Document:

exv10w12

Table of Contents

EXHIBIT 10.12

AMENDED AND RESTATED CREDIT AGREEMENT

Dated

October 30, 2003

among

ARCHSTONE-SMITH OPERATING TRUST,

as Borrower

and

ARCHSTONE-SMITH TRUST,

as Parent

and

JPMORGAN CHASE BANK,

as Administrative Agent

and

BANK OF AMERICA, N.A., and

WELLS FARGO BANK, N.A.

as Syndication Agents

and

BANK ONE, NA and

COMMERZBANK AG, NEW YORK BRANCH

as Documentation Agents

and

the Lenders Party Hereto

J. P. MORGAN SECURITIES INC.,

as Lead Arranger and Sole Bookrunner

 

TABLE OF CONTENTS

									
	1. Definitions
	2. The Loans
		 2.1 Advances
		 2.2 Letters of Credit
		 2.3 Payments
		 2.4 Pro Rata Treatment
		 2.5 Non-Receipt of Funds by the Agent
		 2.6 Sharing of Payments, Etc
		 2.7 Fees
		 2.8 Money Market Borrowings
		 2.9 Reduction of Commitment
		 2.10 Additional Guarantees
	3. Conditions
		 3.1 All Loans
		 3.2 First Loan
		 3.3 Options Available
		 3.4 Designation and Conversion
		 3.5 Special Provisions Applicable to Eurodollar Rate Borrowings and Money Market Loans
		 3.6 Funding Offices; Adjustments Automatic
		 3.7 Funding Sources, Payment Obligations
		 3.8 Mitigation, Non-Discrimination
	4. Representations and Warranties
		 4.1 Organization
		 4.2 Financial Statements
		 4.3 Enforceable Obligations; Authorization
		 4.4 Other Debt
		 4.5 Litigation
		 4.6 Taxes
		 4.7 Regulation U
		 4.8 Securities Act of 1933
		 4.9 No Contractual or Corporate Restrictions
		 4.10 Investment Company Act Not Applicable
		 4.11 Public Utility Holding Company Act Not Applicable
		 4.12 ERISA Not Applicable
	5. Affirmative Covenants
		 5.1 Taxes, Insurance, Existence, Regulations, Property, etc
		 5.2 Financial Statements and Information
		 5.3 Financial Tests
		 5.4 Inspection
		 5.5 Further Assurances
		 5.6 Books and Records
		5.7 Insurance
		 5.8 Notice of Certain Matters
		5.9 Use of Proceeds
		 5.10 Expenses of and Claims Against the Agent and the Lenders
		 5.11 Legal Compliance; Indemnification
		 5.12 Borrower’s Performance
		 5.13 Professional Services
		 5.14 Capital Adequacy
		 5.15 Property Pool
		 5.16 DC Holdings
	6. Negative Covenants
		 6.1 Mergers, Consolidations and Acquisitions of Assets
		 6.2 Redemption
		 6.3 Nature of Business
		 6.4 Transactions with Related Parties
		 6.5 Limiting Agreements
		 6.6 Parent Negative Covenants
	7. Events of Default and Remedies
		 7.1 Events of Default
		 7.2 Remedies Cumulative
		 7.3 Guaranty Proceeds
	8. The Agent
		 8.1 Appointment, Powers and Immunities
		 8.2 Reliance
		 8.3 Defaults
		 8.4 Rights as a Lender
		 8.5 Indemnification
		 8.6 Non-Reliance on Agent and Other Lenders
		 8.7 Failure to Act
		 8.8 Resignation of Agent
		 8.9 No Partnership
	9. Renewal and Extension
		 9.1 Procedure for Renewal and Extension
		 9.2 Conditions to Renewal and Extension
	10. Miscellaneous
		 10.1 No Waiver, Amendments
		 10.2 Notices
		 10.3 Venue
		 10.4 Choice of Law
		 10.5 Survival; Parties Bound; Successors and Assigns
		 10.6 Counterparts
		 10.7 Usury Not Intended; Refund of Any Excess Payments
		 10.8 Captions
		 10.9 Severability
		 10.10 Disclosures
		 10.11 No Novation
		 10.12 Limitation of Liability
		 10.13 Entire Agreement
	EX-4.4 Rights Agreement dated as of 12-1-03
	EX-10.6 Form of Indemnification Agreement
	EX-10.12 Amended and Restated Credit Agreement
	EX-12.1 Computation of Ratio of Earnings
	EX-12.2 Computation of Ratio of Earnings
	EX-21 Subsidiaries of Archstone-Smith
	EX-23.1 Consent of KPMG LLP
	EX-31.1 Certification of CEO pursuant to Sec. 302
	EX-31.2 Certification of CFO pursuant to Sec. 302
	EX-32.1 Certification of CEO pursuant to Sec. 906
	EX-32.2 Certification of CFO pursuant to Sec. 906

Table of Contents

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	1. Definitions	 	 	1	 
	2. The Loans	 	 	17	 
	 	 	
2.1 Advances
	 	 	17	 
	 	 	
2.2 Letters of Credit
	 	 	19	 
	 	 	
2.3 Payments
	 	 	23	 
	 	 	
2.4 Pro Rata Treatment
	 	 	25	 
	 	 	
2.5 Non-Receipt of Funds by the Agent
	 	 	26	 
	 	 	
2.6 Sharing of Payments, Etc
	 	 	26	 
	 	 	
2.7 Fees
	 	 	27	 
	 	 	
2.8 Money Market Borrowings
	 	 	28	 
	 	 	
2.9 Reduction of Commitment
	 	 	32	 
	 	 	
2.10 Additional Guarantees
	 	 	32	 
	3. Conditions.	 	 	32	 
	 	 	
3.1 All Loans
	 	 	33	 
	 	 	
3.2 First Loan
	 	 	33	 
	 	 	
3.3 Options Available
	 	 	34	 
	 	 	
3.4 Designation and Conversion
	 	 	34	 
	 	 	
3.5 Special Provisions Applicable to Eurodollar
Rate Borrowings and Money Market Loans
	 	 	35	 
	 	 	
3.6 Funding Offices; Adjustments Automatic
	 	 	37	 
	 	 	
3.7 Funding Sources, Payment Obligations
	 	 	37	 
	 	 	
3.8 Mitigation, Non-Discrimination
	 	 	38	 
	4. Representations and Warranties	 	 	39	 
	 	 	
4.1 Organization
	 	 	39	 
	 	 	
4.2 Financial Statements
	 	 	39	 
	 	 	
4.3 Enforceable Obligations; Authorization
	 	 	39	 
	 	 	
4.4 Other Debt
	 	 	39	 
	 	 	
4.5 Litigation
	 	 	39	 
	 	 	
4.6 Taxes
	 	 	40	 
	 	 	
4.7 Regulation U
	 	 	40	 
	 	 	
4.8 Securities Act of 1933
	 	 	40	 
	 	 	
4.9 No Contractual or Corporate Restrictions
	 	 	40	 
	 	 	
4.10 Investment Company Act Not Applicable
	 	 	40	 
	 	 	
4.11 Public Utility Holding Company Act Not Applicable
	 	 	40	 
	 	 	
4.12 ERISA Not Applicable
	 	 	40	 
	5. Affirmative Covenants	 	 	40	 
	 	 	
5.1 Taxes, Insurance, Existence, Regulations, Property, etc
	 	 	41	 
	 	 	
5.2 Financial Statements and Information
	 	 	41	 

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Table of Contents

	 	 	 	 	 	 	 
	 	 	
5.3 Financial Tests
	 	 	42	 
	 	 	
5.4 Inspection
	 	 	42	 
	 	 	
5.5 Further Assurances
	 	 	42	 
	 	 	
5.6 Books and Records
	 	 	42	 
	 	 	
5.7 Insurance
	 	 	42	 
	 	 	
5.8 Notice of Certain Matters
	 	 	42	 
	 	 	
5.9 Use of Proceeds
	 	 	42	 
	 	 	
5.10 Expenses of and Claims Against the Agent and the Lenders
	 	 	43	 
	 	 	
5.11 Legal Compliance; Indemnification
	 	 	43	 
	 	 	
5.12 Borrower’s Performance
	 	 	44	 
	 	 	
5.13 Professional Services
	 	 	45	 
	 	 	
5.14 Capital Adequacy
	 	 	45	 
	 	 	
5.15 Property Pool
	 	 	45	 
	 	 	
5.16 DC Holdings
	 	 	47	 
	6. Negative Covenants	 	 	47	 
	 	 	
6.1 Mergers, Consolidations and Acquisitions of Assets
	 	 	47	 
	 	 	
6.2 Redemption
	 	 	47	 
	 	 	
6.3 Nature of Business
	 	 	47	 
	 	 	
6.4 Transactions with Related Parties
	 	 	48	 
	 	 	
6.5 Limiting Agreements
	 	 	48	 
	 	 	
6.6 Parent Negative Covenants
	 	 	49	 
	7. Events of Default and Remedies	 	 	49	 
	 	 	
7.1 Events of Default
	 	 	49	 
	 	 	
7.2 Remedies Cumulative
	 	 	51	 
	 	 	
7.3 Guaranty Proceeds
	 	 	51	 
	8. The Agent.	 	 	52	 
	 	 	
8.1 Appointment, Powers and Immunities
	 	 	52	 
	 	 	
8.2 Reliance
	 	 	53	 
	 	 	
8.3 Defaults
	 	 	54	 
	 	 	
8.4 Rights as a Lender
	 	 	54	 
	 	 	
8.5 Indemnification
	 	 	54	 
	 	 	
8.6 Non-Reliance on Agent and Other Lenders
	 	 	55	 
	 	 	
8.7 Failure to Act
	 	 	55	 
	 	 	
8.8 Resignation of Agent
	 	 	55	 
	 	 	
8.9 No Partnership
	 	 	56	 
	9. Renewal and Extension	 	 	56	 
	 	 	
9.1 Procedure for Renewal and Extension
	 	 	56	 
	 	 	
9.2 Conditions to Renewal and Extension
	 	 	56	 
	10. Miscellaneous.	 	 	57	 
	 	 	
10.1 No Waiver, Amendments
	 	 	57	 
	 	 	
10.2 Notices
	 	 	57	 
	 	 	
10.3 Venue
	 	 	57	 

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Table of Contents

	 	 	 	 	 	 	 
	 	 	
10.4 Choice of Law
	 	 	58	 
	 	 	
10.5 Survival; Parties Bound; Successors and Assigns
	 	 	58	 
	 	 	
10.6 Counterparts
	 	 	62	 
	 	 	
10.7 Usury Not Intended; Refund of Any Excess Payments
	 	 	62	 
	 	 	
10.8 Captions
	 	 	62	 
	 	 	
10.9 Severability
	 	 	62	 
	 	 	
10.10 Disclosures
	 	 	62	 
	 	 	
10.11 No Novation
	 	 	63	 
	 	 	
10.12 Limitation of Liability
	 	 	63	 
	 	 	
10.13 Entire Agreement
	 	 	63	 

SCHEDULE I: Guarantor

EXHIBITS:

A -  Officer’s Certificate

B -  Request for Loan

C -  Note

C-1- Swing Loan Note

C-2- Master Note

D -  Legal Opinion

E -  Money Market Quote Request

F -  Invitation for Money Market Quotes

G -  Money Market Quote

H -  Designation Agreement

I -  Form of Guaranty

J -  Assignment and Assumption Agreement

K -  Form of Additional Guaranty

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AMENDED AND RESTATED

CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT (the “Agreement”) is made and
entered into as of October 30, 2003, by and among ARCHSTONE-SMITH OPERATING
TRUST, a Maryland real estate investment trust (the “Borrower”),
ARCHSTONE-SMITH TRUST, a Maryland real estate investment trust, and the parent
of the Borrower (the “Parent”), the financial institutions (including JPMC, the
Syndication Agents and the Documentation Agents, the “Lenders”) which are now
or may hereafter become signatories hereto, JPMORGAN CHASE BANK, a New York
banking corporation (“JPMC”), as administrative agent for Lenders (in such
capacity, “Agent”), BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., and as
syndication agents for Lenders (in such capacity, “Syndication Agents”), and
BANK ONE, NA and COMMERZBANK AG, NEW YORK BRANCH, as documentation agents for
Lenders (in such capacity, “Documentation Agents”).

     WHEREAS, the Borrower, the Agent and certain of the Lenders entered into a
Credit Agreement dated as of December 20, 2000 (as amended to the date hereof,
the “Original Credit Agreement”); and

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

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

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

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

1. Definitions.

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

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

 

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

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

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

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

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

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

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APPLICABLE MARGIN

	 	 	 	 	 	 	 	 	 
	APPLICABLE	 	EURODOLLAR RATE	 	BASE RATE
	CREDIT RATING	 	BORROWING	 	BORROWING
	
	 	
	 	

	A/A2 or better
	 	 	0.500	%	 	 	0	 
	A-/A3
	 	 	0.525	%	 	 	0	 
	BBB+/Baa1
	 	 	0.600	%	 	 	0	 
	BBB/Baa2
	 	 	0.700	%	 	 	0	 
	BBB-/Baa3
	 	 	0.900	%	 	 	0	 
	Worse than BBB-/Baa3
	 	 	1.250	%	 	 	.25	%
	or no Credit Rating
	 	 	 	 	 	 	 	 

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

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

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

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

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

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

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

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

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

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

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

     Committed Loan shall mean Loans other than Money Market Loans.

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

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

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

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

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

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Holdings Aventura A LLC, Smith Property Holdings Aventura B LLC, Smith
Property Holdings Aventura C LLC, Smith Property Sunset Pointe West LLC, Smith
Property Holdings 4411 Connecticut Avenue LLC, and any Person formed solely for
the purpose of owning Real Property in the District of Columbia.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Table of Contents

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

     Fitch shall mean Fitch, Inc.

     Fixed Charge Coverage Ratio shall mean the ratio of (a) the Borrower’s
EBITDA (calculated by adding the Parent’s Interest Expense) for the immediately
preceding four (4) calendar quarters, less Unit Capital Expenditures, to (b)
dividends of any kind or character or other proceeds paid or payable with
respect to any Disqualified Stock, plus all of the Borrower’s and the Parent’s
Interest Expense, plus all of the principal payable and principal paid on the
Borrower’s and the Parent’s Indebtedness (but not including prepayment
penalties and make-whole costs not included in the calculation of EBITDA) other
than (i) any final scheduled principal payment on any Indebtedness which pays
such Indebtedness in full, to the extent the amount of such scheduled principal
payment is greater than the scheduled principal payment immediately preceding
such final scheduled principal payment and (ii) scheduled principal payments on
the Borrower’s and the Parent’s Indebtedness incurred prior to October 30, 2003
which has a rating from Standard & Poor’s Rating Services, Moody’s Investor
Service, Inc. or Fitch which is the equivalent of BBB-/Baa3 or better at the
time of issuance, in each case for the period used to calculate EBITDA.

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

     Generally Accepted Accounting Principles shall mean, as to a particular
Person, such accounting practice as, in the opinion of the independent
accountants of recognized national standing regularly retained by such Person
and acceptable to the Agent, conforms at the time to generally accepted
accounting principles, consistently applied. Generally Accepted Accounting
Principles means those principles and practices (a) which are recognized as
such by the Financial Accounting Standards Board, (b) which are applied for all
periods after the date hereof in a manner consistent with the manner in which
such principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Lenders or where a change
therein has been concurred in by such Person’s independent auditors, and (c)
which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes
in financial position, of such Person. If there is a change in such accounting
practice as to the Borrower that could affect the Borrower’s ability to comply
with the terms of this Agreement, the parties hereto agree to review and
discuss such

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changes in accounting practice and the terms of this Agreement for a
period of no more than thirty (30) days with a view to amending this Agreement
so that the financial measures of the Borrower’s operating performance and
financial condition are substantially the same after such change as they were
immediately before such change.

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

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

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

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

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

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

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

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

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

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

     Interest Period shall mean:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Pool Value shall mean the Value of the Pool.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Tangible Net Worth shall mean total assets (without deduction for
accumulated depreciation) less (1) all intangibles and (2) all liabilities
(including contingent and indirect liabilities), all determined in accordance
with Generally Accepted Accounting Principles. The term “intangibles” shall
include, without limitation, (i) deferred charges, and (ii) the

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aggregate of all amounts appearing on the assets side of any such balance
sheet for franchises, licenses, permits, patents, patent applications,
copyrights, trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like intangibles. The term “liabilities”
shall include, without limitation, (i) Indebtedness secured by Liens on
Property of the Person with respect to which Tangible Net Worth is being
computed whether or not such Person is liable for the payment thereof, (ii)
deferred liabilities, and (iii) obligations under leases which have been
capitalized. Tangible Net Worth shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.

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

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

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

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

     Value means the sum of the following:

     (a) for Real Property that has reached the Calculation Date and that the
Person has owned for the full determination period, the result of dividing (i)
the aggregate Net Operating Income of the subject property ((1) beginning with
the Calculation Date until the end of the third full calendar quarter after the
Stabilization Date, based on the annualized Net Operating Income from the
Calculation Date until the time of measurement, and (2)

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beginning with the fourth full calendar quarter after the Stabilization
Date, based on the immediately preceding four (4) calendar quarter period), by
eight percent (8%); plus

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

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

2. The Loans.

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

     (b) The Borrower shall give the Agent notice of each borrowing of a
Committed Loan to be made hereunder as provided in Section 3.1, and the Agent
shall deliver same to each Lender promptly thereafter. Not later than 12:00
noon, New York, New York time, on the date specified for each such borrowing of
a Committed Loan hereunder other than Swing Loans, each Lender shall make
available the amount of the Loan, if any, to be made by it on such date to the
Agent at the Agent’s principal office in

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New York, New York, in immediately available funds, for the account of the
Borrower. Such amounts received by the Agent will be held in Agent’s general
ledger account. The amounts so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Borrower by
wiring or otherwise transferring, in immediately available funds not later than
1:00 p.m., New York, New York time, such amount to an account designated by the
Borrower and maintained with JPMC or any other account or accounts which the
Borrower may from time to time designate to the Agent by a written notice as
the account or accounts to which borrowings hereunder are to be wired or
otherwise transferred. JPMC shall make available the amount of each Swing Loan
by depositing the same in immediately available funds, in the foregoing account
by 3:00 p.m., New York, New York time, on the date of the borrowing.

