or relating to Borrower, Borrower shall, without expense to Silicon, make
available Borrower and its officers, employees and agents and Borrower's books
and records, to the extent that Silicon may deem them reasonably necessary in
order to prosecute or defend any such suit or proceeding.

         5.7  FURTHER ASSURANCES. Borrower agrees, at its expense, on request
by Silicon, to execute all documents and take all actions, as Silicon, may, in
its good faith business judgment, deem necessary or useful in order to perfect
and maintain Silicon's perfected first-priority security interest in the
Collateral (subject to Permitted Liens), and in order to fully consummate the
transactions contemplated by this Agreement.

                  6.  TERM

         6.1  MATURITY DATE.  This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the "Maturity Date"), subject to
Section 6.3 below.

         6.2 EARLY TERMINATION.  This Agreement may be terminated prior to the
Maturity Date as follows:  (i) by Borrower, effective three Business Days after
written notice of termination is given to Silicon, or (ii) by Silicon at any
time after the occurrence and during the continuance of an Event of Default,
without notice, effective immediately.

         6.3  PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Without limiting the generality of the foregoing, if on the Maturity Date, or on
any earlier effective date of termination, there are any outstanding Letters of
Credit issued by Silicon or issued by another institution based upon an
application, guarantee, indemnity or similar agreement on the part of Silicon,
then on such date Borrower shall provide to Silicon cash collateral in an amount
equal to 105% of the face amount of all such Letters of Credit plus all
interest, fees and cost due or to become due in connection therewith (as
estimated by Silicon in its good faith business judgment), to secure all of the
Obligations relating to said Letters of Credit, pursuant to Silicon's then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Silicon's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided that
Silicon may, in its sole discretion, refuse to make any further Loans after
termination. No termination shall in any way affect or impair any right or
remedy of Silicon, nor shall any such termination relieve Borrower of any
Obligation to Silicon, until all of the Obligations have been paid and performed
in full. Upon payment and performance in full of all the Obligations and
termination of this Agreement, Silicon shall promptly terminate

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its financing statements with respect to the Borrower and deliver to Borrower
such other documents as may be required to fully terminate Silicon's security
interests.

                 7. EVENTS OF DEFAULT AND REMEDIES.

         7.1 EVENTS OF DEFAULT The occurrence of any of the following events
shall constitute and "Event of Default" under this Agreement, and Borrower shall
give Silicon immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to Silicon by Borrower or any
of Borrower's officers, employees or agents, now or in the future, shall be
untrue or misleading in a material respect when made or deemed to be made; or
(b) Borrower shall fail to pay when due any Loan or any interest thereon or any
other monetary Obligation; or (c) the Revolving Loans and other Obligations
outstanding at any time shall exceed the Credit Limit; or (d) Borrower shall
fail to comply with any of the financial covenants set forth in the Schedule, or
shall fail to perform any other non-monetary Obligation which by its nature
cannot be cured, or shall fail to permit Silicon to conduct an inspection or
audit as specified in Section 5.4 hereof; or (e) Borrower shall fail to perform
any other non-monetary Obligation, which failure is not cured within five
Business Days after the date due; or (f) any levy, assessment, attachment,
seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any
part of the Collateral which is not cured within 10 days after the occurrence of
the same; or (g) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or (h) Borrower
breaches any material contract or obligation, which has resulted or may
reasonably be expected to result in a Material Adverse Change; or (i)
dissolution, termination of existence, insolvency or business failure of
Borrower; or appointment of a receiver, trustee or custodian, for all or any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding by Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect; or (j) the
commencement of any proceeding against Borrower or any guarantor of any of the
Obligation under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof with in 30 days after the date commenced; or (k) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing, or commencement of
proceedings by any guarantor of any of the Obligations under any bankruptcy or
insolvency law; or (l) revocation or termination of, or limitation or denial of
liability upon, any pledge of any certificate of deposit, securities or other
property or asset of any kind pledged by any third party to secure any or all of
the Obligations, or any attempt to do any of the foregoing, or commencement of
proceedings by or against any such third party under any bankruptcy or
insolvency law; or (m) Borrower makes any payment on account of any indebtedness
or obligation which has been subordinated to the Obligations other than as
permitted in the applicable subordination agreement, or if any Person who has
subordinated such indebtedness or obligations terminates or in any way limits
his subordination agreement; or (n) there shall be a change in the record or
beneficial ownership of an aggregate of more than 25% of the outstanding shares
of stock of Borrower, in one or more transactions, compared to the ownership of
outstanding shares of stock of Borrower in effect on the date hereof, without
the prior written consent of Silicon; or (o) Borrower shall generally not pay
its debts as they become due, or Borrower shall conceal, remove or transfer any
part of its property, with intent to hinder, delay or defraud its creditors, or
make or suffer any transfer of any of its property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or (p) a Material Adverse
Change shall occur; or (q) Silicon, acting in good faith and in a commercially
reasonable manner, deems itself insecure because of the occurrence of an event
prior to the effective date hereof of which Silicon has knowledge on the
effective date or because of the occurrence of an event on or subsequent to the
effective date. Silicon may cease making any Loans hereunder during any of the
above cure periods, and thereafter if an Event of Default has occurred and is
continuing.

         7.2 REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, Silicon, at its option, and
without notice or demand of any kind (all of which are hereby expressly waived
by Borrower), may do any one or more of the following: (a) Cease making Loans or
otherwise extending credit to Borrower under this Agreement or any other Loan
Document; (b) Accelerate and declare all or any part of the Obligations to be
immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Obligation; (c) Take possession of any or all of the Collateral wherever it may
be found, and for that purpose Borrower hereby authorizes Silicon without
judicial process to enter onto any of Borrower's premises without interference
to search for, take possession of, keep, store, or remove any of the Collateral,
and remain on the premises or cause a custodian to remain on the premises in
exclusive control thereof, without charge for so long as Silicon deems its
necessary, in its good faith business judgment, in order to complete the
enforcement of its rights under this Agreement or any other agreement; provided,
however, that should Silicon seek to take possession of any of the Collateral by
court process, Borrower hereby irrevocably waives; (i) any bond and any surety
or security relating thereto required by any statue, court rule or otherwise as
an incident to such possession; (ii) any demand for possession prior to the
commencement of any suit or action to recover

