Document:

exv10w21

 

EXHIBIT 10.21

CNA Financial Corporation

2000 Incentive Compensation Plan

 

 

Table of Contents

	 	 	 	 	 	 	 
	Article 1. Establishment, Objectives and Duration	 	 	1	 
	1.1.
	 	Establishment of the Plan	 	 	1	 
	1.2.
	 	Objectives of the Plan	 	 	1	 
	1.3.
	 	Duration of the Plan	 	 	1	 
	 
	 	 	 	 	 	 
	Article 2. Definitions	 	 	1	 
	2.1.
	 	“Article”	 	 	1	 
	2.2.
	 	“Award”	 	 	1	 
	2.3.
	 	“Award Agreement”	 	 	1	 
	2.4.
	 	“Board”	 	 	1	 
	2.5.
	 	“Bonus Shares”	 	 	2	 
	2.6.
	 	“Cause”	 	 	2	 
	2.7.
	 	“Code”	 	 	2	 
	2.8.
	 	“Committee”	 	 	2	 
	2.9.
	 	“Common Stock”	 	 	2	 
	2.10.
	 	“Company”	 	 	2	 
	2.11.
	 	“Deferred Shares”	 	 	2	 
	2.12.
	 	“Disability”	 	 	2	 
	2.13.
	 	“Disqualifying Disposition”	 	 	2	 
	2.14.
	 	“Effective Date”	 	 	2	 
	2.15.
	 	“Eligible Person”	 	 	2	 
	2.16.
	 	“Fair Market Value”	 	 	3	 
	2.17.
	 	“Former Bonus Plan”	 	 	3	 
	2.18.
	 	“Freestanding SAR”	 	 	3	 
	2.19.
	 	“Grant Date”	 	 	3	 
	2.20.
	 	“Grantee”	 	 	3	 
	2.21.
	 	“Incentive Stock Option” or “ISO”	 	 	3	 
	2.22.
	 	“including” or “includes”	 	 	3	 
	2.23.
	 	“Mature Shares”	 	 	3	 
	2.24.
	 	“Non-Qualified Stock Option” or “NQSO”	 	 	3	 
	2.25.
	 	“Option”	 	 	3	 
	2.26.
	 	“Option Price”	 	 	3	 
	2.27.
	 	“Option Term”	 	 	3	 
	2.28.
	 	“Performance-Based Exception”	 	 	3	 
	2.29.
	 	“Performance Bonus”	 	 	4	 
	2.30.
	 	“Performance Period”	 	 	4	 
	2.31.
	 	“Performance Share” or “Performance Unit”	 	 	4	 
	2.32.
	 	“Period of Restriction”	 	 	4	 
	2.33.
	 	“Person”	 	 	4	 
	2.34.
	 	“Plan”	 	 	4	 
	2.35.
	 	“Reload Option”	 	 	4	 
	2.36.
	 	“Reorganization Transaction”	 	 	4	 
	2.37.
	 	“Required Withholding”	 	 	4	 
	2.38.
	 	“Restated Effective Date”	 	 	4	 
	2.39.
	 	“Restricted Executive”	 	 	4	 
	2.40.
	 	“Restricted Shares”	 	 	4	 
	2.41.
	 	“Retirement”	 	 	4	 
	2.42.
	 	“SAR”	 	 	4	 
	2.43.
	 	“Section”	 	 	4	 
	2.44.
	 	“Share”	 	 	4	 
	2.45.
	 	“Strike Price”	 	 	5	 
	2.46.
	 	“Subsidiary”	 	 	5	 
	2.47.
	 	“Substitute Award”	 	 	5	 
	2.48.
	 	“Surviving Corporation”	 	 	5	 

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	2.49.
	 	“Tandem SAR”	 	 	5	 
	2.50.
	 	“10% Owner”	 	 	5	 
	2.51.
	 	“Termination of Affiliation”	 	 	5	 
	 
	 	 	 	 	 	 
	Article 3. Administration	 	 	5	 
	3.1.
	 	Committee	 	 	5	 
	3.2.
	 	Powers of Committee	 	 	5	 
	 
	 	 	 	 	 	 
	Article 4. Shares Subject to the Plan and Maximum Awards	 	 	7	 
	4.1.
	 	Number of Shares Available	 	 	7	 
	4.2.
	 	Adjustments in Authorized Shares	 	 	7	 
	4.3.
	 	Performance Measures	 	 	7	 
	4.4.
	 	Compliance with Section 162(m) of the Code	 	 	9	 
	 
	 	 	 	 	 	 
	Article 5. Eligibility and General Conditions of Awards	 	 	9	 
	5.1.
	 	Eligibility	 	 	9	 
	5.2.
	 	Grant Date	 	 	10	 
	5.3.
	 	Maximum Term	 	 	10	 
	5.4.
	 	Award Agreement	 	 	10	 
	5.5.
	 	Restrictions on Share Transferability	 	 	10	 
	5.6.
	 	Termination of Affiliation	 	 	10	 
	5.7.
	 	Nontransferability of Awards	 	 	12	 
	 
	 	 	 	 	 	 
	Article 6. Stock Options	 	 	12	 
	6.1.
	 	Grant of Options	 	 	12	 
	6.2.
	 	Award Agreement	 	 	12	 
	6.3.
	 	Option Price	 	 	12	 
	6.4.
	 	Grant of Incentive Stock Options	 	 	13	 
	6.5.
	 	Grant of Reload Options	 	 	13	 
	6.6.
	 	Conditions on Reload Options	 	 	13	 
	6.7.
	 	Payment	 	 	14	 
	 
	 	 	 	 	 	 
	Article 7. Stock Appreciation Rights	 	 	14	 
	7.1.
	 	Grant of SARs	 	 	14	 
	7.2.
	 	Exercise of Tandem SARs	 	 	14	 
	7.3.
	 	Payment of SAR Amount	 	 	15	 
	 
	 	 	 	 	 	 
	Article 8. Restricted Shares	 	 	15	 
	8.1.
	 	Grant of Restricted Shares	 	 	15	 
	8.2.
	 	Award Agreement	 	 	15	 
	8.3.
	 	Consideration	 	 	15	 
	8.4.
	 	Effect of Forfeiture	 	 	15	 
	8.5.
	 	Escrow; Legends	 	 	15	 
	8.6.
	 	Stockholder Rights in Restricted Shares	 	 	16	 
	 
	 	 	 	 	 	 
	Article 9. Performance Units and Performance Shares	 	 	16	 
	9.1.
	 	Grant of Performance Units and Performance Shares	 	 	16	 
	9.2.
	 	Value/Performance Goals	 	 	16	 
	9.3.
	 	Earning of Performance Units and Performance Shares	 	 	16	 
	9.4.
	 	Form and Timing of Payment of Performance Units and Performance Shares	 	 	16	 
	 
	 	 	 	 	 	 
	Article 10. Bonus Shares and Deferred Shares	 	 	17	 
	10.1.
	 	Bonus Shares	 	 	17	 
	10.2.
	 	Deferred Shares	 	 	17	 

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	Article 11. Performance Bonus Awards	 	 	17	 
	11.1.
	 	Performance Bonus Awards	 	 	17	 
	11.2.
	 	Performance Periods, Measures and Goals	 	 	17	 
	11.3.
	 	Determination of Performance Goals	 	 	17	 
	11.4.
	 	Adjustment of Goals	 	 	17	 
	11.5.
	 	Determination and Payment at Bonus	 	 	18	 
	 
	 	 	 	 	 	 
	Article 12. Beneficiary Designation	 	 	18	 
	12.1.
	 	Beneficiary Designation	 	 	18	 
	 
	 	 	 	 	 	 
	Article 13. Deferrals	 	 	18	 
	13.1.
	 	Deferrals	 	 	18	 
	 
	 	 	 	 	 	 
	Article 14. Rights of Employees, Consultants and Directors	 	 	18	 
	14.1.
	 	Employment	 	 	18	 
	14.2.
	 	Participation	 	 	19	 
	 
	 	 	 	 	 	 
	Article 15. Withholding	 	 	19	 
	15.1.
	 	Withholding	 	 	19	 
	15.2.
	 	Notification under Section 83(b)	 	 	19	 
	 
	 	 	 	 	 	 
	Article 16. Certain Extraordinary Events	 	 	19	 
	16.1.
	 	Certain Reorganization Transactions or Other Events	 	 	19	 
	16.2.
	 	Pooling of Interests Accounting	 	 	20	 
	16.3.
	 	Substituting Awards in Certain Corporate Transactions	 	 	21	 
	 
	 	 	 	 	 	 
	Article 17. Amendment, Modification, and Termination	 	 	21	 
	17.1.
	 	Amendment, Modification, and Termination	 	 	21	 
	17.2.
	 	Adjustments Upon Certain Unusual or Nonrecurring Events	 	 	21	 
	17.3.
	 	Awards Previously Granted	 	 	21	 
	 
	 	 	 	 	 	 
	Article 18. Additional Provisions	 	 	21	 
	18.1.
	 	Successors	 	 	21	 
	18.2.
	 	Gender and Number	 	 	21	 
	18.3.
	 	Severability	 	 	21	 
	18.4.
	 	Requirements of Law	 	 	21	 
	18.5.
	 	Securities Law Compliance	 	 	22	 
	18.6.
	 	No Rights as a Stockholder	 	 	22	 
	18.7.
	 	Nature of Payments	 	 	22	 
	18.8.
	 	Scope of Plan	 	 	22	 
	18.9.
	 	Awards under Former Bonus Plan	 	 	22	 
	18.10.
	 	Governing Law	 	 	22	 

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CNA Financial Corporation

2000 Incentive Compensation Plan

Article 1. Establishment, Objectives and Duration

     1.1. Establishment of the Plan. Effective as of January 1, 1996, CNA Financial
Corporation, a Delaware corporation (the “Company”), by duly adopted resolution of its
board of directors (the “Board”) adopted the CNA Financial Corporation Incentive Compensation
Plan for Certain Executive Officers (the “Former Bonus Plan”), subject to approval of the
Company’s stockholders, which was obtained on May 1, 1996. Effective as of August 4, 1999 (the
“Effective Date”), the Company by duly adopted resolution of the Board adopted this CNA
Financial Corporation 2000 Incentive Compensation Plan (the “Plan”) as the CNA Financial
Corporation 2000 Long-Term Incentive Plan, subject to approval of the Plan by the Company’s
stockholders. The Company amended and restated this Plan and amended and merged the Former Bonus
Plan into this Plan as set forth herein effective February 23, 2000 (the “Restated Effective
Date”), subject to the approval of the Company’s stockholders, which was obtained on May 2,
2001. The Company now desires to amend and restate this Plan effective February 9, 2005, subject
to the approval of the Company’s stockholders.

     1.2.  Objectives of the Plan. The Plan is intended to allow employees, directors
and consultants of the Company and its Subsidiaries to obtain the economic benefits of equity
ownership in the Company, thereby strengthening their commitment to the success of the Company
and stimulating their efforts on behalf of the Company, and to assist the Company and its
Subsidiaries in attracting new employees, directors and consultants and retaining existing
employees, directors and consultants. The Plan is also intended to optimize the profitability and
growth of the Company through incentives which are consistent with the Company’s goals; to
motivate Eligible Persons, by means of appropriate incentives, to achieve long-term Company
goals, and reward Grantees for achievement of those goals; provide incentive compensation
opportunities that are competitive with those of other similar companies, and thereby promote the
financial interest of the Company and its Subsidiaries; and, in the case of annual incentives, to
provide a means of rewarding certain Eligible Persons with compensation which, when coupled with
a base salary, produces a competitive level of total compensation that reflects their
contributions to the overall long term enhancement of the value of the Company and its
Subsidiaries.

     1.3. Duration of the Plan. The Plan shall commence on the Effective Date and shall
remain in effect, until terminated by the Board pursuant to Article 17 hereof, provided, however,
that no Incentive Stock Options may be granted under the Plan more than 10 years from the
Effective Date, and no Options, Restricted Shares, Bonus Shares, Deferred Shares, SARs, or
Performance Shares may be granted under the Plan after all Shares reserved for delivery under the
Plan pursuant to Article 4 have been exhausted.

Article 2. Definitions

     Whenever used in the Plan, the following terms shall have the meanings set forth below:

     2.1. “Article” means an Article of the Plan.

     2.2. “Award” means Options (including Reload Options), Restricted Shares, Bonus
Shares, Deferred Shares, stock appreciation rights (SARs), Performance Units, Performance Shares,
and Performance Bonus Awards granted under the Plan.

     2.3. “Award Agreement” means a written agreement by which an Award is evidenced.

     2.4. “Board” has the meaning set forth in Section 1.1.

 

 

     2.5. “Bonus Shares” means Shares that are awarded to a Grantee without cost and
without restrictions in recognition of past performance (whether determined by reference to
another employee benefit plan of the Company or otherwise), or as an incentive to become an
employee or consultant of the Company or a Subsidiary or otherwise.

     2.6. “Cause” as to a Grantee means (a) “cause” for discharge from employment as
specified in an employment contract between the Grantee and the Company or any Subsidiary; or (b)
if there is no employment contract, “cause” as defined in the Award Agreement; or (c) if “cause”
is not otherwise defined in such employment contract or Award Agreement as determined by the
Committee:

     (i) a Grantee’s engaging in any act which is a felony or other similar act
involving fraud, dishonesty, moral turpitude, unlawful conduct or breach of fiduciary
duty;

     (ii) a Grantee’s willful or reckless material misconduct in the performance of
the Grantee’s duties; or

     (iii) a Grantee’s habitual neglect of duties;

provided, however, that for purposes of clauses (ii) and (iii), Cause shall not include any one or
more of the following: bad judgment, negligence or any act or omission believed by the Grantee in
good faith to have been in or not opposed to the interest of the Company (without intent of the
Grantee to gain, directly or indirectly, a profit to which the Grantee was not legally entitled). A
Grantee who agrees to resign from his affiliation with the Company or a Subsidiary in lieu of being
terminated for Cause may be deemed to have been terminated for Cause for purposes of this Plan.

     2.7. “Code” means the Internal Revenue Code of 1986, as amended from time to time,
and regulations and rulings thereunder. References to a particular section of the Code include
references to successor provisions of the Code or any successor statute.

     2.8. “Committee” has the meaning set forth in Section 3.1.

2.9. “Common Stock” means the common stock, $2.50 par value, of the Company.

2.10. “Company” has the meaning set forth in Section 1.1.

     2.11. “Deferred Shares” means Shares that are awarded to a Grantee on a deferred
basis pursuant to Section 10.2.

     2.12. “Disability” means a physical or mental condition of the Grantee which, as
determined by the Committee in its sole discretion based on all available medical information,
would qualify the Grantee for benefits under the Company’s long-term disability plan as in effect
when the determination is made (ignoring the requirements of any waiting period) if the Grantee
were a participant in such plan (whether or not the Grantee actually participates therein).
Notwithstanding the foregoing, if the Company has no long-term disability plan, “Disability”
means a physical or mental condition of the Grantee which, as determined by the Committee in its
sole discretion based on all available medical information, is expected to continue indefinitely
and which renders the Grantee incapable of performing any substantial portion of the service
required of him by his employer.

     2.13. “Disqualifying Disposition” has the meaning set forth in Section 6.4.

     2.14. “Effective Date” has the meaning set forth in Section 1.1.

     2.15. “Eligible Person” means (i) any employee (including any officer) of the
Company or any Subsidiary, including any such employee who is on an approved leave of absence,
layoff, or has been subject to a disability which does not qualify as a Disability, (ii) any
person performing services for the

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Company or a Subsidiary in the capacity of a consultant, (iii) any person performing
services for the Company or a Subsidiary in the capacity of a member of the Board or as a member
of the board of directors of such Subsidiary, and (iv) any person for whom the Committee
determines an Award would provide a material inducement to become an employee or director of or a
consultant to the Company or a Subsidiary.

     2.16. “Fair Market Value” means (A) with respect to any property other than Shares, the
fair market value of such property determined by such methods or procedures as shall be
established from time to time by the Committee, and (B) with respect to Shares, as of any date,
(i) the average of the high and low trading prices on such date on the New York Stock Exchange
Composite Transactions Tape (or, if no sale of Shares was reported for such date, on the next
preceding date on which a sale of Shares was reported), (ii) if the Shares are not listed on the
New York Stock Exchange, the average of the high and low trading prices of the Shares on such
other national exchange on which the Shares are principally traded or as reported by the NASDAQ
Stock Market, or similar organization, or if no such quotations are available, the average of the
high bid and low asked quotations in the over-the-counter market; or (iii) in the event that
there shall be no public market for the Shares, the fair market value of the Shares as determined
by the Committee.

     2.17. “Former Bonus Plan” has the meaning set forth in Section 1.1.

     2.18. “Freestanding SAR” means an SAR that is granted independently of any other Award.

     2.19. “Grant Date” has the meaning set forth in Section 5.2.

     2.20. “Grantee” means an individual who has been granted an Award.

     2.21. “Incentive Stock Option” or “ISO” means an Option that (i) is
designated as an Incentive Stock Option in the Award Agreement granting such Option; and (ii) is
intended to met the requirements of Section 422 of the Code for treatment as an Incentive Stock
Option.

     2.22. “including” or “includes” mean “including, without limitation,” or
“includes, without limitation”, respectively.

     2.23. “Mature Shares” means Shares for which the holder thereof has good title, free
and clear of all liens and encumbrances, and which such holder either (i) has held for at least
six months or (ii) has purchased on the open market.

     2.24. “Non-Qualified Stock Option” or “NQSO” means an Option that is not an
Incentive Stock Option.

     2.25. “Option” means an option (including either an Incentive Stock Option or a
Non-Qualified Stock Option) granted under Article 6 of the Plan.

     2.26. “Option Price” means the price at which a Share may be purchased by a Grantee
pursuant to an Option.

     2.27. “Option Term” means the period beginning on the Grant Date of an Option and
ending on the expiration date of such Option, as specified in the Award Agreement for such Option
and as may, consistent with the provisions of the Plan, be extended from time to time by the
Committee prior to the expiration date of such Option then in effect.

     2.28. “Performance-Based Exception” means the performance-based exception from the
tax deductibility limitations of Section 162(m) of the Code.

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     2.29. “Performance Bonus” means a cash bonus determined and awarded in accordance
with Article 11.

     2.30. “Performance Period” means the time period during which performance goals
designated by the Committee shall be met.

     2.31. “Performance Share” or “Performance Unit” has the meaning set forth in
Article 9.

     2.32. “Period of Restriction” means the period during which the transfer of
Restricted Shares is limited in some way (based on the passage of time, the achievement of
performance goals, or upon the occurrence of other events as determined by the Committee) or the
Shares are otherwise subject to a substantial risk of forfeiture.

     2.33. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of
the Securities Exchange Act of 1934 and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d) thereof.

     2.34. “Plan” has the meaning set forth in Section 1.1.

     2.35. “Reload Option” has the meaning set forth in Section 6.5.

     2.36. “Reorganization Transaction” means the earlier of the approval by the Board or
the approval by the stockholders of the Company of a merger, reorganization, consolidation, or
similar transaction, or a plan or agreement for the sale or other disposition of all or
substantially all of the consolidated assets of the Company or a plan of liquidation of the
Company.

     2.37. “Required Withholding” has the meaning set forth in Article 15.

     2.38. “Restated Effective Date” has the meaning set forth in Section 1.1.

     2.39. “Restricted Executive” means a Grantee who is the Chief Executive Officer of
the Company, any officer of the Company who reports directly to the Chief Executive Officer of
the Company, and any other officer of the Company or of a Subsidiary who is salary grade 96 or
above; provided, however, that the Committee may at the time of any Award to any Grantee
determine that such Grantee be treated as a Restricted Executive for purposes of that Award; and
further provided, however, that no Grantee shall be a Restricted Executive after the last day of
the calendar year in which he ceases to be an employee of the Company (unless he is subsequently
reemployed by the Company on terms and conditions making him a Restricted Executive as defined in
this Section).

     2.40. “Restricted Shares” means Shares that are subject to transfer restrictions and
are subject to forfeiture if conditions specified in the Award Agreement applicable to such
Shares are not satisfied.

     2.41. “Retirement” means a Termination of Affiliation on or after the date a Grantee
attains age 62 unless the Award Agreement or Committee provides otherwise; and in the case of a
Grantee who is an Eligible Person solely by reason of clause (ii) or (iii) of Section 2.15, a
Termination of Affiliation for a reason other than death, Disability or Cause at or after the
date the Grantee attains age 62 unless the Award Agreement or Committee provides otherwise.

     2.42. “SAR” means a stock appreciation right.

     2.43. “Section” means, unless the context otherwise requires, a Section of the Plan.

     2.44. “Share” means a share of Common Stock.

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     2.45. “Strike Price” of any SAR shall equal, for any Tandem SAR (whether granted at
the same time as or after the grant of the related Option), the Option Price of such Option, or
for any other SAR, 100% of the Fair Market Value of a Share on the Grant Date of such SAR;
provided that the Committee may specify a higher Strike Price in the Award Agreement; and further
provided that any SAR granted as a Substitute Award pursuant to Section 16.3 may be granted at
such Strike Price as the Committee determines to be necessary to achieve preservation of economic
value as provided in Section 16.3.

     2.46. “Subsidiary” means, for purposes of grants of Incentive Stock Options, a
corporation as defined in Section 424(f) of the Code (with the Company being treated as the
employer corporation for purposes of this definition); and for all other purposes, with respect
to any Person, any business entity in which such Person has a direct or indirect interest
(whether in the form of stock ownership, voting power or participation in profits or capital
contribution) of more than 50%, as determined by the Committee.

     2.47. “Substitute Award” has the meaning set forth in Section 16.3.

     2.48. “Surviving Corporation” means the corporation resulting from a Reorganization
Transaction or, if securities of such corporation that are entitled to vote generally in the
election of directors (other than a class of securities may have voting power by reason of the
occurrence of a contingency) representing at least 50% of the aggregate voting power of such
resulting corporation are directly or indirectly owned by another corporation, such other
corporation.

     2.49. “Tandem SAR” means an SAR that is granted in connection with a related Option,
the exercise of which shall require cancellation of the right to purchase a Share under the
related Option (and when a Share is purchased under the related Option, the Tandem SAR shall
similarly be canceled).

     2.50. “10% Owner” means a person who owns capital stock (including stock treated as
owned under Section 424(d) of the Code) possessing more than 10% of the total combined voting
power of all classes of capital stock of the Company or any Subsidiary.

     2.51. “Termination of Affiliation” occurs on the first day on which an individual is
for any reason no longer providing services to the Company or any Subsidiary in the capacity of
an employee, consultant, or director; or with respect to an individual who is an employee of, or
consultant to, or director of, a Person which is a Subsidiary, the first day on which such Person
ceases to be a Subsidiary.

Article 3. Administration

     3.1. Committee. The Plan shall be administered by the Incentive Compensation
Committee of the Board, or such other committee of the Board as the Board shall appoint to
administer the Plan (the “Committee”). The number of members of the Committee shall be set and
may from time to time be increased or decreased, and shall be subject to such conditions, in each
case as the Board deems appropriate.