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

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made under the Commitment and each Lender’s Lender Commitment. The Swing
Loans shall be evidenced by the Swing Loan Note substantially in the form of
Exhibit C-1 attached hereto.

     (d)  So long as the Borrower is not then in Default and so long as the
Borrower has not reduced the Commitment pursuant to Section 2.9, the Borrower
may on two (2) occasions prior to October 30, 2006, request that the aggregate
Commitment be increased, so long as (i) the aggregate Commitment does not
exceed Nine Hundred Million Dollars ($900,000,000.00) (the “Maximum
Commitment”), and (ii) each increase is a minimum of $50,000,000. If the
Borrower requests that the aggregate Commitment be increased, the Agent shall
use its best efforts to obtain increased or additional commitments up to the
Maximum Commitment, and to do so the Agent may obtain additional lenders of its
choice (and approved by Borrower, such approval not to be unreasonably withheld
or delayed), and without the necessity of approval from any of the Lenders.
The Borrower and each Guarantor shall execute an amendment to this Agreement,
additional Notes and other documents as the Agent may reasonably require to
evidence the increase of the Commitment, and the admission of additional
Persons as Lenders, if necessary.

     2.2 Letters of Credit.

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

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

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shall not exceed the total Commitment. Copies of all Letters of Credit
and amendments, extensions and cancellations related thereto, must be delivered
to the Agent and the other Lenders by the Issuing Bank.

          (c) Each Letter of Credit shall expire not later than the earlier of (i)
three (3) years after date of issuance of the Letter of Credit (the “Maximum
Outside Date”), and (ii) the close of business on the date that is ten (10)
days prior to the Maturity Date (including the extension period provided in
Section 9); provided, however, that Letters of Credit with an aggregate LC
Exposure not exceeding $50,000,000.00 at any time may expire up to the earlier
of October 30, 2008 and the Maximum Outside Date.

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

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

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of the payment then due from the Borrower, in the same manner as provided
in Section 2.1(a) with respect to Loans made by such Lender (and Section 2.1(a)
shall apply, mutatis mutandis, to the payment obligations of the Lenders), and
the Agent shall promptly pay to the Issuing Bank the amounts so received by it
from the Lenders. Promptly following receipt by the Agent of any payment from
the Borrower pursuant to this paragraph, the Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of Base Rate Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.

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

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contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.

          (g) The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit. The Issuing Bank shall promptly notify the Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and
whether the Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such LC Disbursement.

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

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

          (j) If (i) any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Agent or the Majority
Lenders demanding the deposit of cash collateral pursuant to this paragraph, or
(ii) any Letter of Credit will expire after the Maturity Date as allowed by
Section 2.2(c) then at least ten (10) days before the Maturity Date, the
Borrower shall deposit in an account with the Agent, in the name of the Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the

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obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Section 7.1.
Such deposit shall be held by the Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Agent and at the Borrower’s risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

     2.3 Payments.

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

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

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date the Lender received the payment. The Agent may apply payments
received from the Borrower to pay any unpaid principal and interest on the
Swing Loans before making payment to each Lender of amounts due under the Notes
other than the Swing Loan Note. Loans may be prepaid only if the accompanying
Funding Loss, if any, is also paid.

          (c) If the due date of any payment hereunder or under any Note falls on a
day which is not a Business Day or a Eurodollar Business Day, as the case may
be, the due date for such payments shall be extended to the next succeeding
Business Day or Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such extension;
provided, however, that with respect to Eurodollar Rate Borrowings and Money
Market LIBOR Loans if such extension would cause the Eurodollar Business Day of
payment to fall in another calendar month, the payment shall be due on the
Eurodollar Business Day next preceding the due date of the payment.

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

          (e) All payments by the Borrower hereunder or under any other Credit
Documents shall be made free and clear of and without deduction for or on
account of any Taxes, including withholding and other charges of any nature
whatsoever imposed by any taxing authority excluding in the case of each Lender
taxes imposed on or measured by its net income or franchise taxes imposed in
lieu of net income taxes by the jurisdiction in which it is organized or
through which it acts for purposes of this Agreement. If any withholding or
deduction from any payment to be made to, or for the account of, a Lender by
the Borrower hereunder or under any other Credit Document is required in
respect of any Taxes pursuant to any applicable law, rule, or regulation, then
the Borrower will (i) pay to the relevant authority the full amount required to
be so withheld or deducted; (ii) to the extent available, promptly forward to
the Agent an official receipt or other documentation satisfactory to the Agent
evidencing such payment to such authority; and (iii) pay to the Agent, for the
account of each affected Lender, such additional amount or amounts as are
necessary to ensure that the net amount actually received by such Lender will
equal the full amount such Lender would have received had no such withholding
or deduction been required. Each Lender shall determine such additional amount
or amounts payable to it (which determination shall, in the absence of manifest
error, be conclusive and binding on the Borrower). If a Lender becomes aware
that any such withholding or deduction from any payment to be made by the
Borrower hereunder or under any other Credit Document is required, then such
Lender shall promptly notify the Agent and the Borrower thereof stating the
reasons therefor and the additional amount required to be paid under this
Section. Each Lender shall execute and deliver to the Agent and Borrower such
forms as it may be required to execute and deliver pursuant to subsection (f)
below. To the extent that any such withholding or deduction results from the
failure of a Lender to provide a form

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required by subsection (f) below (unless such failure is due to some
prohibition under applicable Legal Requirements), the Borrower shall have no
obligation to pay the additional amount required by clause (iii) above.
Anything in this Section notwithstanding, if any Lender elects to require
payment by the Borrower of any material amount under this Section, the Borrower
may, within 60 days after the date of receiving notice thereof and so long as
no Default shall have occurred and be continuing, elect to terminate such
Lender as a party to this Agreement; provided that, concurrently with such
termination the Borrower shall (1) if the Agent and each of the other Lenders
shall consent, pay that Lender all principal, interest and fees and other
amounts owed to such Lender through such date of termination or (2) have
arranged for another institution approved by the Agent (such approval not to be
unreasonably withheld) as of such date, to become a substitute Lender for all
purposes under this Agreement in the manner provided in Section 10.5; provided
further that, prior to substitution for any Lender, the Borrower shall have
given written notice to the Agent of such intention and the Lenders shall have
the option, but no obligation, for a period of 60 days after receipt of such
notice, to increase their Commitments pro rata based on their Lender
Commitments in order to replace the affected Lender in lieu of such
substitution.

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

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

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Committed Loans (other than Swing Loans) held by the Lenders. Payments of
Swing Loans shall be for JPMC’s own account.

     2.5 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the “Payor”) prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan (or
purchase of a portion of a Swing Loan) to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of
the Lenders, as the case may be (such payment being herein called the “Required
Payment”), which notice shall be effective upon receipt, that the Payor does
not intend to make the Required Payment to the Agent, the Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
pay to the Agent the amount made available by the Agent together with interest
thereon in respect of the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (a) the Past Due Rate for such period if the recipient
returning a Required Payment is the Borrower, or (b) the Federal Funds
Effective Rate for such period if the recipient returning a Required Payment is
the Agent or a Lender.

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

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

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

	 	 	 	 	 
	CREDIT RATING	 	FACILITY FEE
	
	 	

	A/A2 or better
	 	 	0.125	%
	A-/A3
	 	 	0.150	%
	BBB+/Baa1
	 	 	0.150	%
	BBB/Baa2
	 	 	0.150	%
	BBB-/Baa3
	 	 	0.200	%

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

          (b) If the Maturity Date is extended pursuant to Section 9 of this
Agreement, an amount payable as an extension fee by the Borrower to the Agent
for the account of each Lender equal to 0.200% of each Lender’s Lender
Commitment at that time payable on the first day of the extension.

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

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Commitment terminates shall be payable on demand. Any other fees payable
to the Issuing Bank pursuant to this paragraph shall be payable within ten (10)
days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number
of days elapsed (including the first day but excluding the last day).

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

     2.8 Money Market Borrowings.

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

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

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

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

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

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

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

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

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

		
	 	     (2) in the case of a LIBOR Auction, the margin (the “Money Market
Margin”) above or below the applicable Eurodollar Interbank Rate )
offered

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	 	for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such applicable rate, and

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

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

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

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

		
	 	     (2) contains qualifying, conditional or similar language;

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

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

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

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

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

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

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

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

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

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

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

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

     2.9 Reduction of Commitment.

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

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

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

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

3.     Conditions.

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     3.1 All Loans. The obligation of any Lender to make any Loan, or to
issue, renew or extend any Letter of Credit, is subject to the accuracy of all
representations and warranties of the Borrower on the date of such Loan, or
issuance, renewal or extension of such Letter of Credit, to the performance by
the Borrower of its obligations under the Credit Documents and to the
satisfaction of the following further conditions: (a) the Agent shall have
received the following, all of which shall be duly executed and in Proper Form:
(1) for Committed Loans, a Request for Loan (i) by 12:00 noon, New York, New
York time, one (1) Business Day before the date (which shall also be a Business
Day) of the proposed Loan which is to be a Base Rate Borrowing (other than
Swing Loans or Base Rate Borrowings to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.2(e) hereof), (ii) by 12:00 noon, New
York, New York time, on the same Business Day of any proposed Swing Loan or
Base Rate Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.2(e) hereof, provided that by 12:00 noon, New York,
New York time on the date of the proposed Loan, Borrower shall also have
notified JPMC by telephone of its request for a Loan, or (iii) by the Rate
Designation Date of the proposed Loan which is to be a Eurodollar Rate
Borrowing; (2) for Money Market Loans the information required by Section 2.8;
(3) for Letters of Credit the documents required by Section 2.2 hereof; and (4)
such other documents as the Agent may reasonably require to satisfy itself or
the request of any Lender; (b) no Default or Event of Default shall have
occurred and be continuing; (c) the making of the Loan or issuance, renewal or
extension of such Letter of Credit, shall not be prohibited by any Legal
Requirement (in which event the applicable portion of the Fee will not be
charged to the Borrower); (d) the Borrower shall have paid all legal fees and
expenses of the type described in Section 5.10 hereof through the date of such
Loan; (e) in the case of a Committed Loan other than a Swing Loan, all Swing
Loans then outstanding shall have been paid or shall be paid with the proceeds
of such Loan and (f) the Agent shall have received an Officer’s Certificate
certifying the information set forth therein as of the end of the immediately
preceding fiscal quarter.

     3.2 First Loan. In addition to the matters described in Section 3.1
hereof, the obligation of the Lenders to make the first Loan under this
Agreement is subject to the receipt by the Lenders of each of the following, in
Proper Form: (a) the Notes, executed by the Borrower; (b) a separate
certificate executed by each of the Secretary of the Borrower and the
Secretary of the Parent dated as of the date hereof; (c) a separate certificate
from the Secretary of State or other appropriate public official of Maryland as
to the continued existence and good standing of each of the Parent and the
Borrower; (d) a separate certificate from the appropriate public official of
Maryland as to the due qualification and good standing of each of the Parent
and the Borrower; (e) a legal opinion from independent counsel for the Parent,
the Borrower and the Guarantors as to the matters set forth on Exhibit D
acceptable to the Lenders; (f) policies of insurance addressed to the Agent
reflecting the insurance required by Section 5.7 hereof; (g) an Officer’s
Certificate in the form of Exhibit A as of the end of the immediately preceding
fiscal quarter; (h) a certificate from Borrower and Parent setting forth the
pro forma calculations of Secured Debt to Total Asset Value Ratio, Coverage
Ratio, Fixed Charge Coverage Ratio, Tangible Net Worth, Debt to Total Asset
Value Ratio, and the Pool pursuant to Section 5.15 (which include actual
figures as of June 30, 2003; and (i) any Guaranty required by Section 5.15

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together with such Guarantors’ organizational documents and certificates
of existence and good standing from the state of its organization; and to the
further condition that, at the time of the initial Loan, all legal matters
incident to the transactions herein contemplated shall be satisfactory to Locke
Liddell & Sapp LLP, counsel for the Agent.

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

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

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

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

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

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

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

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

          (a) If the adoption of any applicable Legal Requirement or any change in
any applicable Legal Requirement or in the interpretation or administration
thereof by any Governmental Authority or compliance by the Lenders with any
request or directive (whether or not having the force of law) of any central
bank or other Governmental Authority shall at any time make it unlawful or
impossible for any Lender to permit the establishment of or to maintain any
Eurodollar Rate Borrowing or a Money Market Loan, or to increase the cost to
such Lender of participating in or maintaining any Letter of Credit, the
commitment of the Lenders to establish or maintain such Eurodollar Rate
Borrowing or a Money Market Loan, or to issue or participate in Letters of
Credit shall forthwith be suspended until such condition shall cease to exist
and Borrower shall forthwith, upon demand by Agent to Borrower, (1) convert the
Eurodollar Rate Borrowing with respect to which such demand was made to a Base
Rate Borrowing; (2) convert the Money Market LIBOR Loan with respect to which
such demand was made to a Loan bearing interest at the Base Rate; (3) pay all
accrued and unpaid interest to date on the amount so converted; and (4) pay any
amounts required to compensate the Lenders for any additional cost or expense
which the Lenders may incur as a result of such adoption of or change in such
Legal Requirement or in the interpretation or administration thereof and any
Funding Loss which the Lenders may incur as a result of such conversion. If,
when Agent so notifies Borrower, Borrower has given a Request for Loan
specifying a Eurodollar Rate Borrowing or a Notice of Money Market Borrowing
but the selected Interest Period has not yet begun, such Request for Loan or a
Notice of Money Market Borrowing shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans specified in such Request for
Loan shall bear interest at the Base Rate until a different available Interest
Option shall be designated in accordance herewith.

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

	 	(1)	 	subject any Lender (or make it apparent that
any Lender is subject) to any Taxes, or any deduction or
withholding for any Taxes, on or from any payment due under
any Eurodollar Rate Borrowing, Money Market Loan or other
amount due hereunder, other than income and franchise taxes
of the United States and its political subdivisions; or
	 
	 	(2)	 	change the basis of taxation of payments due
from Borrower to any Lender under any Eurodollar Rate
Borrowing or Money Market

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	 	 	 	Loan (otherwise than by a change in the rate of taxation of
the overall net income of a Lender); or
	 
	 	(3)	 	impose, modify, increase or deem applicable any
reserve requirement (excluding that portion of any reserve
requirement included in the calculation of the applicable
interest rate), special deposit requirement or similar
requirement (including, but not limited to, state law
requirements and Regulation D) imposed, modified, increased
or deemed applicable by any Governmental Authority against
assets held by any Lender, or against deposits or accounts in
or for the account of any Lender, or against loans made by
any Lender, or against any other funds, obligations or other
property owned or held by any Lender; or
	 
	 	(4)	 	impose on any Lender any other condition
regarding any Eurodollar Rate Borrowing, Money Market Loan or
Letter of Credit;

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

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

	 	(1)      Agent is unable through its customary general practices to
determine any applicable Eurodollar Rate, or
	 
	 	(2)     by reason of circumstances affecting the applicable market
generally, Agent is not being offered deposits in United States
dollars in such market, for the applicable Interest Period and in
an amount equal to the

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	 	amount of any applicable Eurodollar Rate Borrowing requested by
Borrower, or
	 
	 	(3)     any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of making and maintaining such
Eurodollar Rate Borrowing hereunder for any proposed Interest
Period,
	 
	 	then Agent shall give Borrower notice thereof and thereupon, (A)
any Request for Loan previously given by Borrower designating the
applicable Eurodollar Rate Borrowing which has not commenced as of
the date of such notice from Agent shall be deemed for all
purposes hereof to be of no force and effect, as if never given,
and (B) until Agent shall notify Borrower that the circumstances
giving rise to such notice from Agent no longer exist, each
Request for Loan requesting the applicable Eurodollar Rate shall
be deemed a request for a Base Rate Borrowing, and any applicable
Eurodollar Rate Borrowing then outstanding shall be converted,
without any notice to or from Borrower, upon the termination of
the Interest Period then in effect with respect to it, to a Base
Rate Borrowing.

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

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

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

     3.7 Funding Sources, Payment Obligations. Notwithstanding any provision
of this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of the Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded
and maintained each Eurodollar Rate Borrowing and Money Market LIBOR Loan
during each Interest Period through the

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purchase of deposits having a maturity corresponding to such Interest
Period and bearing an interest rate equal to the interest rate for such
Interest Period. Notwithstanding the foregoing, Funding Losses, increased
costs and other obligations relating to Eurodollar Rate Borrowings and Money
Market Loans described in Section 3.5 of this Agreement will only be paid by
the Borrower as and when actually incurred by the Lenders.

     3.8 Mitigation, Non-Discrimination.

          (a) Each Lender will notify the Borrower through the Agent of any event
occurring after the date of this Agreement which will require or enable such
Lender to take the actions described in Sections 3.5(a) or (b) of this
Agreement as promptly as practicable after it obtains knowledge thereof and
determines to request such action, and (if so requested by the Borrower through
the Agent) will designate a different lending office of such Lender for the
applicable Eurodollar Rate Borrowing or Money Market Loan or will take such
other action as the Borrower reasonably requests if such designation or action
is consistent with the internal policy of such Lender and legal and regulatory
restrictions, can be undertaken at no additional cost, will avoid the need for,
or reduce the amount of, such action and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender (provided that such Lender will have
no obligation to designate a different lending office which is located in the
United States of America).

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

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

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4. Representations and Warranties.

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

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

     4.2 Financial Statements. The financial statements delivered to the Agent
fairly present, in accordance with Generally Accepted Accounting Principles
(provided, however, that the Quarterly Unaudited Financial Statements are
subject to normal year-end adjustments and may contain condensed footnotes as
permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the
Borrower as at the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements. The Borrower
is not subject to any instrument or agreement which would materially prevent it
from conducting its business as it is now conducted or as it is contemplated to
be conducted.

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

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

     4.5 Litigation. There is no litigation or administrative proceeding
pending or, to the knowledge of the Borrower, threatened against, or any
outstanding judgment, order or decree affecting, the Borrower before or by any
Governmental Authority which is not

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adequately covered by insurance or which, if determined adversely to the
Borrower could reasonably be expected to have a Material Adverse Effect. The
Borrower is not in default with respect to any judgment, order or decree of any
Governmental Authority which default could reasonably be expected to have a
Material Adverse Effect.