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possession thereof; and (iii) any requirement that Silicon retain possession
of, and not dispose of, any such Collateral until after trial or final judgment;
(d) Require Borrower to assemble any or all of the Collateral and make it
available to Silicon at places designated by Silicon which are reasonably
convenient to Silicon and Borrower, and to remove the Collateral to such
locations as Silicon may deem advisable; (e) Complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and,
for such purpose and for the purpose of removal, Silicon shall have the right
to use Borrower's premises, vehicles, hoists, lifts, cranes, and other
Equipment and all other property without charge; (f) Sell, lease or otherwise
dispose of any of the Collateral, in its condition at the time Silicon obtains
possession of it or after further manufacturing, processing or repair, at one
or more public and/or private sales, in lots or in bulk, for cash, exchange or
other property, or on credit, and to adjourn any such sale from time to time
without notice other than oral announcement at the time scheduled for sale.
Silicon shall have the right to conduct such disposition on Borrower's premises
without charge, for such time or times as Silicon deems reasonable, or on
Silicon's premises, or elsewhere and the Collateral need not be located at the
place of disposition. Silicon may directly or through any affiliated company
purchase or lease any Collateral at any such public disposition, and if
permissible under applicable law, at any private disposition. Any sale or
other disposition of Collateral shall not relieve Borrower of any liability
Borrower may have if any Collateral is defective as to title or physical
condition or otherwise at the time of sale; (g) Demand payment of, and collect
any Accounts and General Intangibles comprising Collateral and, in connection
therewith, Borrower irrevocably authorizes Silicon to endorse or sign
Borrower's name on all collections, receipts, instruments and other documents,
to take possession of and open mail addressed to Borrower and remove therefrom
payments made with respect to any item of the Collateral or proceeds thereof,
and, in Silicon's good faith business judgment, to grant extensions of time to
pay, compromise claims and settle Accounts and the like for less than face
value; (h) Offset against any sums in any of Borrower's general, special or
other Deposit Accounts and Silicon against any or all of the Obligations; and
(i) Demand and receive possession of any of Borrower's federal and state income
tax returns and the books and records utilized in the preparation thereof or
referring thereto. All reasonable attorneys' fees, expenses, costs, liabilities
and obligations incurred by Silicon with respect to the foregoing shall be
added to and become part of the Obligations, shall be due on demand, and shall
bear interest at a rate equal to the highest interest rate applicable to any of
the Obligations. Without limiting any of Silicon's rights and remedies, from
and after the occurrence and during the continuance of any Event of Default,
the interest rate applicable to the Obligations shall be increased by an
additional four percent per annum (the "Default Rate").

         7.3  STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS.  Borrower and
Silicon agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least ten days prior to the sale, and, in the case of a public sale,
notice of the sale is published at least five days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m.; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect to
any sale of any of the Collateral, Silicon may (but is not obligated to) direct
any prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. Silicon shall be free to employ other methods
of noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.

         7.4  POWER OF ATTORNEY.   Upon the occurrence and during the
continuance of any Event of Default, without limiting Silicon's other rights and
remedies, Borrower grants to Silicon an irrevocable power of attorney coupled
with an interest, authorizing and permitting Silicon (acting through any of its
employees, attorneys or agents) at any time; at its option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the following, in Borrower's name or otherwise, but Silicon agrees
that if it exercises any right hereunder, it will do so in good faith and in a
commercially reasonable manner: (a) Execute on behalf of Borrower any documents
that Silicon may, in its good faith business judgment, deem advisable in order
to perfect and maintain Silicon's security interest in the Collateral, or in
order to exercise a right of Borrower or Silicon, or in order to fully
consummate all the transactions contemplated under this Agreement, and all other
Loan Documents; (b) Execute on behalf of Borrower, any invoices relating to any
Account, any draft against any Account Debtor and any notice to any Account
Debtor, any proof of claim in bankruptcy, any Notice of Lien, claim of
mechanic's, materialman's or other lien, or assignment or satisfaction of
mechanic's, materialman's or other lien; (c) Take control in any manner of any
cash or non-cash items of payment or proceeds of Collateral; endorse the name of
Borrower upon any instruments, or documents, evidence of payment or Collateral
that may come into Silicon's possession; (d) Endorse all checks and other forms
of remittances received by Silicon; (e) Pay, contest or settle any lien, charge,
encumbrance, security interest and adverse claim in or to any of the Collateral,
or any judgment based thereon, or otherwise take any action to terminate or
discharge the same; (f) Grant extensions of time to pay, compromise claims and
settle Accounts and General Intangibles for less than face value and execute all
releases and other documents in connection therewith; (g) Pay any sums required
on account of Borrower's taxes or to secure the release of any liens therefor,
or both; (h)

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Settle and adjust, and give releases of, any insurance claim that relates to any
of the Collateral and obtain payment therefor; (i) Instruct any third party
having custody or control of any books or records belonging to, or relating to,
Borrower to give Silicon the same rights of access and other rights with respect
thereto as Silicon has under this Agreement; and (j) Take any action or pay any
sum required of Borrower pursuant to this Agreement and any other Loan
Documents. Any and all reasonable sums paid and any and all reasonable costs,
expenses, liabilities, obligations and attorneys' fees incurred by Silicon with
respect to the foregoing shall be added to and become part of the Obligations,
shall be payable on demand, and shall bear interest at a rate equal to the
highest interest rate applicable to any of the Obligations. In no event shall
Silicon's rights under the foregoing power of attorney or any of Silicon's other
rights under this Agreement be deemed to indicate that Silicon is in control of
the business, management or properties of Borrower.

         7.5  APPLICATION OF PROCEEDS.  All proceeds realized as the result of
any sale of the Collateral shall be applied by Silicon first to the reasonable
costs, expenses, liabilities, obligations and attorneys' fees incurred by
Silicon in the exercise of its rights under this Agreement, second to the
interest due upon any of the Obligations, and third to the principal of the
Obligations, in such order as Silicon shall determine in its sole discretion.
Any surplus shall be paid to Borrower or other persons legally entitled thereto;
Borrower shall remain liable to Silicon for any deficiency. If, Silicon, in its
good faith business judgment, directly or indirectly enters into a deferred
payment or other credit transaction with any purchaser at any sale of
Collateral, Silicon shall have the option, exercisable at any time, in its good
faith business judgment, of either reducing the Obligations by the principal
amount of purchase price or deferring the reduction of the Obligations until the
actual receipt by Silicon of the cash therefor, and to the extent Silicon defers
applying the purchase price to the Obligations and receives interest on the
purchase price from such purchaser. Silicon will reduce the amount of the
Obligations by the amount of interest actually received by Silicon.