     3.2. Powers of Committee. Subject to the express provisions of the Plan and in
addition to the authority and discretion granted elsewhere in the Plan, the Committee has full
and final authority and sole discretion as follows:

     (a) to determine when, to whom and in what types and amounts Awards should be granted
and the terms and conditions applicable to each Award, including the Option Price, the Option
Term, the benefit payable under any SAR, Performance Unit, Performance Share, or Performance
Bonus Award, and whether or not specific Awards shall be granted in connection with other
specific awards, and if so whether they shall be exercisable cumulatively with, or
alternatively to, such other specific Awards;

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     (b) to determine the amount, if any, that a Grantee shall pay for Restricted Shares,
whether and on what terms to permit or require the payment of cash dividends thereon to be
deferred, what restrictions shall apply to Restricted Shares, when Restricted Shares
(including Restricted Shares acquired upon the exercise of an Option) shall be forfeited and
whether such shares shall be held in escrow;

     (c) to construe and interpret the Plan and to make all determinations necessary or
advisable for the administration of the Plan, including determining whether a Termination of
Affiliation is for Cause, Retirement, death, Disability or other reason;

     (d) to make, amend, and rescind rules relating to the Plan, including rules with respect
to the exercisability and nonforfeitability of Awards upon the Termination of Affiliation of
a Grantee;

     (e) to determine the terms and conditions of all Award Agreements (which need not be
identical) and, with the consent of the Grantee, to amend any such Award Agreement at any
time in any manner permitted for Awards of such type by the Plan as then in effect; provided
that the consent of the Grantee shall not be required for any amendment which (i) does not
materially adversely affect the rights of the Grantee, or (ii) is necessary or advisable (as
determined by the Committee) to carry out the purpose of the Award as a result of any new or
change in existing applicable law or generally accepted accounting principles;

     (f) to cancel, with the consent of the Grantee, outstanding Awards and to grant new
Awards in substitution therefor;

     (g) to accelerate the exercisability (including exercisability within a period of less
than six months after the Grant Date) of, and to accelerate or waive any or all of the terms
and conditions applicable to, any Award or any group of Awards for any reason and at any
time, including in connection with a Termination of Affiliation;

     (h) subject to Sections 1.3, 5.3, and 6.4, to extend the time during which any Award or
group of Awards may be exercised;

     (i) to make such adjustments or modifications to Awards to Grantees who are working
outside the United States as are advisable to fulfill the purposes of the Plan or to comply
with applicable local law;

     (j) to delegate to the Chief Executive Officer of the Company, other executive officers
of the Company, or other members or committees of the Board, the power to grant Performance
Units and Performance Bonus Awards from time to time to specified categories of Eligible
Persons in amounts and on terms to be specified by the Committee, in which event the
Committee’s delegates may exercise in their sole discretion all powers and authority of the
Committee with respect to such Awards except as otherwise specified in this Plan or by the
Committee;

     (k) to delegate to officers, employees or independent contractors of the Company matters
involving the routine administration of the Plan and which are not specifically required by
any provision of this Plan to be performed by the Committee;

     (l) to impose such additional terms and conditions upon the grant, exercise or retention
of Awards as the Committee may, before or concurrently with the grant thereof, deem
appropriate, including limiting the percentage of Awards which may from time to time be
exercised by a Grantee; and

     (m) to take any other action with respect to any matters relating to the Plan for which
it is responsible.

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All determinations on any matter relating to the Plan or any Award Agreement may be made in the
sole and absolute discretion of the Committee, and all such determinations of the Committee shall
be final, conclusive and binding on all Persons. The determinations of the Committee in granting
Awards need not be uniform among Grantees and among Awards and no determination of the Committee
with respect to any Grantee or Award shall entitle that Grantee or any other Grantee to the same
determination with respect to any other Award; except that the Committee shall construe the terms
of the Plan and of any Award Agreement consistently as to the meaning of the same language. No
member of the Committee shall be liable for any action or determination made with respect to the
Plan or any Award.

Article 4. Shares Subject to the Plan and Maximum Awards

     4.1. Number of Shares Available. Subject to Section 4.4 and to adjustment as
provided in Section 4.2, the number of Shares hereby reserved for delivery under the Plan is
4,000,000. If any Shares subject to an Award granted hereunder are forfeited or an Award or any
portion thereof otherwise terminates or is settled without the issuance of Shares, the Shares
subject to such Award, to the extent of any such forfeiture, termination or settlement, shall
again be available for grant under the Plan. If any Shares (whether subject to or received
pursuant to an Award granted under this Plan or any other plan, purchased on the open market, or
otherwise obtained, and including Shares that are deemed (by attestation or otherwise) to have
been delivered to the Company as payment for all or any portion of the Option Price of an Option
pursuant to Section 6.7) are withheld or applied as payment by the Company in connection with the
exercise of an Award hereunder or the withholding of taxes related thereto, such Shares, to the
extent of any such withholding or payment, shall again be available or shall increase the number
of Shares available, as applicable, for grant under the Plan. The Committee may from time to time
determine the appropriate methodology consistent with this Section 4.1 for calculating the number
of Shares issued pursuant to the Plan. Shares issued pursuant to the Plan may be treasury
            shares or newly-issued Shares.

     4.2. Adjustments in Authorized Shares. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock split, subdivision,
consolidation or reduction of capital, reorganization, merger, scheme of arrangement, split-up,
spin-off or combination involving the Company or repurchase or exchange of Shares or other rights
to purchase Shares or other securities of the Company, or other similar corporate transaction or
event that occurs at any time after the Effective Date affects the Shares such that any
adjustment is determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property of the Company or any Person that is a
party to a Reorganization Transaction with the Company) with respect to which Awards may be
granted, (ii) the number and type of Shares (or other securities or property of the Company or
any Person that is a party to a Reorganization Transaction with the Company) subject to
outstanding Awards, (iii) the grant price, strike price, or exercise price with respect to any
Award, and (iv) the limitations on the maximum number and type of Shares available under the Plan
and that may be granted as particular Awards as set forth in Section 4.1; or, if deemed
appropriate, apply the provisions of Article 16; provided, in each case that with respect to
Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such
adjustment would cause the Plan to violate Section 422(b)(1) of the Code or any successor
provision thereto; and provided further, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.

     4.3. Performance Measures. Unless and until the Committee proposes for stockholder
vote and the stockholders of the Company approve a change in the general performance measures set
forth in this Section 4.3 the attainment of which may determine the degree of payout and/or
vesting with respect to Awards granted to Restricted Executives which are designed to qualify for
the Performance-Based Exception, the performance measure(s) to be used for purposes of such
grants shall be chosen from among one or more or any combination of the following performance
measures relating to the Company, subsidiary, operating unit or division:

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     (a) Earnings (either in the aggregate or on a per-share basis, and if on a per-share
basis reflecting such dilution of shares outstanding as the Committee deems appropriate)
before or after interest and taxes;

     (b) Net Income;

     (c) Net Operating Income;

     (d) Return measures (including return or net return on assets, net assets, investments,
capital, equity, or gross sales);

     (e) Stockholder returns (including growth measures and stockholder return or attainment
by the Shares of a specified value for a specified period of time), share price or share price
appreciation;

     (f) Cash flow(s);

     (g) Dividends;

     (h) Gross revenues;

     (i) Gross or net premiums written;

     (j) Net premiums earned;

     (k) Net investment income;

     (l) losses and loss expenses, loss ratios, expense ratios, or combined ratios;

     (m) Underwriting and administrative expenses;

     (n) Operating expenses;

     (o) Stock price;

     (p) Satisfaction of specified business expansion goals or goals relating to acquisitions
or divestitures;

     (q) Expense or cost levels in each case, where applicable, determined either on a
Company-wide basis or in respect of any one or more specified business units;

     (r) Net economic value;

     (s) Market share or market penetration with respect to specific designated products or
product groups;

     (t) Customer retention goals;

     (u) Customer satisfaction goals;

     (v) Productivity improvements; or

     (w) Attainment of personal objectives with respect to any of the foregoing criteria or
other criteria such as growth and profitability, leadership effectiveness, negotiation of
transactions and sales or development of long term business goals.

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Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise
employ comparisons based on internal targets, the past performance of the Company or any business
unit thereof, and/or the past or current performance of other companies. In establishing
performance goals, the Committee shall establish reasonable definitions of the applicable
performance measures, and such definitions may provide for adjustments and may include or exclude
items, including but not limited to: realized investment gains and losses; extraordinary,
unusual or infrequent items; effects of accounting changes, currency fluctuations, acquisitions,
divestitures, reserve strengthening, asbestos and environmental and mass tort losses, or
financing activities; expenses for restructuring or productivity initiatives and other
non-operating items.

The Committee shall have the discretion to adjust the Awards and the determinations of the degree
of attainment of the pre-established performance goals; provided, however, the Awards which are
designed to qualify for the Performance-Based Exception, and which are held by Restricted
Executives, may not be adjusted upward. The Committee, however, shall retain the discretion to
adjust any Awards downward, except to the extent otherwise provided in the Award Agreement or in
a previously executed agreement between the Company and the Grantee.

In the event that applicable tax and/or securities laws change to permit Committee discretion to
alter the governing performance measures without obtaining stockholder approval of such changes,
the Committee shall have sole discretion to make such changes without obtaining stockholder
approval. In addition, in the event that the Committee determines that it is advisable to grant
or pay Awards which shall not qualify for the Performance-Based Exception, the Committee may make
such grants or payments without satisfying the requirements of Section 162(m) of the Code.

     4.4 Compliance with Section 162(m) of the Code.

     (a) Section 162(m) Compliance. At all times when Section 162(m) of the Code is
applicable, all Awards granted under this Plan to Restricted Employees shall to the extent
provided by the Committee comply with the requirements of Section 162(m) of the Code;
provided, however, that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the Plan, then
compliance with Section 162(m) of the Code will not be required; provided further that to the
extent Section 162(m) or the regulations thereunder require periodic stockholder approval of
such performance measures such approval shall not be required for the continuation of the
Plan or as a condition to grant any Award hereunder after such approval is required. In
addition, in the event that changes are made to Section 162(m) of the Code to permit
flexibility with respect to the Award or Awards available under the Plan, the Committee may,
subject to this Section 4.4, make any adjustments to such Awards or otherwise it deems
appropriate.

     (b) Section 162(m) Maximum Individual Limits. Subject to adjustment as provided
in Section 4.2, the maximum aggregate number of Shares (including as Shares, a number of
Shares equal to the number of SARs granted) for which Awards (other than Reload Options,
Performance Units and Performance Bonus Awards) may be granted to any Grantee in any calendar
year shall not exceed 400,000 and the number of Shares for which Reload Options may be
granted to any Grantee in any calendar year shall not exceed 400,000. The maximum aggregate
value of Performance Units and Performance Bonus Awards granted to any Grantee hereunder in
any calendar year shall not exceed in the case of annual awards, $5,000,000, and in the case
of other awards $8,000,000. Maximum Limits under this Section 4.4(b) shall be calculated in
accordance with Treasury Regulation §1.162-27(e)(2)(vi)(B).

Article 5. Eligibility and General Conditions of Awards

     5.1. Eligibility. The Committee may grant Awards to any Eligible Person, whether or
not he or she has previously received an Award.

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     5.2. Grant Date. The Grant Date of an Award shall be the date on which the
Committee grants the Award or such later date as specified by the Committee in the Award
Agreement.

     5.3. Maximum Term. The Option Term or other period during which an Award may be
outstanding, unless otherwise provided in the Award Agreement, shall not extend more than 10
years after the Grant Date, and shall be subject to earlier termination as herein specified;
provided, that the Option Term of any ISO shall not exceed 10 years; and provided, however, that
any deferral of a cash payment or of the delivery of Shares that is permitted or required by the
Committee pursuant to Article 12 may, if so permitted or required by the Committee, extend more
than 10 years after the Grant Date of the Award to which the deferral relates.

     5.4. Award Agreement. To the extent not set forth in the Plan, the terms and
conditions of each Award (which need not be the same for each grant or for each Grantee) shall be
set forth in an Award Agreement.

     5.5. Restrictions on Share Transferability. The Committee may include in the Award
Agreement such restrictions on transferability of any Shares acquired pursuant to the exercise or
vesting of an Award as it may deem advisable.

     5.6. Termination of Affiliation. Except as otherwise provided in an Award Agreement
(including an Award Agreement as amended by the Committee pursuant to Section 3.2), the extent to
which the Grantee shall have the right to exercise, vest in, or receive payment in respect of an
Award following Termination of Affiliation shall be determined in accordance with the following
provisions of this Section 5.6.

     (a) For Cause. If a Grantee has a Termination of Affiliation for Cause:

     (i) the Grantee’s Awards (including any Restricted Shares or Deferred Shares) that
are forfeitable immediately before such Termination of Affiliation shall
automatically be forfeited on such Termination of Affiliation, subject in the case
of Restricted Shares to the provisions of Section 8.4 regarding repayment of certain
amounts to the Grantee;

     (ii) the Grantee’s Deferred Shares that were vested immediately
before such Termination of Affiliation shall promptly be settled by delivery to such
Grantee of a number of unrestricted Shares equal to the aggregate number of such
vested Deferred Shares, and

     (iii) any unexercised Option or SAR, and any Performance Share,
Performance Unit or Performance Bonus Award with respect to which the Performance
Period has not ended immediately before such Termination of Affiliation, shall
terminate effective immediately upon such Termination of Affiliation.

     (b) On Account of Retirement, Death or Disability. If a Grantee has a Termination
of Affiliation on account of Retirement, death or Disability:

     (i) the Grantee’s Awards that were forfeitable immediately before
such Termination of Affiliation shall thereupon become nonforfeitable;

     (ii) the Company shall promptly settle all Deferred Shares, whether
or not forfeitable, by delivery to the Grantee (or, after his or her death, to his
or her personal representative or beneficiary designated in accordance with Article
11) of a number of unrestricted Shares equal to the aggregate number of the
Grantee’s Deferred Shares;

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     (iii) any unexercised Option or SAR, whether or not exercisable
immediately before such Termination of Affiliation, may be exercised, in whole or in
part, at any time after such Termination of Affiliation (but in either case only
during the Option Term) by the Grantee (whether or not, in the case of Disability,
such exercise causes an Option to fail to qualify as an ISO) or, after his or her
death, by (A) his or her personal representative or the person to whom the Option or
SAR, as applicable, is transferred by will or the applicable laws of descent and
distribution, or (B) the Grantee’s beneficiary designated in accordance with Article
12; and

     (iv) the benefit payable with respect to any Performance Share or
Performance Unit with respect to which the Performance Period has not ended
immediately before such Termination of Affiliation shall be equal to the product of
the Fair Market Value of a Share as of the date of such Termination of Affiliation
or the value of the Performance Unit specified in the Award Agreement (determined as
of the date of such Termination of Affiliation), as applicable, multiplied
successively by (1) and (2) below; and the benefit payable with respect to any
Performance Bonus Award with respect to which the Performance Period has not ended
immediately before such Termination of Affiliation shall be equal to the product of
(1) and (2) below; where:

     (1) is a fraction, the numerator of which is the number of
months that have elapsed since the beginning of such Performance Period to
and including the month in which occurs the date of such Termination of
Affiliation and the denominator of which is the number of months in the
Performance Period; and

     (2) is a percentage determined by the Committee that would
be earned under the terms of the applicable Award Agreement assuming that
the rate at which the performance goals have been achieved as of the date of
such Termination of Affiliation would continue until the end of the
Performance Period, or, if the Committee elects to compute the benefit after
the end of the Performance Period, the performance percentage, as determined
by the Committee, attained during the Performance Period.

     (c) Any Other Reason. If a Grantee has a Termination of Affiliation for any
reason other than for Cause, Retirement, death or Disability, then:

     (i) the Grantee’s Awards, to the extent forfeitable under the Plan
or the Award Agreement immediately before such Termination of Affiliation, shall
thereupon automatically be forfeited unless the Committee determines in writing
otherwise, subject in the case of Restricted Shares to the provisions of Section 8.4
regarding repayment of certain amounts to the Grantee;

     (ii) the Grantee’s Deferred Shares that were not forfeitable
immediately before such Termination of Affiliation shall, unless otherwise provided
in an Award Agreement or determined by the Committee in writing, promptly be settled
by delivery to the Grantee of a number of unrestricted Shares equal to the aggregate
number of the Grantee’s vested Deferred Shares;

     (iii) any unexercised Option or SAR, and any Performance Share,
Performance Unit or Performance Bonus Award with respect to which the Performance
Period has not ended immediately before such Termination of Affiliation, shall
terminate effective immediately upon such Termination of Affiliation unless the
Committee determines in writing otherwise.

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     (iv) any Performance Shares, Performance Units or Performance Bonus
with respect to which the Performance Period has not ended as of the date of such
Termination of Affiliation shall terminate immediately upon such Termination of
Affiliation unless the Committee determines in writing otherwise.

     5.7. Nontransferability of Awards.

     (a) Except as provided in Section 5.7(c) below, each Award, and each right under any Award,
shall be nontransferable, and during the Grantee’s lifetime, shall be exercisable only by the
Grantee, or, if permissible under applicable law, by the Grantee’s guardian or legal
representative.

     (b) Except as provided in Section 5.7(c) below, no Award (prior to the time, if
applicable, Shares are issued in respect of such Award), and no right under any Award, may be
assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Grantee otherwise than by will or by the laws of descent and distribution (or in the case of
Restricted Shares, to the Company) and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company
or any Subsidiary; provided, however, that the designation of a beneficiary in accordance
with Article 12 shall not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance.

     (c) To the extent and in the manner permitted by the Committee, and subject to such
terms and conditions as may be prescribed by the Committee, a Grantee may transfer a
Non-Qualified Stock Option, SAR, Restricted Share, Bonus Share, or Deferred Share Award to
(i) a spouse, sibling, parent or lineal descendant (including a lineal descendant by
adoption) (any of the foregoing, an “Immediate Family Member”) of the Grantee; (ii) a trust,
the primary beneficiaries of which consist exclusively of the Grantee or Immediate Family
Members of the Grantee or the spouses of such Immediate Family Members, or (iii) a
corporation, partnership or similar entity, the owners of which consist exclusively of the
Grantee or Immediate Family Members of the Grantee or the spouses of such Immediate Family
Members. This subsection (c) shall not be construed to authorize a transfer of an Incentive
Stock Option, Performance Unit, Performance Share, or Performance Bonus Award.

Article 6. Stock Options

     6.1. Grant of Options. Subject to the terms and provisions of the Plan, Options may
be granted to any Eligible Person in such number, and upon such terms, and at any time and from
time to time as shall be determined by the Committee. Without limiting the generality of the
foregoing, the Committee may grant to any Eligible Person, or permit any Eligible Person to elect
to receive, an Option in lieu of or in substitution for any other compensation (whether payable
currently or on a deferred basis, and whether payable under this Plan or otherwise) which such
Eligible Person may be eligible to receive from the Company or a Subsidiary, which Option may
have a value (as determined by the Committee under Black-Scholes or any other option valuation
method) that is equal to or greater than the amount of such other compensation.

     6.2. Award Agreement. Each Option grant shall be evidenced by an Award Agreement
that shall specify the Option Price, the Option Term, the number of Shares to which the Option
pertains, the time or times at which such Option shall be exercisable and such other provisions
as the Committee shall determine.

     6.3. Option Price. The Option Price of an Option under this Plan shall be
determined by the Committee, and shall be no less than 100% of the Fair Market Value of a Share
on the Grant Date; provided, however, that any Option granted as a Substitute Award pursuant to
Section 16.3 may be granted at such Option Price as the Committee determines to be necessary to
achieve preservation of economic value as provided in Section 16.3.

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     6.4. Grant of Incentive Stock Options. At the time of the grant of any Option, the
Committee may in its discretion designate such Option as an Incentive Stock Option. Any Incentive
Stock Option:

     (a) shall, if granted to a 10% Owner, have an Option Price not less than 110% of the
Fair Market Value of a Share on its Grant Date;

     (b) shall have an Option Term of not more than 10 years (five years in the case of an
Incentive Stock Option granted to a 10% Owner) from its Grant Date, and shall be subject to
earlier termination as provided herein or in the applicable Award Agreement;

     (c) shall not have an aggregate Fair Market Value (as of the Grant Date of each
Incentive Stock Option) of the Shares with respect to which Incentive Stock Options (whether
granted under the Plan or any other stock option plan of the Grantee’s employer or any parent
or Subsidiary thereof (“Other Plans”)) are exercisable for the first time by such Grantee
during any calendar year, determined in accordance with the provisions of Section 422 of the
Code, which exceeds $100,000 (the “$100,000 Limit”); and to the extent any Grant is in excess
of such $100,000 Limit, a portion of such Grant equal to the $100,000 Limit shall be
designated as an ISO and the remainder shall, notwithstanding its prior designation as an
ISO, be regarded as a NQSO.

     (d) shall be granted within 10 years from the earlier of the date the Plan is adopted or
the date the Plan is approved by the stockholders of the Company;

     (e) shall require the Grantee to notify the Committee of any disposition of any Shares
issued pursuant to the exercise of the Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying dispositions) (any
such circumstance, a “Disqualifying Disposition”), within 10 days of such Disqualifying
Disposition; and

     (f) shall by its terms not be assignable or transferable other than by will or the laws
of descent and distribution and may be exercised, during the Grantee’s lifetime, only by the
Grantee; provided, however, that the Grantee may, to the extent provided in the Plan in any
manner specified by the Committee, designate in writing a beneficiary to exercise his or her
Incentive Stock Option after the Grantee’s death.

Notwithstanding the foregoing, the Committee may, without the consent of the Grantee, at any time
before the exercise of an Option (whether or not an Incentive Stock Option), take any action
necessary to prevent such Option from being treated as an Incentive Stock Option.

     6.5. Grant of Reload Options. The Committee may in connection with the grant of an
Option or thereafter provide that a Grantee who (i) is an Eligible Person when he or she
exercises an Option (“Exercised Option”) and (ii) satisfies the Option Price or Required
Withholding applicable thereto with Shares (including Shares that are deemed to have been
delivered as payment for all or any portion of the Option Price of an Exercised Option by
attestation or otherwise) shall automatically be granted, subject to Article 4, an additional
option (“Reload Option”) in an amount equal to the sum (“Reload Number”) of the number of Shares
tendered (including Shares that are deemed to have been tendered) to exercise the Exercised
Option plus, if so provided by the Committee, the number of Shares, if any, retained by the
Company in connection with the exercise of the Exercised Option to satisfy any federal, state,
local or foreign tax withholding requirements.

     6.6. Conditions on Reload Options. Reload Options shall be subject to the following
terms and conditions:

     (a) the Grant Date for each Reload Option shall be the date of exercise of the Exercised
Option to which it relates;

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     (b) subject to Section 6.6(c), the Reload Option may be exercised at any time during the
Option Term of the Exercised Option (subject to earlier termination thereof as provided in
the Plan or in the applicable Award Agreement); and

     (c) the terms of the Reload Option shall be the same as the terms of the Exercised
Option to which it relates, except that, unless otherwise provided in the Award Agreement,
the Option Price for the Reload Option shall be 100% of the Fair Market Value of a Share on
the Grant Date of the Reload Option.

