Document:

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                                                                   Exhibit 10.26

                                                                  EXECUTION COPY

                                                 ASSIGNMENT AND ASSUMPTION
                                        AGREEMENT dated as of May 30, 2002 (this
                                        "Agreement"), between QUALITY
                                        DISTRIBUTION, INC., a Florida
                                        corporation (the "Assignor"), and
                                        QUALITY DISTRIBUTION, LLC, a Delaware
                                        limited liability company and a
                                        wholly-owned subsidiary of the company
                                        (the "Assignee").

         WHEREAS, the Assignor has issued $100,000,000 aggregate principal
amount of its 10% Series B Senior Subordinated Notes due 2006 (the "Fixed Rate
Notes") and $40,000,000 aggregate principal amount of its Series B Floating
Interest Rate Subordinated Term Securities due 2006 (FIRSTS(SM)) (together with
the Fixed Rate Notes, the "Old Notes").

         WHEREAS, pursuant to the terms of an Offering Memorandum and Consent
Solicitation Statement dated as of April 10, 2002, as amended by Supplement No.
1 thereto dated May 10, 2002 (the "Offering Memorandum"), the Assignor is
offering certain holders of the Old Notes the opportunity to exchange pursuant
to the terms set forth in the Offering Memorandum (the "Debt/Equity Exchange"),
Old Notes for debt and equity securities consisting of (a) 12.5% Senior
Subordinated Secured Notes due 2008 which will be issued by the Assignee; (b)
12% Junior Subordinated PIK Notes due 2009 (the "PIK Notes") which will be
issued by the Assignor; and (c) Warrants to purchase one share of the Assignor's
Common Stock, $0.01 par value per share.

         WHEREAS, the Assignor, Levy Transport Ltd./Levy Transport Ltee, various
Banks, Lasalle Bank National Association (f/k/a ABN AMRO Bank N.V.), The Bank of
Nova Scotia, PB Capital Corp. (f/k/a BHF-Bank Aktiengesellschaft), Bank Austria
Creditanstalt Corporate Finance, Inc. (f/k/a Creditanstalt Corporate Finance,
Inc.) and Royal Bank of Canada, as Co-Agents, Salomon Brothers Holding Company
Inc., as Documentation Agent, Deutsche Bank Trust Company Americas (f/k/a
Bankers Trust Company), as Syndication Agent, and the Administrative Agent are
parties to a Credit Agreement, dated as of June 9, 1998 and amended and restated
as of August 28, 1998 (as so amended and restated and as the same has been
further amended, modified and/or supplemented to, but not including, the date
hereof, (the "Credit Agreement"), providing for the making of loans and the
issuance of letters of credit, all as contemplated thereby.

         WHEREAS, in connection with the consummation of the Debt/Equity
Exchange, the Assignor desires to contribute to the Assignee all of the
Assignor's assets, liabilities and obligations (except as set forth herein) and
the Assignee desires to accept such contribution and to assume all such
liabilities and obligations of the Assignor (except as set forth herein), upon
the terms and subject to the conditions hereinafter set forth.

         WHEREAS, the execution and delivery of this Agreement is a condition to
the satisfaction of the transactions contemplated by the Debt/Equity Exchange.

<PAGE>

         NOW, THEREFORE, in consideration of the mutual benefits to be derived
and the covenants contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as set forth below.

     Section 1. Contribution of Assets; Assumption of Liabilities.

         (a) Contributed Assets. On and subject to the terms and conditions of
this Agreement, the Assignor hereby sells, contributes, transfers, assigns,
conveys and delivers to the Assignee, as a contribution to capital and in
consideration for all of the equity of the Assignee to be issued to the Assignor
and the assumption of the Assumed Liabilities by the Assignee, all right, title
and interest in and to all of the assets, business, goodwill and rights of the
Assignor (other than the Excluded Assets), as the same shall exist immediately
prior to the consummation of the Debt/Equity Exchange, subject to all
encumbrances and liens attaching thereto (all such assets, business, goodwill
and rights being collectively referred to as, the "Contributed Assets"),
including, without limitation, the following:

                  (i) all cash and cash equivalents of the Assignor;

                  (ii) all accounts, notes and other receivables;

                  (iii) all raw materials and supplies, work-in-process,
         finished goods and other items of inventory and all shipping containers
         and other parts;