         7.6  REMEDIES CUMULATIVE.  In addition to the rights and remedies set
forth in this Agreement, Silicon shall have all the other rights and remedies
accorded a secured party under the California Uniform Commercial Code and under
all other applicable laws, and under any other instrument or agreement now or in
the future entered into between Silicon and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Silicon of one or more of its rights or remedies shall not be deemed an
election, nor bar Silicon from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Silicon to exercise any rights
or remedies shall not operate as a waiver thereof, but all rights and remedies
shall continue in full force and effect until all of the Obligations have been
fully paid and performed.

                  8.  DEFINITIONS.  As used in this agreement, the following
         terms have the following meanings:

         "Account Debtor" means the obligor on an Account.

         "Accounts" means all present and future "accounts" as defined in the
Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all accounts receivable and
other sums owing to Borrower.

         "Affiliate" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

         "Bridge Loan Debt" shall mean indebtedness of U.S. RealTel, Inc. and
Borrower of up to $8,000,000 pursuant to that certain Loan Agreement dated July
16, 2002 by and among U.S. RealTel, Inc., and Borrower (as borrowers), and J.
Oliver Cunningham Trust dated February 26, 1971, an Indiana trust, the Anne C.
McClure Trust dated February 26, 1971, an Illinois trust, the Jane C. Warriner
Trust dated February 26, 1971, an Indiana trust, Noro-Moseley Partners V, L.P.,
a Georgia limited partnership and Wakefield Group III, LLC, a North Carolina
limited liability company (as lenders).

         "Business Day" means a day on which Silicon is open for business.

         "Code" means the Uniform Commercial Code as adopted and in effect in
the State of California from time to time.

         "Collateral" has the meaning set forth in Section 2 above.

         "continuing" and "during the continuance of" when used with reference
to a Default or Event of Default means that the Default or Event of Default has
occurred and has not been either waived in writing by Silicon or cured within
any applicable cure period.

         "Convertible Notes" shall mean indebtedness of U.S. RealTel, Inc. which
is guaranteed by Borrower of up to $12,000,000 pursuant to U.S. RealTel's 7.5%
convertible notes due July 1, 2009.

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         "Debt Service Coverage Change Date" shall mean the first day of the
month after which Borrower has achieved (and Silicon has confirmed that Borrower
has achieved) a Debt Service Coverage Ratio of not less than 1.25 to 1.00 for
the immediately preceding two (2) consecutive quarters.

         "Default" means any event which with notice or passage of time or both,
would constitute an Event of Default.

         "Default Rate" has the meaning set forth in Section 7.2 above.

         "Deposit Accounts" means all present and future "deposit accounts" as
defined in the Code in effect on the date hereof with such additions to such
term as may hereafter be made, and includes without limitation all general and
special bank accounts, demand accounts, checking accounts, savings accounts and
certificates of deposit.

         "Eligible Accounts" means Accounts and General Intangibles arising in
the ordinary course of Borrower's business from the sale of goods or the
rendition of services, or the non-exclusive licensing of Intellectual Property,
which Silicon, in its good faith business judgment, shall deem eligible for
borrowing. Without limiting the fact that the determination of which Accounts
are eligible for borrowing is a matter of Silicon's good faith business
judgment, the following (the "Minimum Eligibility Requirements") are the minimum
requirements for a Account to be an Eligible Account: (i) the Account must not
be outstanding for more than 90 days from its invoice date (the "Eligibility
Period"), (ii) the Account must not represent progress billings, or be due under
a fulfillment or requirements contract with the Account Debtor, (iii) the
Account must not be subject to any contingencies (including Accounts arising
from sales on consignment, guaranteed sale or other terms pursuant to which
payment by the Account Debtor may be conditional), (iv) the Account must not be
owing from an Account Debtor with whom Borrower has any dispute (whether or not
relating to the particular Account), (v) the Account must not be owing from an
Affiliate of Borrower, (vi) the Account must not be owing from an Account Debtor
which is subject to any insolvency or bankruptcy proceeding, or whose financial
condition is not acceptable to Silicon, or which, fails or goes out of a
material portion of its business, (vii) the Account must not be owing from the
United States or any department, agency or instrumentality thereof (unless there
has been compliance, to Silicon's satisfaction, with the United States
Assignment of Claims Act), (viii) the Account must not be owing from an Account
Debtor located outside the United States or Canada (unless pre-approved by
Silicon in its discretion in writing, or backed by a letter of credit
satisfactory to Silicon, or PCIA insured satisfactory to Silicon), (ix) the
Account must not be owing from an Account Debtor to whom Borrower is or may be
liable for goods purchased from such Account Debtor or otherwise (but, in such
case, the Account will be deemed not eligible only to the extent of any amounts
owed by Borrower to such Account Debtor). Accounts owing from one Account Debtor
will not be deemed Eligible Accounts to the extent they exceed 25% of the total
Accounts outstanding. In addition, if more than 50% of the Accounts owing from
an Account Debtor are outstanding for a period longer than their Eligibility
Period (without regard to unapplied credits) or are otherwise not Eligible
Accounts, then all Accounts owing from that Account Debtor will be deemed
ineligible for borrowing. In addition, prior to including any Accounts acquired
as part of the Acquired Assets as Eligible Accounts, Silicon shall have
completed a satisfactory audit of such Accounts. Silicon may, from time to time,
in its good faith business judgment, revise the Minimum Eligibility
Requirements, upon written notice to Borrower.