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

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

     4.8 Securities Act of 1933. Other than the Agent’s efforts in syndicating
the Loans (for which the Agent is responsible) neither the Borrower nor any
agent acting for it has offered the Notes or any similar obligation of the
Borrower for sale to or solicited any offers to buy the Notes or any similar
obligation of the Borrower from any Person other than the Agent or any Lender,
and neither the Borrower nor any agent acting for it will take any action which
would subject the sale of the Note to the provisions of Section 5 of the
Securities Act of 1933, as amended.

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

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

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

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

5. Affirmative Covenants.

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

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

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

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

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

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

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

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

          (e) a Debt to Total Asset Value Ratio no greater than sixty percent (60%).

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

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

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

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

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

     5.9 Use of Proceeds. The proceeds of the Loans will be used for general
business purposes, including (without limitation) for acquisition of
multifamily real estate

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properties, for the development and enhancement of multifamily real estate
properties, for the costs of construction of multifamily real estate projects
owned or to be acquired by the Borrower, for repurchase of the Borrower’s
stock, or for other investments permitted by this Agreement. Notwithstanding
the foregoing, none of the proceeds of the Loans will be used to finance, fund
or complete any hostile acquisition of any Person.

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

     5.11 Legal Compliance; Indemnification.

          (a) The Borrower shall operate its Property and businesses in full
compliance with all Legal Requirements. It shall not constitute an Event of
Default if there is a failure to comply with any Legal Requirement which
failure could not reasonably be expected to have a Material Adverse Effect.
The Borrower shall indemnify the Agent and each Lender, their directors,
officers, employees and shareholders (the “Indemnified Parties”) for and defend
and hold the Indemnified Parties harmless against any and all claims, demands,
liabilities, causes of action, penalties, obligations, damages, judgments,
deficiencies, losses, costs or expenses (including, without limitation,
interest, penalties, attorneys’ fees, and amounts paid in settlement)
threatened or incurred by reason of, arising out of or in any way related to
(i) any failure of the Borrower to so comply with the provisions of any Legal
Requirement, this Agreement or the other Credit Documents, or (ii) the Agent or
any Lender’s making of the Loans, issuing or participating in any Letters of
Credit, or any other acts or omissions taken or made in connection with the
Loans or Letters of Credit (including any refusal by the Issuing Bank to honor
a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of the Letter
of Credit), and any and all matters arising out of any act, omission, event or
circumstance, regardless of whether the act, omission, event or circumstance
constituted a violation of any such Legal Requirement, this Agreement or the

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other Credit Documents at the time of its existence or occurrence. THE
BORROWER SHALL INDEMNIFY THE AGENT AND EACH LENDER PURSUANT TO THIS SECTION
REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS, CIRCUMSTANCES OR CONDITIONS
GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN WHOLE OR IN PART BY THE
AGENT’S OR SUCH LENDER’S NEGLIGENCE (SIMPLE, BUT NOT GROSS NEGLIGENCE).

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

          (c) The Parent will (i) maintain at least one class of common shares of
the Parent having trading privileges on the New York Stock Exchange or the
American Stock Exchange, or which is listed on The NASDAQ Stock Market’s
National Market; (ii) own, directly or indirectly, at least fifty-one percent
(51%) of (1) the shares of beneficial interest of the Borrower, and (2) the
Class A-2 Common Units of the Borrower and any other class of security issued
by the Borrower with the power to elect the Trustees of the Borrower; (iii)
maintain management and control of the Borrower; (iv) not sell, transfer or
convey any of the shares of beneficial interest of the Borrower owned by the
Parent, except (A) in payment of the purchase price of Property (including
mergers with and acquisitions of Persons) acquired by the Borrower, (B) upon
conversion or redemption of securities of the Borrower in accordance with their
terms or (C) upon any repurchase by the Borrower of the Borrower’s securities
from the Parent in connection with a repurchase by the Parent of the Parent’s
securities; and (v) hold all of its assets and conduct all of its operations
through the Borrower, the QRS Entities in existence on October 31, 2001 and one
or more of the Borrower’s Subsidiaries.

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

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

     5.14 Capital Adequacy.

          (a) If after the date of this Agreement, the Agent or any Lender shall
have determined that the adoption or effectiveness of any applicable law, rule
or regulation regarding capital adequacy of general applicability, or any
change therein, or any change in the interpretation or administration thereof
by any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by the Agent or any
Lender with any request or directive regarding capital adequacy of general
applicability (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the Agent’s or any Lender’s capital as a
consequence of its obligations hereunder to a level below that which the Agent
or such Lender could have achieved but for such adoption, change or compliance
(taking into consideration the Agent’s or such Lender’s policies with respect
to capital adequacy) by an amount deemed by the Agent or such Lender to be
material, then from time to time, the Borrower shall pay to the Agent or such
Lender such additional amount or amounts as will compensate the Agent or such
Lender for such reduction.

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

     5.15 Property Pool.

          (a) The Borrower (or a Subsidiary of the Borrower if the conditions in
clause (c) below are satisfied) will at all times own fee simple title to a
pool (the “Pool”) of Real Property that is not subject to any Lien other than
Permitted Encumbrances (the “Pool Real Estate”) and except as permitted by
Section 6.5 with an aggregate Pool Value of at

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least one hundred sixty-seven percent (167%) of the Borrower’s
Indebtedness other than Secured Debt outstanding from time to time, with the
following characteristics:

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

		
	 	     (ii) the Property is not subject to or affected by any Limiting
Agreement.

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

          (b) Notwithstanding the foregoing, (i) the maximum Pool Value that can be
attributable to the Value of land not improved for multifamily use (not
including land that is either under development or planned for commencement of
development within three (3) years after the date of acquisition) is five
percent (5%) of the Pool Value after adding the effect of said land, (ii) the
maximum Pool Value that can be attributable to the Value (in the aggregate) of
Real Property that is under construction or development, that has not reached
the Calculation Date, that has reached the Calculation Date but the Occupancy
Level is less than eighty percent (80%), unimproved land that is planned for
commencement of development within three (3) years after the date of
acquisition, and land not improved for multifamily use, is twenty percent (20%)
of the Pool Value after adding the effect of said Real Property and land; and
(iii) the maximum Pool Value that can be attributable to the Value of improved
property not used for multifamily residential use (property will be considered
as multifamily residential use even if it includes other non-primary uses which
are incidental to the residential use, such as retail or office) is ten percent
(10%) of the Pool Value after adding the effect of said property.

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

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

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

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

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

6. Negative Covenants.

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

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

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

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

     “Specified Permitted Holdings” means the following:

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

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

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

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

          (e) investments in income producing Real Property that is not primarily
multifamily residential property (property will be considered as primarily
multifamily residential property even if it includes other non-primary uses
which are incidental to the residential use, such as retail or office), so long
as the aggregate Historical Value of such investments does not exceed ten
percent (10%) of the Total Asset Value after giving effect to such investments;

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

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

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

     6.5 Limiting Agreements. Neither Borrower nor any of its Subsidiaries has
entered into, and after the date hereof, neither Borrower nor any of its
Subsidiaries shall enter into, any Limiting Agreements; provided that so long
as the Borrower has received

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an S&P Rating and a Moody’s Rating that are BBB/Baa2 or better
(respectively), up to five percent (5%) of the Pool Value (after adding the
effect of said property) may be subject to debt-related agreements (but not the
related mortgages or pledges) that require the owner of the project to mortgage
and pledge the project to secure the debt if the Borrower’s S&P Rating and
Moody’s Rating are below BBB-/Baa3 (respectively).

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

7. Events of Default and Remedies.

     7.1 Events of Default. If any of the following events shall occur, then,
as to the events described in Sections 7.1(b), (c), and (d), if the event has
not been waived, cured or remedied within twenty (20) days after the Agent
gives the Borrower notice of such event, at any time thereafter, and as to all
of the other events described herein, at any time, the Agent may do any or all
of the following: (1) without notice to the Borrower, declare the Notes to be,
and thereupon the Notes shall forthwith become, immediately due and payable,
together with all accrued interest thereon, without notice of any kind, notice
of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to the
Borrower, terminate the Commitment; (3) exercise, as may any other Lender, its
rights of offset against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is hereby granted
by the Borrower to the Agent and each Lender; and (4) exercise any and all
other rights pursuant to the Credit Documents:

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

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

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

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

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

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

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

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

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

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

          (k) The Borrower or any Guarantor shall have concealed, removed, or
permitted to be concealed or removed, any part of its Property, with intent to
hinder, delay or defraud its creditors or any of them, or made or suffered a
transfer of any of its Property

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which may be fraudulent under any bankruptcy, fraudulent conveyance or
similar law; or shall have made any transfer of its Property to or for the
benefit of a creditor at a time when other creditors similarly situated have
not been paid.

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

     7.3 Guaranty Proceeds.

          (a) Notwithstanding any other provision of any Credit Document to the
contrary, any funds, claims, or distributions actually received by Agent for
the account of any Lender as a result of the enforcement of, or pursuant to,
any Guaranty, net of Agent’s and Lenders’ expenses of collection thereof (such
net amount, “Guaranty Proceeds”), shall be made available for distribution
equally and ratably (in proportion to the aggregate amount of principal,
interest and other amounts then owed in respect of the Obligations or of an
issuance of Public Debt (as defined below), as the case may be) among the
Agent, the Lenders and the trustee or trustees of any Indebtedness not
subordinated to the Obligations (or to the holders thereof), issued by
Borrower, before or after the date of this Agreement, in offerings registered
under the Securities Act of 1933, as amended, or in transactions exempt from
registration pursuant to rule 144A thereof (“Public Debt”). Agent is hereby
authorized by Borrower, by each Lender and by each Guarantor (by its execution
and delivery of the Guaranty to which it is party) to make such Guaranty
Proceeds so available. No Lender shall have any interest in any amount paid
over by Agent to the trustee or trustees in respect of any Public Debt (or to
the holders thereof) pursuant to the foregoing authorization. This Section
7.3(a) shall apply (i) solely to Guaranty Proceeds and not to any payments,
funds, claims or distributions received by Agent or Lenders directly or
indirectly from Borrower or any other Person other than from a Guarantor
pursuant to a Guaranty, and (ii) as to Public Debt issued after December 20,
2000, only if the documents governing the Public Debt provide for the same
sharing with the Lenders of guaranty proceeds recovered to pay the Public Debt.
Borrower is aware of the terms of the Guaranty, and specifically understands
and agrees with Agent and the Lenders that, to the extent Guaranty Proceeds are
distributed to holders of Public Debt or their respective trustees, such
Guarantor has agreed that the Obligations will not be deemed reduced by any
such distributions, and each Guarantor shall continue to make payments pursuant
to its Guaranty until such times as the Obligations have been paid in full (and
the Commitment has been terminated and any LC Exposure reduced to zero), after
taking into account any such distributions of Guaranty Proceeds in respect of
Indebtedness other than the Obligations.

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

          (c) This Agreement and each Guaranty are for the sole benefit of Agent and
the Lenders and their respective successors and assigns. Nothing contained
herein or in

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any Guaranty shall be deemed for the benefit of any holder of Public Debt,
or any trustee for such holder; nor shall anything contained herein or therein
be construed to impose on Agent or Lenders any fiduciary duties, obligations or
responsibilities to the holder of any Public Debt or their trustees (including,
but not limited to, any duty to pursue any Guarantor for payment under its
Guaranty).

8. The Agent.

     8.1 Appointment, Powers and Immunities.

          (a) Each Lender hereby irrevocably appoints and authorizes the Agent to
act as its agent hereunder and under the other Credit Documents with such
powers as are specifically delegated to the Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto.
The Agent (i) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and the other Credit Documents, and shall
not by reason of this Agreement or any other Credit Document be a trustee for
any Lender; (ii) shall not be responsible to any Lender for any recitals,
statements, representations or warranties contained in this Agreement or any
other Credit Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability, execution, filing, registration, collectibility, recording,
perfection, existence or sufficiency of this Agreement or any other Credit
Document or any other document referred to or provided for herein or therein or
any property covered thereby or for any failure by any Party or any other
Person to perform any of its obligations hereunder or thereunder, and shall not
have any duty to inquire into or pass upon any of the foregoing matters; (iii)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or any other Credit Document except to the extent
requested by the Majority Lenders; (iv) SHALL NOT BE RESPONSIBLE FOR ANY
MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN CONNECTION
HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS OWN
NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to recognize any
agreement among or between the Borrower, the Agent, and any Lender other than
this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and
provisions thereof; (vi) shall not be charged with notice or knowledge of any
fact or information not herein set out or provided to the Agent in accordance
with the terms of this Agreement or any other Credit Document; (vii) shall not
be responsible for any delay, error, omission or default of any mail,
telegraph, cable or wireless agency or operator, and (viii) shall not be
responsible for the acts or edicts of any Governmental Authority. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.

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

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

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

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

     8.2 Reliance. The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
facsimile, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (which may be counsel for the
Borrower), independent accountants and other experts selected by the Agent.
The Agent shall not be required in any way to determine the identity or
authority of any Person delivering or executing the same. As to any matters
not expressly provided for by this Agreement or any other Credit Document, the
Agent shall in

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all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. If any order, writ, judgment or decree shall be
made or entered by any court affecting the rights, duties and obligations of
the Agent under this Agreement or any other Credit Document, then and in any of
such events the Agent is authorized, in its sole discretion, to rely upon and
comply with such order, writ, judgment or decree which it is advised by legal
counsel of its own choosing is binding upon it under the terms of this
Agreement, the relevant Credit Document or otherwise; and if the Agent complies
with any such order, writ, judgment or decree, then it shall not be liable to
any Lender or to any other Person by reason of such compliance even though such
order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.

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

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

     8.5 Indemnification. The Lenders agree to indemnify the Agent, its
officers, directors, agents and Affiliates, ratably in accordance with each
Lender’s respective Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE

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

     8.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has received current financial information with respect to the Borrower and
that it has, independently and without reliance on the Agent or any other
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Credit Documents. The Agent shall not be required to keep itself
informed as to the performance or observance by any Party of this Agreement or
any of the other Credit Documents or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Borrower or
any Party except as specifically required by the Credit Documents. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder or the other Credit Documents,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the affairs, financial condition or
business of the Borrower or any other Party (or any of their affiliates) which
may come into the possession of the Agent. Each Lender assumes all risk of
loss in connection with its Percentage in the Loans to the full extent of its
Percentage therein. The Agent assumes all risk of loss in connection with its
Percentage in the Loans to the full extent of its Percentage therein.

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

     8.8 Resignation of Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. The Agent shall resign if it
has assigned all of its

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

     8.9 No Partnership. Neither the execution and delivery of this Agreement
nor any of the other Credit Documents nor any interest the Lenders, the Agent
or any of them may now or hereafter have in all or any part of the Obligations
shall create or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the Agent. The
relationship between the Lenders, on the one hand, and the Agent, on the other,
is and shall be that of principals and agent only, and nothing in this
Agreement or any of the other Credit Documents shall be construed to constitute
the Agent as trustee or other fiduciary for any Lender or to impose on the
Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.

9. Renewal and Extension.

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

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

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

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

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

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

10. Miscellaneous.

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

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

     10.3 Venue. HARRIS COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO
ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS, UNLESS THE AGENT SHALL GIVE ITS PRIOR WRITTEN CONSENT TO A DIFFERENT
VENUE. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES
AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING
ARISING OUT OF ANY OF THE CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY
TEXAS LAW. THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY OF THE CREDIT DOCUMENTS IN THE DISTRICT COURTS OF HARRIS COUNTY, TEXAS, OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON
DIVISION, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH

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COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER (A) AGREES
TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF TEXAS
IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO THE
AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING
BY NOTICE GIVEN AS PROVIDED FOR IN THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS
IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE AGENT OR ANY LENDER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER CREDIT
DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT COURTS OF HARRIS
COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
TEXAS, HOUSTON DIVISION.

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

     10.5 Survival; Parties Bound; Successors and Assigns.

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

          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations

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under this Agreement (including all or a portion of its Lender Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

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

		
	 	     (B) the Agent.

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

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

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

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

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

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

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

          (iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and

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Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.5, 5.10, 5.11 and 10.7). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply
with this Section shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with paragraph (c) of this Section.

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

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

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

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

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

          (f) Any Lender (each, a “Designating Lender”) may at any time designate
one Designated Lender to fund Money Market Loans on behalf of such Designating
Lender subject to the terms of this Section 10.5(f), and the provisions in
Sections 10.5(b) and (c) shall not apply to such designation. No Lender may
designate more than one (1) Designated Lender. The parties to each such
designation shall execute and deliver to the Agent for its acceptance a
Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and will give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Lender
a Designated Lender Note payable to the order of the Designated Lender, (ii)
from and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right (subject
to the provisions of Section 2.8(b)) to make Money Market Loans on behalf of
its Designating Lender pursuant to Section 2.8 after the Borrower has accepted
a Money Market Loan (or portion thereof) of the Designating Lender, and (iii)
the Designated Lender shall not be required to make payments with respect to
any obligations in this Agreement except to the extent of excess cash flow of
such Designated Lender which is not otherwise required to repay obligations of
such Designated Lender which are then due and payable; provided, however, that
regardless of such designation and assumption by the Designated Lender, the
Designating Lender shall be and remain obligated to the Borrower, Agent and the
Lenders for each and every obligation of the Designating Lender and its related
Designated Lender with respect to this Agreement, including, without
limitation, any indemnification obligations under Section 8.5 hereof and any
sums otherwise payable to the Borrower by the Designated Lender. Each
Designating Lender shall serve as the administrative agent of the Designated
Lender and shall on behalf of, and to the exclusion of, the Designated Lender:
(1) receive any and all payments made for the benefit of the Designated Lender
and (2) give and receive all communications and notices and take all actions
hereunder, including, without limitation, votes, approvals, waivers, consents
and amendments under or relating to this Agreement and the other Credit
Documents. Any such notice, communication, vote, approval, waiver, consent or
amendment shall be signed by the Designating Lender as administrative agent for
the Designated Lender and shall not be signed by the Designated Lender on its
own behalf, and shall be binding upon the Designated Lender to the same extent
as if signed by the Designated Lender on its own

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behalf. The Borrower, the Agent and the Lenders may rely thereon without
any requirement that the Designated Lender sign or acknowledge the same. No
Designated Lender may assign or transfer all or any portion of its interest
hereunder or under any other Credit Document, other than assignments to the
Designating Lender which originally designated such Designated Lender or
otherwise in accordance with the provisions of Sections 10.5(b) and (c). The
Agent and each Lender agrees that it will not institute against any Designated
Lender or join any other Person in instituting against any Designated Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any federal or state bankruptcy or similar law, until the
later to occur of (x) one year and one day after the payment in full of the
latest maturing commercial paper note issued by such Designated Lender and (y)
the Maturity Date.