                  (iv) all real property, machinery, equipment, furniture,
         fixtures, leasehold improvements, vehicles and other tangible personal
         property, including, without limitation, all such assets currently
         located at any of the real property owned, leased or used by the
         Assignor;

                  (v) all intellectual property rights, goodwill associated
         therewith, licenses and sublicenses granted or obtained with respect
         thereto, and rights thereunder, remedies against infringements thereof,
         and rights to protection of interests therein under any laws;

                  (vi) all of the Assignor's interest and rights in all
         contracts to which the Assignor is a party or by which its assets are
         bound; including without limitation, the Credit Agreement and the other
         Credit Documents (as defined in the Credit Agreement as in effect
         immediately prior to the consummation of the Debt/Equity Exchange) to
         which the Assignor is a party;

                  (vii) all stationery, forms, labels, shipping material,
         catalogs, brochures, art work, photographs, advertising material and
         promotional material;

                  (viii) all payments, deposits (excluding prepaid tax deposits)
         and prepaid expenses of the Assignor;

                  (ix) all claims, causes of action, judgments, warranties,
         refunds, rights of recovery, rights of set-off and rights of recoupment
         of any kind;

                  (x) all permits;

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                  (xi) all rights (including experience ratings, to the extent
         transferable to the Assignee) with respect to unemployment, workers'
         compensation and other similar insurance and related funded reserves,
         in each case relating to employees of the Assignor who become employees
         of the Assignee;

                  (xii) all assets relating to or owned by, and all rights in
         and to, any employee benefit plans, including the books, records and
         other documents relating thereto;

                  (xiii) all rights to receive mail and other communications
         addressed to the Assignor (including mail and communications from
         customers, suppliers, distributors, agents and others and payments with
         respect to the Contributed Assets), other than such rights that relate
         solely to the Excluded Assets;

                  (xiv) all books, records, ledgers, files, documents and
         correspondence, lists, drawings, specifications, studies, reports and
         other printed or written materials relating to the Assignor (other than
         any of the foregoing that relate solely to the Excluded Assets);

                  (xv) all securities issued to and held by the Assignor (other
         than the membership interests of the Assignee issued to the Assignor);
         and

                  (xvi) all other assets of the Assignor other than the Excluded
         Assets.

         (b) Excluded Assets. Notwithstanding anything to the contrary contained
herein, the Contributed Assets shall not include the following assets and rights
of the Assignor (collectively, the "Excluded Assets"):

                  (i) the corporate charter, qualifications to conduct business
         as a foreign corporation, arrangements with registered agents relating
         to foreign qualifications, taxpayer and other identification numbers,
         seals, minute books, stock transfer books, blank stock certificates and
         other documents relating to the organization, maintenance and existence
         of the Assignor as a corporation;

                  (ii) the name "Quality Distribution Inc." and all intellectual
         property rights and goodwill associated therewith, and rights to
         protection of interests thereof under any laws or contracts; and

                  (iii) any of the assets and rights of the Assignor under any
         insurance policy issued to or on behalf of the Assignor;

                  (iv) any of the assets or rights of the Assignor under any
         employee benefit plan established for the benefit of the employees,
         officers and directors of the Assignor and its subsidiaries; and

                  (v) any of the rights of the Assignor under this Agreement and
         the other agreements listed on Schedule I hereto.

         (c) Assumed Liabilities. On and subject to the terms of Section 1(d)
hereof, the Assignor hereby transfers and assigns to the Assignee, and the
Assignee hereby assumes and

                                       -3-

<PAGE>

agrees to discharge or perform when due in accordance with the terms thereof,
all of the liabilities and obligations of the Assignor in existence, or
contingent (other than the Excluded Liabilities), as the same shall exist
immediately prior to the consummation of the Debt/Equity Exchange, including
without limitation, (x) all Loans, reimbursement obligations with respect to
Letters of Credit and all other Obligations (as each such term is defined in the
Credit Agreement) of the Assignor under the Credit Agreement and (y) all other
obligations and liabilities of the Assignor under the Credit Agreement and the
other Credit Documents (as defined in the Credit Agreement as in effect
immediately prior to the consummation of the Debt/Equity Exchange) to which the
Assignor is a party (all such liabilities and obligations collectively referred
to as the "Assumed Liabilities"); provided, however, that said assumption shall
not (i) increase the obligation of the Assignee to any third party with respect
to the Assumed Liabilities beyond the obligation that the Assignor would have to
any third party if not for said assumption; (ii) waive any valid defense that
was available to the Assignor with respect to the Assumed Liabilities; or (iii)
enlarge any rights or remedies of any third party under any of the Assumed
Liabilities.