     6.7. Payment. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for the Shares made
by cash, personal check or wire transfer or, subject to the approval of the Committee, any one or
more of the following means:

     (a) Tendering, either by actual tender or by attestation to ownership of, Mature Shares,
valued at their Fair Market Value on the date of exercise;

     (b) Tendering Restricted Shares held by the Grantee for at least six months prior to the
exercise of the Option, each such share valued at the Fair Market Value of a Share on the
date of exercise; or

     (c) Pursuant to procedures approved by the Committee, through the sale of the Shares
acquired on exercise of the Option through a broker-dealer to whom the Grantee has submitted
an irrevocable notice of exercise and irrevocable instructions to deliver promptly to the
Company the amount of sale or loan proceeds sufficient to pay for such Shares, together with,
if requested by the Company, the amount of federal, state, local or foreign withholding taxes
payable by Grantee by reason of such exercise.

If any Restricted Shares (“Tendered Restricted Shares”) are used to pay the Option Price, a
number of Shares acquired on exercise of the Option equal to the number of Tendered Restricted
Shares shall be subject to the same restrictions as the Tendered Restricted Shares, determined as
of the date of exercise of the Option.

If tender by attestation of ownership of Mature Shares is used to pay the Option Price, the
number of Shares delivered upon exercise of the Option shall be limited to the difference between
the number of Shares subject to the Option and the number of Shares tendered by attestation.

Article 7. Stock Appreciation Rights

     7.1. Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be
granted to any Eligible Person at any time and from time to time as shall be determined by the
Committee. The Committee may grant Freestanding SARs, Tandem SARs, or any combination thereof.
The Committee shall determine the number of SARs granted to each Grantee (subject to Article 4),
the Strike Price thereof, and, consistent with Section 7.2 and the other provisions of the Plan,
the other terms and conditions pertaining to such SARs.

     7.2. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for
which its related Option is then exercisable.

Notwithstanding any other provision of this Plan to the contrary, with respect to a Tandem SAR,
(i) the Tandem SAR will expire no later than the expiration of the underlying Option; (ii) the
value of the payout with respect to the Tandem SAR may be for no more than 100% of the difference
between the Option Price of the underlying Option and the Fair Market Value of the Shares subject
to the underly

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ing Option at the time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised
only when the Fair Market Value of the Shares subject to the Option exceeds the Option Price of
the Option.

     7.3. Payment of SAR Amount. Upon exercise of an SAR, the Grantee shall be entitled
to receive payment from the Company in an amount determined by multiplying:

     (a) the excess of the Fair Market Value of a Share on the date of exercise over the
Strike Price; by

     (b) the number of Shares with respect to which the SAR is exercised;

provided that the Committee may provide in the Award Agreement that the benefit payable on
exercise of an SAR shall not exceed such percentage of the Fair Market Value of a Share on the
Grant Date as the Committee shall specify. As determined by the Committee, the payment upon SAR
exercise may be in cash, in Shares which have an aggregate Fair Market Value (as of the date of
exercise of the SAR) equal to the amount of the payment, or in some combination thereof, as set
forth in the Award Agreement.

Article 8. Restricted Shares

     8.1. Grant of Restricted Shares. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Restricted Shares to any Eligible
Person in such amounts as the Committee shall determine.

     8.2. Award Agreement. Each grant of Restricted Shares shall be evidenced by an
Award Agreement that shall specify the Period(s) of Restriction, the number of Restricted Shares
granted, and such other provisions as the Committee shall determine. The Committee may impose
such conditions or restrictions on any Restricted Shares as it may deem advisable, including
restrictions based upon the achievement of specific performance goals (Company-wide, divisional,
Subsidiary or individual), time-based restrictions on vesting or restrictions under applicable
securities laws.

     8.3. Consideration. The Committee shall determine the amount, if any, that a
Grantee shall pay for Restricted Shares. Such payment shall be made in full by the Grantee
before the delivery of the shares and in any event no later than 10 business days after the Grant
Date for such shares.

     8.4. Effect of Forfeiture. If Restricted Shares are forfeited, and if the Grantee
was required to pay for such shares or acquired such Restricted Shares upon the exercise of an
Option, unless the Committee determines in writing otherwise the Grantee shall be deemed to have
resold such Restricted Shares to the Company at a price equal to the lesser of (i) the amount
paid by the Grantee for such Restricted Shares, or (ii) the Fair Market Value of a Share on the
date of such forfeiture. The Company shall pay to the Grantee the required amount as soon as is
administratively practical. Such repurchased Restricted Shares shall cease to be outstanding,
and shall no longer confer on the Grantee thereof any rights as a stockholder of the Company,
from and after the date of the event causing the forfeiture, whether or not the Grantee accepts
the Company’s tender of payment for such Restricted Shares.

     8.5. Escrow; Legends. The Committee may provide that the certificates for any
Restricted Shares (i) shall be held (together with a stock power executed in blank by the
Grantee) in escrow by the Secretary of the Company until such Restricted Shares become
nonforfeitable or are forfeited or (ii) shall bear an appropriate legend restricting the transfer
of such Restricted Shares. If any Restricted Shares become nonforfeitable, the Company shall
cause certificates for such shares to be issued without such legend.

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     8.6. Stockholder Rights in Restricted Shares. Restricted Shares, whether held by a
Grantee or in escrow by the Secretary of the Company, shall confer on the Grantee all rights of a
stockholder of the Company, including, but not limited to, the right to vote such Restricted
Shares and the right to receive dividends on such Restricted Shares, except as otherwise provided
in the Plan or Award Agreement. Any cash dividends that become payable on Restricted Shares shall
be paid currently except to the extent the Award Agreement provides otherwise. Any stock
dividends that become payable on Restricted Shares shall be subject to the same restrictions and
other terms as apply to the Restricted Shares with respect to which such dividends are paid,
except to the extent the Award Agreement provides otherwise. The Award Agreement may, but need
not, provide for payment of interest on deferred dividends.

Article 9. Performance Units and Performance Shares

     9.1. Grant of Performance Units and Performance Shares. Subject to the terms of the
Plan, Performance Units or Performance Shares may be granted to any Eligible Person in such
amounts and upon such terms, and at any time and from time to time, as shall be determined by the
Committee.

     9.2. Value/Performance Goals. Each Performance Unit shall have an initial value
that is established by the Committee at the time of grant. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the date of grant. The Committee shall
set the beginning and ending dates of the Performance Period, select Performance Measures from
among those set forth in Section 4.3, and set performance goals which, depending on the extent to
which they are met, will determine the number or value of Performance Units or Performance Shares
that will be paid out to the Grantee.

     9.3. Earning of Performance Units and Performance Shares. Subject to the terms of
this Plan, (including Section 4.3 regarding the Committee’s discretion to make downward
adjustments) after the applicable Performance Period has ended, the holder of Performance Units
or Performance Shares shall be entitled to receive a payout based on the number and value of
Performance Units or Performance Shares earned by the Grantee over the Performance Period, to be
determined as a function of the extent to which the corresponding performance goals have been
achieved.

If a Grantee is promoted, demoted or transferred to a different business unit or a different
position in the same business unit of the Company or a Subsidiary during a Performance Period,
then, to the extent the Committee determines appropriate, the Committee may adjust, change or
eliminate the performance goals or the applicable Performance Period as it deems appropriate in
order to make them appropriate and comparable to the initial performance goals or Performance
Period.

     9.4. Form and Timing of Payment of Performance Units and Performance Shares. Unless
the Committee provides for a different method of payment, earned Performance Units or Performance
Shares shall be paid in a lump sum following the close of the applicable Performance Period or
may be deferred pursuant to Section 10.2 or Article 13. The Committee may pay earned Performance
Units or Performance Shares in cash or in Shares (or in a combination thereof) which have an
aggregate Fair Market Value equal to the value of the earned Performance Units or Performance
Shares at the close of the applicable Performance Period. Such Shares may be granted subject to
any restrictions deemed appropriate by the Committee. The form of payout of such Awards shall be
set forth in the Award Agreement pertaining to the grant of the Award.

As determined by the Committee, a Grantee may be entitled to receive any dividends declared with
respect to Shares which have been earned in connection with grants of Performance Units or
Performance Shares but not yet distributed to the Grantee. In addition, a Grantee may, as
determined by the Committee, be entitled to exercise his or her voting rights with respect to
such Shares.

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Article 10. Bonus Shares and Deferred Shares

     10.1 Bonus Shares. Subject to the terms of the Plan, the Committee may grant Bonus
Shares to any Eligible Person, in such amount and upon such terms and at any time and from time
to time as shall be determined by the Committee.

     10.2. Deferred Shares. Subject to the terms and provisions of the Plan, Deferred
Shares may be granted to any Eligible Person in such amounts and upon such terms, and at any time
and from time to time, as shall be determined by the Committee. The Committee may impose such
conditions or restrictions on any Deferred Shares as it may deem advisable, including
time-vesting restrictions and deferred payment features. The Committee may cause the Company to
establish a grantor trust to hold Shares subject to Deferred Share Awards. Without limiting the
generality of the foregoing, the Committee may grant to any Eligible Person, or permit any
Eligible Person to elect to receive, Deferred Shares in lieu of or in substitution for any other
compensation (whether payable currently or on a deferred basis, and whether payable under this
Plan or otherwise) which such Eligible Person may be eligible to receive from the Company or a
Subsidiary.

Article 11. Performance Bonus Awards

     11.1. Performance Bonus Awards. Subject to the terms of the Plan, the Committee may
grant Performance Bonus Awards to any Eligible Person, in such amount and upon such terms an at
any time and from time to time as shall be determined by the Committee.

     11.2. Performance Periods, Measures and Goals. For each Performance Bonus Award the
Committee shall establish the beginning and ending dates of the Performance Period, select the
Performance Measures and establish the performance goals for that Performance Measure to be
applied for that Performance Period. The Committee may but shall not be required to, establish
one or more Performance Periods that begin before the last day of any other Performance Periods;
and may establish Performance Periods that extend for more than one calendar year or may grant
Performance Bonus Awards that extend for more than one consecutive Performance Periods (a
“Multiple Award Period.”)

     11.3. Determination of Performance Goals. A Performance Bonus Award shall specify
the payment amount or percentage of the Performance Bonus Award for the Performance Period for
each Grantee at designated levels of achievement of the Performance Measures. In the case of a
Performance Bonus Award to a Restricted Executive, if the Committee intends such Performance
Bonus Award to qualify for the Performance Based Exception, (a) the selection of the Performance
Measures, establishment of the performance goals, and the determination of the amount or
percentage of the Performance Bonus Award payable at designated levels of achievement of the
Performance Measures, shall be made not later than the 90th calendar day of the
Performance Period; (b) in the case of a Multiple Award Period, selection of the Performance
Measures, establishment of the performance goals, and the determination of the amount or
percentage of the Performance Bonus Award payable at designated levels of achievement of the
Performance Measures, shall be done not later than the 90th calendar day of the first
Performance Period, and (c) notwithstanding (a) and (b), the performance goal shall be
established while the outcome as to the performance goal is substantially uncertain, and in no
event shall the performance goal be established after more than 25% of the Performance Period has
elapsed.

     11.4. Adjustment of Goals. The Committee may in its discretion (i) decrease (or for
a Grantee other than a Restricted Executive whose award is intended to qualify for the
Performance Based Exception, also increase) the amount or percentage of the Performance Bonus
Award payable for such Grantee at designated levels of achievement of the Performance Measures,
or (ii) increase (or for a Grantee other than a Restricted Executive whose award is intended to
qualify for the Performance Based Exception, also decrease), the designated level of achievement
of the Performance

-17-

 

     Measures to make payable the stated amount or percentage of the Performance Bonus Award, at
any time during a Performance Period including any Multiple Award Period.

     11.5. Determination and Payment at Bonus. As soon as practicable after the necessary
financial data for a Performance Period are available to the Committee, the Committee shall make
a written determination of the extent of the achievement of the performance goal for Performance
Bonus Award for that Performance Period, and shall make a written determination of the amount, if
any, to be distributable with respect to a Performance Bonus award for the Performance Period.
Distributions with respect to any Performance Bonus Award shall be subject to the following.

     (a) Except as otherwise specifically provided in the documents reflecting the terms of a
Performance Bonus Award, the Committee may in its discretion, reduce the amount of any
Performance Bonus Award or cancel the Award for any reason whatsoever for any Grantee
(including but not limited to a Restricted Executive) at any time prior to payment, and

     (b) Except as otherwise provided by the Committee, Performance Bonus Awards shall be
settled through cash payments, which shall be made as soon as practicable after the Committee
makes the determination described in this Section 11.5.

Article 12. Beneficiary Designation

     12.1. Beneficiary Designation. Each Grantee under the Plan may, from time to time,
name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or she receives any or
all of such benefit. Each such designation shall revoke all prior designations by the same
Grantee, shall be in a form prescribed by the Company, and will be effective only when filed by
the Grantee in writing with the Company during the Grantee’s lifetime. In the absence of any such
designation, benefits remaining unpaid at the Grantee’s death shall be paid to the Grantee’s
surviving spouse, if any, or if none, then to the Grantee’s estate.

Article 13. Deferrals

     13.1. Deferrals. The Committee may permit or require in an initial Award Agreement,
or permit with the consent of the Grantee in any amendment to the Award Agreement, the Grantee to
defer receipt of the payment of cash or the delivery of Shares that would otherwise be due by
virtue of the exercise of an Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Shares, the satisfaction of any requirements or goals with respect to Performance
Units, Performance Shares or Performance Bonus, the grant of Bonus Shares or the expiration of
the deferral period for Deferred Shares. In the case of an Award to a Restricted Executive the
Committee may require such deferral after the initial Award without the consent of the Grantee;
provided, however, that if the Committee requires deferral without the consent of the Grantee of
an Award which is or may be payable in cash, the Committee shall cause the Company to pay (at
such time as such Award is paid) interest on the amount of such Award for the period of required
deferral at a rate not less from time to time than the rate charged to the Company by its
principal revolving credit lender, or if none, than at the publicly announced prime lending rate
of Citibank, N.A. plus one percentage point. The Committee may require amounts relating to
deferred Awards to be held in a grantor trust created by the Company or a Subsidiary, and shall
establish such other rules and procedures for such deferrals consistent with this Article 13 as
the Committee in its discretion determines.

Article 14. Rights of Employees, Consultants and Directors

     14.1. Employment. Nothing in the Plan shall interfere with or limit in any way the
right of the Company or any Subsidiary to terminate any Grantee’s employment, consultancy or
service as a member of the Board of Directors at any time, nor confer upon any Grantee the right
to continue in the employ or as consultant or as a director of the Company or any Subsidiary.

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     14.2. Participation. No employee, consultant or director shall have the right to be
selected to receive an Award, or, having been so selected, to be selected to receive a future
Award.

Article 15. Withholding

     15.1. Withholding

     (a) Mandatory Tax Withholding. Whenever under the Plan, Shares are to be
delivered upon exercise or payment of an Award or upon Restricted Shares becoming
nonforfeitable, or any other event with respect to rights and benefits hereunder, including a
Grantee’s making an election under Section 83(b) of the Code, the Company shall be entitled
to require (x) that the Grantee remit an amount in cash, or if permitted by the Committee,
Mature Shares, sufficient to satisfy all federal, state, local and foreign tax withholding
requirements related thereto (“Required Withholding”), (y) the withholding of such Required
Withholding from compensation otherwise due to the Grantee or from any Shares or other
payment due to the Grantee under the Plan or otherwise, or (z) any combination of the
foregoing.

     (b) Elective Share Withholding.

     (i) Subject to subsection 15.1(b)(ii), a Grantee may elect the
withholding (“Share Withholding”) by the Company of a portion of the Shares subject
to an Award upon the exercise of such Award or upon Restricted Shares becoming
non-forfeitable or upon making an election under Section 83(b) of the Code (each, a
“Taxable Event”) having a Fair Market Value equal to the minimum amount necessary to
satisfy Required Withholding liability attributable to the Taxable Event.

     (ii) Each Share Withholding election shall be subject to the
following conditions:

     (1) any Grantee’s election shall be subject to the
Committee’s discretion to revoke the Grantee’s right to elect Share
Withholding at any time before the Grantee’s election if the Committee has
reserved the right to do so in the Award Agreement;

     (2) the Grantee’s election must be made on or before the
date (the “Tax Date”) on which the amount of tax to be withheld is
determined; and

     (3) the Grantee’s election shall be irrevocable.

     15.2. Notification under Section 83(b). If the Grantee, in connection with the
exercise of any Option, or the grant of Restricted Shares, makes the election permitted under
Section 83(b) of the Code to include in such Grantee’s gross income in the year of transfer the
amounts specified in Section 83(b) of the Code, then such Grantee shall notify the Company of
such election within 10 days of filing the notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to regulations issued under
Section 83(b) of the Code. The Committee may, in connection with the grant of an Award or at any
time thereafter prior to such an election being made, prohibit a Grantee from making the election
described above.

Article 16. Certain Extraordinary Events

     16.1. Certain Reorganization Transactions or Other Events. In the event of a
Reorganization Transaction or other transaction described in Section 4.2 as a result of which (i)
the Company is not the Surviving Corporation or the stock of the Surviving Corporation will not
be publicly traded, or (ii) in the determination of the Committee, the attainment of Performance
Measures established as performance goals by in connection with restrictions on any outstanding
Restricted Shares, or any outstanding

-19-

 

Performance Units, Performance Shares, and Performance Bonus Awards, or any of them, will
not reasonably be ascertainable, the Committee may in its discretion cancel any or all Awards or
class of Awards without the consent of any Grantee; provided, however, that in lieu of such
Awards the Company shall pay the Grantee in cash as soon as reasonably practicable after such
determination by the Committee:

     (a) with respect to any Restricted Share as to which the restrictions have not lapsed in
connection with such event, the Fair Market Value of a Share (determined as nearly as
practicable to the time of such transaction),

     (b) with respect to any Option or SAR, the positive difference (if any) between the Fair
Market Value of the Shares subject to the Option or SAR (determined as nearly as practicable
to the time of such transaction) and the Option Price or Strike Price of the Option or SAR;
provided, however, that no duplicate payment will be made for Tandem SARs and further
provided, however, that the amount paid with respect to any Option shall not be less than the
fair value of the Option (determined as nearly as practicable to the time of such
transaction) under a recognized option pricing model selected by the Committee; and

     (c) with respect to any Performance Unit, Performance Share, or Performance Bonus Award,
the amount that would be payable to the Grantee under Section 5.6(b) if he had Retired on the
date of the transaction.

     16.2. Pooling of Interests Accounting. If the Committee determines:

     (a) that the consummation of a sale or merger of the Company (a “Closing”) is reasonably
likely to occur but for the circumstances described in this Section;

     (b) that, based on the advice of the Company’s independent accountants and such other
factors that the Committee deems relevant, the grant of any Award or exercise of some or all
outstanding Options or SARs would preclude the use of pooling of interests accounting
(“pooling”) after the Closing; and

     (c) the preclusion of pooling can reasonably be expected to have a material adverse
effect on the terms of such sale or merger or on the likelihood of a Closing (a “Pooling
Material Adverse Effect”),

then the Committee may:

     (i) make adjustments to such Options, SARs or other Awards
(including the substitution, effective upon such Closing, of Options, SARs or other
Awards denominated in shares or other equity securities of another party to such
proposed sale or merger transaction) prior to the Closing so as to permit pooling
after the Closing,

     (ii) cause the Company to pay the benefits attributable to such
Options, SARs or other Awards (including for this purpose not only the spread
between the then Fair Market Value of the Shares subject to such Options or SARs and
the Option Price or Strike Price applicable thereto, but also the additional value
of such Options or SARs in excess of such spread, as determined by the Committee) in
the form of Shares if such payment would not cause the transaction to remain or
become ineligible for pooling; or provided that the Committee has determined, based
on the advice of the Company’s independent accountants and such other factors that
the Committee deems relevant, that no reasonable alternative is available to the
Company to prevent such a Pooling Material Adverse Effect, cancel any or all such
Options, SARs or other Awards without the consent of any affected Grantee; provided,
however, that to the extent practicable without a

-20-

 

Pooling Material Adverse Effect, the Grantee shall receive in lieu of the Award
the amount payable upon cancellation of such Award as set forth in Section 16.1.

     16.3. Substituting Awards in Certain Corporate Transactions. In connection with the
Company’s acquisition, however, effected, of another corporation or entity (the “Acquired
Entity”) or the assets thereof, the Committee may, at its discretion, grant Awards (“Substitute
Awards”) associated with the stock or other equity interest in such Acquired Entity (“Acquired
Entity Award”) held by such Grantee immediately prior to such Acquisition in order to preserve
for the Grantee the economic value of all or a portion of such Acquired Entity Award at such
price and on such terms as the Committee determines necessary to achieve preservation of economic
value.

Article 17. Amendment, Modification, and Termination

     17.1. Amendment, Modification, and Termination. Subject to the terms of the Plan,
the Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in
whole or in part without the approval of the Company’s stockholders.

     17.2. Adjustments Upon Certain Unusual or Nonrecurring Events. The Committee may
make adjustments in the terms and conditions of Awards in recognition of unusual or nonrecurring
events (including the events described in Section 4.2) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan.

     17.3. Awards Previously Granted. Except as expressly provided in Section 3.2,
Section 4.3; Section 6.4; Article 11, Section 13.1, or Article 16, no termination, amendment or
modification of the Plan and no modification of an Award Agreement shall adversely affect in any
material way any Award previously granted under the Plan, without the written consent of the
Grantee of such Award, provided, however, that to the extent any Award shall be adversely
affected by any amendment or modification of the Plan, the provisions of the Plan in toto
as in effect as of the Grant Date of such Award shall prevail.

Article 18. Additional Provisions

     18.1. Successors. All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger, consolidation, or
otherwise of all or substantially all of the business or assets of the Company.

     18.2. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.

     18.3. Severability. If any part of the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not
invalidate any other part of the Plan. Any Section or part of a Section so declared to be
unlawful or invalid shall, if possible, be construed in a manner which will give effect to the
terms of such Section or part of a Section to the fullest extent possible while remaining lawful
and valid.

     18.4. Requirements of Law. The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals
by any governmental agencies or stock exchanges as may be required. Notwithstanding any provision
of the Plan or any Award, Grantees shall not be entitled to exercise, or receive benefits under,
any Award, and the Company shall not be obligated to deliver any Shares or other benefits to a
Grantee, if such

-21-

 

exercise or delivery would constitute a violation by the Grantee or the Company of any
applicable law or regulation.