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

     10.7 Usury Not Intended; Refund of Any Excess Payments. It is the intent
of the parties in the execution and performance of this Agreement to contract
in strict compliance with the usury laws of the State of Texas and the United
States of America from time to time in effect. In furtherance thereof, the
Agent, the Lenders and the Borrower stipulate and agree that none of the terms
and provisions contained in this Agreement or the other Credit Documents shall
ever be construed to create a contract to pay for the use, forbearance or
detention of money with interest at a rate in excess of the Ceiling Rate and
that for purposes hereof “interest” shall include the aggregate of all charges
which constitute interest under such laws that are contracted for, reserved,
taken, charged or received under this Agreement. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Ceiling Rate, the Borrower, the Agent and the Lenders shall, to the maximum
extent permitted under applicable law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) “spread” the total
amount of interest throughout the entire contemplated term of the Loans. The
provisions of this paragraph shall control over all other provisions of the
Credit Documents which may be in apparent conflict herewith.

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

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

     10.10 Disclosures. Every reference in the Credit Documents to disclosures
of the Borrower to the Agent and the Lenders in writing, to the extent that
such references refer to disclosures at or prior to the execution of this
Agreement, shall be deemed strictly to

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refer only to written disclosures delivered to the Agent and the Lenders
in an orderly manner concurrently with the execution hereof.

     10.11 No Novation. THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT
AND THE OTHER CREDIT DOCUMENTS SOLELY TO AMEND, RESTATE AND RESTRUCTURE THE
TERMS OF, AND THE OBLIGATIONS OWING UNDER AND IN CONNECTION WITH, THE CREDIT
AGREEMENT DATED DECEMBER 20, 2000 AMONG THE BORROWER, THE AGENT AND CERTAIN OF
THE LENDERS. THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS
CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING
BY THE BORROWER UNDER OR IN CONNECTION WITH THE SAID CREDIT AGREEMENT.

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

     10.13 Entire Agreement. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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

	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	9200 E. Panorama Circle
	 	 	Suite 400
	 	 	Englewood, Colorado 80112
	 	 	Attention: Corporate Finance

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

	 	 	 	 	 
	 	 	ARCHSTONE – SMITH TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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	Lender Commitment: $35,000,000.00	 	JPMORGAN CHASE BANK,
	Percentage: 5.833333333%	 	as Agent and as a Lender
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	Address:
	 	 	712 Main Street
	 	 	Houston, Texas 77002
	 	 	Attention: Manager, Real Estate Group
	 	 	 	 	 
	 	 	Telecopy No.: 713/216-7713
	 	 	Telephone No.: Kent Kaiser
	 	 	 	 	          
     713/216-8699

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	Lender Commitment: $30,000,000.00	 	CITICORP NORTH AMERICA, INC.
	Percentage: 5.000000000%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	390 Greenwich Street
	 	 	New York, New York 10013
	 	 	Attention: Mr. Michael Chlopak
	 	 	 	 	 
	 	 	Telephone No.: 212/723-5899
	 	 	Telecopier No.: 212/723-8380

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	Lender Commitment: $35,000,000.00	 	BANK OF AMERICA, N.A.
	Percentage: 5.833333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	901 Main Street, 64th Floor
	 	 	Dallas, Texas 75202
	 	 	Attention: Charlotte Wai Deinhart
	 	 	 	 	 
	 	 	Telephone No.: 214/209-9129
	 	 	Telecopier No.: 214/209-0995

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	Lender Commitment: $35,000,000.00	 	WELLS FARGO BANK, NATIONAL
	Percentage: 5.833333333%	 	ASSOCIATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	4643 S. Ulster Street
	 	 	Suite 1400
	 	 	Denver, Colorado 80237
	 	 	Attention: Martia Kontak
	 	 	 	 	 
	 	 	Telephone No.: 303/741-0800 X208
	 	 	Telecopy No.: 303/741-0867

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	Lender Commitment: $35,000,000.00	 	COMMERZBANK AG, NEW YORK
	Percentage: 5.833333333%	 	BRANCH
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	
Commerzbank AG, New York Branch
	 	 	2 World Financial Center
	 	 	New York, New York 10281-1050
	 	 	Attention: David Schwarz
	 	 	 	 	 
	 	 	Telephone No.: 212/266-7632
	 	 	Telecopy No.: 212/266-7565

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	Lender Commitment: $20,000,000.00	 	MELLON BANK, N.A.
	Percentage: 3.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	One Mellon Bank Center, Room 5325
	 	 	Pittsburgh, PA 15258-0001
	 	 	Attention: James McDunn
	 	 	 	 	 
	 	 	Telephone No.: 412/234-5344
	 	 	Telecopy No.:412/234-8657

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	Lender Commitment: $26,000,000.00	 	SOUTHTRUST BANK
	Percentage: 4.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	600 West Peachtree, Suite 2600
	 	 	Atlanta, Georgia 30308
	 	 	Attention: Jim Miller
	 	 	 	 	 
	 	 	Telephone No.: 404/532-5259
	 	 	Telecopy No.: 404/532-5280

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	Lender Commitment: $30,000,000.00	 	SUNTRUST BANK
	Percentage: 5.000000000%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	8245 Boone Blvd., Suite 820
	 	 	Vienna, Virginia 22182
	 	 	Attention: Gregory T. Horstman
	 	 	 	 	 
	 	 	Telephone No.: 703/902-9384
	 	 	Telecopy No.: 703/902-9245

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	Lender Commitment: $35,000,000.00	 	BANK ONE, NA
	Percentage: 5.833333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	Address:
	 	 	Corporate Real Estate
	 	 	One Bank One Plaza, Suite IL1-0315
	 	 	Chicago, Illinois 60670-0374
	 	 	Attention: Angela L. Kleiman
	 	 	 	 	 
	 	 	Telephone No.: 312/325-3120
	 	 	Telecopy No.: 312/325-3122

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	Lender Commitment: $26,000,000.00	 	UNION BANK OF CALIFORNIA, N.A.
	Percentage: 4.333333333%	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

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	Lender Commitment: $30,000,000.00	 	KEYBANK NATIONAL ASSOCIATION
	Percentage: 5.000000000%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	1675 Broadway, Suite 400
	 	 	Denver, Colorado 80202
	 	 	
Attention:
	 	Scott Childs and Cheryl
	 	 	 	 	Van Klompenberg
	 	 	 	 	 
	 	 	Telephone No.: 720/904-4407/4441
	 	 	Telecopy No.: 720/904-4410/4420

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	Lender Commitment: $26,000,000.00	 	CITIZENS BANK OF MASSACHUSETTS
	Percentage: 4.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

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	Lender Commitment: $30,000,000.00	 	PNC BANK, NATIONAL ASSOCIATION
	Percentage: 5.000000000%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	Address:
	 	 	One PNC Plaza, 19th Floor
	 	 	Mail Stop PL-POPP-19-2
	 	 	Pittsburgh, Pennsylvania 15222
	 	 	Attention: Paul Jamiolkowski
	 	 	 	 	 
	 	 	Telephone No.: 412/768-3928
	 	 	Telecopy No.: 412/762-6500

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	Lender Commitment: $25,000,000.00	 	U.S. BANK NATIONAL ASSOCIATION
	Percentage: 4.166666667%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	918 17th Street, 5th Floor
	 	 	Denver, Colorado 80203
	 	 	Attention: Leanne Toler
	 	 	 	 	 
	 	 	Telephone No.: 303/585-4172
	 	 	Telecopy No.: 303/585-4199

78

Table of Contents

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

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	600 Peachtree Street, Suite 2700
	 	 	Atlanta, Georgia 30308
	 	 	Attention: Bill Zarrett
	 	 	 	 	 
	 	 	Telephone No.: 404/877-1504
	 	 	Telecopy No.: 404/888-8998

	 	 	 	 	 
	Lender Commitment: $20,000,000.00	 	THE BANK OF NOVA SCOTIA
	Percentage: 3.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	580 California Street, Suite 2100
	 	 	San Francisco, California 94104
	 	 	Attention: Abid Gilani
	 	 	 	 	 
	 	 	Telephone No.: 415/816-9800
	 	 	Telecopy No.: 415/397-0791

79

Table of Contents

	 	 	 	 	 
	Lender Commitment: $26,000,000.00	 	MANUFACTURERS AND TRADERS
	Percentage: 4.333333333%	 	TRUST COMPANY
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	Mail Code 101-747
	 	 	25 South Charles Street, 17th Floor
	 	 	Baltimore, Maryland 21201
	 	 	Attention: Ken Crawford
	 	 	 	 	 
	 	 	Telephone No.: 410/545-2369
	 	 	Telecopy No.: 410/545-2017

80

Table of Contents

	 	 	 	 	 
	Lender Commitment: $26,000,000.00	 	MORGAN STANLEY BANK
	Percentage:   4.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

81

Table of Contents

	 	 	 	 	 
	Lender Commitment: $25,000,000.00	 	LASALLE BANK NATIONAL
	Percentage: 4.166666667%	 	ASSOCIATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

82

Table of Contents

	 	 	 	 	 
	Lender Commitment: $20,000,000.00	 	BANK OF CHINA, NEW YORK BRANCH
	Percentage: 3.333333333%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

83

Table of Contents

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

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	745 Seventh Avenue, 6th Floor
	 	 	New York, New York 10019
	 	 	Attention: Jane Gillard
	 	 	 	 	 
	 	 	Telephone No.: 212/526-7417
	 	 	Telecopy No.: 646/758-2538

84

Table of Contents

	 	 	 	 	 
	Lender Commitment: $15,000,000.00	 	COMPASS BANK
	Percentage: 2.500000000%	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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

85

Table of Contents

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

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	Address:
	 	 	7501 Wisconsin Avenue, 12th Floor
	 	 	Bethesda, Maryland 20814
	 	 	Attention: J. Jordan O’Neill, III
	 	 	 	 	 
	 	 	Telephone No.: 240/497-7733
	 	 	Telecopy No.: 240/497-7714

86

Table of Contents

	 	 	 	 	 
	Lender Commitment: $10,000,000.00	 	E. SUN COMMERCIAL BANK, LTD., LOS
	Percentage: 1.666666667%	 	ANGELES BRANCH
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Address:
	 	 	17700 Castleton Street, Suite 500
	 	 	City of Industry, California 91748
	 	 	Attention: Nina Siu
	 	 	 	 	 
	 	 	Telephone No.: 626/810-2400 X223
	 	 	Telecopy No.: 626/839-5531

87

Table of Contents

SCHEDULE I

AMERITON Properties Incorporated

ASN Richardson Highlands LLC

ASN Roosevelt Center LLC

SCA North Carolina Limited Partnership

API Hibiscus LLC

API Jefferson Park LLC

API Methuen LLC

ASN Rockville LLC

Kentlands Village Business Trust

Briar Meadows Apartments LLC

ASN Bowie LLC

ASN Cambridge LLC

ASN Esplanade at Park Center LLC

ASN Estancia LLC

ASN Fairfax Corner LLC

ASN Lakeshore East LLC

ASN Miramar Lakes LLC

ASN Northgate, LLC

ASN Park Essex LLC

ASN Santa Monica LLC

ASN Saybrooke LLC

ASN Sussex Commons LLC

ASN Ventura LLC

ASN Warner Center, LLC

ASN Washington Boulevard LLC

ASN Watertown LLC

ASN Dakota Ridge LLC

ASN-Massachusetts Holdings (2) LLC

ASN-Massachusetts Holdings (3) LLC

ASN-Washington Holdings (1) LLC

ASN Wendemere, LLC

Courthouse Hill LLC

PTR-California Holdings (3) LLC

SCA Florida Holdings (2) LLC

Security Capital Atlantic Multifamily LLC

Smith Property Holdings Ballston Place L.L.C.

Smith Property Holdings Harbour House South L.L.C.

Smith Property Holdings Illinois Center L.L.C.

 

Table of Contents

Smith Property Holdings Lincoln Towers L.L.C.

Smith Property Holdings One East Delaware L.L.C.

Smith Property Holdings Reston Landing L.L.C.

Smith Property Holdings South Beach Towers L.L.C.

Smith Property Holdings Sunset Pointe Court L.L.C.

Smith Property Holdings Sunset Pointe 3 L.L.C.

Smith Property Holdings Sunset Pointe North L.L.C.

Smith Property Holdings Superior Place L.L.C.

Smith Property Holdings Harbor House L.L.C.

First Herndon Associates Limited Partnership

Smith Property Holdings 4411 Connecticut L.L.C.

Smith Property Holdings Columbia Road L.P.

Smith Property Holdings Crystal Towers L.P.

Smith Property Holdings Five L.P.

Smith Property Holdings Six L.P.

2

Table of Contents

OFFICER’S CERTIFICATE

     Archstone-Smith Operating Trust (the “Borrower”), Archstone-Smith Trust
(the “Parent”), JPMorgan Chase Bank (“JPMC”), Wells Fargo Bank, N.A. and Bank
of America, N.A., as Agents (the “Agents”) and certain other Lenders (the
“Lenders”) entered into that certain Amended and Restated Credit Agreement (the
“Agreement”) dated as of      , 2003, as the same may be amended.
Any term used herein and not otherwise defined shall have the meaning ascribed
to it in the Agreement.

          The undersigned hereby certifies that:

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

	 	1.	 	Maximum Debt to Total Asset Value Ratio Calculation
	 
	 	 	 	(Section 5.3 (e))

	 	 	 	 	 	 	 
	 	 	
(A)
	 	Indebtedness (Borrower and Parent)	 	 
	 	 	 	 	Total Unsecured Debt (per GAAP)
	 	$           
	 	 	 	 	Total Secured Debt (per GAAP)
	 	$           
	 	 	 	 	Guarantees, Endorsements and Other Contingent Obligations
	 	$           
	 	 	 	 	Obligations under Hedging Agreements, as defined
	 	$           
	 	 	 	 	Equity Percentage of Indebtedness of Unconsolidated Affiliates
	 	$           
	 	 	 	 	Other (pursuant to the Agreement)
	 	$           
	 	 	 	 	Total Indebtedness, as defined
	 	$           
	 	 	
(B)
	 	Total Asset Value:	 	 
	 	 	 	 	Aggregated Net Operating Income from Stabilized Properties	 	 
	 	 	 	 	Divided by 8.00%
	 	$           
	 	 	 	 	Historical Value of Pre-Stabilized Properties
	 	$           
	 	 	 	 	Historical Value of Properties Under Construction
	 	$           
	 	 	 	 	Historical Value of Undeveloped Land
	 	$           
	 	 	 	 	Other Assets (excluding intangibles as defined by GAAP)
	 	$           
	 	 	 	 	Total Asset Value of Unconsolidated Affiliates
	 	$           

EXHIBIT A

Page 1 of 7 Pages

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Total Asset Value, as defined
	 	$           
	 	 	
(C)
	 	Maximum Debt to Total Asset Value (Ratio of 1(A) to 1(B))
Required: Maximum:
	 	60%
	 	 	 	 	 	 	 
	 	 	
2.
	 	Maximum Secured Debt Calculation	 	 
	 	 	 	 	(Section 5.3 (a))	 	 
	 	 	 	 	 	 	 
	 	 	 	 	(A)    Secured Debt, as defined
	 	$           
	 	 	 	 	(B)    Total Asset Value, as defined
	 	$           
	 	 	 	 	(C)    Maximum Secured Debt to
Total Asset Value	 	 
	 	 	 	 	(Ratio of 2(A) to 2(B))
	 	            
	 	 	 	 	Required:Maximum:
	 	   40%  
	 	 	 	 	 	 	 
	 	 	
3.
	 	Coverage Ratio Calculation	 	 
	 	 	 	 	(Section 5.3 (b))	 	 
	 	 	 	 	 	 	 
	 	 	
(A)
	 	Borrower’s EBITDA:	 	 
	 	 	 	 	Net Income (per GAAP)
	 	$           
	 	 	 	 	Plus:	 	 
	 	 	 	 	Depreciation and Amortization (per GAAP)
	 	$           
	 	 	 	 	Interest Expense, as defined, of Borrower
and Parent
	 	$           
	 	 	 	 	Income Taxes (per GAAP)
	 	$           
	 	 	 	 	Extraordinary Gains/Losses (per GAAP)
	 	$           
	 	 	 	 	Payments on Borrower’s Preferred Stock (to
the extent included in net income)
	 	$           
	 	 	 	 	Equity Percentage of EBITDA for
	 	$           
	 	 	 	 	Unconsolidated Affiliates
	 	$           
	 	 	 	 	Other (pursuant to the Agreement)
	 	$           
	 	 	 	 	Borrower’s EBITDA, as defined
	 	$           
	 	 	
(B)
	 	Dividends and Distributions Paid with Respect to
Disqualified Stock
	 	$           
	 	 	
(C)
	 	Interest Expense, as defined, of Borrower and Parent
	 	$           
	 	 	
(D)
	 	Sum of 3(B) and 3(C)
	 	$           
	 	 	
(E)
	 	Coverage Ratio (Ratio of 3(A) to 3(D))
	 	:    1.0   
	 	 	 	 	 	 	 
	 	 	 	 	Required:
	Minimum of 2.0 to 1.0
	 	 	 	 	 	 	 
	 	 	
4.
	 	Fixed Charge Coverage Ratio Calculation	 	 
	 	 	 	 	(Section 5.3(c))	 	 
	 	 	 	 	 	 	 
	 	 	
(A)
	 	Borrower’s EBITDA, as defined
	 	$           
	 	 	
(B)
	 	Unit Capital Expenditures
	 	$           
	 	 	
(C)
	 	EBITDA minus Unit Capital Expenditures
	 	$           

EXHIBIT A

Page 2 of 7 Pages

Table of Contents

	 	 	 	 	 	 	 
	 	 	