         (d) Excluded Liabilities. Notwithstanding anything to the contrary
contained herein, the Assumed Liabilities shall not include the following
liabilities of the Assignor (collectively, the "Excluded Liabilities"):

                  (i) any liability of the Assignor arising from or related to
         the Excluded Assets; and

                  (ii) any liability of the Assignor arising from or related to
         any Old Notes not tendered in connection with the Debt/Equity Exchange.

         (e) Acknowledgment of Obligations.

                  (i) The Assignor hereby acknowledges that it is retaining the
         Excluded Liabilities and the Assignor shall pay, discharge and perform
         all such Excluded Liabilities promptly when due.

                  (ii) The Assignor hereby acknowledges that concurrently with
         the consummation of the Debt/Equity Exchange, (i) the Assignor shall be
         a party to the Credit Agreement as a Guarantor and shall have all the
         rights, obligations and liabilities of "Holdings" thereunder, (ii) the
         Assignor shall be a party to the U.S. Pledge Agreement and the U.S.
         Security Agreement by virtue of its execution of such agreements on the
         date of the consummation of the Debt/Equity Exchange and shall have all
         of the rights, obligations and liabilities of an "Assignor" or
         "Pledgor" thereunder, as the case may be, and (iii) that rights,
         obligations and liabilities of the Assignor referred to in the
         preceding clauses (i) and (ii) are not being contributed, assigned, or
         otherwise transferred to the Assignee pursuant to this Agreement.

         (f) Deliveries.

                  (i) The Assignor hereby agrees to deliver to the Assignee,
         duly executed instruments of sale, transfer, conveyance and assignment
         as the Assignee or its counsel reasonably may request, including,
         without limitation, any real property or intellectual

                                       -4-

<PAGE>

         property right transfer instruments, in form reasonably satisfactory to
         the Assignor, to effectuate the transfer of the Contributed Assets to
         the Assignee.

                  (ii) The Assignee shall deliver to the Assignor such
         instruments of assumption as the Assignor reasonably may request, in
         form reasonably satisfactory to the Assignee, to effectuate the
         assumption of the Assumed Liabilities by the Assignee.

         (g) Certain Commitments, Permits and Intellectual Property.
Notwithstanding anything to the contrary contained herein, to the extent that
the assignment by the Assignor of any contract (excluding, however any Credit
Document), permit or intellectual property right to be assigned hereunder shall
require the consent, waiver or approval of another party thereto or of any
governmental entity or shall violate any law, this Agreement shall not
constitute an assignment or attempted assignment thereof or an assumption by the
Assignee of any of the Assignor's liabilities or obligations thereunder. The
Assignor shall use commercially reasonable efforts to obtain any consent, waiver
or approval to the assignment to the Assignee of each such contract, permit or
intellectual property right with respect to which any consent, waiver or
approval is required for such assignment. Until such consent, waiver or approval
is obtained, each party hereto agrees to cooperate with the other party hereto
in any reasonable arrangement necessary or desirable to provide to the Assignee
the benefits of the contract, permit or intellectual property right (subject to
the assumption by the Assignee of the Assignor's obligations thereunder).

         (h) Power of Attorney; Right of Endorsement, Etc. The Assignor hereby
constitutes and appoints the Assignee, and its successors and assigns, the true
and lawful attorney of the Assignor with full power of substitution, in the name
of the Assignee or the name of the Assignor, on behalf of and for the benefit of
the Assignee,

                  (i) to collect all Contributed Assets;

                  (ii) to endorse, without recourse, checks, notes and other
         instruments attributable to the Contributed Assets;

                  (iii) to institute and prosecute all proceedings which the
         Assignee may deem proper in order to collect, assert or enforce any
         claim, right or title in or to the Contributed Assets;

                  (iv) to defend and compromise all actions, suits or
         proceedings with respect to any of the Contributed Assets or the
         Assumed Liabilities; and

                  (v) to do all such reasonable acts and things with respect to
         the Contributed Assets and the Assumed Liabilities as the Assignee may
         deem advisable.