     18.5. Securities Law Compliance.

     (a) If the Committee deems it necessary to comply with any applicable securities law, or
the requirements of any stock exchange upon which Shares may be listed, the Committee may
impose any restriction on Shares acquired pursuant to Awards under the Plan as it may deem
advisable. All certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements of the SEC,
any stock exchange upon which Shares are then listed, any applicable securities law, and the
Committee may cause a legend or legends to be placed on any such certificates to refer to
such restrictions. If so requested by the Company, the Grantee shall represent to the Company
in writing that he or she will not sell or offer to sell any Shares unless a registration
statement shall be in effect with respect to such Shares under the Securities Act of 1933 or
unless he or she shall have furnished to the Company evidence satisfactory to the Company
that such registration is not required.

     (b) If the Committee determines that the exercise of, or delivery of benefits pursuant
to, any Award would violate any applicable provision of securities laws or the listing
requirements of any stock exchange upon which any of the Company’s equity securities are then
listed, then the Committee may postpone any such exercise or delivery, as applicable, but the
Company shall use all reasonable efforts to cause such exercise or delivery to comply with
all such provisions at the earliest practicable date.

     18.6. No Rights as a Stockholder. Subject to Section 8.6 regarding Restricted
Shares, a Grantee shall not have any rights as a stockholder with respect to the Shares (other
than Restricted Shares) which may be deliverable upon exercise or payment of such Award until
such shares have been delivered to him or her.

     18.7. Nature of Payments. Awards shall be special incentive payments to the Grantee
and shall not be taken into account in computing the amount of salary or compensation of the
Grantee for purposes of determining any pension, retirement, death or other benefit under (a) any
pension, retirement, profit-sharing, bonus, insurance or other employee benefit plan of the
Company or any Subsidiary or (b) any agreement between (i) the Company or any Subsidiary and (ii)
the Grantee, except as such plan or agreement shall otherwise expressly provide.

     18.8. Scope of Plan. Nothing in this Plan shall be construed to prevent the Board,
the Committee, or any other officer of the Company or any Subsidiary authorized to determine
compensation of employees and consultants of the Company or such Subsidiary, from awarding any
cash bonus or other cash incentive or achievement compensation to any person for such reasons and
on such terms and conditions, whether or not consistent with this Plan, as they in their
authorized discretion determine is appropriate.

     18.9. Awards under Former Bonus Plan. Each Award under the Former Bonus Plan that
is outstanding on the Restated Effective Date shall continue in effect as an Award under this
Plan, but shall be administered subject to all the terms and provisions of this Plan from and
after the Restated Effective Date, except to the extent application of any provision of this
amended, restated and merged Plan to such Award would violate the requirements of Section 17.3
hereof.

     18.10. Governing Law. The Plan shall be construed in accordance with and governed
by the laws of the State of Illinois other than its laws respecting choice of law.

-22-<PAGE>
                                                                   EXHIBIT 10.24

             AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT

      THIS AMENDED AND RESTATED SECURED REVOLVING CREDIT AGREEMENT, dated as of
this 30th day of December, 2003 by and among WINDROSE MEDICAL PROPERTIES, L.P.,
a Virginia limited partnership (the "Borrower"), THE HUNTINGTON NATIONAL BANK, a
national banking association ("Huntington"), and each of the lenders listed on
the signature pages hereof (individually, a "Lender" and collectively, the
"Lenders"), and each of their respective successors and assigns;

                                   WITNESSETH:

      The parties hereto, in consideration of their mutual covenants hereinafter
set forth and intending to be legally bound hereby, agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

      1.01. Certain Definitions. The following words and terms shall have the
following meanings, respectively, unless the context hereof clearly otherwise
requires:

            "Acquisition Price" shall mean the total costs (including, but not
      limited to the purchase price, due diligence costs, legal fees, accounting
      fees, loan assumption costs and expenses, closing costs and other
      customary costs and expenses of closing) paid by Borrower or a Special
      Purpose Entity to acquire a Real Estate Asset.

            "Adjusted EBITDA" shall mean EBITDA, plus Loss on Interest Rate Swap
      plus corporate general and administrative expenses.

            "Affiliate" of any Person means any other Person directly or
      indirectly controlling, controlled by or under common control with such
      Person. A Person shall be deemed to control another Person if such Person
      owns 10% or more of any class of voting securities (or other ownership
      interests) of the controlled Person or possesses, directly or indirectly,
      the power to direct or cause the direction of the management or policies
      of the controlled Person, whether through ownership of stock, by contract
      or otherwise.

            "Agent" shall mean The Huntington National Bank and any successor
      Agent appointed hereunder.

            "Adjusted LIBOR Interest Rate" shall mean a rate per annum equal to
      the quotient obtained (rounded upwards, if necessary, to the nearest
      1/100th of 1%) by dividing (i) the applicable LIBOR Interest Rate by (ii)
      1.00 minus the Reserve Percentage.

            "Advance" shall mean an advance to the Borrower on the account of
      Loan.

            "Agreement" shall mean this Amended and Restated Secured Revolving
      Credit Agreement, as the same may be supplemented, modified or amended
      from time to time.

<PAGE>

            "Appraised Value" shall mean, with respect to a Mortgaged Property,
      the fair market value of such Mortgaged Property, as determined by the
      appraisal or any update thereof for such Mortgaged Property, as provided
      in Section 4.02 (l) hereof.

            "Assignment and Acceptance" shall mean an Assignment and Acceptance
      Agreement in the form attached hereto as Exhibit A.

            "Assignment of Rents" shall mean an Assignment of Rents and Leases
      in the form attached hereto as Exhibit B, with blanks completed
      appropriately, given by the Borrower or a Special Purpose Entity, as
      applicable, to the Lenders with respect to a Mortgaged Property as
      security for the Borrower's obligations under the Loan, subject to such
      changes as may be required to comply with the requirements of the law of
      the state in which such Mortgaged Property is located, as the same may be
      supplemented, modified or amended from time to time.

            "Borrower's Affidavit" shall mean a Borrower's Closing Affidavit in
      the form of Exhibit C attached hereto, with blanks completed
      appropriately, given by the Borrower or a Special Purpose Entity to the
      Lenders with respect to a Mortgaged Property.

            "Borrowing Base" shall mean sixty-five percent (65%) of the
      aggregate Appraised Value of the Mortgaged Properties, subject to the
      provisions of Section 2.01 hereof.

            "Borrowing Base Certificate" shall mean a certificate in the form of
      Exhibit D attached hereto executed by the Chief Executive Officer or Chief
      Financial Officer of the Borrower.

            "Business Day" shall mean each day excluding Saturdays, Sundays and
      any other day on which Agent is closed for business to the public.

            "Capital Expenditure Reserve" shall mean an amount equal to the
      product of (i) $0.15 multiplied by (ii) the gross rentable square footage
      of the Real Estate Assets as determined from time to time by the
      Compliance Certificate and identified as item E thereon.

            "Capital Expenditure Reserve Factor" shall mean $0.15 per rentable
      square foot.

            "Closing" shall mean the execution and delivery by the Borrower to
      the Lenders of this Agreement, the Notes and the other Loan Documents.

            "Closing Date" shall mean the date of the Closing.

            "Collateral Assignment of Mortgaged Property Sale Agreement" shall
      mean a Collateral Assignment of Mortgaged Property Sale Agreement in the
      form attached hereto as Exhibit E, with blanks completed appropriately,
      given by the Borrower or a Special Purpose Entity, as applicable, to the
      Lenders with respect to a Mortgaged

                                       2
<PAGE>

      Property as security for the Borrower's obligations under the Loan, as the
      same may be supplemented, modified or amended from time to time.

            "Commitment" shall mean the maximum amount each Lender has agreed to
      lend to Borrower as part of the Loan, as set forth below the signature
      line of each Lender, subject to modification by each Assignment and
      Acceptance.

            "Commitment Fee" shall mean an amount equal to One-Half of One
      Percent (1/2 of 1%) of each Lender's Commitment under the Loan.

            "Compliance Certificate" shall mean a certificate in the form of
      Exhibit F annexed hereto, executed by the chief executive officer or chief
      financial officer of Borrower.

            "Conditional Default" shall mean any condition, event, act or
      omission which, with the giving of notice or passage of time or both,
      would constitute an Event of Default.

            "Consolidated Group" shall mean Guarantor, Borrower and all
      Subsidiaries of Guarantor or Borrower which are consolidated with
      Guarantor and/or Borrower for financial reporting purposes under GAAP.
      Consolidated Group shall not include an Investment Affiliate or any other
      Affiliate which is not owned 50% or more by the Borrower, Guarantor, or
      their respective Subsidiaries.

            "Construction Loans" shall mean financing obtained by Borrower,
      Guarantor or a Special Purpose Entity to finance the costs set forth in
      the Real Estate Asset Budget Amount for the construction of a Real Estate
      Asset.

            "Current Asset Value of Existing Real Estate Asset" shall mean, for
      any calendar quarter, the current asset value of Real Estate Assets, other
      than Real Estate Assets acquired during such calendar quarter, determined
      from time to time by the Compliance Certificate and identified as item H
      thereon.

            "Debt Service Coverage Ratio" shall mean the ratio of EBITDA plus
      Loss on Interest Rate Swap during the then-ending calendar quarter
      determined as of the last day of such calendar quarter, annualized
      (multiplied by 4), to the aggregate sum of all Interest payments and
      principal payments (excluding principal payments upon maturity of a loan
      or voluntary prepayments of principal) on Indebtedness of the Consolidated
      Group, and the Consolidated Group's pro rata share of any Indebtedness of
      any Investment Affiliate due and payable during such then-ending calendar
      quarter determined as of the last day of such calendar quarter, annualized
      (multiplied by 4). The first test shall be conducted for the quarter ended
      December 31, 2003, and tested at each quarter end thereafter.

            "Default Rate" shall mean a rate of interest from time to time which
      is Two Percent (2%) per annum above the applicable Interest Rates
      otherwise then in effect.

            "Defaulting Lender" shall have the meaning set forth in Section
      11.5(b).

                                       3
<PAGE>

            "Deposit" shall mean an earnest money deposit made by a buyer under
      a Mortgaged Property Sale Agreement and held by a Title Company or by the
      Borrower or Special Purpose Entity, as applicable.

            "Disbursement Request" shall mean a statement of the Borrower
      setting forth the amount of an Advance being requested and containing such
      other information as is required by Paragraph (a) of Section 5.01 hereof.

            "EBITDA" shall mean for any period, with respect to the Consolidated
      Group on a consolidated basis, determined in accordance with GAAP, the sum
      of the net income (or net loss) for the then-ending calendar quarter,
      including the Consolidated Group's pro rata share of net income (or net
      loss) in any Investment Affiliate, plus the sum of all expenses determined
      in accordance with GAAP for the then-ending calendar quarter for (a)
      Interest, including interest on the Mezzanine Debt upon achievement of
      Stabilized Occupancy of the Real Estate Asset for which the Mezzanine Debt
      has been incurred, (b) depreciation, (c) amortization, (d) all accrued or
      paid taxes on or measured by income to the extent included in the
      determination of such net income (or net loss), and (e) amounts
      attributable to the minority interest of members of Special Purpose
      Entities and other minority members or partners of Borrower, Special
      Purpose Entities or Guarantor). Net income (or net loss) shall be computed
      without giving effect to extraordinary losses or gains.

            "Environmental Indemnity Agreement" shall mean an Environmental
      Indemnity Agreement in the form attached hereto as Exhibit G, with blanks
      completed appropriately, to be executed and delivered with respect to a
      Mortgaged Property by a Special Purpose Entity, the Borrower and the
      Guarantor to the Lenders, as the same may be supplemented, modified or
      amended from time to time.

            "ERISA" shall mean the Employee Retirement Income Security Act of
      1974, as amended.

            "ERISA Affiliate" shall mean any trade or business, whether or not
      incorporated, which together with the Borrower would be treated as a
      single employer under ERISA.

            "Event of Default" shall mean any of the events of default described
      in Section 8.01 hereof.

            "FEMA" shall mean the Federal Emergency Management Agency, or any
      successor entity.

            "Fixtures" shall mean all personal property now or hereafter owned
      by the Borrower or a Special Purpose Entity and now or hereafter affixed
      to, incorporated into or to be incorporated into, or used or useful in
      connection with, a Mortgaged Property or any part thereof, all
      replacements thereof, additions thereto and substitutions therefor.

            "GAAP" shall mean generally accepted accounting principles in the
      United States of America in effect from time to time as promulgated by the
      Financial Accounting

                                       4
<PAGE>

      Standards Board and recognized and interpreted by the American Institute
      of Certified Public Accountants as of the end of the first full quarter
      following the promulgation of such standards.

            "Governmental Authorities" shall mean the United States of America,
      the state and local jurisdictions in which a Mortgaged Property is located
      and any political subdivision thereof, and any agency, department,
      commission, board, bureau or instrumentality of any of them.

            "Governmental Requirement" shall mean any law, ordinance, order,
      rule or regulation of any Governmental Authority, including but not
      limited to laws, ordinances, orders, rules or regulations with regard to
      zoning, subdivision, building, safety, fire protection or environmental
      matters applicable to a Mortgaged Property.

            "Guarantor" shall mean Windrose Medical Properties Trust, a Maryland
      real estate investment trust.

            "Guaranty" shall mean the Amended and Restated Unconditional
      Guaranty executed and delivered by Guarantor to the Lenders of even date
      herewith, pursuant to which the Guarantor guarantees the Borrower's
      obligations under the Loan Documents, as the same may be supplemented,
      modified or amended from time to time.

            "Hazardous Constituent" shall have the meaning assigned thereto
      under 40 C.F.R. Section 260.10.

            "Hazardous Materials" shall mean, collectively, Hazardous
      Substances, Hazardous Constituent and Solid Wastes.

            "Hazardous Materials Laws" shall mean all laws, statutes,
      ordinances, rules, regulations, permits, licenses, judgments, writs,
      injunctions, decrees, orders, determinations, directives and standards
      promulgated by any governmental authority concerning Hazardous Materials
      or concerning the protection of, or regulation of the discharge of
      substances into, the environment or concerning the health or safety of
      persons with respect to environmental hazards, and includes, without
      limitation, the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, as amended by the Superfund Amendments and
      Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq., Solid Waste
      Disposal Act, as amended by the Resource Conservation and Recovery Act of
      1976 and Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. Sections
      6901 et seq., Federal Water Pollution Control Act, as amended by the Clean
      Water Act of 1977, 33 U.S.C. Sections 1251 et seq., Clean Air Act of 1966,
      as amended, 42 U.S.C. Sections 7401 et seq., Toxic Substances Control Act
      of 1976, 15 U.S.C. Sections 2601 et seq., Occupational Safety and Health
      Act of 1970, as amended, 29 U.S.C. Sections 651 et seq., Emergency
      Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001
      et seq., National Environmental Policy of 1975, 42 U.S.C. Sections 4321 et
      seq., Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Section
      300(f) et seq., the Hazardous Materials Transportation Act, 42, U.S.C.
      Section 1801 et seq., the Federal Insecticide, Fungicide, and

                                       5
<PAGE>

      Rodenticide Act, U.S.C. Section 7401 et seq., and any similar or
      implementing law of the state in which a Mortgaged Property is located,
      and all amendments, rules, and regulations promulgated thereunder or
      implementing the same.

            "Hazardous Substances" shall mean at any time any substance, waste,
      pollutant, contaminant or material, in solid, liquid or gaseous form,
      which: (i) is a substance regulated or defined or designated as hazardous,
      extremely or imminently hazardous, objectionable, dangerous, or toxic
      pursuant to any law, by any local, state, territorial or federal
      governmental authority; (ii) is a substance with respect to which such a
      governmental authority otherwise requires environmental compliance,
      investigation, monitoring, reporting, or remediation; including but not
      limited to, (A) all substances, wastes, pollutants, contaminants and
      materials regulated, or defined or designated as hazardous, extremely or
      imminently hazardous, dangerous, objectionable or toxic, under any
      Hazardous Materials Law; (B) petroleum and petroleum based products
      including crude oil, used oil and any fractions thereof; (C) natural gas,
      synthetic gas, and any mixtures thereof; (D) radon; (E) radioactive
      substances and materials; (F) asbestos; (G) urea formaldehyde; (H)
      polychlorinated biphenyls; (I) lead; (J) methane; (K) flammable substances
      and materials; and (L) explosives.

            "Improvements" shall mean the improvements located upon a Mortgaged
      Property.

            "Indebtedness" shall mean all obligations, contingent and otherwise,
      that in accordance with GAAP should be classified upon a Person's balance
      sheet as liabilities, or to which reference should be made by footnotes
      thereto, including, without limitation, all of the following, whether or
      not so classified: (a) all debt and similar monetary obligations, whether
      direct or indirect; (b) all liabilities secured by any mortgage, pledge,
      negative pledge, security interest, lien, negative lien, charge, or other
      encumbrance existing on property owned or acquired subject thereto,
      whether or not the liability secured thereby shall have been assumed; (c)
      all guarantees, endorsements and other contingent obligations whether
      direct or indirect in respect of indebtedness or obligations of others,
      including any liability as the general partner of a partnership, any
      obligation to supply funds to or in any manner to invest in, directly or
      indirectly, any Person, to purchase indebtedness, or to assure the owner
      of indebtedness against loss, through an agreement to purchase goods,
      supplies, or services for the purpose of enabling the debtor to make
      payment of the indebtedness held by such owner or otherwise, and the
      obligations to reimburse the issuer in respect of any letters of credit;
      (d) obligations as a lessee under any "capitalized lease" (as determined
      in accordance with GAAP); (e) all subordinated debt; (f) all obligations
      in respect of deferred purchase prices; (g) all obligations to contribute
      money; (h) all obligations under interest rate swaps and similar
      agreements; and (i) such Person's liabilities, contingent or otherwise of
      the type set forth in (a) through (h) above, under any joint venture,
      limited liability company or partnership agreement. Indebtedness shall not
      include proceeds from the issuance of preferred stock if such proceeds are
      classified as equity under GAAP.

                                       6
<PAGE>

            "Inspecting Architect" shall mean an independent architectural or
      engineering firm employed by the Agent with respect to a Mortgaged
      Property. The Borrower may submit to the Agent a list of suggested
      architectural and engineering firms for consideration by the Agent. The
      Agent shall not, however, be obligated to select or retain an Inspecting
      Architect from such list.

            "Interest" shall mean, for any period, the sum of all interest due
      and payable for such period (including amortization of original issue
      discount and debt issuance costs on any Indebtedness and the interest
      portion of any deferred payment obligation, calculated in accordance with
      generally accepted accounting principles), capitalized interest and
      non-cash interest expenses, all commissions, discounts and other fees and
      expenses owed with respect to letters of credit and bankers' acceptance
      financing, the net costs associated with any type of interest rate
      protection agreements (including caps, swaps, options, futures or similar
      agreements or arrangements with respect to interest rates), and all but
      the principal component of rentals in respect of "capitalized leases"
      (determined in accordance with GAAP) paid, accrued or due to be paid or to
      be accrued during such period.

            "Interest Rate" shall mean, as to each Advance, a rate per annum
      equal to (i) for Prime Advances, the Prime Interest Rate and (ii) for
      LIBOR Advances, the Adjusted LIBOR Interest Rate.

            "Interest Rate Protection Product" shall mean an interest rate
      hedging program through the purchase of an interest rate swap, cap or
      other such interest rate protection product with respect to any
      Indebtedness during the term of the Loan plus one (1) day.

            "Investment Affiliate" shall mean any Person in which the
      Consolidated Group, directly or indirectly, has an ownership interest,
      whose financial results are not consolidated under GAAP with the financial
      results of the Consolidated Group.

            "Lease" shall mean a lease of all or a portion of a Mortgaged
      Property (excluding any incidental real estate which is contiguous to the
      leased real estate and improvements and which the Borrower or a Special
      Purpose Entity is or was required to purchase as part of the acquisition
      of the leased real estate and improvements) entered into in the ordinary
      course of business by and between the Borrower or a Special Purpose
      Entity, as applicable, as landlord, and a Tenant, as tenant.

            "Letter of Credit" shall mean the One Million Dollar ($1,000,000)
      Standby Letter of Credit issued by Agent on behalf of Lenders at the
      request of Borrower and Guarantor in favor of Orix Capital Markets, LLC
      pursuant to Section 2.10 hereof.

            "Leverage Ratio" shall mean the ratio of (a) Total Current Value of
      Assets to (b) Total Liabilities as such ratio shall be determined from
      time to time in accordance with this Agreement and calculated in the
      manner set forth in the Compliance Certificate.

            "LIBOR" shall mean the average (rounded upward to the nearest 1/16
      of 1%) of the per annum rates at which deposits in immediately available
      funds in U.S. dollars for

                                       7
<PAGE>

      the applicable LIBOR Interest Period and in the amount of the applicable
      LIBOR Advance are offered to the Agent by prime banks in the London
      interbank Eurodollar market, determined as of 11:00 a.m. London time (or
      as soon thereafter as practicable) two (2) London Banking Days prior to
      the beginning of the applicable LIBOR Interest Period.

            "LIBOR Advance" shall mean any Advance which is determined with
      reference to the Adjusted LIBOR Interest Rate.

            "LIBOR Interest Period" shall mean a period of one (1) month, two
      (2) months, three (3) months, or six (6) months as selected by the
      Borrower.

            "LIBOR Interest Rate" shall mean a rate per annum equal to (i) Two
      Percent (2%) above LIBOR at such time as the Leverage Ratio is less than
      Forty Percent (40%), (ii) Two and One-Quarter Percent (2-1/4%) above LIBOR
      at such time as the Leverage Ratio equals or exceeds Forty Percent (40%)
      but is less than Sixty Percent (60%), and (iiii) Two and One-Half Percent
      (2-1/2%) above LIBOR at such time as the Leverage Ratio equals or exceeds
      Sixty Percent (60%) or in the event Borrower fails to provide Agent with
      the Compliance Certificate in accordance with the terms hereof.

            "Loan" shall mean the revolving loan under the Loan Documents from
      the Lenders to the Borrower in a principal amount not to exceed Seventy
      Million Dollars ($70,000,000) at any time outstanding.

            "Loan Documents" shall mean, this Agreement, the Notes, Mortgages,
      Assignments of Rents, Collateral Assignments of Mortgaged Property Sale
      Agreements, Guaranty, Borrower's Affidavits, Environmental Indemnities,
      the Pledge Agreements and other documents executed and/or delivered by or
      on behalf of the Borrower, the Guarantor or a Special Purpose Entity in
      connection with the Loan or any Advance which are in effect from time to
      time, as the same may be supplemented, modified or amended from time to
      time.

            "London Banking Day" shall mean a day on which commercial banks are
      open for business in London, England, and quoting deposit rates for U.S.
      dollar deposits.

            "Loss on Interest Rate Swap" shall mean the loss recognized
      currently in earnings pursuant to compliance with Statement of Financial
      Accountings Standard No. 133, "Accounting for Derivative Instruments and
      Hedging Activities."

            "Major Lease" shall mean a Lease between Borrower or a Special
      Purpose Entity, as applicable, and a Major Tenant.

            "Major Tenant" shall mean any Tenant occupying twenty-five percent
      (25%) or more of a Mortgaged Property.