(D)
	 	Interest Expense, as defined, of Borrower and Parent
	 	$           
	 	 	
(E)
	 	Payments and Payables on Disqualified Stock
	 	$           
	 	 	
(F)
	 	Regularly Scheduled Principal Paid and Payable
(Borrower and Parent)
	 	$           
	 	 	
(G)
	 	Sum of 4(D), 4(E) and 4(F)
	 	$           
	 	 	
(H)
	 	Fixed Charge Coverage Ratio (Ratio of 4(C) to 4(G))
	 	    1.0    
	 	 	 	 	 	 	 
	 	 	 	 	Required:
	Minimum of 1.75 to 1.0
	 	 	 	 	 	 	 
	 	 	
5.
	 	Tangible Net Worth	 	 
	 	 	 	 	(Section 5.3(d))	 	 
	 	 	 	 	Assets
	 	$           
	 	 	 	 	Liabilities
	 	$           
	 	 	 	 	Tangible Net Worth, as defined
	 	$           
	 	 	 	 	 	 	 
	 	 	 	 	Required:
	Minimum of $3.500 billion
	 	 	 	 	 	 	 
	 	 	
6.
	 	Property Pool	 	 
	 	 	 	 	(Section 5.15)	 	 
	 	 	 	 	 	 	 
	 	 	
(A)
	 	Sum of the Aggregate Net Operating Income for Pool Real Estate   That Has Reached the Stabilization Date Divided by 8.00% and the
Aggregate Historical Value for Pool Real Estate That Has Not
Reached the Stabilization Date
	 	$           
	 	 	
(B)
	 	Outstanding Unsecured Indebtedness
	 	$           
	 	 	
(C)
	 	Pool Value Divided by Outstanding Unsecured

Indebtedness (6(A) divided by 6(B))
	 	          %
	 	 	 	 	 	 	 
	 	 	Required:
	Minimum of 167%
	 	 	 	 	 	 	 
	 	 	
(D)
	 	Pool Value attributable to unimproved land (Maximum-5%)
	 	$           
	 	 	
(E)
	 	Pool Value attributable to unimproved land, land under
construction or development, projects that do not have 80%
Occupancy Level, non-multifamily land, land that has not
reached the Calculation Date (Maximum-20%)
	 	$           
	 	 	
(F)
	 	Pool Value attributable to improved property that is not
multifamily residential (Maximum-10%)
	 	$           
	 	 	
(G)
	 	The Borrower confirms that it has received the
environmental assessments required by
Section 5.15(a)(i)
	 	             
	 	 	 	 	 	 	 
	 	 	
7.
	 	Specified Permitted Holdings	 	 
	 	 	 	 	(Section 6.3)	 	 

EXHIBIT A

Page 3 of 7 Pages

Table of Contents

	 	 	 	 	 	 	 
	 	 	
(A)
	 	Securities Received in Settlement Liabilities Created in the
Ordinary Course of Business
	 	          
	 	 	 	 	(Maximum – 5%)	 	 
	 	 	
(B)
	 	Unconsolidated Affiliates Engaged in Permitted Businesses
	 	          
	 	 	 	 	(Maximum – 20%)	 	 
	 	 	
(C)
	 	Loans to Unaffiliated Persons
	 	          
	 	 	 	 	(Maximum – 10%)	 	 
	 	 	
(D)
	 	Other Securities
	 	          
	 	 	 	 	(Maximum – 10%)	 	 
	 	 	
(E)
	 	Income Producing Properties That Are Not Multifamily

Residential
	 	          
	 	 	 	 	(Maximum – 10%)	 	 
	 	 	
(F)
	 	Unimproved Land
	 	          
	 	 	 	 	(Maximum – 7.5%)	 	 
	 	 	
(G)
	 	Unrelated, Non-Incidental Investments
	 	          
	 	 	 	 	(Maximum – 5%)	 	 
	 	 	
(H)
	 	Aggregate Value of the specified Permitted Holdings
(sum of 7(A) through 7(H))
	 	          
	 	 	 	 	(Maximum – 30%)	 	 

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

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

EXHIBIT A

Page 4 of 7 Pages

Table of Contents

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

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	
1.	 	 	(A)
	 	Sum of Total Assets, Aggregate Purchase Price of Real
Estate Assets, or Mortgages Receivable Acquired, and
Securities Offering Proceeds Received to Purchase
said Assets
	 	$           
	 	 	 	 	 	 	(B)
	 	Maximum amount of Debt
	 	$           
	 	 	 	 	 	 	(C)
	 	Debt
	 	$           
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	
2.	 	 	(A)
	 	Consolidated Income Available for Debt Service
	 	$           
	 	 	 	 	 	 	(B)
	 	Annual Service Charge
	 	$           
	 	 	 	 	 	 	(C)
	 	Ratio of Consolidated Income Available for Debt
Service to Annual Service Charge
	 	             
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	
3.	 	 	(A)
	 	Total Assets
	 	$           
	 	 	 	 	 	 	(B)
	 	Maximum Secured Debt
	 	$           
	 	 	 	 	 	 	(C)
	 	Secured Debt
	 	$           

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

	 	 	 	 	 
	1.	 	
Indebtedness
	 	$           
	2.	 	
Interest Expense
	 	$           

	VIII.	 	Check either (A) or (B)

	 	 	 	 	 
	 	 	
[  ]
	 	(A) The Parent has kept, observed, performed and
fulfilled each and every one of its obligations under the Agreement
during the period covered by the applicable financial statements.
	 	 	 	 	 
	 	 	
[  ]
	 	(B) The Parent has kept, observed, performed and
fulfilled each and every one of its obligations under the Agreement
during the period covered by the applicable financial statements
except for the following matters:

EXHIBIT A

Page 5 of 7 Pages

Table of Contents

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

	 	 	 	 	 
	Date:	 	
Name:	 	 
	 	
	 	 	

	 	 	 	 	      [Vice President Name]

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

EXHIBIT A

Page 6 of 7 Pages

Table of Contents

POOL PROPERTY LIST

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

EXHIBIT A

Page 7 of 7 Pages

Table of Contents

REQUEST FOR LOAN

Date: _______________, 2003

JPMorgan Chase Bank

712 Main Street

Houston, Texas 77002

(“Agent”)

	 	 	 
	RE:	 	
Request for Loan Under Amended and Restated Credit
Agreement (as amended from time to time, the “Credit
Agreement”) dated as of      , 2003, among
Archstone-Smith Operating Trust (the “Borrower”), the Agent
and the Lenders as signatory to the Credit Agreement

Gentlemen:

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Maximum Principal Amount	 	$	600,000,000.00	 
	 
	 	 	Less the amount outstanding under the
Credit Agreement (including Swing Loans
and Money Market Loans)	 	 	($              .  	)
	 	 	Less the LC Exposure	 	 	($              .  	)
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Less the LC Exposure	 	 	($              .  	)
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Available amount	 	 	$               .  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Less amount requested	 	 	($              .  	)
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount remaining to be advanced	 	 	$               .  	 

EXHIBIT B

Page 1 of 3 Pages

Table of Contents

	 	 	 	 	 	 	 	 	 	 	 
	 	 	The advance or conversion is to be made as follows:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Base Rate Borrowing.	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Amount of Base Rate Borrowing:
	 	 	$              .  	 
	 	 	 	 	2.
	 	Date of Base Rate Borrowing
	 	 	              ,20  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Eurodollar Rate Borrowing:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Amount of Eurodollar Rate Borrowing:
	 	 	$              .  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Amount of conversion of existing
Loan to Eurodollar Rate Borrowing:
	 	 	$              .  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	3.
	 	Number of Eurodollar Rate
Borrowing(s) now in effect:
	 	 	                  	 
	 	 	 	 	 	 	[cannot exceed 12]	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	4.
	 	Date of Eurodollar Rate Borrowing
or conversion:
	 	 	              ,20  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	5.
	 	Interest Period:
	 	 	                  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	6.
	 	Expiration date of current Interest
Period as to this conversion:
	 	 	              ,20  	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Swing Loan.	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	1.
	 	Amount of Swing Loan:
	 	 	$              .  	 
	 	 	 	 	 	 	[minimum of $1,000,000.00 and in
multiples of $100,000.00]	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2.
	 	Date of Swing Loan:
	 	 	              ,20  	 

EXHIBIT B

Page 2 of 3 Pages

Table of Contents

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

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

EXHIBIT B

Page 3 of 3 Pages

Table of Contents

	 	 	 
	$[          ]	 	
     , 2003

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

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

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

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

     4.     Excess Interest Will be Refunded or Credited. If, for any reason
whatever, the interest paid or received on this note during its full term
produces a rate which exceeds the Ceiling Rate, the Holder of this note shall
refund to the payor or, at the Holder’s option,

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

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

     6.     Payment Schedule. The principal of this note shall be due and payable
on the Maturity Date. Accrued and unpaid interest shall be due and payable on
each Interest Payment Date. All payments shall be applied first to accrued
interest, the balance to principal.

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

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

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

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

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

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

     The Holder’s right to accelerate this note on account of any late payment
or other default shall not be waived or deemed waived by the Holder by reason
of the Holder’s having previously accepted one or more late payments or by
reason of any Holder’s otherwise not accelerating this note or exercising other
remedies for any default, and no Holder shall ever be obligated or deemed
obligated to notify Maker or any other person

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that Holder is requiring strict compliance with this note or any papers
securing or otherwise relating to it before such Holder may accelerate this
note or exercise any other remedy.

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

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

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

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

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after the Holder has made such determination and shall be conclusive and
binding, absent manifest error. Maker shall pay the Holder the amount shown as
due on any such certificate within 15 days after the Holder gives it. In
preparing such certificate, the Holder may employ such assumptions and make
such allocations of costs and expenses as the Holder in good faith deems
reasonable and may use any reasonable averaging and attribution method.

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

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

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

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

	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

EXHIBIT C

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SWING LOAN NOTE

	 	 	 
	$100,000,000.00	 	
     , 2003

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

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

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

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

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

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

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

     6.     Payment Schedule. The principal of this note shall be due and payable
on the Revolving Credit Termination Date. Accrued and unpaid interest shall be
due and payable on each Interest Payment Date. All payments shall be applied
first to accrued interest, the balance to principal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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MASTER NOTE

Money Market Borrowings

	 	 	 
	$300,000,000.00	 	
     , 2003

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Name:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

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Form of Money Market Quote Request

	 	 	 
	To:	 	
JPMorgan Chase Bank (the “Agent”)
	 	 	 
	From:	 	
Archstone-Smith Operating Trust (the “Borrower”)
	 	 	 
	Re:	 	
Amended and Restated Credit Agreement (the “Credit Agreement”),
dated      , 2003 among the Borrower, the Lenders parties
thereto and the Agent

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

     Date of Borrowing:      

	 	 	 	 	 
	Principal Amount	 	Interest Period
	
	 	

	$

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

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

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

	 	 	 	 	 	 	 
	 	 	ARCHSTONE-SMITH OPERATING TRUST
	 	 	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

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

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

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EXHIBIT F

Form of Invitation for Money Market Quotes

	 	 	 
	To:	 	
[Name of Lender]
	 	 	 
	RE:	 	
Invitation for Money Market Quotes to Archstone-Smith Operating Trust
(the “Borrower”)

     Pursuant to Section 2.8 of the Amended and Restated Credit Agreement dated
     , 2003 among the Borrower, the Lenders parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Loan(s):

Date of Borrowing:

	 	 	 	 	 
	Principal Amount	 	Interest Period
	
	 	

	$

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

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

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,
	 	 	as Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	     Authorized Officer

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Form of Money Market Quote

	 	 	 
	To:	 	
JPMorgan Chase Bank, as Agent
	 	 	 
	RE:	 	
Money Market Quote to Archstone-Smith Operating Trust (the “Borrower”)

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

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

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

	$
	 
	$

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

		
	 	       We understand and agree that the offer(s) set forth above, subject
to the satisfaction of the applicable conditions set forth in the Amended
and Restated Credit Agreement dated
     , 2003 among the
Borrower, the Lenders parties thereto and yourselves, as Agent,
irrevocably obligates us to make the Money Market Loan(s) for which any
offer(s) are accepted, in whole or in part.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	[NAME OF LENDER]
	 	 	 	 	 
	Dated:	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	     Authorized Officer

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Form of Designation Agreement

Dated
               , 200__

     Reference is made to that certain Amended and Restated Credit Agreement
dated
               , 2003 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among ARCHSTONE-SMITH OPERATING TRUST,
the Lenders parties thereto, and JPMORGAN CHASE BANK (the “Agent”), as Agent.
Terms defined in the Credit Agreement are used herein with the same meaning.

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

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

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

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

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

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

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

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

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

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

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

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

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

Effective Date:

                         ,
200     

	 	 	 	 	 
	 	 	[NAME OF DESIGNOR], as Designor
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	[NAME OF DESIGNEE], as Designee
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	
Title:	 	 
	 	 	 	 	

	 	 	 	 	 
	 	 	Applicable Lending Office

(and address for notices):
	 	 	 	 	 
	 	 	[Address]

Accepted this _____ day of

______________, 200__

JPMORGAN CHASE BANK, as Agent

	 	 	 	 
	By:	 	 	 
	 	 	

	 
	Name:	 	 	 
	 	 	

	 
	Title:	 	 	 
	 	 	

	 

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FORM OF GUARANTY

     THIS
GUARANTY dated as of
               , 2003 executed and delivered by
each of the undersigned, whether one or more, (all each a “Guarantor” and
collectively, the “Guarantors”), in favor of (a) JPMORGAN CHASE BANK, in its
capacity as Agent (the “Agent”) for the Lenders under that certain Amended and
Restated Credit Agreement dated as of October 30, 2003 by and among
ARCHSTONE-SMITH OPERATING TRUST (the “Borrower”), the financial institutions
party thereto and their assignees in accordance therewith (the “Lenders”), and
the Agent (as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms, the “Credit
Agreement”) and (b) the Lenders.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     SECTION 17. JURISDICTION, VENUE.

     (a)  EACH GUARANTOR AGREES THAT THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF TEXAS, HOUSTON DIVISION, OR, AT THE OPTION OF THE AGENT, ANY STATE
COURT LOCATED IN HARRIS COUNTY, TEXAS SHALL HAVE NON-EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY GUARANTOR, THE
AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY
OR ANY OTHER CREDIT DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM OR
ANY COLLATERAL. EACH GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. THE
CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE
AGENT OR ANY LENDER IN ANY OTHER APPROPRIATE JURISDICTION. FURTHER, EACH
GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	[Guarantor Signature]

	 	Address:

9200 E. Panorama Circle

Suite 400

Englewood, Colorado 80112

Attention: Corporate Finance

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ASSIGNMENT AND ASSUMPTION

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

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

	 	 	 	 	 
	1.	 	
Assignor:	 	 
	 	 	 	 	

	2.	 	
Assignee:	 	 
	 	 	 	 	

	 	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]1]
	 	 	 	 	 
	3.	 	
Borrower:
	 	Archstone-Smith Operating Trust
	 	 	 	 	 
	4.	 	
Administrative Agent:
	 	JPMorgan Chase Bank, as the administrative agent under the Credit Agreement
	 	 	 	 	 
	5.	 	
Credit Agreement:
	 	[The Amended
and Restated Credit Agreement dated as of
     , 2003 among Archstone-Smith
Operating Trust, the Lenders parties thereto, JPMorgan Chase Bank, as Administrative Agent, and
the other lenders parties thereto]

	1 Select as applicable.

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	6.	 	Assigned Interest:

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

	 	 	 	
$	 	 	$	 	 	 	 	%	 
	 	 	 	
$	 	 	$	 	 	 	 	%	 
	 	 	 	
$	 	 	$	 	 	 	 	%	 

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

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

	 	 	 	 	 
	 	 	ASSIGNOR
	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	
Title:	 
	 	 	 	 	 
	 	 	ASSIGNEE
	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	
Title:	 

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

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[Consented to and]4 Accepted:

JPMORGAN CHASE BANK, as

   Administrative Agent

	 	 	 
	By	 	 
	 	

	 	Title:	 

[Consented to:]5

[NAME OF RELEVANT PARTY]

	 	 	 
	By	 	 
	 	

	 	Title:	 

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

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ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

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

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

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

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

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GUARANTY OF COLLECTION

     THIS
GUARANTY (this “Guaranty”), dated as of
               
 is made by
                    
(the “Guarantor”), in favor of (a) JPMorgan Chase Bank,
in its capacity as Administrative Agent (the “Agent”) for the Lenders under
that certain Amended and Restated Credit Agreement dated as of October 30, 2003
by and among Archstone-Smith Operating Trust (the “Borrower”), the financial
institutions party thereto and their assignees in accordance therewith (the
“Lenders”), and the Agent (as the same may be amended, restated, supplemented,
or otherwise modified from time to time in accordance with its terms, the
“Credit Agreement”) and (b) the Lenders.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EXHIBIT K

Page 3 of 4

 

Table of Contents

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

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

	 	 	 	 	 
	 	 	[Name of Guarantor]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	
Name:	 	 
	 	 	 	

	 	 	
Title:	 	 
	 	 	 	

	 	 	 	 	 
	 	 	[Address of Guarantor]

EXHIBIT K

Page 4 of 4exv4w4

 

RIGHTS AGREEMENT

between

ARCHSTONE-SMITH TRUST

and

MELLON INVESTOR SERVICES LLC

Rights Agent

Dated as of December 1, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	Section 1.	 	Certain Definitions
	 	 	1	 
	Section 2.	 	Appointment of Rights Agent
	 	 	5	 
	Section 3.	 	Issuance of Right Certificates
	 	 	6	 
	Section 4.	 	Form of Right Certificates
	 	 	8	 
	Section 5.	 	Countersignature and Registration
	 	 	9	 
	Section 6.	 	Transfer, Division, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates
	 	 	9	 
	Section 7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8.	 	Cancellation and Destruction of Right Certificates
	 	 	12	 
	Section 9.	 	Availability of Preferred Shares
	 	 	12	 
	Section 10.	 	Preferred Shares Record Date
	 	 	13	 
	Section 11.	 	Adjustment of Purchase Price, Number of Shares or Number of Rights
	 	 	13	 
	Section 12.	 	Certificate of Adjusted Purchase Price or Number of Shares
	 	 	20	 
	Section 13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	20	 
	Section 14.	 	Fractional Rights and Fractional Shares
	 	 	22	 
	Section 15.	 	Rights of Action
	 	 	24	 
	Section 16.	 	Agreement of Right Holders
	 	 	24	 
	Section 17.	 	Right Certificate Holder Not Deemed a Shareholder
	 	 	25	 
	Section 18.	 	Concerning the Rights Agent
	 	 	25	 
	Section 19.	 	Merger or Consolidation or Change of Name of Rights Agent
	 	 	25	 
	Section 20.	 	Rights and Duties of Rights Agent
	 	 	26	 
	Section 21.	 	Change of Rights Agent
	 	 	28	 
	Section 22.	 	Issuance of New Right Certificates
	 	 	29	 
	Section 23.	 	Redemption
	 	 	29	 
	Section 24.	 	Exchange
	 	 	30	 
	Section 25.	 	Notice of Certain Events
	 	 	32	 
	Section 26.	 	Notices
	 	 	32	 
	Section 27.	 	Supplements and Amendments
	 	 	33	 
	Section 28.	 	General Limitations on Redemption, Modification or Termination of Rights or Amendment to Agreement
	 	 	34	 
	Section 29.	 	Successors
	 	 	34	 
	Section 30.	 	Benefits of this Agreement
	 	 	34	 
	Section 31.	 	Severability
	 	 	34	 
	Section 32.	 	Governing Law
	 	 	34	 
	Section 33.	 	Counterparts
	 	 	34	 
	Section 34.	 	Descriptive Headings
	 	 	34	 
	Section 35.	 	Determinations and Actions by the Board of Trustees
	 	 	34	 
	Section 36.	 	Limitation of Liability
	 	 	35	 
	Exhibit A	 	-           Terms of Series B Junior Participating Preferred Shares
	 	 	 	 
	Exhibit B	 	-           Form of Right Certificate
	 	 	 	 

2

 

RIGHTS AGREEMENT

     Rights Agreement, dated as of December 1, 2003 (this “Agreement”), between
Archstone-Smith Trust, a Maryland real estate investment trust (the “Trust”),
and Mellon Investor Services LLC, a New Jersey limited liability company, as
rights agent (the “Rights Agent”). This Agreements amends and supersedes that
certain Rights Agreement, dated as of August 31, 2001, between the Trust and
the Rights Agent.