         "Eligible Inventory" means all Inventory of Borrower held for sale in
the ordinary course of business, valued at the lowest of the net purchase cost
or the lowest bulk market price, provided, however, that at any time that a
Permitted Overadvance occurs and is continuing under this Agreement, the value
of such Inventory shall be determined based upon an appraisal of the Inventory
from an appraiser acceptable to Silicon. Eligible Inventory shall exclude, any
inventory which consists of: (a) any Inventory located outside of the United
States; (b) any Inventory located outside of a state in which Silicon has
properly and unavoidably perfected the Liens of Silicon under this Agreement,
free and clear of all other Liens; (b) any Inventory not in the actual
possession of Borrower, except to the extent provided in subsection (d) below;
(c) any Inventory in the possession of a bailee, warehouseman, consignee or
similar third party, except to the extent that such bailee, warehouseman,
consignee or similar third party has entered into an agreement with Silicon in
which such bailee, warehouseman, consignee or similar third party consents and
agrees to Silicon's Lien on such Inventory and to such other terms and
conditions as may be required by Silicon; (d) any Inventory located on premises
leased or rented to Borrower or otherwise not owned by Borrower, unless Silicon
has received a waiver and consent from the lessor, landlord and/or owner, in
form and substance satisfactory to Silicon; (e) any Inventory the sale or other
disposition of which has given rise to a Eligible Account; (f) work-in-process,
supplies, displays, packaging and promotional materials; (g) any Inventory as to
which Silicon determines in the exercise of its sole and absolute discretion at
any time and in good faith is not in good condition or is defective,
unmerchantable, post-seasonal, slow moving or obsolete; and (h) any Inventory
which in Silicon's good faith business judgment has deemed to be ineligible
because Silicon otherwise considers the collateral value to Silicon to be
impaired or its or their ability to realize such value to be insecure. In the
event of any dispute under the foregoing criteria, as to whether Inventory is,
or has ceased to be, Eligible Inventory, the decision of Silicon shall control.

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         "Equipment" means all present and future "equipment" as defined in the
Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all machinery, fixtures,
goods, vehicles (including motor vehicles and trailers), and any interest in
any of the foregoing.

         "Event of Default" means any of the events set forth in Section 7.1 of
this Agreement.

         "GAAI" means generally accepted accounting principles consistently
applied.

         "General Intangibles" means all present and future "general
intangibles" as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation
all Intellectual Property, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income tax refunds, security and other
deposits, options to purchase or sell real or personal property, rights in all
litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property
damage, and business interruption insurance), payments of insurance and rights
to payment of any kind.

         "good faith business judgment" means honesty in fact and good faith
(as defined in Section 1201 of the Code) in the exercise of Silicon's business
judgment.

         "including" means including (but not limited to).

         "Intellectual Property" means all present and future (a) copyrights,
copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof, whether
published or unpublished, (b) trade secret rights, including all rights to
unpatented inventions and know-how, and confidential information; (c) mask work
or similar rights available for the protection of semiconductor chips; (d)
patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, servicemarks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections,
and the entire goodwill of the business of Borrower connected with and
symbolized by any such trademarks; (f) computer software and computer software
products; (g) designs and design rights; (h) technology; (i) all claims for
damages by way of past, present and future infringement of any of the rights
included above; and (j) all licenses or other rights to use any property or
rights of a type described above.

         "Inventory" means all present and future "inventory" as defined in the
Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all merchandise, raw
materials, parts, supplies, packing and shipping materials, work in process and
finished products, including without limitation such inventory as is
temporarily out of Borrower's custody or possession or in transit and including
any returned goods and any documents of title representing any of the above.

         "Investment Property" means all present and future investment
property, securities, stocks, bonds debentures, debt securities, partnership
interests, limited liability company interests, options, security entitlements,
securities accounts, commodity contracts, commodity accounts, and all financial
assets held in any securities account or otherwise, and all options and
warrants to purchase any of the foregoing, wherever located, and all other
securities of every kind, whether certificated or uncertificated.

         "Loan Documents" means, collectively, this Agreement, the
Representations, and all other present and future documents, instruments and
agreements between Silicon and Borrower, including, but not limited to those
relating to this Agreement, and all amendments and modifications thereto and
replacements therefor.

         "Material Adverse Change" means any of the following: (i) a material
adverse change in the business, operations, or financial or other condition of
the Borrower, or (ii) a material impairment of the prospect of repayment of any
portion of the Obligations; or (iii) a material impairment of the value or
priority of Silicon's security interests in the Collateral.

         "Obligations" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Silicon, whether evidenced by this Agreement or any
note or other instrument or document, or otherwise, whether arising from an
extension of credit, opening of a letter of credit, banker's acceptance,

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loan, guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment and any
participation by Silicon in Borrower's debts owing to others), absolute or
contingent, due or to become due, including, without limitation, all interest,
charges, expenses, fees, attorney's fees, expert witness fees, audit fees,
letter of credit fees, collateral monitoring fees, closing fees, facility fees,
termination fees, minimum interest charges and any other sums chargeable to
Borrower under this Agreement or under any other Loan Documents.

  "OTHER PROPERTY" means the following as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and all
rights relating thereto; all present and future "commercial tort claims"
(including without limitation any commercial tort claims identified in the
Representations), "documents", "instruments", "promissory notes", "chattel
paper", "letters of credit", "letter-of-credit rights", "fixtures", "farm
products" and "money"; and all other goods and personal property of every kind,
tangible and intangible, whether or not governed by the California Uniform
Commercial Code.

  "PERMITTED DEBT" means: (i) the Loans; (ii) any unsecured indebtedness
arising in the ordinary course of business of Borrowers, including trade
payables, utility costs, payroll and benefit obligations, accrued tax
liabilities and other non-extraordinary accounts payable; (iii) the Bridge Loan
Debt; (iv) the Convertible Notes; and (v) the Seller Debt.

  "PERMITTED LIENS" means the following:  (i) purchase money security interests
in specific items of Equipment; (ii) leases of specific items of Equipment;
(iii) liens for taxes not yet payable; (iv) additional security interests and
liens consented to in writing by Silicon, which consent may be withheld in its
good faith business judgement; (v) security interests being terminated
substantially concurrently with this Agreement; (vi) liens of materialmen,
mechanics, warehousemen, carriers, or other similar liens arising in the
ordinary course of business and securing obligations which are not delinquent;
(vii) liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by liens of the type described above in clauses
(i) or (ii) above, provided that any extension, renewal or replacement lien is
limited to the property encumbered by the existing lien and the principal
amount of the indebtedness being extended, renewed or refinanced does not
increase; (viii) liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods. Silicon
will have the right to require, as a condition to its consent under
subparagraph (iv) above, that the holder of the additional security interest or
lien sign an intercreditor agreement on Silicon's then standard form,
acknowledge that the security interest is subordinate to the security interest
in favor of Silicon, and agree not to take any action to enforce its
subordinate security interest so long as any Obligations remain outstanding,
and that Borrower agree that any uncured default in any obligation secured by
the subordinate security interest shall also constitute an Event of Default
under this Agreement.

   "PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

   "PURCHASE AGREEMENT TRANSACTION" means the asset purchase agreement
transaction contemplated by the provisions of the Purchase Agreement.

   "REPRESENTATIONS" means the written Representations and Warranties provided
by Borrower to Silicon referred to in the Schedule.