            "Material Adverse Effect" shall mean any fact or circumstance which
      (a) materially and adversely effects the business, operation, property or
      financing

                                       8
<PAGE>

      conditions of the Borrower and Guarantor taken as a whole, or (b) has a
      material adverse effect on the ability of the Borrower, Guarantor or a
      Special Purpose Entity to perform their respective obligations under this
      Agreement, the Notes or the other Loan Documents.

            "Maturity Date" shall mean September 30, 2005.

            "Mezzanine Debt" shall mean Indebtedness of Borrower to The
      Huntington Real Estate Investment Company or to other financial
      institutions acceptable to Agent not to exceed the sum of Ten Million
      Dollars ($10,000,000) in the aggregate, which Indebtedness is secured by
      equity interests in entities having Indebtedness secured by mortgages and
      which Indebtedness is subordinate to such mortgage debt.

            "Monetary Event of Default" shall mean an Event of Default under
      Section 8.01(a) hereof or any other Event of Default which can be cured by
      the payment of money.

            "Mortgage" shall mean a Real Estate Mortgage and Security Agreement
      substantially in the form of Exhibit H-1 attached hereto, with blanks
      completed appropriately, or a Deed of Trust and Security Agreement
      substantially in the form of Exhibit H-2 attached hereto, with blanks
      completed appropriately, given by the Borrower or a Special Purpose
      Entity, as applicable, to the Lenders with respect to a Mortgaged Property
      as security for the Borrower's obligations under the Loan, subject to such
      changes as may be required to comply with the requirements of the laws of
      the state in which the Mortgaged Property is located, as the same may be
      supplemented, modified or amended from time to time.

            "Mortgage Release Price" shall mean with respect to a Mortgaged
      Property, an amount equal to the principal reduction required to allow
      Borrower to remain in compliance with the Borrowing Base and the Debt
      Service Coverage Ratio as set forth in this Agreement determined in
      accordance with Section 2.07 (b) hereof.

            "Mortgaged Property" shall mean all Real Estate Assets securing the
      Loan by virtue of a Mortgage.

            "Mortgaged Properties Debt Service" shall mean the sum of all
      Interest payments and principal payments on the outstanding principal
      balance of the Loan due and payable during the then-ending calendar
      quarter, annualized (multiplied by 4), assuming the level amortization of
      the then outstanding principal balance of the Loan over a period of
      twenty-five (25) years, at a per annum interest rate equal to Two Percent
      (2%) above the most recent weekly average yield on United States Treasury
      Securities adjusted to a constant maturity of ten (10) years as measured
      on the first day of each calendar quarter.

            "Mortgaged Properties Debt Service Coverage Ratio" shall mean the
      Mortgaged Properties Net Operating Income divide by the Mortgaged Property
      Debt Service.

                                       9
<PAGE>

            "Mortgaged Properties Net Operating Income" shall mean the total
      rental income during the then-ending calendar quarter, annualized
      (multiplied by 4) (including minimum rent, additional rent, common area
      maintenance, real estate tax and insurance reimbursements and other tenant
      reimbursements, including tenant expense reimbursements and tenant
      improvement reimbursements, recurring parking income), received by
      Borrower and each Special Purpose Entity, as applicable, and arising from
      the ownership and operation of the Mortgaged Properties (excluding tenant
      security deposits, rents from tenants that are subject to a voluntary or
      involuntary petition for relief under any federal or state bankruptcy
      codes or insolvency laws, and rents from tenants that are not in
      possession of its demised premises, except rents and other payments from
      tenants under master leases or occupancy agreements approved by Agent),
      less the sum of all actual costs, taxes, expenses and disbursements paid
      or due and payable during such then-ending calendar quarter, annualized
      (multiplied by 4), in connection with the ownership, leasing, management,
      operation, maintenance and repair of the Mortgaged Properties and of the
      personal property, fixtures, machinery, equipment, systems and apparatus
      located therein or used in connection therewith, but excluding (i)
      non-cash expenses, such as depreciation and amortized costs, (ii) state
      and federal income taxes, (iii) the non-current portion of capital
      expenditures, (iv) any expenses paid directly by tenants to third parties,
      (v) any adjustments made for straight lining of rents, (vi) extraordinary
      income or expense, and (vii) debt service payments on all Indebtedness of
      Borrower with respect to the Mortgaged Properties; all determined in
      accordance with GAAP, as measured on the last day of each calendar
      quarter.

            "Mortgaged Property Sale Agreement" shall mean with respect to a
      Mortgaged Property, an agreement between the Borrower or a Special Purpose
      Entity, as applicable, and a buyer not affiliated with the Borrower or the
      Guarantor which is approved by the Agent in a form reasonably acceptable
      to the Agent, pursuant to which agreement the Borrower or a Special
      Purpose Entity, as applicable, agrees to sell, and such buyer agrees to
      purchase, a Mortgaged Property. Such sale agreement shall require the
      buyer thereunder to deposit a Deposit with the Borrower or a Special
      Purpose Entity, as applicable, or a Title Company or other escrow agent.
      Such term shall also include the exercise of a right of first refusal or
      purchase option in a lease of a Mortgaged Property held by a Major Tenant.

            "Mortgaged Property Site" shall mean the real estate portion of a
      Mortgaged Property.

            "Non-Monetary Event of Default" shall mean any Event of Default,
      other than a Monetary Event of Default.

            "Non-Use Fee" shall mean an amount equal to 1/5 of 1% on the
      principal amount of undrawn funds then available under the Loan.

            "Notes" shall mean those certain Replacement Credit Notes in the
      aggregate original principal amount of Seventy Million Dollars
      ($70,000,000) executed and

                                       10
<PAGE>

      delivered by Borrower to the Lenders of even date herewith, as the same
      may be renewed, extended, supplemented, replaced, modified or amended from
      time to time.

            "PBGC" shall mean the Pension Benefit Guaranty Corporation
      established pursuant to ERISA, or any successor entity.

            "Percentage" shall mean, with respect to each Lender, the percentage
      which its Commitment constitutes of the maximum amount of the Loan as set
      forth below the signature line of each Lender as the same may be adjusted
      from time to time.

            "Person" shall mean an individual, a partnership, a joint venture, a
      corporation, a limited liability company, a trust, an unincorporated
      organization or a Governmental Authority.

            "Personal Property" shall mean all tangible personal property owned
      by the Borrower or a Special Purpose Entity and now or at any time
      hereafter located on or at a Mortgaged Property or used in connection
      therewith or with the improvements forming a part of such Mortgaged
      Property.

            "Plan" shall mean an Employee Benefit Plan which is covered by Title
      4 of ERISA or subject to the minimum lending standards under Section 412
      of the Internal Revenue Service as to which the Borrower may have any
      liability.

            "Plans and Specifications" shall mean the plans and specifications
      for the construction of the Improvements forming part of an applicable
      Mortgaged Property prepared by the architect therefor approved by
      Borrower.

            "Pledge Agreements" shall mean certain Membership Pledge Agreements
      now or hereafter executed by Borrower in favor of Lenders pursuant to
      which Borrower pledges its membership interest in Special Purpose
      Entities.

            "Prime Advance" shall mean any Advance which is determined with
      reference to the Prime Rate.

            "Prime Interest Rate" shall mean a rate per annum equal to the Prime
      Rate.

            "Prime Rate" shall mean the interest rate per annum announced from
      time to time by the Agent as its prime rate. Each interest rate determined
      by reference to the Prime Rate shall change automatically from time to
      time, effective as of the effective date of each change in the Prime Rate.
      The Agent's Prime Rate is not necessarily the lowest rate at which the
      Agent lends its funds. The Prime Rate is only an index rate from which
      interest rates actually charged to the Agent's customers may be measured.
      The use of the Prime Rate does not constitute a commitment by the Agent to
      lend money at a preferred rate.

            "Prohibited Transaction" shall have the meaning ascribed thereto by
      ERISA.

                                       11
<PAGE>

            "Project Agreement" shall mean a Project Agreement in the form of
      Exhibit I attached hereto, with blanks completed appropriately, to be
      entered into by the Agent and the Borrower and a Special Purpose Entity,
      pursuant to which the Required Lenders approve a Mortgaged Property.

            "Real Estate Asset" shall mean the real estate and all improvements
      thereon for use as a medical related facility owned by the Consolidated
      Group, together with any incidental real estate which is contiguous to the
      leased real estate and improvements and which Consolidated Group is or was
      required to purchase as part of the acquisition of the leased real estate
      and improvements.

            "Real Estate Asset Budget Amount" shall mean the total budgeted cost
      (as such budget shall be updated from time to time) of all projects under
      construction owned by the Consolidated Group plus the Consolidated Group's
      pro rata share of the total budgeted cost (as such budget shall be updated
      from time to time) of all projects under construction owned by any
      Investment Affiliate or by any Subsidiary of the Consolidated Group that
      is not a wholly owned Subsidiary provided, however, that with respect to
      (i) projects owned by any such Investment Affiliate or Subsidiary for
      which the respective financial responsibilities of the other owners of
      such Investment Affiliate or Subsidiary on the one hand and the
      Consolidated Group and its wholly owed Subsidiaries on the other hand are
      not in proportion to the respective ownership interests in the applicable
      Investment Affiliate or Subsidiary, then the portion of budgeted cost of
      such project included in the Real Estate Asset Budget Amount shall be
      adjusted to reflect the Consolidated Group's actual financial
      responsibility related to such project. Such costs shall include, without
      limitation, all land acquisition costs (but may exclude costs of land used
      for expansion projects which was not purchased for the purpose of such
      expansion project), design and permitting costs, construction period real
      estate taxes, leasing costs including brokers' commissions and tenant
      improvements, allowances or reimbursements, construction costs and opening
      costs. With respect to any projects financed with Indebtedness other than
      this Loan, such costs shall also include construction period interest and
      all fees and expenses associated with such Indebtedness.

            "Recourse Indebtedness" shall mean any Indebtedness of the Borrower,
      Guarantor or Special Purpose Entity, including the Borrower's, Guarantor's
      or Special Purpose Entity's respective recourse pro rata share of any
      Indebtedness in any Investment Affiliate, for which the lender thereof
      does not agree to look solely to a Real Estate Asset for the payment of
      the indebtedness subject to usual and customary exculpation carve out
      provisions and environmental indemnification agreements.

            "Regulation U" shall mean Regulation U of the Board of Governors of
      the Federal Reserve System, as amended from time to time.

            "Reportable Event" shall have the meaning ascribed thereto by ERISA.

            "Restricted Assets" shall have the meaning set forth in Section 7.07
      hereof.

                                       12
<PAGE>

            "Required Lenders" shall mean Lenders holding Percentages
      aggregating at least Sixty-Six and Two-Thirds Percent (66-2/3%) or
      greater.

            "Reserve Percentage" shall mean for any day that percentage
      (expressed as a decimal) which is in effect on such day, as prescribed by
      the Board of Governors of the Federal Reserve System (or any successor)
      for determining the maximum reserve requirement (including, without
      limitation, all basic, supplemental, marginal and other reserves and
      taking into account any transitional adjustments or other scheduled
      changes in reserve requirements) for a member of the Federal Reserve
      System in Cleveland, Ohio, in respect of "Eurocurrency Liabilities." The
      Adjusted LIBOR Interest Rate shall be adjusted automatically on and as of
      the effective date of any change in the Reserve Percentage.

            "Single Mortgaged Property Debt Service" shall mean the total sum of
      all Interest payments and principal payments which would be due and
      payable during the then-ending calendar quarter, annualized (multiplied by
      4), with respect to a single Mortgaged Property assuming the level
      amortization of a principal loan balance equal to Sixty-Five Percent (65%)
      of the Appraised Value of such Mortgaged Property over a period of
      twenty-five (25) years, at a per annum interest rate equal to Two Percent
      (2%) above the most recent weekly average yield on United States Treasury
      Securities adjusted to a constant maturity of ten (10) years as measured
      on the last day of each calendar quarter.

            "Single Mortgaged Property Debt Service Coverage Ratio" shall mean
      the Single Mortgaged Property Net Operating Income divided by the Single
      Mortgaged Property Debt Service.

            "Single Mortgaged Property Net Operating Income" shall mean the
      total rental income, with respect to a Mortgaged Property during the
      then-ending calendar quarter, annualized (multiplied by 4) (including
      minimum rent, additional rent, common area maintenance, real estate tax
      and insurance reimbursements and other tenant reimbursements, including
      tenant expense reimbursements and tenant improvement reimbursements,
      recurring parking income), received by Borrower and each Special Purpose
      Entity, as applicable, arising from the ownership and operation such
      Mortgaged Property (excluding tenant security deposits, rents from tenants
      that are subject to a voluntary or involuntary petition for relief under
      any federal or state bankruptcy codes or insolvency laws and rents from
      tenants that are not in possession in its demised premises at such
      Mortgaged Property, except rents and other payments from tenants under
      master leases or occupancy agreements approved by Agent), less the sum of
      actual costs, taxes, expenses and disbursements paid or due and payable
      during such then-ending calendar quarter, annualized (multiplied by 4), in
      connection with the ownership, leasing, management, operation, maintenance
      and repair of such Mortgaged Property and of the personal property,
      fixtures, machinery, equipment, systems and apparatus located therein or
      used in connection therewith, but excluding (i) non-cash expenses, such as
      depreciation and amortized costs, (ii) state and federal income taxes,
      (iii) the non-current portion of capital expenditures, (iv) any expenses
      to be paid directly by tenants to third parties, (v) any adjustments made
      for straight lining of rents, (vi) extraordinary income or

                                       13
<PAGE>

      expense, and (vii) the Single Mortgaged Property Debt Service for such
      Mortgaged Property, all determined in accordance with GAAP, as measured on
      the last day of each calendar quarter.

            "Solid Wastes" shall have the meaning assigned thereto in 40 C.F.R.
       Section 261.2.

            "Special Purpose Entities" shall mean limited liability companies or
      limited partnerships which own a Mortgaged Property and in which Borrower
      holds a controlling interest.

            "Stabilized Occupancy" shall mean, with respect to a Real Estate
      Asset under construction, the time when such Real Estate Asset has
      received a certificate of occupancy (or similar permit or approval).

            "Storage Containers" shall mean existing and future containers for
      Hazardous Materials and above ground and underground storage tank systems
      (including underground piping, conduits or sumps).

            "Subordination, Non-Disturbance and Attornment Agreement" shall mean
      a Subordination, Non-Disturbance and Attornment Agreement in the form of
      Exhibit J attached hereto, with blanks completed appropriately, entered
      into by the Agent, the Borrower or a Special Purpose Entity, as
      applicable, and a Major Tenant with respect to a Mortgaged Property,
      subject to such changes as may be required to comply with the requirements
      of the law of the state in which the Mortgaged Property is located and
      such other revisions as may be reasonably acceptable to Agent, as the same
      may be supplemented, modified or amended from time to time.

            "Subsidiary" shall mean, with respect to any Person, (i) any
      corporation more than 50% of the outstanding securities having ordinary
      voting power of which shall at the time be owned or controlled, directly
      or indirectly, by such Person or by one or more of its Subsidiaries or by
      such Person and one or more of its Subsidiaries, or (ii) any partnership,
      limited liability company, association, joint venture or similar business
      organization more than 50% of the ownership interests having ordinary
      voting power of which shall at the time be so owned or controlled. Unless
      otherwise expressly provided, all references herein to a "Subsidiary"
      shall mean a Subsidiary of the Borrower and/or Guarantor. Subsidiaries of
      a Person shall not include an Investment Affiliate or any other Affiliate
      which is not owned 50% or more directly by a Person.

            "Tangible Net Worth" shall mean the sum of capital surplus, earned
      surplus, capital stock, accumulated depreciation and amortization minus
      deferred charges, intangibles (excluding lease intangibles and deferred
      loan fees) and treasury stock, all as determined in accordance with GAAP
      consistently applied.

            "Tenant" shall mean any tenant of a Mortgaged Property.

                                       14
<PAGE>

            "Title Company" shall mean with respect to a Mortgaged Property, any
      other title insurer designated by the Borrower and approved by the Agent
      which agrees to insure the priority of the lien of the Mortgage on such
      Mortgaged Property.

            "Title Policy" shall mean with respect to a Mortgaged Property, the
      policy of title insurance issued by a Title Company to the Lenders
      insuring the priority of the lien of the Mortgage on such Mortgaged
      Property.

            "Total Current Value of Assets" shall be the amount determined from
      time to time by the Compliance Certificate and identified as item M
      thereon.

            "Total Current Value of Real Estate Assets" shall be the amount
      determined from time to time by the Compliance Certificate and identified
      as item K thereon.

            "Total Liabilities" shall mean all liabilities of the Consolidated
      Group, including the pro rata share of any liabilities of the Consolidated
      Group in any Investment Affiliate, all as determined in accordance with
      GAAP.

            "Unrestricted Cash and Cash Equivalents" shall mean unencumbered
      cash on hand plus cash reserved for the payment of taxes, tenant
      improvements, capital expenditures, lease commissions or other reserves
      available to offset expenditures generally recognized as property
      operating expenses, or other general and administrative expenses.

            "Variable Rate Indebtedness" shall mean Indebtedness which does not
      bear interest at a fixed rate of interest and is not covered by an
      Interest Rate Protection Product.

            "Wetlands" shall mean any wetlands area or other area which is
      subject to the regulatory jurisdiction of the United States Environmental
      Protection Agency and/or Army Corps of Engineers and/or any other
      Governmental Authority, under any Governmental Requirement, including,
      without limitation, the Clean Water Act, 33 U.S.C.  Section 1251, et. seq.

      Unless the context clearly otherwise requires, the foregoing definitions
shall be equally applicable to both the singular and plural forms.

                                   ARTICLE II
                                    THE LOAN

      2.01. Loan. Subject to the terms and conditions hereof, and relying upon
the representations and warranties herein set forth, the Lenders agree to make
the Loan to the Borrower. The principal amount of the Loan outstanding at any
time shall not exceed the lesser of: (a) Seventy Million Dollars ($70,000,000),
or (b) the Borrowing Base (as the same may be adjusted as set forth below in
this Section 2.01). Unless otherwise extended by Lenders, the Lenders'
commitment to make Advances shall expire on the Maturity Date. The proceeds of
the Loan will be used solely for the acquisition and development by the
Borrower, as applicable, of

                                       15
<PAGE>

Real Estate Assets and for working capital purposes as described herein. The
proceeds of the Loan will be advanced to the Borrower in accordance with and
subject to the requirements and limitations set forth herein. Advances of the
Loan will be made to Borrower for working capital purposes provided such
Advances shall not exceed Five Million Dollars ($5,000,000) at any one time. If
prior to the Maturity Date, the Borrower repays any Advance(s), or any portion
thereof, Loan proceeds in an amount equal to the amount of the repayment will
again be made available to the Borrower for Advances, subject to the terms and
conditions hereof.

      In the event a Single Mortgaged Property Debt Service Coverage Ratio is
less than 1.25 to 1.00, the Borrowing Base shall be reduced to an amount
sufficient to support a 1.40 to 1.0 Single Mortgaged Property Debt Service
Coverage Ratio with respect to the subject Mortgaged Property until such time as
such Mortgaged Property achieves a 1.40 to 1.0 Single Mortgaged Property Debt
Service Coverage Ratio. By way of illustration, assume a Single Mortgaged
Property has (i) an Appraised Value of $1,000,000; (ii) an initial Borrowing
Base Value of $650,000 (65% of Appraised Value); (iii) an initial Single
Mortgaged Property Debt Service of $50,256 (assuming an interest rate of six
percent (6%) for this example); and (iv) single Mortgaged Property Net Operating
Income of $62,820 (or, 1.25 to 1.0 of the Single Mortgaged Property Debt Service
Ratio). If the Single Mortgaged Property Net Operating Income decreases to
$55,000 (a Single Mortgaged Property Debt Service Ratio below 1.25 to 1.0 using
a Borrowing Base Value of $650,000 and a debt constant of $50,256), then the
required Single Mortgaged Property Debt Service Ratio is adjusted to 1.4 to 1.0
Assuming net operating income to $55,000, then the Borrowing Base value for this
property is reduced to $508,070. At 1.40 to 1.0, net operating income of $55,000
supports a Single Mortgaged Property Debt Service of $39,285, which is a
Borrowing Base Value of $508,070 (at the assumed interest rate). The Single
Mortgaged Property Debt Service Ratio will remain at 1.40 to 1.0 until the
Borrowing Base Value for such property equals $650,000. Thereafter, the
Borrowing Base Value (subject to the 65%) limit) shall be calculated based on
the actual Single Mortgaged Property Debt Service unless and until the Single
Mortgaged Property Debt Service falls below 1.25 to 1.0 at which time the Single
Mortgaged Property Debt Service Ratio shall return to 1.4 to 1.0.

      In the event of an occurrence of an event which has a Material Adverse
Effect upon a Special Purpose Entity and the same is not cured within sixty (60)
days after notice by Agent to Borrower, the Borrowing Base will be reduced by
sixty percent (60%) of the Appraised Value of the applicable Mortgaged Property.

      2.02. Mortgaged Property Approval. With respect to a proposed Mortgaged
Property, Borrower shall submit the information required by Exhibit K to the
Agent and Agent shall deliver copies of such information to all of the Lenders,
and the Required Lenders shall have approved those materials identified in
Exhibit K attached hereto. In connection with the approval of a Mortgaged
Property, the Required Lenders may impose requirements with respect to the
proposed Mortgaged Property regarding disbursement of any Advance in addition to
those set forth herein. Such additional requirements will be set forth in the
Project Agreement to be executed by the Agent and the Borrower in respect of
such Mortgaged Property, which Project Agreement, when executed, shall be deemed
to be a modification and amendment of this Agreement.

                                       16
<PAGE>

      Each Lender hereby acknowledges and agrees that the information submitted
by Borrower to the Lenders, including the information identified on Exhibit K is
proprietary and confidential information of Borrower and shall be maintained in
confidence by the Lenders and used solely and exclusively for the purpose of
determining such Lender's consent to the inclusion of such Real Estate Asset as
a Mortgaged Property subject to disclosure to their respective auditors,
regulatory authorities and potential participants in the Loan.

      2.03. Notes. The Loan and all Advances thereunder shall be evidenced by
the Borrower's receipts and the Notes.

      2.04. Rate of Interest. During the term of the Loan, the unpaid principal
amount thereof shall, subject to the terms and conditions hereinafter set forth,
bear interest on a basis selected by the Borrower from the following interest
rate selections: (a) the Adjusted LIBOR Interest Rate; and (b) the Prime
Interest Rate.