The Assignor agrees that the foregoing powers are coupled with an interest and
shall be irrevocable by the Assignor directly or indirectly by the dissolution
of the Assignor or in any other manner. The Assignee shall retain for its own
account any amounts collected pursuant to the foregoing powers and the Assignor
shall promptly pay to the Assignee any amounts received by the Assignor after
the consummation of the Debt/Equity Exchange with respect to the Contributed
Assets.

                                       -5-

<PAGE>

     Section 2. Further Assurances.

         Each of the parties hereto agrees that it shall from time to time on or
after the date hereof do, execute, acknowledge and deliver, and will cause to be
done, executed, acknowledged and delivered, all such further acts, deeds,
certificates, bills of sale, assignments, transfers, conveyances, powers of
attorney, assurances and other documents as may be reasonably requested by
either party hereto for better assigning, transferring, granting, conveying,
assuring and conferring right, title and interest to the Assignee of the
Contributed Assets and for the better assumption by the Assignee of the Assumed
Liabilities.

     Section 3. Effectiveness of Contributions and Assumptions.

         The contributions and assumptions effected pursuant to this Agreement
shall be deemed to occur immediately and concurrently upon the consummation of
the Debt/Equity Exchange (the "Effective Date").

     Section 4. Miscellaneous.

         (a) Amendment; Waiver and Release. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective unless such modification, amendment or waiver is approved in writing
by each of the parties hereto. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.

         (b) Severability. It is the desire and intent of the parties hereto
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

         (c) Successors and Assigns. This Agreement shall bind and inure to the
benefit of and be enforceable by the Company and parties hereto and their
respective successors and assigns. Except as otherwise expressly provided
herein, this Agreement shall not confer any rights or remedies upon any Person
other than the parties hereto and their respective successors and permitted
assigns.

         (d) Counterparts and Facsimile Execution. This Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered (by facsimile or otherwise) to
the other party, it being understood that all parties need not sign the same
counterpart. Any counterpart or other signature hereupon delivered by

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<PAGE>

facsimile shall be deemed for all purposes as constituting good and valid
execution and delivery of this Agreement by such party.

         (e) Remedies. The parties shall each have and retain all other rights
and remedies existing in their favor at law or equity, including, without
limitation, any actions for specific performance and/or injunctive or other
equitable relief (including, without limitation, the remedy of rescission) to
enforce or prevent any violations of the provisions of this Agreement.

         (f) GOVERNING LAW. THE PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS ENTERED INTO AND FULLY PERFORMED WITHIN THE STATE OF NEW YORK BY
RESIDENTS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).

                                     *******

                                       -7-

<PAGE>

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

                             QUALITY DISTRIBUTION, INC.

                             By:   /s/ Thomas L. Finkbiner
                                  ---------------------------------------------
                                   Name:  Thomas L. Finkbiner
                                   Title: President and Chief Executive Officer

                             QUALITY DISTRIBUTION, LLC

                             By:   /s/ Thomas L. Finkbiner
                                  ---------------------------------------------
                                   Name:  Thomas L. Finkbiner
                                   Title: President and Chief Executive Officer

<PAGE>

                                                                      Schedule I

                               Excluded Agreements

         1. Second Amended and Restated Shareholders Agreement dated as of May
28, 2002, among the Assignor and the shareholders of the Assignor signatory
thereto.

         2. Second Amended and Restated Registration Rights Agreement dated as
of May 28, 2002, among the Assignor and the shareholders of the Assignor
signatory thereto.

         3. Indenture dated as of June 9, 1998 between the Assignor and United
States Trust Company of New York, as trustee.

         4. Indenture dated as of May 28, 2002, among the Assignor and
Wilmington Trust Company, as Trustee, and the Old Notes issued thereunder.

         5. Warrant Agreement dated as of May 28, 2002, among the Assignor and
Bank of New York, as Warrant Agent.<PAGE>

                                                                    Exhibit 10.6

                            INDEMNIFICATION AGREEMENT

     INDEMNIFICATION AGREEMENT, dated as of June __, 2002, between Konover
Property Trust, Inc., a Maryland corporation (the "Company"), and
__________________, an individual ("Indemnitee").