   "RESERVES" means, as of any date of determination, such amounts as Silicon
may from time to time establish and revise in its good faith business
judgement, reducing the amount of Loans, Letters of Credit and other financial
accommodations which would otherwise be available to Borrower under the lending
formula(s) provided in the Schedule: (a) to reflect events, conditions,
contingencies or risks which, as determined by Silicon in its good faith
business judgement, do or may adversely affect (i) the Collateral or any other
property which is security for the Obligations or its value (including without
limitation any increase in delinquencies of Accounts), (ii) the assets,
business or prospects of Borrower or any guarantor of the Obligations, or (iii)
the security interests and other rights of Silicon in the Collateral (including
the enforceability, perfection and priority thereof); or (b) to reflect
Silicon's good faith belief that any collateral report or financial information
furnished by or on behalf of Borrower or any Guarantor to Silicon is or may have
been incomplete, inaccurate or misleading in any material respect; or (c) in
respect of any state of facts which Silicon determines in good faith
constitutes an Event of Default or may, with notice or passage of time or
both, constitute an Event of Default.

   "SELLER DEBT" shall mean indebtedness of U.S. RealTel, Inc. and/or Borrower
payable to Worldcom, Inc. and/or any of its subsidiaries and/or affiliates
under the terms of the Purchase Agreement, as amended.

   OTHER TERMS. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with GAAP,
consistently applied. All other terms contained in this Agreement, unless
otherwise indicated, shall have the meanings provided by the Code, to the
extent such terms are defined therein.

                                      -14-
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     9.  GENERAL PROVISIONS.

   9.1  INTEREST COMPUTATION.  In computing interest on the Obligations, all
wire transfers shall be deemed applied on account of the Obligations on the
day of receipt by Silicon thereof and all checks and other items of payment
received by Silicon (including proceeds of Accounts and payment of the
Obligations in full) shall be deemed applied by Silicon on account of the
Obligations two (2) Business Days after receipt by Silicon. For purposes of the
foregoing, any such funds received after 12:00 Noon (Pacific standard time) on
any day shall be deemed received on the next Business Day. Silicon shall not,
however, be required to credit Borrower's account for the amount of any item of
payment which is unsatisfactory to Silicon in its good faith business
judgment, and Silicon may charge Borrower's loan account for the amount of any
item of payment which is returned to Silicon unpaid.

   9.2  APPLICATION OF PAYMENTS.  All payments with respect to the Obligations
may be applied, and in Silicon's good faith business judgment reversed and
re-applied, to the Obligations, in such order and manner as Silicon shall
determine in its good faith business judgment.

   9.3  CHARGES TO ACCOUNTS.  Silicon may, in its discretion, require that
Borrower pay monetary Obligations in cash to Silicon, or charge them to
Borrower's Loan account, in which even they will bear interest at the same rate
applicable to the Loans. Silicon may also, in it discretion, charge any
monetary Obligations to Borrower's Deposit Accounts maintained with Silicon.

   9.4  MONTHLY ACCOUNTINGS.  Silicon shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Silicon), unless borrower
notifies Silicon in writing to the contrary within 60 days after such account
is rendered, describing the nature of any alleged errors or omissions.

   9.5  NOTICES.  All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, addressed to Silicon or Borrower at each of the addresses shown in
the heading to this Agreement, or at any other address designated in writing by
one party to the other party. Notices to Silicon shall be directed to the
Commercial Finance Division, to the attention of the Division Manager or the
Division Credit Manager. All notices shall be deemed to have been given upon
delivery in the case of notices personally delivered, or at the expiration of
one Business Day following delivery to the private delivery service, or five
(5) Business Days following the deposit thereof in the United States mail, with
postage prepaid.

   9.6  SEVERABILITY.  Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.

   9.7  INTEGRATION.  This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and Silicon and supersede
all prior and contemporaneous negotiations and oral representations and
agreements, all of which are merged and integrated in this Agreement. There are
no oral understandings, representations or agreements between the parties which
are not set forth in this Agreement or in other written agreements signed by
the parties in connection herewith.

   9.8  WAIVERS; INDEMNITY.  The failure of Silicon at any time to times to
require Borrower to strictly comply with any of the provisions of this
Agreement or any other Loan Document shall not waive or diminish any right of
Silicon later to demand and receive strict compliance therewith. Any waiver of
any default shall not waive or diminish any right of Silicon later to demand
and receive strict compliance therewith. Any waiver of any default shall not
waive or affect any other default, whether prior or subsequent, and whether or
not similar. None of the provisions of this Agreement or any other Loan
Document shall be deemed to have been waived by any act or knowledge of Silicon
or its agents or employees, but only by a specific written waiver signed by an
authorized officer of Silicon and delivered to Borrower. Borrower waives the
benefit of all statutes of limitations relating to any of the Obligations or
this Agreement or any other Loan Document, and Borrower waives demand, protest,
notice of protest and notice of default or dishonor, notice of payment and
nonpayment, release, compromise, settlement, extension or renewal of any
commercial paper, instrument, account, General Intangible, document or
guaranty at any time held by Silicon on which Borrower is or may in any way be
liable, and notice of any action taken by Silicon, unless expressly required
by this Agreement. Borrower hereby agrees to indemnify Silicon and its
affiliates, subsidiaries, parent, directors, officers, employees, agents, and
attorneys, and to hold them harmless from and against any and all claims,
debts, liabilities, demands, obligations, actions, causes of action, penalties,
costs and expenses (including reasonable attorneys' fees), of every kind, which
they may sustain or incur based upon or arising out of any of the Obligations,
or any relationship or agreement between Silicon and Borrower, or any other
matter, relating to Borrower or the Obligations; provided that this indemnity
shall not extend to damages proximately caused by the indemnitee's own gross
negligence or willful misconduct.

                                     -15-

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Notwithstanding any provision in this Agreement to the contrary, the indemnity
agreement set forth in this Section shall survive any termination of this
Agreement and shall for all purposes continue in full force and effect.

         9.9  NO LIABILITY FOR ORDINARY NEGLIGENCE.  Neither Silicon, nor any of
its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Silicon shall be liable for any claims, demands,
losses or damages, of any kind whatsoever, made, claimed, incurred or suffered
by Borrower or any other party through the ordinary negligence of Silicon, or
any of its directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Silicon, but nothing herein shall relieve
Silicon from liability for its own gross negligence or willful misconduct.