      Each Advance shall be made as either a Prime Advance or a LIBOR Advance,
as selected by the Borrower. The Borrower may have Prime Advances and LIBOR
Advances outstanding simultaneously; provided, however, the Borrower may not
have more than five (5) LIBOR Advances in existence at any time and each LIBOR
Advance must be in an amount which is greater than or equal to $1,000,000. The
Borrower may convert any Prime Advances aggregating at least $1,000,000 in
principal amount into a LIBOR Advance on the first day of a calendar month. At
the end of the LIBOR Interest Period applicable to a LIBOR Advance, the Borrower
may renew the LIBOR Advance or may convert the LIBOR Advance to a Prime Advance.
If the Borrower fails to renew any LIBOR Advance or if the Borrower shall
receive any new Advance without designating whether such Advance is a LIBOR
Advance or a Prime Advance, such Advance shall automatically be deemed to be a
Prime Advance. At any time that the Borrower desires a LIBOR Advance or intends
to renew a LIBOR Advance or convert a Prime Advance into a LIBOR Advance, the
Borrower must notify the Agent by a Notice of Pricing Election in the form
attached hereto as Exhibit L at least three (3) London Banking Days prior to the
day on which the Borrower desires such Advance, renewal or conversion to be
effective. The Borrower shall have no right to designate a new Advance as, or
convert an existing Prime Rate Advance to, a LIBOR Advance if an Event of
Default is then continuing. The Borrower shall have no right to select a LIBOR
Interest Period for a LIBOR Advance if such LIBOR Interest Period would extend
beyond the Maturity Date.

      While and so long as no Event of Default is continuing, interest shall
accrue at the applicable Interest Rates upon the daily principal balance of the
Loan, based on a three hundred sixty (360) day year, for the actual number of
days elapsed since the date to which interest has been paid.

      If a Lender shall determine, after the date hereof, that the adoption of
any applicable law, rule, regulation or guideline regarding capital adequacy, 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 such Lender
(or such Lender's lending office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or

                                       17
<PAGE>

comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital (or on the capital of a Lender's holding company) as a
consequence of the Loan to a level below that such Lender (or such Lender's
holding company) could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's policies or the policies of such
Lender's holding company with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within fifteen (15) days
after demand by such Lender, the Borrower shall either (a) pay to such Lender
such additional amount or amounts as will compensate such Lenders (or such
Lender's holding company) for such reduction, or (b) convert all LIBOR Advances
to a Prime Advance. If the Borrower elects the option provided in the foregoing
subparagraph (b), the Borrower shall not be subject to the requirement hereunder
that the Borrower reimburse such Lender for any loss, cost or expense incurred
by such Lender as a result of the Borrower paying a LIBOR Advance prior to the
end of the applicable LIBOR Interest Period, provided, however, thereafter the
Borrower may not elect for any Advances to be LIBOR Advances. A Lender will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender. In determining such
amount, a Lender may use any reasonable averaging and attribution methods.
Failure on the part of a Lender to demand compensation for any reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's rights to demand compensation for any reduction in return on
capital in such period or in any other period. The protection of this Section
shall be available to the Lenders regardless of any possible contention of the
invalidity of the law, regulation or other condition which shall have been
imposed.

      2.05. Principal Payment of Advances. If not sooner paid, all Advances
shall be due and payable on the Maturity Date.

      2.06. Interest Payments. The Borrower shall pay interest to the Agent at
the applicable Interest Rates on the outstanding principal balance of the Loan
on the first (1st) day of each calendar month while proceeds of the Loan remain
outstanding, commencing on the first (1st) day of the first (1st) calendar month
following the first Advance.

      2.07. Principal Payments. Except as set forth herein, all payments of
principal shall be first applied to the reduction of Advances for working
capital purposes or as otherwise directed by Borrower. Upon the sale of a
Mortgaged Property, the Borrower shall pay to the Agent an amount equal to the
Mortgage Release Price payable in respect thereof, and such Mortgage Release
Price payment when received by the Agent, shall be applied in reduction of the
principal balance of the Loan. Notwithstanding the foregoing provisions, during
the continuance of an Event of Default, any Mortgage Release Price payment
received by the Agent may be applied, in the discretion of the Lenders, in
reduction of any accrued and unpaid interest on the Loan or any outstanding
Advance made pursuant to Section 5.01(c) hereof, so long as the Agent provides
to Borrower all documents necessary to release the Mortgaged Property being
sold.

      At the request of the Agent, the Borrower will furnish to the Agent copies
of any closing statement, purchase agreement and similar documents relating to
the sale of a Mortgaged Property prior to the release by the Agent of the
security with respect to such Mortgaged Property.

                                       18
<PAGE>

      During the term of the Loan, upon the Agent's receipt of the Mortgage
Release Price with respect to a Mortgaged Property, the Agent will release the
applicable Mortgaged Property and all other security of the Lenders encumbering
such Mortgaged Property by the prompt delivery of appropriate documents duly
authorized and executed and in accordance with the law of the State in which the
Mortgaged Property is located to fully and completely release any security
interest of Lenders encumbering such Mortgaged Property.

      Notwithstanding anything contained herein to the contrary, as a condition
to any release Borrower shall have satisfied the following conditions prior to
the Agent's release of a Mortgaged Property:

            a. No Conditional Default or Event of Default shall exist;

            b. Borrower shall have provided to Agent a proforma Borrowing Base
      Certificate as of the end of the previous calendar month and a proforma
      Compliance Certificate as of the end of the previous calendar quarter,
      demonstrating Borrower's compliance with the terms of this Agreement after
      giving effect to the release of such Mortgaged Property;

            c. Borrower shall pay all costs and expenses reasonably incurred by
      Agent in connection with the release of such Mortgaged Property.

      2.08. Loan Prepayments. The Borrower may prepay the principal amount of
any Prime Advance in whole or in part from time to time without any prepayment
penalty. The Borrower may not prepay any LIBOR Advance before the expiration of
the LIBOR Interest Period applicable to such LIBOR Advance, except upon the
payment of the amount provided for below.

      If any LIBOR Advance becomes due and payable or is prepaid prior to the
last day of the applicable LIBOR Interest Period (including any prepayment
resulting from the acceleration of the Loan by the Lenders as a consequence of
an Event of Default), the Borrower also promises to reimburse the Lenders on
demand for any resulting loss, cost, or expense incurred by the Lenders as a
result thereof including, without limitation, any loss incurred in obtaining,
liquidating, or employing deposits from third parties, but excluding the
Lenders' loss of margin for the period after any such payment. If, because of
the introduction of or any change in, or because of any judicial,
administrative, or other governmental interpretation of, any law or regulation,
there shall be any increase in the cost to the Lenders of making, funding,
maintaining, or allocating capital to LIBOR Advances, then from time to time,
within fifteen (15) days after demand by the Agent, the Borrower shall either
(a) pay to the Lenders additional amounts sufficient to compensate the Lenders
for such increased cost; or (b) convert all LIBOR Advances to a Prime Advance.
If the Borrower elects the option provided in the foregoing subparagraph (b),
the Borrower shall not be subject to the requirement hereunder that the Borrower
reimburse the Lenders for any loss, cost or expense incurred by the Lenders as a
result of the Borrower paying a LIBOR Advance prior to the end of the applicable
LIBOR Interest Period; provided, however, thereafter the Borrower may not elect
for any Advances to be LIBOR Advances. If, because of the introduction of or any
change in, or because of any judicial, administrative, or other governmental
interpretation of, any law or regulation, it becomes unlawful for the Lenders to
make, fund, or maintain any LIBOR

                                       19
<PAGE>

Advance, then the Lenders' obligation to make, fund, or maintain any LIBOR
Advance shall terminate.

      2.09. Late Fee. If any sum of principal or interest in respect of the Loan
is not paid within five (5) days after the date when due, then, in addition to
and not in lieu of any other rights or remedies available to the Lenders, the
Borrower shall pay to the Lenders, on demand, a late fee in an amount equal to
the greater of five percent (5%) of such sum or Twenty-Five Dollars ($25.00),
but not to exceed Two Thousand Dollars ($2,000.00). In no event, however, shall
a late fee be payable under this Section 2.09 in respect of an Advance and the
interest thereon if the Borrower fails to pay such Advance and interest on the
Advance Maturity Date therefor or on the date on which such Advance and interest
are payable as a result of the acceleration of the Loan pursuant to the terms of
this Agreement.

      2.10. Letter of Credit. Subject to the terms, provisions and conditions
hereof, up to One Million Dollars ($1,000,000) of the Loan shall be made
available to Borrower for the issuance of the Letter of Credit. The Letter of
Credit shall be irrevocable and shall have an expiration date not later than May
15, 2004. The amount of the Loan available to Borrower hereunder at any time
shall be reduced by the amount of the Letter of Credit issued under the Loan and
outstanding at such time. Any draw upon the Letter of Credit issued under the
Loan shall be evidenced by the Notes, shall bear interest at the Prime Rate,
shall be due and payable on demand and shall be secured by the Mortgage and
other Loan Documents. Borrower shall cause the Title Company to (i) issue a
Letter of Credit Endorsement to the Lenders' title policy referencing such
Letter of Credit, and (ii) amend the pending disbursement endorsement to include
the face amount of such Letter of Credit.

      Borrower shall pay to Agent for the benefit of the Lenders a fee for
issuance of the Letter of Credit equal to 135 basis points per annum (computed
on the basis of a year of 360-days and the actual number of days of the stated
term of the Letter of Credit) of the aggregate stated amount of the Letter of
Credit. Such fee shall be payable in advance on the date of issuance of the
Letter of Credit. Borrower shall also pay to Agent when due all usual and
customary administrative fees associated with the issuance of the Letter of
Credit.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Lenders that as of the Closing
Date:

      3.01. Organization and Qualification. The Borrower is a duly formed and
validly existing limited partnership under the laws of the Commonwealth of
Virginia. The Guarantor is a duly formed and validly existing real estate
investment trust under the laws of the State of Maryland.

      3.02. Right and Power; Corporate Authority. The Borrower has full right,
power and authority to execute and deliver this Agreement and the other Loan
Documents and to perform its obligations thereunder. The Borrower has taken the
necessary corporate action to authorize

                                       20
<PAGE>

the execution and delivery of the Agreement and the other Loan Documents and the
borrowings thereunder.

      3.03. Conflict With Other Instruments. The execution and delivery of this
Agreement and the other Loan Documents, the consummation of the transactions
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the partnership agreement of the Borrower,
or, to the Borrower's actual knowledge, any law or any regulation, order, writ,
injunction or decree of any court or Governmental Authority or any agreement or
instrument to which the Borrower is a party or by which the Borrower or its
properties or assets are subject to or bound, or constitute a default thereunder
or result in the creation or imposition of any lien, charge, security interest
or encumbrance of any nature whatsoever upon any of the property of the Borrower
pursuant to the terms of any such agreement or instrument, except as created by
the Loan Documents.

      3.04. Authority, Validity and Binding Effect. The execution and delivery
of this Agreement and the other Loan Documents, and the making of the borrowings
contemplated by the provisions hereof and thereof, have been duly authorized by
all necessary action on the part of the Borrower, and no authorization, approval
or consent by, or filing with, any Governmental Authority or public regulatory
authority is necessary therefor except for disclosures as required with the
Securities and Exchange Commission. This Agreement and the other Loan Documents
have been duly and validly executed and delivered by the Borrower and constitute
a legal, valid and binding obligation of the Borrower, enforceable in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other laws of general application affecting the
enforcement of creditors' rights generally and by principles of equity.

      3.05. Financial Condition. The financial statements of the Borrower and
the Guarantor furnished to the Lenders are complete and correct in all material
respects. Such financial statements were prepared in accordance with GAAP
consistently applied. The financial statements of the Borrower and the Guarantor
fairly present their respective financial condition at the respective dates
indicated therein. Since the dates of such financial statements, there has been
no material adverse change in the assets, liabilities or financial condition of
the Borrower and the Guarantor from that reflected thereon.

      3.06. Litigation. There are no actions, suits or proceedings pending or,
to the Borrower's actual knowledge, threatened, against or affecting the
Borrower, a Special Purpose Entity or the Guarantor before any court or
Governmental Authority which might have a Material Adverse Effect.

      3.07. ERISA. The Borrower and each ERISA Affiliate is in compliance in all
material respects with all applicable provisions of ERISA, and neither the
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC. Neither
a Reportable Event nor a Prohibited Transaction, has occurred under, nor has
there occurred any complete or partial withdrawal from, nor has there occurred
any other event which would constitute grounds for termination of or the
appointment of a trustee to administer any "employee benefit plan" (including
any "multi-

                                       21
<PAGE>

employer plan") maintained for employees of Borrower or any ERISA Affiliate, all
within the meanings ascribed by ERISA.

      3.08. Regulation U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U) and the Borrower does not hold any margin stock (as
defined in Regulation U).

      3.09. Investment Company Act. Neither the Borrower nor the Guarantor is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.

      3.10. Public Utility Holding Company. Neither the Borrower nor the
Guarantor is a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

      3.11. Insolvency. Neither the Borrower, a Special Purpose Entity nor the
Guarantor is "insolvent" within the meaning of that term as defined in the
Federal Bankruptcy Code and the Borrower and the Guarantor are each able to pay
their debts as they mature.

      3.12. Organization and Qualification. To the extent required by
Governmental Requirement, the Borrower and each Special Purpose Entity is duly
qualified to conduct business in the state in which the Mortgaged Property is
located.

      3.13. Right and Power; Corporate Authority. The Borrower and each Special
Purpose Entity has full right, power and authority to execute and deliver the
Loan Documents contemplated by the provisions hereof for such Advance and to
perform its obligation thereunder. The Borrower has taken the necessary
corporate action to authorize the execution and deliver of such Loan Documents.

      3.14. Conflict With Other Instruments. The execution and delivery of the
Loan Documents contemplated by the provisions hereof for such Advance, the
consummation of the transactions contemplated thereby, and the compliance with
the terms, conditions and provisions thereof will not conflict with or result in
a breach of any of the terms, conditions or provisions of the limited
partnership agreement of the Borrower and the operating agreement of each
Special Purpose Entity, or, to the Borrower's actual knowledge, any law or any
regulation, order, writ, injunction or decree of any court or Governmental
Authority or any agreement or instrument (except to the extent required under
ground leases applicable to future Mortgaged Properties) to which the Borrower
and each Special Purpose Entity is a party or by which the Borrower and each
Special Purpose Entity or their properties or assets are subject to or bound, or
constitute a default thereunder or result in the creation or imposition of any
lien, charge, security interest or encumbrance of any nature whatsoever upon the
Mortgaged Properties or any other property of the Borrower and each Special
Purpose Entity pursuant to the terms of any such agreement or instrument, except
as created by the Loan Documents.

      The execution and delivery of the Guaranty, the Guarantor's guarantee
contemplated thereby, and the compliance with the terms, conditions and
provisions thereof will not conflict

                                       22
<PAGE>

with or result in a breach of any of the terms, conditions or provisions of the
trust agreement of the Guarantor, or, to the Guarantor's actual knowledge, any
law or any regulation, order, writ, injunction or decree of any court or
Governmental Authority or any agreement or instrument to which the Guarantor is
a party or by which the Guarantor or its properties or assets are subject to or
bound.

      3.15. Authority, Validity and Binding Effect. The execution and delivery
of the Loan Documents contemplated by the provisions hereof for such Advance,
have been duly authorized by all necessary action on the part of the Borrower
and each Special Purpose Entity, and no authorization, approval or consent by,
or filing with, any Governmental Authority or public regulatory authority is
necessary therefor. Such Loan Documents have been duly and validly executed and
delivered by the Borrower and each Special Purpose Entity and constitute legal,
valid and binding obligations of the Borrower and each Special Purpose Entity,
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights generally and by principles of
equity.

      3.16. Litigation. There are no actions, suits or proceedings pending or,
to the Borrower's actual knowledge, threatened, against or affecting the
Mortgaged Properties before any court or Governmental Authority which might have
a Material Adverse Effect.

      3.17. Compliance With Governmental Requirements. To Borrower's knowledge,
the intended use of the Mortgaged Properties complies in all material respects
with all applicable Governmental Requirements, as the same may be modified by
any applicable variances and exceptions, to Borrower's knowledge, and all
material provisions of any applicable restrictive covenants, and to Borrower's
knowledge, the Borrower has obtained all material required permits with respect
to the operation and use of such Mortgaged Properties.

      3.18. Utility Services. To Borrower's knowledge, all utility services
necessary for the use and operation of the Mortgaged Property for such Mortgaged
Property are available at the boundaries of the Mortgaged Property and are
located within a public right of way adjacent to the Mortgaged Property or
within an easement benefiting the Mortgaged Property, which easement is
contiguous to the Mortgaged Property and a public right of way, and, to the
actual knowledge of Borrower, such utilities have sufficient capacity to serve
such Mortgaged Property.

      3.19. Hazardous Materials; Storage Containers; Wetlands. The Borrower and
each Special Purpose Entity have not used Hazardous Materials on, from or
affecting the Mortgaged Property in any manner which violates any Governmental
Requirements or Hazardous Materials Laws, and, to the best of the Borrower's
knowledge, except as disclosed in any written reports and data provided to the
Lenders, no prior owner of such Mortgaged Property or prior occupant thereof,
has used Hazardous Materials on, from or affecting the Mortgaged Property in any
manner which violates any Governmental Requirements or Hazardous Materials Laws.
The Borrower further represents to the Lenders that, except as disclosed in any
written reports and data provided to the Lenders, the Borrower and each Special
Purpose Entity have not received any notice of any violations of Governmental
Requirements or Hazardous Materials Laws governing the use, storage, treatment,
transportation, manufacture, refinement, handling,

                                       23
<PAGE>

production or disposal of Hazardous Materials at such Mortgaged Property and, to
the best of the Borrower's knowledge, there have been no actions commenced or
threatened by any party for non-compliance with any such laws or regulations at
such Mortgaged Property. The Borrower further represents that, except as
disclosed in any written reports and data provided to the Lenders, no Storage
Containers are located on or under such Mortgaged Property, except in compliance
with all applicable Hazardous Materials Laws, and such Mortgaged Property does
not contain any Wetlands.

      3.20. Covenants and Restrictions. Except as disclosed in writing to Agent
or in any Title Policy delivered to Agent hereunder, there are no covenants,
conditions or restrictions of record or of which the Borrower has knowledge that
prohibit the Mortgaged Property from being used and operated as contemplated by
the Lease for such Mortgaged Property.

      3.21. Flood Hazard. To Borrower's knowledge, except as may be disclosed in
any survey or flood hazard certificate provided to Agent, no part of the
Improvements forming a part of the Mortgaged Property are located in or on an
"area having special flood hazards" ("Special Flood Hazard Area"), as that term
is defined in the Flood Disaster Protection Act of 1973, as amended by the 1994
National Flood Insurance Reform Act, and as otherwise amended. If such
Improvements (or any portion thereof) are located in a Special Flood Hazard
Area, to Borrower's knowledge, the building floor elevations of such
Improvements are located at the height prescribed (if any) by Governmental
Requirements above the designated flood plain elevation for the Special Flood
Hazard Area, as determined by FEMA. For purposes of this Paragraph 3.21, the
defined term Improvements shall include only walled and roofed buildings.

      The representations and warranties contained above and in the other Loan
Documents shall be true on and as of the date of each Advance with the same
effect as though such representations and warranties had been made on and as of
each such date.

                                   ARTICLE IV
                              CONDITIONS OF LENDING

      The Borrower agrees that the obligation of the Lenders to make an Advance
is subject to the accuracy in all material respects, as of the date hereof and
the date of such Advance of the representations and warranties contained herein
and under the other Loan Document, to performance by the Borrower of its
agreements to be performed hereunder and under the other Loan Document on or
before the date of such Advance, and to the satisfaction of the following
further conditions:

      4.01. Initial Advance. Prior to the initial Advance by the Lenders:

            a. Organizational Documents. There shall have been furnished to the
      Agent by the Borrower:

                  i. A copy of the certificate of limited partnership of the
            Borrower, together with any and all amendments thereto, filed with
            the appropriate Governmental Authorities of the Commonwealth of
            Virginia;

                                       24
<PAGE>

                  ii. A copy of the limited partnership agreement of the
            Borrower, together with any and all amendments thereto certified by
            the Guarantor, as the general partner of Borrower;

                  iii. An original or a copy of a Certificate of Existence for
            the Borrower issued by the appropriate Governmental Authorities of
            the Commonwealth of Virginia bearing a recent date;

                  iv. A copy of the resolutions of the Borrower authorizing the
            Loan and the execution of this Agreement and the Loan Documents
            certified by the Guarantor, as the general partner of Borrower;

                  v. A copy of the articles of organization of each Special
            Purpose Entity, together with any and all amendments thereto, filed
            with the appropriate Governmental Authorities of the state in which
            the Special Purpose Entity is organized;

                  vi. A copy of the operating agreement of each Special Purpose
            Entity, together with any and all amendments thereto, certified by
            the Borrower;

                  vii. An original or copy of a Certificate of Existence for
            each Special Purpose Entity issued by the appropriate Governmental
            Authorities for the state in which the Special Purpose Entity is
            organized;

                  viii. A copy of the trust agreement for the Guarantor,
            together with any and all amendments thereto, certified by the
            Secretary thereof;

                  ix. A copy of the resolutions of the Guarantor authorizing the
            Guaranty, certified by the Secretary of Guarantor; and

                  x. An original or a copy of a Certificate of Existence for the
            Guarantor issued by the appropriate Governmental Authorities of the
            State of Maryland.

            b. Borrower's Counsel Opinion. The Borrower shall furnish to the
      Lenders an opinion of counsel for the Borrower, the Guarantor and the
      Special Purpose Entities in form and substance reasonably acceptable to
      the Lenders.

            c. Notes/Loan Documents. The Borrower shall have executed and
      delivered to the Lenders the Notes and the applicable Loan Documents with
      blanks appropriately completed.

            d. Guaranty. The Guarantor shall have executed and delivered to the
      Agent the Guaranty.

                                       25
<PAGE>

            e. Commitment Fee. The Borrower shall have paid to the Agent, for
      the benefit of the Lenders in accordance with their respective
      Commitments, the Commitment Fee. The Commitment Fee shall be paid on
      December 31, 2003.

      4.02. Mortgaged Properties. With respect to each of the Mortgaged
Properties, the Borrower shall have satisfied each of the following conditions:

            a. Organizational Documents. There shall have been furnished to the
      Agent by the Borrower:

                  i. A certificate of the Borrower, certifying that no
            amendments or modifications have been made to the limited
            partnership agreement of the Borrower furnished to the Agent
            pursuant to Section 4.01(a) hereof, other than such amendments or
            modifications as have been furnished to the Agent pursuant to
            Section 6.12 hereof.

                  ii. An original or copy of a Certificate of Existence for the
            Borrower and each Special Purpose Entity issued by the Secretary of
            State of Virginia or the state in which a Special Purpose Entity is
            organized, as applicable, bearing a recent date;

                  iii. To the extent required by Governmental Requirement, an
            original or copy of a Certificate of Authority for the Borrower, if
            applicable, and each Special Purpose Entity as a foreign limited
            liability company doing business in the state in which the Mortgaged
            Property is located;

                  iv. A copy of the resolutions of Borrower authorizing the
            Advance and the execution of the Loan Documents contemplated by the
            provisions hereof for such Advance;

                  v. A certificate of the Guarantor certifying that no
            amendments or modifications have been made to the trust agreement of
            the Guarantor furnished to the Lenders pursuant to Section 4.01(ix)
            hereof;

                  vi. An original or copy of a Certificate of Existence for the
            Guarantor issued by the Secretary of State of Maryland bearing a
            recent date; and

                  vii. A copy of the resolutions of the Guarantor authorizing
            such Advance or for all Advances made pursuant to this Agreement.

      b. Borrower's Counsel Opinion. The Borrower shall furnish to the Lenders
the opinions of counsel for the Borrower, each Special Purpose Entity and the
Guarantor in form and substance reasonably acceptable to the Lenders.