WITNESSETH:

     WHEREAS, the Board of Trustees of the Trust (the “Board of Trustees”) has
authorized and declared a dividend of one preferred share purchase right (a
“Right”) for each Common Share (as hereinafter defined) of the Trust
outstanding as of the close of business on the effective date of the Primary
Archstone Merger (as such term is defined in the Amended and Restated Agreement
and Plan of Merger, dated as of May 3, 2001, by and among Archstone, the Trust,
Charles E. Smith Residential Realty, Inc. and Charles E. Smith Residential
Realty L.P. (the “Merger Agreement”) (the “Record Date”), each Right
representing the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the Expiration Date (as such term is hereinafter defined).

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

     “Acquiring Person” shall mean any Person (as hereinafter defined)
who or which, together with all Affiliates and Associates (as such terms
are hereinafter defined) of such Person, shall be the Beneficial Owner
(as hereinafter defined) of 15% or more of the Common Shares of the Trust
then outstanding, but shall not include the Trust, any Subsidiary (as
hereinafter defined) of the Trust, or any employee benefit plan of the
Trust or of any Subsidiary of the Trust or any entity holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, no Person shall become an “Acquiring Person” as the result
of (i) an acquisition of Common Shares by the Trust which, by reducing
the number of Common Shares outstanding, increases the proportionate
number of Common Shares beneficially owned by such Person to 15% or more
of the Common Shares of the Trust then outstanding, or (ii) the
acquisition by such Person of newly issued Common Shares directly from
the Trust (it being understood that a purchase from an underwriter or
other intermediary is not directly from the Trust); provided, however,
that if a Person shall become the Beneficial Owner of 15% or more of the
Common Shares of the

 

 

Trust then outstanding by reason of Common Share purchases by the Trust
or the receipt of newly issued Common Shares directly from the Trust and
shall, after such Common Share purchases or direct issuance by the Trust,
become the Beneficial Owner of any additional Common Shares of the Trust,
then such Person shall be deemed to be an “Acquiring Person”; provided
further, however, that any transferee from such Person who becomes the
Beneficial Owner of 15% or more of the Common Shares of the Trust then
outstanding shall nevertheless be deemed to be an “Acquiring Person.”
Notwithstanding the foregoing, if the Board of Trustees determines in
good faith that a Person who would otherwise be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this paragraph, has
become such inadvertently, and such Person divests as promptly as
practicable (and in any event within ten Business Days after notification
by the Trust) a sufficient number of Common Shares so that such Person
would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this paragraph, then such Person shall not be
deemed to be an “Acquiring Person” for any purposes of this Agreement.

     “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.

     “Agreement” shall have the meaning set forth in the preamble hereto.

     “Archstone” shall mean Archstone Communities Trust, a Maryland real
estate investment trust.

     A Person shall be deemed the “Beneficial Owner” of and shall be
deemed to have “beneficial ownership” of or to “beneficially own” any
securities:

     (i) which such Person or any of such Person’s Affiliates or
Associates beneficially owns, directly or indirectly;

     (ii) which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities, but only
to the extent such securities are held for a period consistent with
such a bona fide public offering), or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; (B) the sole or shared right to
vote or dispose of (including any such right pursuant to any
agreement, arrangement or

2

 

understanding, whether written or oral); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or (C) “beneficial ownership” (as determined pursuant to
Rule 13d-3 (or any successor rule) of the General Rules and
Regulations under the Exchange Act); or

     (iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person’s Affiliates or Associates
has any agreement, arrangement or understanding, whether written or
oral (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities, but only to the extent such securities are
held for a period consistent with such a bona fide public offering)
for the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to clause (B) of subparagraph (ii) of
this definition) or disposing of any securities of the Trust.

     Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase “then outstanding,” when used with reference
to the Beneficial Ownership of securities of the Trust by any Person,
shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.

     Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, any “clearing agency,” as defined in Section 3(a)(23) of
the Exchange Act, which is holding securities solely in its capacity as a
clearing agency, shall not be deemed to be the Beneficial Owner of such
securities.

     “Business Day” shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in New York or New Jersey are
authorized or obligated by law or executive order to close.

     “Board of Trustees” shall have the meaning set forth in the preamble
hereto.

     “Close of business” on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next preceding
Business Day.

3

 

     “Common Shares” when used with no direct reference or with reference
to the Trust shall mean the common shares of beneficial interest, $0.01
par value per share, of the Trust. “Common Shares” when used with
reference to any Person other than the Trust shall mean the capital stock
(or equity interest) with the greatest voting power of such other Person
or the equity securities or other equity interest having power to control
or direct the management of such other Person.

     “Distribution Date” shall have the meaning set forth in Section 3
hereof.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

     “Exchange Ratio” shall have the meaning set forth in Section 24
hereof.

     “Expiration Date” shall have the meaning set forth in Section 7
hereof.

     “Final Expiration Date” shall have the meaning set forth in Section
7 hereof.

     “Merger Agreement” shall have the meaning set forth in the preamble
hereto.

     “NASDAQ” shall have the meaning set forth in Section 11(d)(i)
hereof.

     “NYSE” shall have the meaning set forth in Section 11(d)(i) hereof.

     “Person” shall mean any individual, firm, corporation, limited
liability company, partnership, trust or other entity, and shall include
any successor (by merger or otherwise) of such entity.

     “Preferred Shares” shall mean the Series B Junior Participating
Preferred Shares of Beneficial Interest, $0.01 par value per share, of
the Trust having the rights and preferences set forth on Exhibit A to
this Agreement.

     “Principal Party” shall have the meaning set forth in Section 13(b)
hereof.

     “Purchase Price” shall have the meaning set forth in Section 4
hereof.

     “Record Date” shall have the meaning set forth in the preamble
hereto.

     “Redemption Date” shall have the meaning set forth in Section 7
hereof.

     “Redemption Price” shall have the meaning set forth in Section 23
hereof.

     “Right” shall have the meaning set forth in the preamble hereto.

     “Rights Agent” shall have the meaning set forth in the preamble
hereto.

     “Right Certificate” shall have the meaning set forth in Section 3
hereof.

4

 

     “Securities Act” shall mean the Securities Act of 1933, as amended.

     “Shares Acquisition Date” shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) promulgated
under the Exchange Act) by the Trust or an Acquiring Person that an
Acquiring Person has become such.

     “Subsidiary” of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person. For purposes of this Agreement, Archstone shall be deemed a
Subsidiary of the Trust and each Subsidiary of Archstone shall likewise
be deemed a Subsidiary of the Trust.

     “Trading Day” shall have the meaning set forth in Section 11(d)(i)
hereof.

     “Triggering Event” shall mean any event described in Section
11(a)(ii) or Section 13(a) hereof.

     “Trust” shall have the meaning set forth in the preamble hereto.

     Any determination or interpretation required in connection with any of the
definitions contained in this Section 1 shall be made by the Board of Trustees
in their good faith judgment, which determination shall be final and binding on
the Rights Agent and on all shareholders of the Trust.

     Section 2. Appointment of Rights Agent. The Trust hereby appoints the
Rights Agent to act as agent for the Trust in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Trust may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten days’ prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent.

     Section 3. Issuance of Right Certificates.

     (a) Until the earlier of (i) the close of business on the tenth day after
the Shares Acquisition Date, (ii) the close of business on the fifteenth
Business Day (or such later date as may be determined by action of the Board of
Trustees prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Trust, any
Subsidiary of the Trust, any employee benefit plan of the Trust or of any
Subsidiary of the Trust or any entity holding Common Shares for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Trust, any Subsidiary of the Trust, any
employee benefit plan of the Trust or of any Subsidiary of the Trust or any
entity holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then

5

 

outstanding Common Shares, or (iii) the close of business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Trustees prior to such time as any Person becomes an Acquiring Person) after
the date of filing by any Person (other than the Trust, any Subsidiary of the
Trust, or any employee benefit plan of the Trust or any Subsidiary of the Trust
or any entity holding Common Shares for or pursuant to the terms of any such
Plan) of, or the first public announcement of the intention of any Person
(other than the Trust, any Subsidiary of the Trust, or any employee benefit
plan of the Trust or any Subsidiary of the Trust or any entity holding Common
Shares for or pursuant to the terms of any such Plan) to file, any application,
request, submission or other document with any federal or state regulatory
authority seeking approval of, attempting to rebut any presumption of control
upon, or otherwise indicating an intention to enter into, any transaction or
series of transactions the consummation of which would result in any Person
(other than the Trust, any Subsidiary of the Trust, or any employee benefit
plan of the Trust or any Subsidiary of the Trust or any entity holding Common
Shares for or pursuant to the terms of any such Plan) becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then outstanding Common
Shares, other than a transaction in which newly issued Common Shares are issued
directly by the Trust to such Person (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for Rights)
and not by separate certificates, and (y) the Rights will be transferable only
in connection with the transfer of the underlying Common Shares (including a
transfer to the Trust). As soon as practicable after the Distribution Date,
the Trust will prepare and execute, the Rights Agent will countersign, and the
Trust will send or cause to be sent (and the Rights Agent, at the expense of
the Trust, will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Trust, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

     The Trust shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally,
the Trust shall confirm same in writing on or prior to the Business Day next
following. Until such notice is received by the Rights Agent, the Rights Agent
may presume conclusively for all purposes that the Distribution Date has not
occurred.

     (b) With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof, and registered
holders of Common Shares shall also be the registered holders of the associated
Rights (regardless of whether such ownership is indicated on the Common Share
certificates). Until the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, the transfer of any certificate for Common
Shares shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.

6

 

     (c) Rights shall be issued in respect of all Common Shares which are
issued (whether or not previously issued) after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date. Certificates evidencing such Common Shares shall also be
deemed to be certificates for Rights. Certificates evidencing both Common
Shares and Rights in accordance with this Section 3 which are executed and
delivered (whether or not the Common Shares represented thereby were previously
issued or are presented for transfer) by the Trust (including, without
limitation, certificates representing reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them a legend that by itself or together with prior legends is substantially to
the following effect:

This certificate also evidences and entitles the holder
hereof to certain rights as set forth in the Rights
Agreement between Archstone-Smith Trust (the “Trust”) and
Mellon Investor Services LLC, dated as of August 31, 2001
(the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal offices of the Trust. Under certain
circumstances, as set forth in the Rights Agreement, the
Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Trust will
mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, shall become null and
void.

Until the Distribution Date, the Rights associated with the Common Shares shall
be evidenced by the certificates evidencing the associated Common Shares alone
(regardless of whether any such certificate contains the above legend), and the
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event
that the Trust purchases or acquires any Common Shares after the Record Date
but prior to the Distribution Date, any Rights associated with such Common
Shares shall be deemed canceled and retired so that the Trust shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding.

     Section 4. Form of Right Certificates.

     (a) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Trust may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or

7

 

with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as shall be set
forth therein at the price per one one-hundredth of a Preferred Share set forth
therein (the “Purchase Price”), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.

     (b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that evidences Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or any Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes an Acquiring Person, or (iii) a transferee of an
Acquiring Person (or any Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding, whether written or oral, regarding the
transferred Rights or (B) a transfer which the Board of Trustees otherwise
concludes in good faith is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect the avoidance
of Section 7(e) hereof, and any Right Certificate issued pursuant to Section 6
or Section 11 hereof upon the transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this sentence, shall contain (to the
extent feasible and otherwise reasonably identifiable as such) the following
legend:

The Rights evidenced by this Right Certificate are or were
beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights evidenced hereby may become void in the circumstances
specified in Section 7(e) of such Agreement.

The provisions of Section 7(e) hereof shall apply whether or not any Right
Certificate actually contains the foregoing legend.

     Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Trust by its Chairman of the Board, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, General
Counsel, any Division President, any Vice President, or its Secretary, either
manually or by facsimile signature, shall have affixed thereto the Trust’s seal
or a facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Trust, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Trust who shall have signed any of the Right Certificates shall cease to be
such officer of the Trust before countersignature by the Rights Agent and
issuance and delivery by the Trust, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Trust with
the same force and effect as though the person

8

 

who signed such Right Certificates had not ceased to be such officer of
the Trust; and any Right Certificate may be signed on behalf of the Trust by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Trust to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person was not
such an officer.

     Following the Distribution Date, and receipt by the Rights Agent of notice
of the Distribution Date and such other necessary information as reasonably
requested by the Rights Agent, the Rights Agent will keep or cause to be kept,
at its office designated for such purpose, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right Certificates, the number
of Rights evidenced on its face by each of the Right Certificates and the date
of each of the Right Certificates.

     Section 6. Transfer, Division, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Sections 4(b), 7(e), 14 and 24 hereof, at any time after
the close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates may be transferred, divided,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Preferred Shares
(or, following a Triggering Event, Common Shares or other securities or
property, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, divide, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, divided, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Trust shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate until the registered holder shall have
properly completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and the Trust shall
have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Trust or Rights Agent shall reasonably request. Thereupon the
Rights Agent shall, subject to Sections 4 and 7 hereof, countersign and deliver
to the person entitled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Trust may require payment of a sum
sufficient to cover any tax or charge that may be imposed in connection with
any transfer, division, combination or exchange of Right Certificates. The
Rights Agent shall have no duty or obligation under this Section unless and
until it is reasonably satisfied that all such taxes and/or charges have been
paid or that adequate provision has been made for such payment.

     Upon receipt by the Trust and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Trust’s request,
reimbursement to the Trust and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if

9

 

mutilated, the Trust will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

     (a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price with respect to each surrendered Right for the total number of
Preferred Shares (or Common Shares or other securities or property, as the case
may be) as to which the Rights are exercised, at or prior to the earliest of
(i) the close of business on August 31, 2011 (the “Final Expiration Date”),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(the “Redemption Date”), or (iii) the time at which such Rights are exchanged
by the Trust as provided in Section 24 hereof (the earliest to occur of the
events described in (i), (ii) and (iii) being herein referred to as the
“Expiration Date”).

     (b) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $75.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.

     (c) Upon receipt of a Right Certificate evidencing exercisable Rights,
with the form of election to purchase and the certificate on the reverse side
of the Right Certificate duly executed, accompanied by payment of the Purchase
Price for the Preferred Shares (or Common Shares or other securities or
property, as the case may be) to be purchased and an amount equal to any
applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier’s
check or money order payable to the order of the Trust, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent of the
Preferred Shares) certificates for the number of Preferred Shares to be
purchased and the Trust hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Trust shall have elected to
deposit the Preferred Shares issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares evidenced by
such receipts shall be deposited by the transfer agent therefor with the
depositary agent) and the Trust shall direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Trust the amount
of cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, deliver
such cash referred to in clause (ii) above to or upon the order of the
registered holder of such Right Certificate. In

10

 

the event that the Trust is obligated to issue other securities (including
Common Shares) of the Trust, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Trust will make all arrangements necessary so that
such other securities, cash and/or property are available for distribution by
the Rights Agent, if and when appropriate.

     (d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.

     (e) Notwithstanding anything in this Agreement to the contrary, from and
after the occurrence of a Triggering Event, any Rights beneficially owned by
(i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes an
Acquiring Person, or (iii) a transferee of an Acquiring Person (or any
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming an Acquiring Person and receives such Rights
pursuant to either (x) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding, whether written or oral, regarding the
transferred Rights or (y) a transfer which the Board of Trustees otherwise
concludes in good faith is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect the avoidance
of this Section 7(e), shall become null and void without any further action,
and any holder of such Rights shall thereupon have no rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise, from and after the occurrence of a Triggering Event. The Trust
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) are complied with, but shall have no liability to any holder of Rights for
the inability to make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.

     (f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Trust shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been properly completed and signed by
the registered holder thereof and the Trust shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Trust or the
Rights Agent shall reasonably request.

     (g) The Trust covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities), the number of Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.

11

 

     Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Trust or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Trust shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Trust otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Trust, or shall, at the written request
of the Trust, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Trust.

     Section 9. Availability of Preferred Shares. The Trust covenants and
agrees that it will take all such action as may be necessary to ensure that all
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities),
subject to payment of the Purchase Price, be duly and validly authorized and
issued and fully paid and nonassessable.

     The Trust further covenants and agrees that it will pay when due and
payable any and all taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Preferred Shares (or
Common Shares and/or other securities, as the case may be) upon the exercise of
Rights. The Trust shall not, however, be required to pay any tax or charge
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts for
Preferred Shares (or Common Shares and/or other securities, as the case may be)
upon the exercise of any Rights until any such tax shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Trust’s or Rights
Agent’s reasonable satisfaction that no such tax or charge is due.

     Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the shares or securities
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable taxes or charges) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Shares (or Common Shares and/or other securities, as
the case may be) transfer books of the Trust are closed, such person shall be
deemed to have become the record holder of such shares or securities on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Trust are

12

 

open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares (or Common Shares and/or other securities, as the case may be)
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Trust, except as provided herein.

     Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.

(a)      (i) In the event the Trust shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any of its shares in a reclassification of
the Preferred Shares (including any such reclassification in connection
with a consolidation or merger in which the Trust is the continuing or
surviving entity), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Trust were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares
of the Trust issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.

     (ii) Subject to Section 24 hereof, in the event any Person becomes
an Acquiring Person, each holder of a Right, except as provided below and
in Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares
of the Trust as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the
Trust’s Common Shares (determined pursuant to Section 11(d) hereof) on
the date of the occurrence of such event. In the event that any Person
shall become an Acquiring Person and the Rights shall then be
outstanding, the Trust shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.

13

 

     (iii) In lieu of issuing Common Shares of the Trust in accordance
with Section 11(a)(ii) hereof, the Trust may, in the sole discretion of
the Board of Trustees, elect to (and, in the event that the Board of
Trustees has not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit the exercise in full of
the Rights in accordance with Section 11(a)(ii) hereof, the Trust shall)
take all such action as may be necessary to authorize, issue or pay, upon
the exercise of the Rights, cash (including by way of a reduction of the
Purchase Price), property, other securities or any combination thereof
having an aggregate value equal to the value of the Common Shares of the
Trust which otherwise would have been issuable pursuant to Section
11(a)(ii) hereof, which aggregate value shall be determined by a majority
of the Board of Trustees. For purposes of the preceding sentence, the
value of the Common Shares shall be determined pursuant to Section 11(d)
hereof and the value of any equity securities which a majority of the
Board of Trustees determines to be equivalent to a Common Share
(including the Preferred Shares, in such ratio as the Board of Trustees
shall determine) shall be deemed to have the same value as the Common
Shares. Any such election by the Board of Trustees must be made and
publicly announced within 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have occurred. Following the
occurrence of the event described in Section 11(a)(ii) hereof, a majority
of the Board of Trustees then in office may suspend the exercisability of
the Rights for a period of up to 60 days following the date on which the
event described in Section 11(a)(ii) hereof shall have occurred to the
extent that the Board of Trustees has not determined whether to exercise
the Trust’s right of election under this Section 11(a)(iii). In the
event of any such suspension, the Trust shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended. The Trust shall notify the Rights Agent whenever it makes a
public announcement pursuant this Section 11(a)(iii) and give the Rights
Agent a copy of such announcement.

     (b) In case the Trust shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares (“equivalent preferred shares”)) or
securities convertible into Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share market price
of the Preferred Shares (as defined in Section 11(d) hereof) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred

14

 

shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of the Trust
issuable upon exercise of one Right. In case such subscription price is paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Trustees, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and on the holders of
the Rights. Preferred Shares owned by or held for the account of the Trust
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.

     (c) In case the Trust shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Trust is the continuing or surviving entity) of evidences of indebtedness or
assets (other than a regular periodic cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on
such record date, less the fair market value (as determined in good faith by
the Board of Trustees, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
attributable to one Preferred Share and the denominator of which shall be such
current per share market price (as such term is defined in Section 11(d)(i)
hereof) of the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Trust to be issued upon exercise of
one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.

     (d)      (i) For the purpose of any computation hereunder, other than under
Section 11(a)(iii) hereof, the “current per share market price” of any security
(a “Security” for the purpose of this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for the purpose of any computation under
Section 11(a)(iii) hereof, the “current per share market price” of a Security
on any date shall be deemed to be the average of the daily closing prices per
share of such Security for thirty (30) consecutive Trading Days immediately
following such date; provided, however, that in the event that the current per
share market price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or securities convertible
into such shares (other than the Rights), or (B) any subdivision, combination
or reclassification of such Security and

15

 

prior to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the “current per
share market price” shall be appropriately adjusted to reflect the current
market price per share equivalent (ex-dividend) of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on The New York Stock Exchange (the “NYSE”) or, if the Security is not
listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System (“NASDAQ”) or such other system then in use, or, if
on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Trustees.
If on any such date no market maker is making a market in the Security, the
fair value of such Security on such date as determined in good faith by the
Board of Trustees shall be used, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
The term “Trading Day” shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.

          (ii) For the purpose of any computation hereunder, the “current per share
market price” of the Preferred Shares shall be determined in accordance with
the method set forth in Section 11(d)(i) hereof. If the Preferred Shares are
not publicly traded, the “current per share market price” of the Preferred
Shares shall be conclusively deemed to be the current per share market price of
the Common Shares of the Trust as determined pursuant to Section 11(d)(i)
hereof (appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof), multiplied by one
hundred. If neither the Common Shares of the Trust nor the Preferred Shares
are publicly held or so listed or traded, “current per share market price”
shall mean the fair value per share as determined in good faith by the Board of
Trustees, whose determination shall be described in a statement filed with the
Rights Agent, or, if at the time of such determination there is an Acquiring
Person, by a majority of the members of the Board of Trustees then in office,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

     (e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share

16

 

or security, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the right
to exercise any Rights.

     (f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of the Trust other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in this Section 11, and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall apply on
like terms to any such other shares.

     (g) All Rights originally issued by the Trust subsequent to any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a Preferred
Share purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.

     (h) Unless the Trust shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (A) the number
of one one-hundredths of a Preferred Share covered by a Right immediately prior
to such adjustment by (B) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.

     (i) The Trust may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Trust shall make a public announcement of its election to adjust
the number of Rights (with prompt written notice thereof to the Rights Agent),
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Trust
shall, as promptly as practicable, cause to be distributed to holders of

17

 

record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Trust, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Trust, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.

     (j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of
a Preferred Share which were expressed in the initial Right Certificates issued
hereunder.

     (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Trust shall take any
action which may, in the opinion of its counsel, be necessary in order that the
Trust may validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.

     (l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Trust may elect to defer (with prompt written notice thereof to the
Rights Agent) until the occurrence of such event the issuance to the holder of
any Right exercised after such record date of the Preferred Shares and other
securities of the Trust, if any, issuable upon such exercise over and above the
Preferred Shares and other securities of the Trust, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Trust shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such
additional shares upon the occurrence of the event requiring such adjustment.

     (m) Anything in this Section 11 to the contrary notwithstanding, the Trust
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that
any consolidation or subdivision of the Preferred Shares, issuance wholly for
cash of any Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b) hereof, hereafter made by the Trust to
holders of its Preferred Shares shall not be taxable to such shareholders.

     (n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Trust shall (i) declare or pay any dividend
on the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common

18

 

Shares (by reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common Shares, then in any
such case (x) the number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (y) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.

     (o) So long as the shares issuable upon the exercise of the Rights may be
listed on any national securities exchange, the Trust shall use its best
efforts to cause, from and after such time as the Rights become exercisable,
all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.

     (p) The Trust shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the date of the expiration of the Rights. The Trust will also take such action
as may be appropriate under the blue sky laws of the various states. The Trust
may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file such registration
statement or in order to comply with such blue sky laws. Upon any such
suspension, the Trust shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended (with prompt
written notice thereof to the Rights Agent).

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment occurs as provided in Section 11 or 13 hereof, the Trust
shall promptly (a) prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall have no duty or
liability with respect to, and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.

     Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.

     (a) If after the Shares Acquisition Date, directly or indirectly, (x) the
Trust shall consolidate with, or merge with and into, any other Person, (y) any
Person shall consolidate with

19

 

the Trust, or merge with and into the Trust and the Trust shall be the
continuing or surviving entity of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Trust) or cash or any
other property, or (z) the Trust shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Trust and its Subsidiaries (taken as a whole) to any
Person or Persons other than the Trust or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of validly authorized and issued, fully paid, non-assessable and
freely tradeable common shares of the Principal Party (as hereinafter defined),
free and clear of all liens, rights of call or first refusal, encumbrances or
other adverse claims, as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable (or, if such Right is not then
exercisable for a number of one one-hundredths of a Preferred Share, the number
of such fractional shares for which it was exercisable immediately prior to an
event described under Section 11(a)(ii) hereof) and dividing that product by
(B) 50% of the then current per share market price of the common shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, or otherwise, all the obligations
and duties of the Trust pursuant to this Agreement; (iii) the term “Trust”
shall thereafter be deemed to refer to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not limited to, the
authorization and reservation of a sufficient number of its common shares in
accordance with Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its common shares
thereafter deliverable upon the exercise of the Rights.

     (b) “Principal Party” shall mean:

     (i) In the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof, the Person that is the issuer of
any securities into which Common Shares of the Trust are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the surviving entity of such merger or consolidation
(including the Trust if applicable); and

     (ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions;

provided, however, that in any such case described in clauses (b)(i) and
(b)(ii) above: (1) if the common shares of such Person are not at such time
and have not been continuously over the

20

 

preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the common
shares of which are and have been so registered, “Principal Party” shall refer
to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the common shares of two or more of which
are and have been so registered, “Principal Party” shall refer to whichever of
such Persons is the issuer of the common shares having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a “Subsidiary” of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.

     (c) The Trust shall not consummate any such consolidation, merger, sale or
transfer unless the Principal Party shall have sufficient common shares
authorized to permit the full exercise of the Rights and prior thereto the
Trust and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will:

     (i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;

     (ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act; and

     (iii) take such actions as may be necessary or appropriate under
the blue sky laws of the various states.

The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that one of the
transactions described in this Section 13(a) shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable
in the manner described in Section 13(a) hereof.

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Trust shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there may be

21

 

paid to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior
to the date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the Rights are not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Trustees. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Trustees shall be used or, if
at the time of such determination there is an Acquiring Person, by a majority
of the members of the Board of Trustees then in office, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.

     (b) The Trust shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Trust, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Trust and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Trust may, to the extent necessary to reduce such fraction to an
integral multiple of one one-hundredth, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a Preferred Share. For the purposes of this Section 14(b),
the current market value of one one-hundredth of a Preferred Share shall be one
one-hundredth of the closing price of a Preferred Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.

     (c) Following the occurrence of a Triggering Event, the Trust shall not be
required to issue fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Trust may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein

22

 

provided an amount in cash equal to the same fraction of the current
market value of one Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise.

     (d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above). The Rights Agent shall have no
duty or obligation with respect to this Section 14 and Section 24 below unless
and until it has received specific instructions (and sufficient cash to make
payments in lieu of issuing fractional shares, if required) from the Trust with
respect to its duties or obligations under such Sections.

     Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Trust to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.

     Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Trust and the Rights Agent and
with every other holder of a Right that:

     (a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;

     (b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer;

     (c) the Trust and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares certificate
made by anyone other than the Trust or the Rights Agent) for all purposes
whatsoever, and neither the Trust nor the Rights Agent shall be affected by any
notice to the contrary; and

23

 

     (d) notwithstanding anything in this Agreement to the contrary, neither
the Trust nor the Rights Agent shall have any liability to any holder of a
Right or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, judgment, decree or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation.

     Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Trust which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Trust or any
right to vote for the election of trustees or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
trust action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

     Section 18. Concerning the Rights Agent. The Trust agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the preparation, delivery,
amendment, administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Trust also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expenses
(including, without limitation, the reasonable fees and expenses of legal
counsel), incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent for any action taken, suffered or omitted by the
Rights Agent in connection with the acceptance, administration, exercise and
performance of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The costs and expenses
incurred in enforcing this right of indemnification shall be paid by the Trust.
The provisions of this Section 18 and Section 20(c) below shall survive the
termination of this Agreement, the exercise or expiration of the Rights or the
resignation or removal of the Rights Agent.

     The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its acceptance and administration of this Agreement and the
exercise and performance of its duties hereunder in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Trust, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified

24

 

or acknowledged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that
such Person would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered; any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

     In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

     Section 20. Rights and Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this Agreement (and
no implied duties) upon the following terms and conditions, by all of which the
Trust and the holders of Right Certificates, by their acceptance thereof, shall
be bound:

     (a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Trust or legal counsel for the Rights Agent), and the opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted by it in good faith and in accordance
with such opinion.

     (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of the current per share market price) be proved or established
by the Trust prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the

25

 

Chairman of the Board, Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, General Counsel, any Division President, any Vice
President, or the Secretary of the Trust and delivered to the Rights Agent; and
such certificate shall be full and complete authorization to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Trust and any other
Person only for its own gross negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of the action.

     (d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Trust only.

     (e) The Rights Agent shall not have any liability for or be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Trust of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to Section 7(e)
hereof) or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24 hereof,
or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after receipt of a certificate furnished pursuant to
Section 12 hereof describing a change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.

     (f) The Trust agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, General Counsel, any Division President, any
Vice President, or the Secretary of the Trust, and to apply to such

26

 

officers for advice or instructions in connection with its duties, and
such instructions or advice shall be full and complete authorization and
protection and the Rights Agent shall not be liable for any action taken,
suffered or omitted by it in good faith in accordance with such advice or
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written
instructions from the Trust may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken, suffered or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken or suffered or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any officer of the Trust actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking or suffering any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken, suffered or omitted.

     (h) The Rights Agent and any stockholder, affiliate, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Trust or its Subsidiaries or become pecuniarily
interested in any transaction in which the Trust or its Subsidiaries may be
interested, or contract with or lend money to the Trust or its Subsidiaries or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent or any such
stockholder, affiliate, director, officer or employee from acting in any other
capacity for the Trust or its Subsidiaries or for any other Person.

     (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself (through its
directors, officers and employees) or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Trust resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.

     (j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Trust.

     (k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

27

 

     Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days’ notice in writing mailed to the Trust and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Trust may
remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Trust shall appoint a successor to
the Rights Agent. If the Trust shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Trust),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Trust or by such a court,
shall be a Person or bank organized and doing business under the laws of the
United States or of any other state of the United States, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Trust
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Trust
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by the Board of Trustees to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.

     Section 23. Redemption.

     (a) The Board, by the affirmative vote of the Board of Trustees, may, at
its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $0.001 per Right, appropriately adjusted to reflect any
share split, share dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the “Redemption
Price”). The

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preceding sentence notwithstanding, prior to the expiration of the period
during which the Rights may be redeemed as specified therein (or such longer
period as the Board of Trustees of the Trust may select pursuant to this
sentence), the Board of Trustees of the Trust may extend, one or more times,
the period during which the Rights may be redeemed beyond the close of business
on the tenth day following the Shares Acquisition Date. The Trust may, at its
option, pay the Redemption Price in cash, Common Shares (based on the current
per share market price of the Common Shares at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Trustees. The
redemption of the Rights by the Board of Trustees may be made effective at such
time on such basis and with such conditions as the Board of Trustees in its
sole discretion may establish.

     (b) Immediately upon the action of the Board of Trustees ordering the
redemption of the Rights (or at the effective time of such redemption
established by the Board of Trustees pursuant to the last sentence of
paragraph (a) of this Section 23), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Trust shall promptly give public notice of any such redemption (with prompt
written notice thereof to the Rights Agent); provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Trustees ordering the redemption of the Rights or, if later, the effectiveness
of the redemption of the Rights pursuant to the last sentence of paragraph (a),
the Trust shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. The Trust may, at its
option, discharge all of its obligations with respect to the Rights by (i)
issuing a press release announcing the manner of redemption of the Rights, (ii)
depositing with a bank or trust company having a capital and surplus of at
least $100,000,000, funds necessary for such redemption, in trust, to be
applied to the redemption of the Rights so called for redemption and (iii)
arranging for the mailing of the Redemption Price to the registered holders of
the Rights; then, and upon such action, all outstanding Right Certificates
shall be null and void without further action by the Trust. Neither the Trust
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23, in Section 24 hereof, or in connection with the
purchase of Common Shares prior to the Distribution Date.

     Section 24. Exchange.

     (a) The Board of Trustees may, at its option, at any time after a
Triggering Event, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any share split,
share dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the “Exchange Ratio”).
Notwithstanding the

29

 

foregoing, the Board of Trustees shall not be empowered to effect such
exchange at any time after any Person (other than the Trust, any Subsidiary of
the Trust, any employee benefit plan of the Trust or of any Subsidiary of the
Trust or any entity holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares then outstanding.

     (b) Immediately upon the action of the Board of Trustees ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Trust shall promptly
give public notice of any such exchange (with prompt written notice thereof to
the Rights Agent); provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Trust
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become null and void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.

     (c) In any exchange pursuant to this Section 24, the Trust, at its option,
may substitute Preferred Shares (or equivalent preferred shares, as such term
is defined in Section 11(b) hereof) for Common Shares exchangeable for Rights,
at the initial rate of one one-hundredth of a Preferred Share (or equivalent
preferred share) for each Common Share, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of each
Common Share shall have the same voting rights as one Common Share.

     (d) In the event that there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Trust shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights.

     (e) The Trust shall not be required to issue fractions of Common Shares or
to distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Trust shall pay to the registered holders of
the Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section

30

 

11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.

     Section 25. Notice of Certain Events.

     (a) In case the Trust shall propose at any time after the Distribution
Date (i) to pay any dividend payable in shares of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Trust and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Trust, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Trust shall give to the Rights Agent and each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for the purposes
of such share dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.

     (b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Trust shall as soon as practicable thereafter give to the
Rights Agent and each holder of a Right Certificate, in accordance with Section
26 hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.

     Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Trust shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

Archstone-Smith Trust

9200 E. Panorama Circle

Englewood, Colorado 80112

Attention: General Counsel

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     Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Trust or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Trust) as follows:

Mellon Investor Services LLC

600 North Pearl Street, Suite 1010

Dallas, Texas 75201-2884

Attention: _________________

With a copy to:

Mellon Investor Services LLC

85 Challenger Road

Ridgefield Park, NJ 07660

Attention: General Counsel

Notices or demands authorized by this Agreement to be given or made by the
Trust or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Trust. Notices or demands sent by mail in accordance with this
Section 26 shall be deemed given or made three Business Days after the date on
which they are sent.

     Section 27. Supplements and Amendments. The Trust, by the affirmative
vote of the Board of Trustees, may from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates in order to
cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or to
make or change any other provisions with respect to the Rights (including,
without limitation, changes to the Purchase Price) which the Trust may deem
necessary or desirable, any such supplement or amendment to be evidenced by a
writing signed by the Trust and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the interests
of the holders of Rights. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights and duties of the
Rights Agent under this Agreement will be effective against the Rights Agent
without the execution of such supplement or amendment by the Rights Agent.