     WHEREAS, Indemnitee is a director of the Company;

     WHEREAS, a special committee of the Board of Directors of the Company (the
"Special Committee") was formed for the purposes of (x) negotiating and
approving an agreement with Prometheus Southeast Retail Trust, as assignee of
Prometheus Southeast Retail LLC ("Prometheus") to amend, modify or replace the
contingent value rights issued pursuant to the Contingent Value Rights
Agreement, dated as of February 24, 1998, between the Company and Prometheus,
and (y) reviewing, considering, investigating, evaluating and making
recommendations to the Board of Directors regarding strategic alternatives for
the Company;

     WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors of public companies
in today's environment;

     WHEREAS, the Amended and Restated Articles of Incorporation of the Company
permit the Company to indemnify directors, officers and certain other persons to
the fullest extent permitted by law; and

     WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability and to provide Indemnitee with specific contractual
assurance that the protection will be available to Indemnitee (regardless of,
among other things, any amendment to the Articles of Incorporation, the
Company's By-Laws or any change in the composition of the Company's Board of
Directors or any acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of, and the
advancement of expenses to, Indemnitee to the fullest extent permitted by law
and as set forth in this Agreement, and, to the extent provided herein, for the
continued coverage of Indemnitee under the Company's directors' and officers'
liability insurance policies.

     NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:

1. Certain Definitions.

     (a) Claim. any threatened, pending or completed action, suit, proceeding,
arbitration, alternate dispute resolution mechanism, or any inquiry or
investigation, whether instituted by or in the right of the Company or any other
party, that Indemnitee in good faith believes might lead to the institution of
any such action, suit, proceeding, arbitration or alternate dispute resolution
mechanism, whether civil, criminal,

<PAGE>

administrative or investigative, arising from or in connection with the fact
that Indemnitee, or a person for whom Indemnitee is the legal representative, is
or was a director or officer of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation
or of a partnership, limited liability company, joint venture, trust, enterprise
or nonprofit entity.

         (b) Expenses. include reasonable attorneys' fees and all other
reasonable costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, be a witness in or participate in any Claim.

         (c) Independent Legal Counsel. an attorney or firm of attorneys who
shall not have otherwise performed services for the Company within the last five
years (other than with respect to matters concerning the rights of Indemnitee
under this Agreement, or of other indemnities under similar indemnity
agreements).

2.       Indemnification.

         (a) In General. In connection with any Claim, whether relating to
events occurring before or after the date hereof, the Company shall indemnify,
and advance Expenses to, Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.

         (b) Claims Other Than Claims by or in the Right of the Company. In the
event Indemnitee was, is or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in
any proceeding pursuant to any Claim, other than a Claim by or in the right of
the Company, the Company shall, subject to Sections 2(e), 2(f) and 2(g),
indemnify Indemnitee against any and all Expenses, judgments, fines, penalties
and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such Claim;
provided, however, that Indemnitee shall not settle a Claim without the consent
of the Company; and provided further, however, that Indemnitee shall not be
entitled to indemnification pursuant to this Section 2(b) in connection with
conduct finally adjudged as constituting acts or omissions not in good faith or
which involved a knowing violation of the law or resulted in the actual receipt
of an improper personal benefit in money, property or services by the
Indemnitee; but provided further, however, that the termination of a proceeding
pursuant to any Claim by judgment, order of the court or settlement (whether
with or without court approval), or its equivalent, shall not, of itself, create
a presumption that Indemnitee did not act in good faith in a manner which he
reasonably believed to be in the best interests of the Company and, with respect
to any criminal proceeding, that such person had reasonable cause to believe
that his conduct was unlawful.