         9.10  AMENDMENT.  The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Silicon.

         9.11  TIME OF ESSENCE.  Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.

         9.12  ATTORNEYS FEES AND COSTS.  Borrower shall reimburse Silicon for
all reasonable attorneys' fees and all filing, recording, search, title
insurance, appraisal, audit, and other reasonable costs incurred by Silicon,
pursuant to, or in connection with, or relating to this Agreement (whether or
not a lawsuit is filed), including, but not limited to, any reasonable
attorneys' fees and costs Silicon incurs in order to do the following: prepare
and negotiate this Agreement and all present and future documents relating to
this Agreement; obtain legal advice in connection with this Agreement or
Borrower; enforce, or seek to enforce, any of its rights; prosecute actions
against, or defend actions by. Account Debtors; commence, intervene in, or
defend any action or proceeding; initiate any complaint to be relieved of the
automatic stay in bankruptcy; file or prosecute any probate claim, bankruptcy
claim, third-party claim, or other claim; examine, audit, copy, and inspect any
of the Collateral or any of Borrower's books and records; protect, obtain
possession of, lease, dispose of, or otherwise enforce Silicon's security
interest in, the Collateral; and otherwise represent Silicon in any litigation
relating to Borrower. In satisfying Borrower's obligation hereunder to reimburse
Silicon for attorneys fees, Borrower may, for convenience, issue checks directly
to Silicon's attorneys, Troutman Sanders LLP, but Borrower acknowledges and
agrees that Troutman Sanders LLP is representing only Silicon and not Borrower
in connection with this Agreement. If either Silicon or Borrower files any
lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
costs and attorneys' fees, including (but not limited to) reasonable attorneys'
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgement. All attorneys' fees and costs to which
Silicon may be entitled pursuant to this Paragraph shall immediately become part
of Borrower's Obligations, shall be due on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations.

         9.13  BENEFIT OF AGREEMENT.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Silicon; provided,
however, that Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of Silicon, and any prohibited
assignment shall  be void. No consent by Silicon to any assignment shall release
Borrower from its liability for the Obligations.

         9.14  JOINT AND SEVERAL LIABILITY.  If Borrower consists of more than
one Person, their liability shall be joint and several, and the compromise of
any claim with, or the release of, any Borrower shall not constitute a
compromise with, or a release of, any other Borrower.

         9.15  LIMITATION OF ACTIONS.  Any claim or cause of action by Borrower
against Silicon, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement, or any
other Loan Document, or any other transaction contemplated hereby or thereby or
relating hereto or thereto, or any other matter, cause or thing whatsoever,
occurred, done, omitted or suffered to be done by Silicon, its directors,
officers, employees, agents, accountants or attorneys, shall be barred unless
assorted by Borrower by the commencement of an action or proceeding in a court
of competent jurisdiction by the filing of a complaint within one year after the
first act, occurrence or omission upon which such claim or cause of action, or
any part thereof, is based, and the service of a summons and complaint on an
officer of Silicon, or on any other person authorized to accept service on
behalf of Silicon, within thirty (30) days thereafter. Borrower agrees that such
one-year period is a reasonable and sufficient time for Borrower to investigate
and act upon any such claim or cause of action. The one-year period provided
herein shall not be waived, tolled, or extended except by the written consent of
Silicon in its sole discretion. This provision shall survive any termination of
this Loan Agreement or any other Loan Document.

         9.16  PARAGRAPH HEADINGS; CONSTRUCTION.  Paragraph headings are only
used in this Agreement for convenience. Borrower and Silicon acknowledge that
the headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. This Agreement has
been fully reviewed and negotiated between the parties and no uncertainty or
ambiguity

                                      -16-
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in any term or provision of this Agreement shall be construed strictly against
Silicon or Borrower under any rule of construction or otherwise.

         9.17 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts
and transactions hereunder and all rights and obligations of Silicon and
Borrower shall be governed by the laws of the State of Georgia. As a material
part of the consideration to Silicon to enter into this Agreement, Borrower
(i) agrees that all actions and proceedings relating directly or indirectly to
this Agreement shall, at Silicon's option, be litigated in courts located
within the State of Georgia, provided that if for any reason Silicon can not
avail itself or the courts of Georgia then the exclusive venue therefor shall be
Santa Clara County, California; (ii) consents to the jurisdiction and venue of
any such court and consents to service of process in any such action or
proceeding by personal delivery or any other method permitted by law; and (iii)
waives any and all rights Borrower may have to object to the jurisdiction of
any such court, or to transfer or change the venue of any such action or
proceeding.

         9.18 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND SILICON EACH HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT
OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN SILICON AND BORROWER, OR ANY
CONDUCT, ACTS OR OMISSIONS OF SILICON OR BORROWER OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
SILICON OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.

                   [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

                                      -17-
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SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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Borrower:                                    Silicon:

CYPRESS COMMUNICATIONS, INC.                 SILICON VALLEY BANK

By: /s/ NEAL L. MILLER                       By: /s/ Heather Christian
    -----------------------------                ------------------------------
    Name: Neal L. Miller                         Name:
    Title: EVP & CFO                             Title:

CYPRESS COMMUNICATIONS, OPERATING
COMPANY, INC.

By: /s/ NEAL L. MILLER
    ------------------------
    Name: Neal L. Miller
    Title: EVP & CFO

                                      -18-
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SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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SILICON VALLEY BANK

                                  SCHEDULE TO
                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

BORROWER:  CYPRESS COMMUNICATIONS, INC.
           CYPRESS COMMUNICATIONS OPERATING COMPANY, INC.
ADDRESS:   15 PIEDMONT CENTER, SUITE 100
           ATLANTA, GEORGIA 30305

DATE:      MARCH 17, 2004

This Schedule forms an integral part of the Amended and Restated Loan and
Security Agreement between Silicon Valley Bank and the above-borrower of even
date.

--------------------------------------------------------------------------------

1. CREDIT LIMIT
 (Section 1.1):            An amount not to exceed the lesser of:
                           (i) $10,000,000 at any one time outstanding (the
                           "Credit Limit"); or (ii) or (ii) the sum of (a)
                           eighty percent (80%) (the "Advance Rate") of the
                           amount of Borrower's Eligible Accounts and (b) the
                           lesser of (i) fifty percent (50%) of Eligible
                           Inventory or (ii) $1,000,000 (both as defined in
                           Section 8 above).

                           Silicon may, from time to time, modify the Advance
                           Rate, in its good faith business judgment, upon
                           notice to the Borrower, based on changes in
                           collection experience with respect to Accounts or
                           other issues or factors relating to the Accounts or
                           other Collateral.