                                       26
<PAGE>

      c. Project Agreement. The Agent, the Borrower and each Special Purpose
Entity shall have entered into a satisfactory Project Agreement with respect to
a Mortgaged Property.

      d. Security Documents. There shall have been executed and delivered to the
Agent the following security documents with respect to such Mortgaged Property:

            i. a Mortgage which shall constitute a first mortgage or deed of
      trust lien, as applicable, on the Borrower's and each Special Purpose
      Entity's fee simple interest in such Mortgaged Property or Borrower's or a
      Special Purpose Entity's interest in the ground lease (which ground lease
      shall be in form and substance acceptable to the Lenders and which ground
      lease shall have no less than 35 years remaining on its lease term and the
      lessor thereunder shall provide Lenders with an estoppel letter containing
      lender protection provisions acceptable to Lenders);

            ii. an Assignment of Rents and Leases pursuant to which the Borrower
      shall have collaterally assigned to the Lenders all the right, title and
      interest of the Borrower and each Special Purpose Entity as landlord in
      and to all existing and future leases of space in such Mortgaged Property,
      including, without limitation, the Lease for such Mortgaged Property, and
      all rentals and other monies due and to become due under said leases;

            iii. an Assignment pursuant to which the Borrower and each Special
      Purpose Entity shall have collaterally assigned to the Lenders all the
      right, title and interest of the Borrower and each Special Purpose Entity
      in and to the material permits, licenses, warranties and other agreements
      in respect of such Mortgaged Property;

            iv. If the Borrower or a Special Purpose Entity has then entered
      into a Mortgaged Property Sale Agreement for such Mortgaged Property, a
      Collateral Assignment of Mortgaged Property Sale Agreement pursuant to
      which the Borrower and a Special Purpose Entity shall have collaterally
      assigned to the Lenders all the right, title and interest of the Borrower
      and a Special Purpose Entity in, to and under such Mortgaged Property Sale
      Agreement and the Deposit made thereunder; and

      Each of the above-described collateral documents shall be properly
completed and reflect only such further changes as may be necessary to comply
with the requirements of the jurisdiction in which such Mortgaged Property is
located.

      e. Borrower's Affidavit. The Borrower and the applicable Special Purpose
Entity shall have furnished to the Lenders an executed Borrower's Affidavit with
respect to such Mortgaged Property.

                                       27
<PAGE>

      f. Environmental Indemnity. The Borrower, the applicable Special Purpose
Entity and the Guarantor shall have furnished to the Lenders an executed
Environmental Indemnity Agreement with respect to such Mortgaged Property.

      g. Title Policy. A Title Company shall have issued and delivered to the
Agent a policy of title insurance acceptable to the Lenders insuring the
priority of the lien of the Mortgage encumbering such Mortgaged Property in an
amount of not less than the purchase price paid by Borrower or the applicable
Special Purpose Entity for the purchase of the Mortgaged Property. The Title
Policy shall have an effective date of no earlier than the date of such Advance,
shall provide extended coverage (i.e., all preprinted or standard exceptions
shall be deleted), a 3.1 zoning endorsement (if such endorsement is selected by
the Borrower pursuant to Section 4.01(j)(i) hereof to evidence proper zoning of
the Mortgaged Property), an access endorsement, a comprehensive endorsement, a
subdivision endorsement (where necessary), a last dollar endorsement, a
contiguity endorsement (if needed), a revolving credit endorsement and
affirmative coverage with respect to filed or unfiled mechanic's lien (where
available at reasonable cost) and shall be subject only to such exceptions as
may be reasonably approved by the Agent.

      h. Survey. The Borrower shall have furnished to the Agent an Urban Class
ALTA/ACSM Minimum Standard Detail Survey (including Items 1,3,4,6,7,8,9,10,11
and 13 of Table A thereof or such provisions thereof as are acceptable to Agent)
of the Mortgaged Property, made by a registered engineer or surveyor licensed by
the state in which such Mortgaged Property is located and reasonably
satisfactory to the Agent and the Title Company and certified to each of them as
of a date not more than sixty (60) days prior to the date of the Advance made in
respect of such Mortgaged Property the boundaries of such Mortgaged Property,
the actual location of the Improvements located on such Mortgaged Property, all
building setback lines, easements, rights of way and encroachments affecting
such Mortgaged Property and other matters apparent thereon and the relation of
such Mortgaged Property to public thoroughfares for access purposes, certifying
that the Improvements (excluding Improvements that are not walled and roofed
buildings) located on the Mortgaged Property are not located within a special
flood hazard area as defined by the Flood Disaster Protection Act of 1973, and
showing the number of the Flood Insurance Rate Map on which such Mortgaged
Property is shown and the date of such map, and shall specify the flood hazard
zone in which such Mortgaged Property is situated. Such survey shall be
reasonably acceptable to the Agent and shall not disclose, in the Agent's
reasonable opinion, any facts or circumstances which materially affect or could
materially affect the marketability of such Mortgaged Property or the Borrower's
ability to sell or finance such Mortgaged Property;

      i. Approvals and Permits. The Borrower shall submit to the Agent evidence
reasonably satisfactory to the Agent to the effect that:

            i. The Mortgaged Property is presently zoned to permit its use and
      operation as contemplated by the Borrower or the applicable Special
      Purpose Entity for such Mortgaged Property, which evidence may

                                       28
<PAGE>

      be a 3.1 zoning endorsement issued by the Title Company or a satisfactory
      opinion of counsel admitted to practice in the state in which such
      Mortgaged Property is located or a zoning confirmation letter of the
      Governmental Authority having zoning jurisdiction over such Mortgaged
      Property;

            ii. The Borrower has obtained such access easements and utility
      easements, if any, as may be reasonably necessary for the contemplated use
      of such Mortgaged Property and such easements are insured under the Title
      Policy;

            iii. All required permits, licenses and approvals for the use and
      operation of such Mortgaged Property (including a permanent occupancy
      permit or a certificate of occupancy, if issued by the jurisdiction in
      which such Mortgaged Property is located) have been obtained from the
      applicable Governmental Authorities; and

            iv. All utility services necessary for the operation of such
      Mortgaged Property are available at the boundaries of the Mortgaged
      Property and are located within a public right of way adjacent to the
      Mortgaged Property or within an easement benefiting the Mortgaged
      Property, which easement is contiguous to the Mortgaged Property and a
      public right of way, and all such utilities have the capacity necessary to
      provide service to such Mortgaged Property.

      j. Insurance. The Borrower shall have furnished to the Agent the insurance
required by the Mortgage encumbering such Mortgaged Property, together with
evidence of payment in full of the premiums thereon.

      k. Plans and Specifications. To the extent the same are in the Borrower's
or its agent's possession, the Borrower shall have furnished to the Agent for
its review and reasonable approval the Plans and Specifications for such
Mortgaged Property.

      l. Appraisal. The Agent shall have received a written appraisal in a form
acceptable to Lenders. The appraiser providing a Mortgaged Property appraisal
will be selected and directly engaged by the Agent. The cost of a Mortgaged
Property appraisal, and any update thereof as provided below, will be charged to
the Borrower and paid by the Borrower upon the Borrower's receipt of an invoice
therefor; provided, however, Borrower shall be responsible for the costs of no
more than one (1) appraisal or update per year with respect to a Mortgaged
Property, except in the case of a foreclosure. Each Mortgaged Property appraisal
shall be prepared in accordance with the Uniform Standards of Professional
Appraisal Practice applicable to Federally Related Transactions as set out in
Appendix A to the real estate appraisal regulations adopted by the Office of the
Comptroller of the Currency pursuant to the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 (Sub-part C of 12 C.F.R. 34) and shall be
prepared in response to an engagement letter to be issued by the Agent. Agent
shall be entitled to

                                       29
<PAGE>

order an update to any Mortgaged Property if Agent reasonably determines in good
faith that a Material Adverse Effect has occurred or is required to do so under
applicable banking regulations. Any new Mortgaged Property appraisal or update
to an existing Mortgaged Property appraisal needs to be approved by the Required
Lenders prior to any change in the appraised value of a Mortgaged Property.

      m. Inspecting Architect's Report. If requested by the Agent, the Lenders
shall have received a satisfactory report of an Inspecting Architect for such
Mortgaged Property.

      n. Environmental Report. The Borrower shall have furnished to the Agent a
copy of an environmental report by an environmental consulting company
reasonably acceptable to the Agent (the "Environmental Report") showing that the
environmental condition of such Mortgaged Property is reasonably acceptable to
the Agent. The Environmental Report shall be addressed to the Lenders, or, in
the alternative, the Borrower shall provide to the Agent a letter of the
consulting company that prepared the Environmental Report pursuant to which such
consulting company authorizes the Lenders to rely on the Environmental Report.

      o. Major Lease. In the event a Mortgaged Property is subject to a Major
Lease to one Tenant, the Borrower shall have furnished to the Agent an executed
Lease for such Mortgaged Property which shall have a remaining term (excluding
optional extension or renewal periods) acceptable to the Lenders and shall be in
a form and content reasonably acceptable to the Lenders in all other respects,
including rental amounts payable thereunder. Such Lease or a separate document
from the Tenant which is party thereto shall include the agreement of such
Tenant to subordinate its interest thereunder to any first mortgage or deed of
trust on such Mortgaged Property upon the request of the mortgagee or the
beneficiary thereunder (a "Mortgagee") and to attorn to such Mortgagee or any
purchaser of such Mortgaged Property at a foreclosure sale or a sale made under
any power of sale or pursuant to a deed in lieu of foreclosure, provided such
mortgagee agrees to reasonable non-disturbance provisions if the Tenant under
such Lease is not in default beyond any applicable cure period thereunder.

      The Borrower shall use reasonable efforts to attempt to obtain the
following provisions in such Major Lease or separate document:

            i. The Major Tenant party thereto shall agree to give a Mortgagee by
      registered or certified mail, a copy of any notice of default served upon
      the landlord, provided that prior to such notice of default such Major
      Tenant has been notified in writing, of the existence of such mortgage or
      deed of trust and the address of such Mortgagee;

            ii. A Mortgagee shall have sixty (60) days after its receipt from
      such Major Tenant of written notice of a default by the landlord under
      such Major Lease to correct or cure such default; and

                                       30
<PAGE>

            iii. Such Major Tenant shall comply with all Hazardous Materials
      Laws, and shall not store any Hazardous Materials in, on or under such
      Mortgaged Property, except in accordance with applicable laws and
      regulations.

      p. Subordination, Non-Disturbance and Attornment Agreement. The Borrower
and each Special Purpose Entity shall have furnished to the Agent a
Subordination, Non-Disturbance and Attornment Agreement for such Mortgaged
Property, executed by the Borrower or the Special Purpose Entity, the Agent and
Tenants leasing in the aggregate Eighty-Five Percent (85%) of the gross rentable
square feet of such Mortgaged Property.

      q. Damage. Such Mortgaged Property shall not have been materially injured
or damaged by fire or other casualty.

      r. Tenant Estoppel. The Borrower shall have furnished to the Agent a
tenant estoppel letter in respect of such Mortgaged Property executed by the
Tenants leasing in the aggregate Eighty-Five Percent (85%) of the gross rentable
square feet of such Mortgaged Property in a form which is reasonably
satisfactory to the Agent and such Tenant, stating that the Lease is in full
force and effect, that landlord is not in default and that Tenant is not aware
of any amounts it could setoff against rent and including such other statements
as are reasonably required by the Agent.

      s. Purchase Agreement for Acquisition of Mortgaged Property. The Borrower
shall have furnished to the Agent a copy of the executed purchase agreement
pursuant to which the Borrower has acquired or will acquire such Mortgaged
Property and a copy of the closing statement therefor.

      t. Special Flood Hazard Area. If the Improvements (or any portion thereof)
forming a part of such Mortgaged Property (excluding Improvements that are not
walled and roofed buildings) are located in an Special Flood Hazard Area:

            i. The Borrower shall have furnished evidence satisfactory to the
      Agent that the building floor elevations of such Improvements are located
      at the height (if any) prescribed by Governmental Requirements above the
      designated flood plain elevation for the Special Flood Hazard Area, as
      determined by FEMA; and

            ii. The Borrower shall have provided to the Agent either: (A) the
      flood insurance required by the Mortgage encumbering such Mortgaged
      Property, together with evidence of payment in full of the premium
      thereon, or (B) a copy of a Letter of Map Revision ("LOMR") issued by
      FEMA, removing such Mortgaged Property from the Special Flood Hazard Area
      as determined by FEMA.

                                       31
<PAGE>

      4.03. Working Capital Advances. With respect to Advance of the Loan for
Borrower's working capital purpose, such Advances will be made by the Lenders to
Borrower upon application by Borrower which application shall state the intended
use of such Advances.

      4.04. Subsequent Advances. Prior to any Advance:

            a. Representations and Warranties. The representations and
      warranties contained herein and in the other Loan Documents shall be true
      in all material respects on and as of the date each Advance with the same
      effect as though such representations and warranties had been made on and
      as of each such date.

            b. Conditional Default/Event of Default. No Event of Default or
      Conditional Default shall have occurred and be continuing or shall exist.

            c. Conditions in 4.01. All of the conditions set forth in Section
      4.01 hereof shall remain satisfied.

      4.05. Proceedings and Documents. All legal details and proceedings in
connection with the transactions contemplated by this Agreement with respect to
a Mortgaged Property shall be in form and substance reasonably satisfactory to
counsel for the Agent, and the Agent shall have received all such counterpart
originals or certified or other copies of such documents and proceedings in
connection with such Mortgaged Property, in form and substance, as to
certification and otherwise, reasonably satisfactory to such counsel, as the
Agent or its counsel may request.

                                    ARTICLE V
                                  DISBURSEMENTS

      5.01. Advances. Subject to the terms and conditions hereof, and relying
upon the representations and warranties herein set forth, the Lenders agree to
make Advances to the Borrower in accordance with, and subject to the following
requirements and limitations:

            a. Requests for Loan Advances. Not less than five (5) business days
      prior to the making of an Advance, the Borrower shall submit to the Agent
      a Disbursement Request in such form as the Agent may require setting forth
      the total amount of the Advance which is requested. Each Disbursement
      Request and each receipt of the Advance requested thereby shall constitute
      a certification by the Borrower that the representations and warranties
      contained in Article III hereof are true and correct on the date of such
      Disbursement Request or such receipt, as the case may be.

            b. Borrowing Limitations. In no event shall the outstanding
      principal balance of the Loan exceed the Borrowing Base.

            c. Advances to Cure Defaults; etc. Notwithstanding the foregoing
      provisions of this Section 5.01, and without receiving Requests for
      Advances for such Advances, the Lenders may at any time or from time to
      time (i) make Advances to cure any Event of Default or Conditional
      Default, (ii) make Advances to pay interest on the Loan, (iii) make

                                       32
<PAGE>

      Advances to pay the reasonable fees and expenses of counsel for the Agent;
      and (iv) make Advances to pay the reasonable fees and expenses payable to
      a Title Company for the issuance of a Title Policy. Any Advances made
      pursuant to this subparagraph (c) shall be evidenced by the Notes, as
      fully as if made to the Borrower, and shall be paid by the Borrower upon
      demand by the Agent. The Agent shall provide written notice to the
      Borrower of each Advance made under this subparagraph (c).

                                   ARTICLE VI
                        BORROWER'S AFFIRMATIVE COVENANTS

      The Borrower covenants that until payment in full of the Loan and
performance of all of the Borrower's other obligations under the Loan Documents:

      6.01. Financial Statements. The Borrower will deliver or cause to be
delivered to the Agent:

            a. As soon as practicable, but in any event within ninety (90) days
      after the close of each fiscal year of Guarantor, audited financial
      statements of Guarantor, prepared by a nationally recognized certified
      public accounting firm on a consolidated and consolidating basis for
      itself and its Subsidiaries, including a balance sheet, statement of
      income and retained earnings and a statement of cash flows.

            b. As soon as practicable, but in any event within ninety (90) days
      after the close of each fiscal year of Borrower, audited financial
      statements of Borrower, prepared by a nationally recognized certified
      public accounting firm on a consolidated and consolidating basis for
      itself and its Subsidiaries, including a balance sheet, statement of
      income and retained earnings and a statement of cash flows.

            c. Within ten (10) days after the same are filed, copies of all
      reports filed by Guarantor with the Securities and Exchange Commission.

            d. Five (5) days prior to each Advance, a Borrowing Base Certificate
      (as of the end of the last calendar month).

            e. As soon as practicable, but in any event within thirty (30) days
      after the end of each fiscal quarter of the Borrower, certified rent rolls
      and operating statements for each of the Mortgaged Properties, together
      with a Compliance Certificate.

            f. Within ninety (90) days after the end of each fiscal year,
      projected income statements and balance sheets for Borrower and Guarantor.

            g. As soon as possible, but in any event within ten (10) Business
      Days after the Borrower becomes aware thereof, a written statement signed
      by the chief executive officer or the chief financial officer of the
      Borrower describing any Reportable Event or Prohibited Transaction which
      has occurred with respect to any Plan and the action which the Borrower
      proposes to take with respect thereto; and

                                       33
<PAGE>

            h. The Borrower will with reasonable promptness furnish to the Agent
      such additional financial and other information respecting the financial
      condition, business or operations of the Borrower as the Agent may from
      time to time reasonably request.

      All such financial statements shall be prepared in accordance with GAAP
applied on a basis consistent with prior practice unless otherwise specifically
noted thereon.

      6.02. Notices. The Borrower will promptly give the Agent written notice
of:

            a. the occurrence or existence of any Event of Default of which the
      Borrower has actual knowledge, together with a written statement of the
      action being taken by the Borrower to remedy such Event of Default;

            b. all litigation or proceedings before any court or Governmental
      Authority affecting the Borrower or its properties that the Borrower
      reasonably determines may have a Material Adverse Effect or that affects
      the use or operation of a Mortgaged Property; and

            c. any claims against any collateral given by Borrower or Guarantor
      to secure the Loan.

      6.03. Access to Books and Inspection. The Borrower will give any officer
or representative of the Agent access to, and permit such representative to
examine, copy or make extracts from, any and all books, records and documents in
the possession of the Borrower relating to the Mortgaged Properties financed
with proceeds of the Loan and to inspect such Mortgaged Properties (provided
such inspections shall not interfere with a Tenant's use of a Mortgaged
Property), all at such reasonable times and as often as the Agent may reasonably
request; provided, however, that the Agent shall have no obligation to make any
such inspections nor have any responsibility to the Borrower or any person, firm
or corporation for any defects or deficiency which may be or which would have
been revealed by any such inspection, whether or not discovered by the Agent.

      6.04. Governmental Requirements. The Borrower will comply with all
material Governmental Requirements (including ERISA) and all material terms of
restrictive covenants applicable to the each Mortgaged Property in respect of
which Advances have been made and are outstanding.

      6.05. Maintenance. The Borrower will maintain each Mortgaged Property in
good repair and safe condition at all times and indemnify and defend and hold
the Lenders harmless from any and all claims relative to the use and occupancy
of each Mortgaged Property.

      6.06. Insurance. The Borrower will maintain such insurance on each
Mortgaged Property in amounts set forth in the Mortgage for such Mortgaged
Property.

      6.07. Further Assurances. The Borrower will execute, acknowledge when
appropriate, and deliver from time to time at the request of the Agent, such
instruments and documents as in

                                       34
<PAGE>

the reasonable opinion of the Agent are necessary or desirable to perfect the
security interests required herein.

      6.08. Failure to Perform. If the Borrower neglects or refuses to pay the
costs, premiums, liabilities or other charges incurred in connection with the
Loan or otherwise fails to perform its covenants hereunder, the Lenders may do
so and may add the cost thereof to the Loan as indebtedness evidenced by the
Notes, and may collect the same from the Borrower upon demand with interest
thereon at the highest Default Rate until paid thereunder.

      6.09. Environmental. The Borrower covenants and agrees to keep or cause
each Mortgaged Property to be kept free of Hazardous Materials in violation of
any Governmental Requirement and, without limiting the foregoing, the Borrower
and each Special Purpose Entity shall not cause or permit any such Mortgaged
Property to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance with all applicable Governmental Requirements, nor shall the Borrower
and each Special Purpose Entity cause or permit, as a result of any intentional
or unintentional act or omission on the part of the Borrower and each Special
Purpose Entity or any tenant, subtenant or occupant, a release of Hazardous
Materials in violation of any Governmental Requirement onto any such Mortgaged
Property or onto any other property.

      If Hazardous Materials are present at a Mortgaged Property in violation of
the requirements of this Section 6.09, the Borrower shall immediately notify
Agent and:

            a. conduct and complete all investigations, studies, sampling and
      testing, and all remedial, removal and other actions necessary to clean up
      and remove all Hazardous Materials on, under or from such Mortgaged
      Property in accordance with all applicable federal, state and local laws,
      ordinances, rules, regulations and policies (including, without
      limitation, Hazardous Materials Laws), to the reasonable satisfaction of
      the Agent, and in accordance with the orders and directives of all
      Governmental Authorities;

            b. defend, indemnify and hold harmless the Lenders, their employees,
      agents, officers and directors (the "Indemnified Parties") from and
      against any claims, demands, penalties, fines, liabilities, settlements,
      damages, costs or expenses of whatever kind or nature, known or unknown,
      contingent or otherwise, arising out of or in any way related to any of
      the following ("Environmental Losses"):

                  i. the presence, disposal, release or threatened release of
            any Hazardous Materials on, over, under, from or affecting such
            Mortgaged Property or the soil, water, vegetation, buildings,
            personal property, persons or animals thereon;

                  ii. any personal injury (including wrongful death) or property
            damage (real or personal) arising out of or related to such
            Hazardous Materials;

                  iii. any lawsuit brought or threatened, settlement reached or
            government order relating to such Hazardous Materials; and/or

                                       35
<PAGE>

                  iv. any violation of laws, orders, regulations, requirements
            or demands of Governmental Authorities, which are based upon or in
            any way related to such Hazardous Materials, including, without
            limitation, attorney's and consultant's fees, investigation and
            laboratory fees, court costs and litigation expenses.

      Notwithstanding any provision hereof, the Borrower does not indemnify the
Indemnified Parties against any Environmental Losses (i) caused by any
Indemnified Party, (ii) arising from the breach, violation or threatened
violation of any applicable Hazardous Materials Laws which first occurs after
the Indemnified Parties take actual possession of a Mortgaged Property pursuant
to a foreclosure of the Mortgage encumbering the same or pursuant to a transfer
pursuant to a power of sale or deed in lieu of foreclosure thereof; or (iii) any
release, discharge, disposal or presence of Hazardous Materials caused by a
receiver of a Mortgaged Property or which first occurs while a receiver is in
possession of such Mortgaged Property.