         (c) Proceedings by or in the Right of the Company. In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be

<PAGE>

made a party to or witness or other participant in any proceeding pursuant to
any Claim brought by or in the right of the Company to procure a judgment in its
favor, the Company shall, subject to Sections 2(e), 2(f), and 2(g), indemnify
Indemnitee against any and all Expenses (including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses)
of such Claim; provided, however, that Indemnitee shall not be entitled to
indemnification pursuant to this Section 2(c) in connection with conduct finally
adjudged as constituting acts or omissions not in good faith or which involved a
knowing violation of the law or resulted in the actual receipt of an improper
personal benefit in money, property or services by the Indemnitee; but provided
further, however, that the termination of a proceeding pursuant to any Claim by
judgment, order of the court or settlement (with or without court approval), or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not act in good faith in a manner which he reasonably believed to be in the best
interests of the Company and, with respect to any criminal proceeding, that such
person had reasonable cause to believe that his conduct was unlawful.
Notwithstanding the foregoing, no such indemnification shall be made in respect
of any Claim, issue or matter as to which Indemnitee shall have been finally
adjudged to be liable to the Company unless and only to the extent that the
Court of Chancery or the court in which such Claim was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Expenses which the Court of Chancery or such other court
shall deem proper.

     (d) Advancement of Expenses. If so requested by Indemnitee, the Company
shall advance (within 30 business days of such request) any and all Expenses to
Indemnitee (an "Expense Advance"); provided, however, that the payment of
Expenses incurred by Indemnitee in advance of the final disposition of the Claim
shall be made only upon receipt by the Company of an undertaking by Indemnitee
to repay all amounts advanced if it should be ultimately determined that
Indemnitee is not entitled to be indemnified under this Agreement or otherwise;
and provided further, however, that the obligation of the Company to make an
Expense Advance shall be subject to the condition that, if, when and to the
extent that a determination is made pursuant to Section 2(f) that Indemnitee
would not be permitted to be so indemnified under applicable law, the Company
shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse
the Company) for all such amounts theretofore paid, but provided that if
Indemnitee has commenced or thereafter commences legal proceedings pursuant to
Section 2(f) in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination by the
Company (including its Board of Directors or Independent Legal Counsel) made
pursuant to Section 2(f) that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and Indemnitee shall not
be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed).

     (e) Indemnitee Not Entitled to Indemnification. Notwithstanding anything in
this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification

<PAGE>

pursuant to this Agreement in connection with any Claim (or part thereof)
initiated by Indemnitee unless the Board of Directors has authorized or
consented to the initiation of such Claim (or part thereof).

     (f) Payment of Indemnification; Determination of Entitlement. Any
indemnification or advance under this Section 2 shall be made no later than 30
business days after receipt of the written request of Indemnitee, unless a
determination is made within said 30 business days period by (a) the Board of
Directors of the Company by a majority vote of directors who were not parties to
such proceeding pursuant to such Claim even though less than a quorum, or (b)
Independent Legal Counsel in a written opinion (which counsel shall be appointed
if such a quorum is not obtainable), that Indemnitee has not met the relevant
standards for indemnification set forth in Section 2(b) and 2(c).

     (g) Procedures with Respect to Claims. Upon receipt by Indemnitee of actual
notice of a Claim, such Indemnitee shall promptly notify the Company in writing
of such Claim, provided, however, that the failure to so notify the Company
shall not relieve the Company from any liability which the Company may have
under this agreement or otherwise, except to the extent the Company shall have
been materially prejudiced by such failure. The Company shall have the right to
assume the defense of any Claim and employ counsel reasonably satisfactory to
the Indemnitee. If (x) the Company has failed promptly to assume the defense of
such Claim and employ counsel reasonably satisfactory to Indemnitee, or (y) such
Indemnitee, in its sole discretion, determines that a conflict exists between
such Indemnitee and the Company with respect to such Claim, then such Indemnitee
shall have the right to assume the defense of the Claim with respect to the
Indemnitee (but not the Company) and the reasonable fees and expenses of such
counsel shall be an Expense for which Indemnitee will be indemnified under this
agreement; provided that if directors who serve on the Special Committee are
entitled under the terms of their indemnification agreements with the Company to
employ separate counsel (the "Special Committee Counsel") at the Company's
expense in connection with such matter, the Indemnitee shall also employ Special
Committee Counsel unless such Indemnitee shall have been advised by counsel that
there are substantive issues that raise conflicts of interest between Indemnitee
and the Special Committee members. The Company will not settle a Claim without
the prior written consent of the Indemnitee unless such settlement includes an
unconditional release of the Indemnitee from all liabilities arising out of such
Claim and does not require Indemnitee to admit to, or plead no contest or its
equivalent to, any violation of any law, rule or regulation.