LETTER OF CREDIT SUBLIMIT
(Section 1.7):            One Million Dollars ($1,000,000).

CASH MANAGEMENT SUBLIMIT
(Section 1.8):            One Hundred Thousand Dollars ($100,000).

EQUIPMENT TERM LOAN SUBLIMIT
(SECTION 1.9):            One Million Dollars ($1,000,000).

<PAGE>

SILICON VALLEY BANK            AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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===============================================================================
2. INTEREST.

         INTEREST RATE (Section 1.2):

                                Interest on the Revolving Loans shall accrue at
                                a rate equal to the greater of (a) the Prime
                                Rate in effect from time to time, plus two
                                percent (2.0%) per annum or (b) six percent
                                (6.0%) per annum. Interest shall be calculated
                                on the basis of a 360-day year for the actual
                                number of days elapsed.

                                Interest on all Equipment Term Loans shall bear
                                interest at a fixed rate equal to the greater of
                                (a) seven percent (7.0%) per annum or (b) Prime
                                Rate in effect on the date of such Equipment
                                Term Loan, plus three percent (3.0%) per annum.

                                "Prime Rate" means the rate announced from time
                                to time by Silicon as its "prime rate;" it is a
                                base rate upon which other rates charged by
                                Silicon are based, and it is not necessarily the
                                best rate available at Silicon. The interest
                                rate applicable to the Obligations shall change
                                on each date there is a change in the Prime
                                Rate.

===============================================================================

3. FEES (Section 1.4):

         Loan Fee:              Seventy Five Thousand Dollars ($75,000) which
                                was paid on the Original Closing Date and Fifty
                                Thousand Dollars ($50,000) which was paid on the
                                first anniversary of the Original Closing Date.

         Collateral Monitoring
         Fee:                   One Thousand Five Hundred Dollars ($1,500) per
                                month, payable in arrears (prorated for any
                                partial month at the beginning and at
                                termination of this Agreement).

         Unused Portion Fee:    The Borrower shall pay to Silicon a fee
                                (collectively, the "Unused Line Fees" and
                                individually, a "Unused Line Fee") in an amount
                                equal to one quarter of one percent (0.25%) per
                                annum of the average daily unused and
                                undisbursed portion of the Credit Limit accruing
                                during each month. Amounts outstanding under the
                                Equipment Term Loans from and after the Debt
                                Service Coverage Change Date shall not be
                                included in the calculation of the Unused Line
                                Fee.

                                The accrued and unpaid portion of the Unused
                                Line Fee shall be paid by the Borrower to
                                Silicon on the last day of each month.

<PAGE>
SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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                      commencing on the first such date following the date
                      hereof, and on the Maturity Date.

     Equipment Term
     Loan Fee:        $5,000 payable on the date of this Agreement, and $5,000
                      payable on the Debt Service Coverage Change Date.
--------------------------------------------------------------------------------
4. REPAYMENT OF EQUIPMENT TERM LOANS
   (Section 1.9):

                      Borrower may request Equipment Term Loans from the date of
                      this Agreement through June 30, 2004 (the "Equipment
                      Availability End Date"), and subject to the limitations on
                      Revolving Loans set forth herein, Silicon will make
                      Equipment Term Loans not exceeding the One Million Dollars
                      ($1,000,000).

                      To obtain an Equipment Term Loan, Borrower will deliver to
                      Silicon copies of invoices for the Equipment being
                      financed, and such additional information as Bank may
                      request at least five (5) Business Days before the
                      proposed funding date. The Equipment Term Loans may only
                      be used to finance or refinance Equipment purchased ninety
                      (90) days before the date of each Equipment Term Loan (the
                      "Funding Date") and may not exceed one hundred percent
                      (100%) of the equipment invoice. Up to twenty five percent
                      (25%) of the Equipment Term Loans may be used to finance
                      transferable software licenses, leasehold improvements, or
                      other soft costs, including taxes, shipping, warranty
                      charges, freight discounts and installation expense. Each
                      Equipment Term Loan must be for a minimum of One Hundred
                      Thousand Dollars ($100,000) and the maximum number of
                      Equipment Term Loans is six (6).

                      Interest accrues from the Funding Date of each Equipment
                      Term Loan at the rate set forth in Section 2 of this
                      Schedule and is payable monthly. Equipment Term Loans are
                      payable in thirty (30) equal monthly installments of
                      principal, plus accrued interest, beginning on the first
                      day of each month (each date being called a "Payment
                      Date"), after the Funding Payment Date. On the Funding
                      Date (unless such Funding Date is the first Business Day
                      of the month) Borrower shall pay to Silicon an amount (the
                      "Interim Payment") equal the number of days from the
                      Funding Date until the first Payment Date with respect to
                      such Equipment Advance.

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SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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================================================================================

5. MATURITY DATE
   (Section 6.1):          July 11, 2004. It being understood and agreed that
                           the Equipment Term Loans shall be due and payable in
                           full on such date unless the Maturity Date of the
                           Revolving Loans is extended.

================================================================================

6. FINANCIAL COVENANTS
   (Section 5.1):

                           Borrower shall comply with each of the following
                           covenants. Compliance shall be determined as of the
                           end of each month, except as otherwise specifically
                           provided below:

MINIMUM TANGIBLE
NET WORTH:                 Borrower shall maintain a Tangible Net Worth, tested
                           as of the last day of each month of not less than
                           $27,000,000, plus fifty percent (50%) of net income
                           (without regard to any loss) from each year of the
                           Borrower commencing with the fiscal year ending in
                           2002.

DEBT SERVICE
COVERAGE RATIO:            From and after the Debt Service Coverage Change
                           Date, Borrower shall maintain a Debt Service Coverage
                           Ratio, tested as of the last day of each month, of
                           not less than 1.25 to 1.00.

DEFINITIONS:               For purposes of the foregoing financial covenants,
                           the following term shall have the following meaning:

                           "Tangible Net Worth" shall mean the excess of
                           Borrower's total assets over total liabilities,
                           determined in accordance with GAAP, with the
                           following adjustments:

                             (A) there shall be excluded from assets: (i) notes,
                             accounts receivable and other obligations owing to
                             Borrower from its officers or other Affiliates, and
                             (ii) all assets which would be classified as
                             intangible assets under GAAP, including without
                             limitation goodwill, licenses, patents, trademarks,
                             trade names, copyrights, capitalized software and
                             organizational costs, licenses and franchises.