     Section 28. General Limitations on Redemption, Modification or
Termination of Rights or Amendment to Agreement. Notwithstanding any provision
of this Agreement to the contrary, in addition to any other approval that may
be necessary, any redemption, modification or termination of the Rights, or any
amendment to this Agreement, requiring the approval of the Board of Trustees
must be approved by a majority of the members of the Board of Trustees.

32

 

     Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Trust or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.

     Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Trust, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Trust, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common
Shares).

     Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

     Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, except that those provisions of this
Agreement affecting the rights, duties and responsibilities of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.

     Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

     Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

     Section 35. Determinations and Actions by the Board of Trustees. The
Board of Trustees shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to
the Board of Trustees or the Trust or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (b) above, all omissions with respect to the
foregoing) which are done or made by the Board of Trustees in good faith, shall
(x) be final, conclusive and binding on the Trust, the Rights Agent, the
holders of the Right Certificates and all other parties, and (y) not subject
the Board of Trustees to any liability to the holders of the Right
Certificates. The Rights Agent shall be entitled to assume

33

 

that the Board of Trustees has acted in good faith with respect to any
such actions, interpretations and determinations.

     Section 36. Limitation of Liability. Any obligation or liability
whatsoever of the Trust which may arise at any time under this Agreement or any
obligation or liability which may be incurred by it pursuant to any other
instrument, transaction or undertaking contemplated hereby shall be satisfied,
if at all, out of the Trust’s assets only. To the maximum extent permissible
under Maryland law, no such obligation or liability shall be personally binding
upon, nor shall resort for the enforcement thereof had to, the property of any
of its shareholders, Trustees, officers, employees or agents, regardless of
whether such obligations or liability is in the nature of contract, tort or
otherwise.

34

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.

	 	 	 	 	 
	 	ARCHSTONE-SMITH TRUST

 	 
	 	By:  	/s/ Caroline Brower
 	 
	 	 	Caroline Brower 	 
	 	 	General Counsel and Secretary 	 
	 

	 	 	 	 	 
	 	Attest:

 	 
	 	By:  	/s/ Thomas S. Reif
 	 	 
	 	 	Thomas S. Reif 	 
	 	 	Assistant Secretary 	 
	 

	 	 	 	 	 
	 	MELLON INVESTOR SERVICES LLC

 	 
	 	By:  	/s/ Cindy Bennett
 	 
	 	 	Name:  	Cindy Bennett 	 
	 	 	Title:  	Client Service Manager 	 
	 

	 	 	 	 	 	 
	 	Attest:

 	 
	 	By:  	       /s/ David Cary
 	 	 
	 	 	Name:  	David Cary 	 
	 	 	Title:  	Vice President 	 
	 

35

 

Exhibit A

SERIES B JUNIOR PARTICIPATING PREFERRED SHARES

OF BENEFICIAL INTEREST

     (a) Designation and Amount. There shall be a series of preferred shares
of the Trust, $0.01 par value per share, which shall be designated “Series B
Junior Participating Preferred Shares” (the “Series B Preferred Shares”), and
the number of shares constituting that series shall be 4,500,000. Such number
of shares may be increased or decreased by resolution of the Board of Trustees
and by the filing of articles supplementary in accordance with the provisions
of Title 8 of the Corporations and Associations Article of the Code of Maryland
stating that such increase or reduction has been so authorized; provided,
however, that no decrease shall reduce the number of Series B Preferred Shares
to a number less than the number of Series B Preferred Shares then outstanding
plus the number of Series B Preferred Shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Trust.

     (b) Dividends and Distributions.

     (i) Subject to the prior and superior rights of the holders of any shares
of any class or series of preferred shares of the Trust ranking prior and
superior to the Series B Preferred Shares with respect to dividends, the
holders of Series B Preferred Shares shall be entitled to receive, when, as and
if declared by the Board of Trustees out of funds legally available for the
purpose, quarterly dividends payable in cash to holders of record on the last
Business Day of January, April, July and October in each year (each such date
being referred to herein as a “Quarterly Dividend Payment Date”), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a Series
B Preferred Share or fraction thereof, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in Common Shares (hereinafter defined) or a subdivision of the
outstanding Common Shares (by a reclassification or otherwise), authorized on
the common shares of beneficial interest, $0.01 par value per share, of the
Trust (the “Common Shares”) since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any Series B Preferred Share or fraction thereof.
In the event the Trust shall at any time following August 31, 2001 (i) declare
any dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount to which holders of
Series B Preferred Shares were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying each such
amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.

36

 

     (ii) The Trust shall declare a dividend or distribution on the Series B
Preferred Shares as provided in paragraph (A) above at the time it declares a
dividend or distribution on the Common Shares (other than a dividend payable in
Common Shares).

     (iii) No dividend or distribution (other than a dividend or distribution
payable in Common Shares) shall be paid or payable to the holders of Common
Shares unless, prior thereto, all accrued but unpaid dividends to the date of
that dividend or distribution shall have been paid to the holders of Series B
Preferred Shares.

     (iv) Dividends shall begin to accrue and be cumulative on outstanding
Series B Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issuance of such Series B Preferred Shares, unless the
date of issuance of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue and be cumulative from the date of issuance of such shares, or
unless the date of issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of Series B Preferred
Shares entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the Series B
Preferred Shares in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Trustees may fix a record date for the determination of holders of Series B
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.

     (c) Voting Rights. The holders of Series B Preferred Shares shall have
the following voting rights:

     (A) Subject to the provision for adjustment hereinafter set forth, each
one one-hundredth of a Series B Preferred Share shall entitle the holder
thereof to one vote on all matters submitted to a vote of the shareholders of
the Trust. In the event the Trust shall at any time following August 31, 2001
(i) declare any dividend on Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the number of
votes per share to which holders of Series B Preferred Shares were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.

     (B) Except as otherwise provided herein or required by law, the holders of
Series B Preferred Shares and the holders of Common Shares and any other shares
of beneficial interest of the Trust having general voting rights shall vote
together as one class on all matters submitted to a vote of shareholders of the
Trust.

37

 

(C)      (i) Whenever, at any time or times, dividends payable on any Series B
Preferred Shares shall be in arrears in an amount equal to at least six
full quarterly dividends (whether or not declared and whether or not
consecutive), the holders of record of the outstanding Series B Preferred
Shares shall have the exclusive right, voting separately as a single
class, to elect two trustees of the Trust at a special meeting of
shareholders of the Trust or at the Trust’s next annual meeting of
shareholders, and at each subsequent annual meeting of shareholders, as
provided below. At elections for such trustees, the holders of Series B
Preferred Shares shall be entitled to cast one vote for each one
one-hundredth of a Series B Preferred Share held, subject to adjustment.

     (ii) Upon the vesting of such right of the holders of the Series B
Preferred Shares, the maximum authorized number of members of the Board
of Trustees shall automatically be increased by two and the two vacancies
so created shall be filled by vote of the holders of the outstanding
Series B Preferred Shares as hereinafter set forth. A special meeting of
the shareholders of the Trust then entitled to vote shall be called by
the Chairman of the Board or the Chief Executive Officer of the Trust, if
requested in writing by the holders of record of not less than 10% of the
Series B Preferred Shares then outstanding. At such special meeting, or,
if no such special meeting shall have been called, then at the next
annual meeting of shareholders of the Trust, the holders of the Series B
Preferred Shares shall elect, voting as above provided, two trustees of
the Trust to fill the aforesaid vacancies created by the automatic
increase in the number of members of the Board of Trustees. At any and
all such meetings for such election, the holders of a majority of the
outstanding Series B Preferred Shares shall be necessary to constitute a
quorum for such election, whether present in person or by proxy, and such
two trustees shall be elected by the vote of at least a plurality of
shares held by such shareholders present or represented at the meeting.
Any trustee elected by holders of Series B Preferred Shares pursuant to
this Section may be removed at any annual or special meeting, by vote of
the holders of a majority of the Series B Preferred Shares, with or
without cause. In case any vacancy shall occur among the trustees
elected by the holders of the Series B Preferred Shares pursuant to this
Section, such vacancy may be filled by the remaining trustee so elected,
or his successor then in office, and the trustee so elected to fill such
vacancy shall serve until the next meeting of shareholders for the
election of trustees. After the holders of the Series B Preferred Shares
shall have exercised their right to elect trustees in any default period
and during the continuance of such period, the number of trustees shall
not be further increased or decreased except by vote of the holders of
Series B Preferred Shares as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the Series B
Preferred Shares.

     (iii) The right of the holders of the Series B Preferred Shares,
voting separately as a class, to elect two members of the Board of
Trustees as aforesaid shall continue until, and only until, such time as
all arrears in dividends (whether or not declared) on the Series B
Preferred Shares shall have been paid or declared and set apart for
payment, at which time such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the event of each and
every subsequent default of the character

38

 

above-mentioned. Upon any termination of the right of the holders
of the Series B Preferred Shares as a class to vote for trustees as
herein provided, the term of office of all trustees then in office
elected by the holders of Series B Preferred Shares pursuant to this
Section shall terminate immediately. Whenever the term of office of the
trustees elected by the holders of the Series B Preferred Shares pursuant
to this Section shall terminate and the special voting powers vested in
the holders of the Series B Preferred Shares pursuant to this Section
shall have expired, the maximum number of members of the Board of
Trustees shall be such number as may be provided for in the Bylaws of the
Trust irrespective of any increase made pursuant to the provisions of
this Section.

     (D) Except as otherwise provided herein or required by law, holders of
Series B Preferred Shares shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Shares as provided herein) for taking any trust action.

     (d) Certain Restrictions.

     (A) Whenever any quarterly dividends or other dividends or distributions
payable on the Series B Preferred Shares as provided in Section 2 are in
arrears, then, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on Series B Preferred Shares
outstanding shall have been paid in full, the Trust shall not:

     (i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series B Preferred Shares, other than dividends
paid or payable in such junior shares;

     (ii) declare or pay dividends on or make any other distributions on
any shares ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred
Shares, except dividends paid ratably on the Series B Preferred Shares
and all such parity shares on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all such shares are then entitled;

     (iii)
redeem or purchase or otherwise acquire for consideration
shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred Shares, provided
that the Trust may at any time redeem, purchase or otherwise acquire any
such parity shares in exchange for shares of the Trust ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series B Preferred Shares; or

     (iv) purchase or otherwise acquire for consideration any Series B
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Trustees) to all
holders of such shares upon such terms as the Board of Trustees, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in

39

 

good faith will result in fair and equitable treatment among the
respective series or classes.

     (B) The Trust shall not permit any subsidiary of the Trust to purchase or
otherwise acquire for consideration any shares of the Trust unless the Trust
could, under paragraph (A) of this Section, purchase or otherwise acquire such
shares at such time and in such manner.

     (e) Reacquired Shares. Any Series B Preferred Shares purchased or
otherwise acquired by the Trust in any manner whatsoever shall become
authorized but unissued shares of beneficial interest and may be reissued as
Common Shares or as part of a new series of preferred shares to be created by
resolution or resolutions of the Board of Trustees, subject to the conditions
and restrictions on issuance set forth herein.

     (f) Liquidation, Dissolution or Winding Up. (A) Upon any voluntary
liquidation, dissolution or winding up of the Trust, no distribution shall be
made to the holders of shares ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Shares
unless, prior thereto, the holders of Series B Preferred Shares shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the “Series B Liquidation Preference”). Following the payment of the full
amount of the Series B Liquidation Preference, no additional distributions
shall be made to the holders of Series B Preferred Shares unless, prior
thereto, the holders of Common Shares shall have received an amount per share
(the “Common Adjustment”) equal to the quotient obtained by dividing (i) the
Series B Liquidation Preference by (ii) 100 (as appropriately adjusted as set
forth in subparagraph C below to reflect such events as share splits, share
dividends and recapitalizations with respect to the Common Shares) (such number
in clause (ii), the “Adjustment Number”). Following the payment of the full
amount of the Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding Series B Preferred Shares and Common Shares,
respectively, holders of Series B Preferred Shares and holders of Common Shares
shall receive their ratable and proportionate share of the remaining assets to
be distributed in the ratio, on a per share basis, of the Adjustment Number to
1 with respect to such Series B Preferred Shares and Common Shares, on a per
share basis, respectively.

     (B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series B Liquidation Preference and the
liquidation preferences of all other series of preferred shares, if any, which
rank on a parity with the Series B Preferred Shares, then such remaining assets
shall be distributed ratably to the holders of the Series B Preferred Shares
and such parity shares in proportion to their respective liquidation
preferences.

     (C) In the event the Trust shall at any time following August 31, 2001 (i)
declare any dividend on Common Shares payable in Common Shares, (ii) subdivide
the outstanding Common Shares or (iii) combine the outstanding Common Shares
into a smaller number of shares, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator

40

 

of which is the number of Common Shares that were outstanding immediately
prior to such event.

     (g) Consolidation, Merger, etc. In case the Trust shall enter into any
consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other shares or securities, cash
and/or any other property, then in any such case, the Series B Preferred Shares
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of shares, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
Common Share is exchanged or changed. In the event the Trust shall at any time
(i) declare any dividend on Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
Series B Preferred Shares shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.

     (h) Redemption. The Series B Preferred Shares shall not be redeemable by
the Trust. The preceding sentence shall not limit the ability of the Trust to
purchase or otherwise deal in such shares to the extent permitted by law.

     (i) Ranking. The Series B Preferred Shares shall rank junior to all other
series of the Trust’s preferred shares (whether with or without par value) as
to the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.

     (j) Amendment. Neither the Trust’s Declaration of Trust, nor any
articles supplementary relating to the Series B Preferred Shares shall be
amended in any manner which would materially alter or change the powers,
preferences, rights or other terms of the Series B Preferred Shares so as to
affect the holders of Series B Preferred Shares adversely without the
affirmative vote of the holders of a majority or more of the outstanding Series
B Preferred Shares, voting separately as a class.

     (k) Fractional Shares. Series B Preferred Shares may be issued in
fractions of a share that are integral multiples of one-one hundredth of a
share, which shall entitle the holder, in proportion to such holder’s
fractional shares, to exercise voting rights, receive dividends and participate
in distributions and to have the benefit of all other rights of holders of
Series B Preferred Shares.

41

 

Exhibit B

[Form of Right Certificate]

Certificate No. R-                                                                  Rights

NOT EXERCISABLE AFTER AUGUST 31, 2011 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE EXCHANGED OR REDEEMED BY
THE TRUST. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE TRUST, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS EVIDENCED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
EVIDENCED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*

Right Certificate

ARCHSTONE-SMITH TRUST

     This certifies that                                          , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of August 31, 2001 (the “Rights Agreement”),
between Archstone-Smith Trust, a Maryland real estate investment trust (the
“Trust”), and Mellon Investor Services LLC, a New Jersey limited liability
company (the “Rights Agent”) to purchase from the Trust at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 p.m. (Eastern time) on August 31, 2011 or notice of redemption or
exchange at the office of the Rights Agent (or its successors as Rights Agent)
designated for such purpose, one one-hundredth of a fully paid, non-assessable
Series B Junior Participating Preferred Share (a “Preferred Share”) of the
Trust, at a purchase price of $75.00 per one one-hundredth of a Preferred Share
(the “Purchase Price”), upon presentation and

	*	 	The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.

42

 

surrender of this Right Certificate with the appropriate Form of Election
to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Right Certificate (and the number of Preferred Shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per Preferred Share set forth above, are the number and Purchase Price as of
the Record Date (as defined in the Rights Agreement), based on the Preferred
Shares as constituted at such date. Capitalized terms not defined in this
Right Certificate that are defined in the Rights Agreement shall have the
meanings ascribed to them in the Rights Agreement.

     Upon the occurrence of a Triggering Event, if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person, (ii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of any such Triggering Event.

     As provided in the Rights Agreement, the Purchase Price and the number and
kind of Preferred Shares or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Trust and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under certain circumstances specified in such Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Trust at its option at a redemption
price of $0.001 per Right at any time prior to the earlier of (i) such time as
any Person becomes an Acquiring Person or (ii) the close of business on the
Final Expiration Date.

43

 

     No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Trust, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

     No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Shares
or of any other securities of the Trust which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Trust or any right to vote for the election of
trustees or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any trust action, or, to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

44

 

     WITNESS the facsimile signature of the proper officers of the Trust and its seal.

	 	 	 	 	 
	Dated as of                     , 20__

	 	ARCHSTONE-SMITH TRUST

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	Attest: (SEAL)

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Countersigned:

MELLON INVESTOR SERVICES LLC

 	 
	 	By:  	 	 
	 	 	Authorized Signature 	 
	 	 	 	 
	 

45

 

[Form of Reverse Side of Right Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)

      

			
	FOR VALUE RECEIVED

assigns and transfers unto
	 	hereby sells,

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint                    
Attorney, to transfer the within Right Certificate on the books of the
within-named Trust, with full power of substitution.

	 	 	 	 	 
	 	 	 
	Date:                                       , 20 __ 	  	 	 
	 	 	          Signature 	 
	 	 	 	 
	 

Signature Guaranteed:

Certificate

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) this
Right Certificate o is o is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned, it o
did o did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.

	 	 	 	 	 
	 	 	 
	Date:                                        , 20 __ 	  	 	 
	 	 	          Signature 	 
	 	 	 	 
	 

NOTICE

     The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.

46

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to

exercise Rights represented by the

Right Certificate.)

To: ARCHSTONE-SMITH TRUST

     The undersigned hereby irrevocably elects to exercise                     Rights
evidenced by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of the Rights (or such other securities of the Trust or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of:

Please insert social security

or other identifying number:                                                                                                                                                         

                                                                                                                                                                                              

(Please print name and address)

     If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:

Please insert social security

or other identifying number:                                                                                                                                                         

                                                                                                                                                                                              

(Please print name and address)

	 	 	 	 	 
	 	 	 
	Date:                                       , 20__ 	  	 	 
	 	 	Signature 	 
	 	 	 	 
	 

Signature Guaranteed:

47

 

Certificate

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights evidenced by this Right Certificate o are o are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned, it o
did o did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.

	 	 	 	 	 
	 	 	 
	Dated:                                       , 20 __ 	  	 	 
	 	 	          Signature 	 
	 	 	 	 
	 

NOTICE

     The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.

48

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