     The right to indemnification or Expense Advances as provided by this
Agreement shall be enforceable by Indemnitee in any court of competent
jurisdiction.

3.   Indemnification for Additional Expenses.

     The Company shall indemnify Indemnitee against any and all Expenses
(including reasonable attorneys' fees) and, if requested by Indemnitee, shall
(within 30

<PAGE>

business days of such request) advance such Expenses to Indemnitee, which are
incurred by Indemnitee in connection with any action brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Company under this
Agreement, or any other agreement, article of incorporation or Company by-law
now or hereafter in effect relating to Claims and/or (ii) recovery under any
directors' and officers' liability insurance policies maintained by the Company;
provided, however, that the payment of Expenses incurred by Indemnitee in
advance of the final disposition of such action shall be made only upon receipt
by the Company of an undertaking by the Indemnitee to repay all amounts advanced
if it should be ultimately determined that the Indemnitee is not entitled to be
indemnified under this Agreement or otherwise.

4.   Partial Indemnity.

     If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for a portion of the Expenses, judgments, fines,
penalties and amounts paid in settlement of a Claim but not, however, for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims or in
defense of any issue or matter therein, including dismissal without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.

5.   Burden of Proof.

     In connection with any determination by the Company (including its Board of
Directors or Independent Legal Counsel) or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.

6.   No Presumptions.

     For purposes of this Agreement, the termination of any claim, action, suit
or proceeding, by judgment, order, settlement (whether with or without court
approval), or its equivalent, shall not create a presumption that Indemnitee did
not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Company (including its Board of
Directors or Independent Legal Counsel) to have made a determination as to
whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Company (including its
Board of Directors or Independent Legal Counsel) that Indemnitee has not met
such standard of conduct or did not have such belief, prior to the commencement
of legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law shall be a defense to
Indemnitee's claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.

<PAGE>

7.   Nonexclusivity.

     The rights of Indemnitee hereunder shall be in addition to any other rights
Indemnitee may have under the Amended and Restated Articles of Incorporation,
the Company's By-Laws, the Maryland General Corporation Law or otherwise. To the
extent that a change in the Maryland General Corporation Law (whether by statute
or judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Amended and Restated Articles of Incorporation and
this Agreement, it is the intent of the parties hereto that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.

8.   Liability Insurance.

     The Company shall maintain directors' and officers' liability insurance
containing terms and conditions that are substantially similar to the current
policies maintained by or for the benefit of the Company. The aggregate amount
of such insurance (whether as part of the current umbrella policy maintained by
an affiliate of Prometheus and/or a policy maintained directly by the Company)
shall not have an overall limit on coverage of less than $20 million. Moreover,
the Company may not reduce its annual costs (measured as of the date hereof) to
maintain directors' and officers' liability insurance unless the Company can do
so without reducing the overall aggregate limit on coverage provided for in the
Company's directors' and officers' liability insurance. Any decision by the
Company with respect to the appropriate level of directors' and officers'
insurance for the Indemnitee will be made by the Board of Directors. The
Company's obligations under this Section 8 shall expire upon the sooner of (i)
three years after the Indemnitee ceases to be a director or officer of the
Company or (ii) six years from the date hereof.

9.   Amendments and Waivers.

     No supplement, modification or amendment of this Agreement shall be binding
unless executed in writing by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

10.  Subrogation.

     In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

11.  No Duplication of Payments.

<PAGE>

     The Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, the By-Laws or
otherwise) of the amounts otherwise indemnifiable hereunder.

12.  Binding Effect.

     This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or
otherwise of all or substantially all of the business, securities and/or assets
of the Company, spouses, heirs, executors, trustees and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an executive officer, director, employee, agent
or other representative of the Company or of any other enterprise at the
Company's request.

13.  Severability.

     The provisions of this Agreement shall be severable in the event that any
of the provisions hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired and shall remain enforceable
to the fullest extent permitted by law.

14.  Governing Law.

     This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland applicable to contracts made
and to be performed in such state without giving effect to the principles of
conflicts of laws.

<PAGE>

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

                                             KONOVER PROPERTY TRUST, INC.

                                             By:___________________________
                                             Name:
                                             Title:

                                             ______________________________

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