                             (B) there shall be excluded from liabilities: all
                             indebtedness which is subordinated to the
                             Obligations under a subordination agreement in form
                             specified by Silicon or by language in the
                             instrument evidencing the indebtedness which
                             Silicon agrees in writing is acceptable to Silicon
                             in its good faith business judgment.

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                         The calculation of Tangible Net Worth shall be based
                         solely on the non consolidated results of Borrower
                         i.e. the Tangible Net Worth of any parent,
                         affiliate or subsidiary of Borrower shall be
                         excluded from the calculation.

                         "Debt Service Coverage Ratio" shall mean a ratio of
                         (1) Borrower's earnings before interest, taxes and
                         depreciation expense for such period, minus all
                         Unfunded Capital Expenditures and cash taxes for
                         the specified period to (ii) current maturities of
                         long term debt, including all capitalized leases,
                         plus interest, calculated on a three (3) month
                         rolling basis.

                         "Unfunded Capital Expenditures" means all purchases
                         of fixed assets, long term investments, intangibles
                         and acquisitions not funded by long term debt or
                         equity.

-------------------------------------------------------------------------------

7. REPORTING
   (Section 5.3):

                          Borrower shall provide Silicon with the following:

                          1. Weekly transaction reports and schedules of
                             collections, on Silicon's standard form.

                          2. Monthly accounts receivable agings, aged by
                             invoice date, within fifteen days after the end
                             of each month.

                          3. Monthly accounts payable agings, aged by invoice
                             date, and outstanding or held check registers, if
                             any, within fifteen days after the end of each
                             month.

                          4. Monthly reconciliations of accounts receivable
                             agings (aged by invoice date), transaction reports,
                             and general ledger, within fifteen days after the
                             end of each month.

                          5. Monthly perpetual inventory reports for the
                             Inventory valued on a first-in, first-out basis at
                             the lower of cost or market (in accordance with
                             GAAP) or such other inventory reports as are
                             requested by Silicon in its good faith business
                             judgment, all within fifteen days after the end of
                             each month.

                          6. Monthly unaudited financial statements, as soon
                             as available, and in any event within thirty days
                             after the end of each month.

                          7. Monthly Compliance Certificates, within thirty
                             days after the end of each month, in such form as
                             Silicon shall reasonably specify, signed by the
                             Chief Financial Officer of Borrower,

<PAGE>

SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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                                    Certifying that as of the end of such month
                                    Borrower was in full compliance with all of
                                    the terms and conditions of this Agreement,
                                    and setting forth calculations showing
                                    compliance with the financial covenants set
                                    forth in this Agreement and including a
                                    calculation of the Debt Service Coverage,
                                    including in any periods prior to the Debt
                                    Service Coverage Change Date, and such other
                                    information as Silicon shall reasonably
                                    request, including, without limitation, a
                                    statement that at the end of such month
                                    there were no held checks.

                           8.       Quarterly unaudited financial statements, as
                                    soon as available, and in any event within
                                    forty-five days after the end of each fiscal
                                    quarter of Borrower.

                           9.       Annual operating budgets (including income
                                    statements, balance sheets and cash flow
                                    statements, by month) for the upcoming
                                    fiscal year of Borrower within thirty days
                                    prior to the end of each fiscal year of
                                    Borrower.

                           10.      Annual financial statements, as soon as
                                    available, and in any event within 120 days
                                    following the end of Borrower's fiscal year,
                                    certified by, and with an unqualified
                                    opinion of, independent certified public
                                    accountants acceptable to Silicon.

================================================================================

8. BORROWER INFORMATION:

                                    Borrower represents and warrants that the
                                    information set forth in the Representations
                                    and Warranties of the Borrower dated July
                                    11, 2002 previously submitted to Silicon
                                    (the "Representations") is true and correct
                                    as of the date hereof.

================================================================================

9. ADDITIONAL PROVISIONS

                           1.       BANKING RELATIONSHIP.  Borrower shall at
                                    all times maintain its primary banking
                                    relationship with Silicon. As to any Deposit
                                    Accounts and investment accounts maintained
                                    with another institution, Borrower shall
                                    cause such institution, within 30 days after
                                    the date of this Agreement, to enter into a
                                    control agreement in form acceptable to
                                    Silicon in its good faith business judgment
                                    in order to perfect Silicon's first-priority
                                    security interest in said Deposit Accounts
                                    and investment accounts.

<PAGE>
SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
                  2.       SUBORDINATED OF INSIDE DEBT.  All present and future
                           indebtedness of Borrower to its  officers, directors
                           and shareholders ("Inside Debt") shall, at all times,
                           be subordinated to the Obligations pursuant to a
                           subordination agreement on Silicon's standard form.
                           Borrower represents and warrants that there is no
                           Inside Debt presently outstanding, except for the
                           following: the Bridge Loans and the Convertible
                           Notes. Prior to incurring any Inside Debt in the
                           future, Borrower shall cause the person to whom such
                           Inside Debt will be owed to execute and deliver to
                           Silicon a subordination agreement on Silicon's
                           standard form.

                  3.       INTELLECTUAL PROPERTY SECURITY AGREEMENT. As a
                           condition precedent to the effectiveness of this
                           Agreement, the Borrower shall have executed and
                           delivered an Intellectual Property Security Agreement
                           (the "IP Security Agreement"), substantially in the
                           form attached hereto as Exhibit B.

Borrower:                                    Silicon:

CYPRESS COMMUNICATIONS, INC.                 SILICON VALLEY BANK

By /s/ Neal Miller                           By /s/ Heather Christian
  -------------------------------              ------------------------------
  Title: Neal Miller                           Title:
  Name: Executive VP and CFO                   Name:

CYPRESS COMMUNICATIONS OPERATING
COMPANY, INC.

By: /s/ Neal Miller
  -------------------------------
  Title: Neal Miller
  Name: Executive VP and CFO

<PAGE>
SILICON VALLEY BANK             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------

The undersigned hereby (i) consents to the increase and amendment and
restatement of the Obligations pursuant to the attached Amended and Restated
Loan and Security Agreement, (ii) hereby ratifies all the provisions of the
Guaranty, and (iii) confirms that all provisions of that document are in full
force and effect without offset or defense.

GUARANTOR:

U.S. REALTEL, INC.

By: /s/ Neal Miller                          Date: 3-17-04
    ---------------------------------              -----------------
    Name: Neal Miller
    Title: Executive VP and CFO

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