      6.10. Personal Property. Borrower and each Special Purpose Entity shall
maintain all Personal Property and Fixtures incorporated into a Mortgaged
Property in accordance with the terms of the Mortgage encumbering such Mortgaged
Property.

      6.11. Financing Statements. The Borrower hereby authorizes the Agent to
execute one or more financing statements and renewals and amendments thereof
pursuant to the Uniform Commercial Code of the State of Virginia and the state
in which each Special Purpose Entity is organized and the state in which a
Mortgaged Property is located in form satisfactory to the Agent, and will pay
the cost of filing the same in all public offices wherever filing is deemed by
the Agent to be necessary or desirable.

      6.12. Organizational Documents. The Borrower shall provide to the Agent
copies of any amendments or modifications to, or replacements of, the Borrower's
certificate or articles of limited partnership, and the organizational documents
of each Special Purpose Entity. The Borrower shall cause to be provided to the
Agent copies of any amendments or modifications to, or replacements of, the
Guarantor's certificate or articles of incorporation or by-laws.

      6.13. Non-Use Fee. Borrower shall pay to Agent for the benefit of the
Lenders on each March 1, June 1, September 1 and December 1 while the Loan is
outstanding the Non-Use Fee attributable to the preceding calendar quarter.

      6.14. USA Patriot Act. Borrower represents and warrants to the Lenders
that neither Borrower nor any entity or individual owning, owned by or under
common ownership with Borrower or any guarantor of the Loan (each for purpose of
this Section 6.14, an "Affiliate"), is identified in any list of known or
suspected terrorists published by any United States government agency
(individually, as each such list may be amended or supplemented from time to
time, referred to as a "Blocked Persons List"), including, without limitation,
(a) the annex to Executive Order 13224 issued on September 23, 2001 by the
President of the United States and (b) the Specially Designated Nationals List
published by the United States Office of Foreign Assets Control. Furthermore,
Borrower hereby agrees that if Borrower becomes aware that Borrower or any
Affiliate is identified on any Blocked Persons List, Borrower shall immediately
notify Agent

                                       36
<PAGE>

in writing of such information. In the event Borrower or any Affiliate is at any
time identified on any Blocked Persons List, such event shall be an Event of
Default, and shall entitle the Agent and the Lenders to exercise any and all
remedies provided hereunder or in any other Loan Document or otherwise permitted
by law. In addition, Agent or any Lender may immediately contact the Office of
Foreign Assets Control and any other governmental agency Agent or such Lender
deems appropriate in order to comply with its legal obligations. Upon the
occurrence of such Event of Default, Agent and Lenders shall forbear enforcement
of their rights and remedies during such time as (1) the party identified in a
Blocked Persons List is contesting in good faith by appropriate legal
proceedings such party's inclusion in a Blocked Persons List and (2) Agent or
any Lender, as the case may be, determines, in its sole and absolute discretion,
that such forbearance will not adversely affect title to, the condition or value
of, or any lien in favor of the Lenders and encumbering any part of the
Mortgaged Property or otherwise adversely impact the ability of the party or
Borrower to perform their respective obligations under or with respect to any
Loan Document.

                                  ARTICLE VII
                          BORROWER'S NEGATIVE COVENANTS

      The Borrower covenants that until payment in full of Loan and performance
of all of the Borrower's other obligations under the Loan Documents:

      7.01. Prohibition upon Transfer, Secondary Financing. The Borrower and
each Special Purpose Entity shall not convey, sell (other than pursuant to a
Mortgaged Property Sale Agreement), lease (other than pursuant to a Lease) or
otherwise dispose of all or any part of a Mortgaged Property or any interest
therein (legal or equitable), or grant any security interest or lien with
respect to such Mortgaged Property, unless in connection therewith the
applicable Mortgage Release Price is paid to the Lenders; provided, however,
Borrower and each Special Purpose Entity shall be entitled to waive its landlord
lien, if required by a Tenant.

      7.02. Easements. The Borrower and each Special Purpose Entity will not
enter into any easement affecting a Mortgaged Property without first obtaining
the Agent's written approval, which approval will not be unreasonably delayed or
withheld or conditioned upon payment of fees, of such easement and the terms and
conditions thereof; provided, however, no such approval shall be required if
such easement is granted in the ordinary course of business and provides
reasonable benefit to such Mortgaged Property. The Borrower shall provide to the
Agent an executed copy of any easement entered into in respect of a Mortgaged
Property in respect of which an Advance has been made and remains outstanding.

      7.03. Lease/Mortgaged Property Sale Agreement. The Borrower and each
Special Purpose Entity may, in the ordinary course of business, enter into,
modify, amend, alter, terminate or cancel any Lease (other than a Major Lease).
The Borrower and each Special Purpose Entity will not enter into, modify, amend,
alter, terminate or cancel any Major Lease for a Mortgaged Property, or assign,
transfer, pledge or encumber any of its right, title or interest under any
Lease, without the Agent's prior written consent, which consent will not be
unreasonably delayed or withheld or conditioned upon payment of fees, or payment
of the Mortgage Release Price for such Mortgaged Property to the Lenders. The
Agent shall not

                                       37
<PAGE>

unreasonably withhold or delay its consent to a modification, amendment or
alteration to such a Major Lease. If the Borrower or a Special Purpose Entity
enters into a Mortgaged Property Sale Agreement for a Mortgaged Property, the
Borrower or a Special Purpose Entity will provide to the Agent a copy of the
same within twenty (20) Business Days after the execution thereof.

      7.04. Margin Stock. The Borrower shall not use or cause or permit any of
the proceeds of the Loan to be used, either directly or indirectly, for the
purpose whether immediate, incidental or remote of purchasing or carrying any
margin stock within the meaning of Regulation U or of extending credit to others
for the purpose of purchasing or carrying any margin stock, and the Borrower
shall furnish to the Agent, upon its request, a statement in conformity with the
requirements of Federal Reserve Board Form U-1 referred to in Regulation U.
Further, no part of the proceeds of the Loan will be used for any purpose that
violates, or which is inconsistent with, the provisions of Regulations G, T, U
or X of the Board of Governors of the Federal Reserve System.

      7.05. Change Name and Place of Business. The Borrower or a Special Purpose
Entity shall not change its corporate name or principal place of business,
except on not less than fifteen (15) days' prior written notice to the Agent.

      7.06. Benefit Plans. The Borrower shall not permit any condition to exist
in connection with any employee benefit plan which might constitute grounds for
the PBGC to institute proceedings to have the employee benefit plan terminated
or a trustee appointed to administer the employee benefit plan; or engage in, or
permit to exist or occur any other condition, event or transaction with respect
to any employee benefit plan which could result in the Borrower incurring any
material liability, fine or penalty.

      7.07. Restricted Assets. The Consolidated Group shall not construct,
acquire or otherwise own nursing homes, congregate care or assisted living
facilities or acquire any undeveloped real estate which the Consolidated Group
does not intend to construct a Real Estate Asset thereon or a portion thereof
(collectively, the "Restricted Assets") unless Borrower delivers to Agent copies
of resolutions authorizing such acquisitions and the aggregate value of all such
Restricted Assets does not exceed Ten Percent (10%) of the Total Current Value
of Assets.

      7.08. Recourse Indebtedness. Other than the Loan, the Mezzanine Debt and
the Construction Loans, Borrower, Guarantor and the Special Purpose Entities
will not have outstanding Recourse Indebtedness in excess of Thirteen Million
Dollars ($13,000,000).

      7.09. Variable Rate Indebtedness. Other than the Loan and Construction
Loans, Borrower, Guarantor and the Special Purpose Entities will not incur
unprotected Variable Rate Indebtedness in excess of Ten Million Dollars
($10,000,000).

      7.10. Mortgaged Properties Debt Service Coverage Ratio. Borrower will not
allow the Mortgaged Properties Debt Service Coverage Ratio to be less than 1.40
to 1.00.

      7.11. Mezzanine Debt. Other than the Mezzanine Debt, the Consolidated
Group will not incur any additional Mezzanine Debt. In addition, the
Consolidated Group shall not incur

                                       38
<PAGE>

Mezzanine Debt on any one Real Estate Asset in excess of Four Million Dollars
($4,000,000), and provided further, the aggregate amount of the applicable
Construction Loan and the Mezzanine Debt shall not exceed ninety percent (90%)
of the Real Estate Asset Budget Amount for any such Real Estate Asset.

      7.12. Asset Value of Real Estate Assets. From the date hereof through
September 30, 2004, the total asset value of all projects under construction
(measured by the Real Estate Assets Budget Amount) shall not exceed forty
percent (40%) of the Total Current Value of Assets and at all times after
September 30, 2004, the total asset value of all projects under construction
(measured by the Real Estate Assets Budget Amount) shall not exceed thirty-five
percent (35%) of the Total Current Value of Assets.

      7.13. Dissolve, Liquidate, Merge, Etc. The Borrower, Guarantor or any
Special Purpose Entity shall not dissolve, liquidate, enter into any
consolidation or merger with, or acquisition of, any other Person.
Notwithstanding the foregoing, Borrower or a Special Purpose Entity may, without
the written consent of Agent (A) transfer limited partnership interests or
membership units in the Borrower or a Special Purpose Entity, as applicable, (B)
replace the general partner for the Borrower or the manager of a Special Purpose
Entity with a wholly owned Subsidiary of Guarantor, (C) convert interests in the
Borrower into interests in Guarantor, and (D) issue additional limited
partnership units or other securities, even if such issuance results in a
reduction of the partnership interest of Guarantor in the Borrower, provided
that, after giving effect to such transactions, transfer or series of transfers
described in (A), (B), (C) and (D), Guarantor or a wholly owned Subsidiary of
Guarantor owns more than fifty-one percent (51%) of the partnership interests of
the Borrower and the Borrower owns more than fifty-one percent (51%) of the
Special Purpose Entity and the Guarantor has managerial control over Borrower
and Borrower has managerial control over the applicable Special Purpose Entity.

      7.14. Value of Undeveloped Land. The total asset value of all undeveloped
land owned by the Consolidated Group (excluding the value of any land under
construction) shall not exceed Five Percent (5%) of the Total Current Value of
Assets.

                                  ARTICLE VIII
                                    DEFAULTS

      8.01. Events of Default. The Borrower agrees each of the following
described events shall constitute an "Event of Default" hereunder:

            a. The Borrower shall fail to make any payment under the Notes
      within ten (10) days after the date the same are due and payable; or

            b. Any representation or warranty made by the Borrower herein, in
      any other Loan Document or in any certificate, financial statement or
      other document furnished by the Borrower or a Special Purpose Entity
      pursuant to the provisions hereof, shall prove to have been materially
      false or misleading as of the time made or furnished, and the Borrower
      does not, within thirty (30) days after the earlier of receiving written
      notice from the Agent or the Borrower's own determination that such
      representation or warranty

                                       39
<PAGE>

      is false or misleading, commence and complete such actions as are
      necessary to make such warranty or representation true and accurate;
      provided, however, that the Borrower shall not be entitled to the
      foregoing cure period if the Borrower had actual knowledge that such
      representation or warranty was false or misleading when made; or

            c. The Borrower shall default in the performance or observance of
      the covenants contained in Article VII hereof, and such default has not
      been cured or corrected within thirty (30) days following written notice
      from the Agent to the Borrower; provided, however, that if such default is
      of such a nature that it cannot be cured or corrected within such thirty
      (30) day period, the Borrower shall be entitled to such additional time as
      may be necessary to cure or correct such default if the Borrower promptly
      commences such cure or corrective action and diligently pursues such cure
      or corrective action to completion; or

            d. The Borrower shall default in the performance or observance of
      any other covenant, condition or provision herein contained including
      those set forth in this Article VIII for which no specific grace or cure
      period is set forth, and such default has not been cured or corrected
      within thirty (30) days following written notice from the Agent to the
      Borrower; provided, however, that if such default is of such a nature that
      it cannot be cured or corrected within such thirty (30) day period, the
      Borrower shall be entitled to such additional time as may be necessary to
      cure or correct such default if the Borrower promptly commences such cure
      or corrective action and diligently pursues such cure or corrective action
      to completion; provided, further, however, there shall be no grace or cure
      period afforded to Borrower for any Event of Default set forth under
      Sections 8.01(o) through 8.01(s) below; or

            e. The Borrower shall default in the performance or observance of
      any covenant, condition or provision contained in any other Loan Document
      to which the Borrower is a party, and such default shall continue uncured
      after any applicable cure or grace period, or if such Loan Document does
      not contain an applicable cure period, such default has not been cured or
      corrected within thirty (30) days following written notice from the Agent
      to the Borrower; provided, however, that if such default is of such a
      nature that it cannot be cured or corrected within such thirty (30) day
      period, the Borrower shall be entitled to such additional time as may be
      necessary to cure or correct such default if the Borrower promptly
      commences such cure or corrective action and diligently pursues such cure
      or corrective action to completion; or

            f. The Borrower or a Special Purpose Entity shall neglect, refuse or
      fail to keep in full force and effect any permit or approval issued by any
      Governmental Authority required for the occupancy or use of a Mortgaged
      Property and the same is not reinstated within thirty (30) days after the
      Borrower receives notice (from any source) that such permit or approval is
      no longer in full force and effect; or

            g. A Mortgaged Property or any part thereof shall be condemned or
      damaged by fire or other casualty in such manner as to preclude, in the
      Lenders' sole reasonable judgment, the restoration of the Improvements
      forming a part of such Mortgaged

                                       40
<PAGE>

      Property and the Borrower fails to substitute an alternate Mortgaged
      Property within sixty (60) days thereof or fails to deliver to the Lenders
      the Mortgage Release Price for such Mortgaged Property; or

            h. An accurate survey of a Mortgaged Property at any time shall show
      that any of the Improvements constructed thereon materially encroach upon
      any street, easement, right of way or adjoining property or violate any
      set back requirement, unless such encroachment or violation is
      satisfactorily insured against under the Title Policy issued in respect of
      such Mortgaged Property or was in existence at the time the Lenders
      approve the Real Estate Asset as Mortgaged Property and shown on the
      survey provided to the Agent, or that any adjoining structure materially
      encroaches on a Mortgaged Property, unless such encroachment is cured
      within sixty (60) days following receipt of notice thereof by the Borrower
      or was in existence at the time such Mortgaged Property was mortgaged; or

            i. The occurrence of any event which results in or causes a Material
      Adverse Effect; or

            j. A writ of execution or attachment or any similar process shall be
      issued or levied against all or any part of or interest in a Mortgaged
      Property, or any judgment involving monetary damages shall be entered
      against the Borrower which shall become a lien on a Mortgaged Property or
      any portion thereof or interest therein and such execution, attachment or
      similar process or judgment is not released, bonded, satisfied, vacated or
      stayed within sixty (60) days after its entry or levy or Borrower fails to
      deliver to the Lenders the Mortgage Release Price for such Mortgaged
      Property within sixty (60) days after the date of such entry or levy; or

            k. The Borrower, a Special Purpose Entity or the Guarantor shall
      file a voluntary petition in bankruptcy or shall file any petition or
      answer seeking or acquiescing in any reorganization, arrangement,
      composition, readjustment, liquidation, dissolution or similar relief for
      itself under any present or future federal, state or other statute, law or
      regulation relating to bankruptcy, insolvency or other relief for debtors;
      or shall seek or consent to or acquiesce in the appointment of any
      trustee, receiver, liquidator, assignee, custodian, sequestrator (or other
      similar official) of the Borrower, a Special Purpose Entity or the
      Guarantor, or of all or any part of a Mortgaged Property, or of any or all
      of the royalties, revenues, rents, issues or profits thereof, or shall
      make any general assignment for the benefit of creditors, or shall admit
      in writing its inability to pay its debts, as the case may be, generally
      as they become due, or shall become insolvent or unable to pay its debts
      as they mature, or shall make a general assignment for the benefit of
      creditors, or shall voluntarily suspend transaction of its business or
      take any corporate action in furtherance of the foregoing; or

            l. A court of competent jurisdiction shall enter an order, judgment
      or decree adjudicating the Borrower, a Special Purpose Entity or the
      Guarantor as bankrupt or insolvent or approving a petition filed against
      the Borrower, a Special Purpose Entity or the Guarantor seeking any
      reorganization, dissolution or similar relief under any present

                                       41
<PAGE>

      or future federal, state or other statute, law or regulation relating to
      bankruptcy, insolvency, or other relief for debtors, and such order,
      judgment or decree shall remain unvacated and unstayed for an aggregate of
      sixty (60) days (whether or not consecutive) from the first date of entry
      thereof; or any trustee, receiver or liquidator of the Borrower, a Special
      Purpose Entity or the Guarantor or of all or any part of a Mortgaged
      Property, or of any or all of the royalties, revenues, rents, issues or
      profits thereof, shall be appointed without the consent or acquiescence of
      the Borrower, a Special Purpose Entity or the Guarantor, as the case may
      be, and such appointment shall remain unvacated and unstayed for an
      aggregate period of sixty (60) days (whether or not consecutive); or

            m. The Borrower or a Special Purpose Entity has breached or
      defaulted under the Lease for a Mortgaged Property which results in a
      Material Adverse Effect, and such breach or default has not been cured or
      corrected within any applicable cure period provided under such Lease; or

            n. Guarantor sells, assigns, hypothecates, pledges or otherwise
      transfers its interest as a partner of the Borrower.

            o. At any time, the Leverage Ratio exceeds Sixty Percent (60%) and
      the same is not cured within ninety days after written notice from the
      Agent to Borrower.

            p. At any time, the Minimum Tangible Worth of the Borrower is less
      than Sixty Million Dollars ($60,000,000) plus One Hundred Percent (100%)
      of additional net proceeds of future stock sales.

            q. Guarantor's dividends exceed One Hundred Percent (100%) of its
      funds from operations as determined in accordance with NAREIT in any
      calendar year.

            r. At any time, the aggregate occupancy of the Mortgaged Properties
      is less than Eighty-Five Percent (85%), inclusive of occupancy with
      respect to master leases and occupancy agreements approved by Agent.

            s. At any time, the Debt Service Coverage Ratio is less than 1.8 to
      1.0 during any calendar quarter from and after December 31, 2003.

            t. There occurs a Reportable Event or a Prohibited Transaction
      under, or any complete or partial withdrawal from, or any other event
      which would constitute grounds for termination of or the appointment of a
      trustee to administer, any "plan" maintained by the Borrower or any ERISA
      Affiliate for the benefit of its "employees" (as such terms are defined in
      ERISA) which could have a Material Adverse Effect.

            u. Fred Klipsch shall cease to be Chairman and CEO of Guarantor or
      Fred Farrar shall cease to be President and Chief Operating Officer of
      Borrower and replacements acceptable to Required Lenders are not in place
      within ninety (90) days.

      If any Event of Default described in 8.01(k) or (l) occurs the Lenders
shall be under no further obligation to make any Advances and the Loan and all
interest accrued thereon and any

                                       42
<PAGE>

penalty or premium thereunder and all other liabilities of the Borrower
hereunder, thereunder and under the other Loan Documents shall thereupon become
and be immediately due and payable without any election or action on the part of
the Lenders, and without presentment, demand, protest, or notice of any kind,
all of which are hereby expressly waived, and if any other Event of Default
described in Section 8.01 occurs and, if there is a cure period, is not cured as
set forth herein, the Lenders shall terminate their commitments to make Advances
hereunder and declare the Loan and all interest accrued thereon and any penalty
or premium thereunder pursuant to Section 2.08 hereof and all other liabilities
of the Borrower hereunder, thereunder and under the other Loan Documents to be
due and payable, whereupon the same shall become and be immediately due and
payable without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived.

      8.02. Special Remedies. If an Event of Default shall exist, the Lenders
shall have the right, in addition to any rights or remedies available to them
under the Loan Documents or otherwise available to them at law or in equity, to
enter upon and take possession of the Mortgaged Properties. For purposes of this
Section 8.02, the Borrower agrees that the Lenders shall have the right, and
hereby irrevocably constitutes and appoints the Agent its true and lawful
attorney-in-fact, coupled with an interest, with full power of substitution, to
(i) prosecute and defend all actions or proceedings in connection with the
Mortgaged Properties and to take such action and require such performance as the
Lenders deem necessary in connection therewith; and (ii) generally do any and
every act with respect to the occupancy and use of such Mortgaged Properties as
the Borrower or a Special Purpose Entity may do in its own behalf. Should the
unadvanced portion of the Loan be insufficient to pay the sums expended or
incurred by the Lenders for any of the foregoing purposes, the amount of the
deficiency shall be added to the indebtedness evidenced by the Notes and in all
events shall be secured by the lien of the Loan Documents and shall be paid by
the Borrower to the Lenders on demand with interest thereon at the respective
Default Rates until paid.

                                   ARTICLE IX
                                  MISCELLANEOUS

      9.01. No Implied Waiver; Cumulative Remedies; Writing Required. No delay
or failure of the Lenders in exercising any right, power or privilege hereunder
(or under any Loan Document) shall affect such right, power or privilege, nor
shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or privilege. The rights
and remedies of the Lenders hereunder and under the other Loan Documents are
cumulative and not exclusive of any rights or remedies which it would otherwise
have. Any waiver, permit, consent or approval of any kind or character on the
part of the Lenders of any breach or default under this Agreement or any other
Loan Document, or any waiver by the Lenders of any provision or condition of
this Agreement or any other Loan Document, must be in writing and shall be
effective only to the extent as may be specifically set forth in such writing.

      9.02. Taxes. The Borrower shall pay any and all stamp, document, mortgage,
intangibles, transfer and recording taxes, fees (including notary fees and
mortgage/deed of trust release fees) and similar impositions payable or
hereafter determined to be payable in connection

                                       43
<PAGE>

with the execution, delivery and/or recording and release of the Loan Documents,
and the Borrower agrees to save the Lenders harmless from and against any and
all present or future claims or liabilities with respect to, or resulting from,
any delay in paying or omitting to pay any such taxes, fees or similar
impositions.

      9.03. Modifications and Amendments. Upon execution thereof, each Project
Agreement shall automatically be deemed to be an amendment of this Agreement,
which amendment shall apply, however, only to the Mortgaged Property which is
the subject of such Project Agreement.

      9.04. Holidays. Except as otherwise provided herein, whenever any payment
or action to be made or taken under any of the Loan Documents shall be stated to
be due or to be performed on a day which is not a business day, such payment or
action shall be made or taken on the next-following business day and such
extension of time shall be included in computing interest or fees, if any, in
connection with such payment or action.

      9.05. Notices. All notices, statements, requests and demands given to or
made upon either party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given or made one (1) day after the same
are deposited with a nationally recognized overnight delivery service, or
immediately upon receipt, if delivered by courier, addressed as follows:

                  If to the Agent:     The Huntington National Bank
                                       201 North Illinois Street, Suite 1800
                                       Indianapolis, IN 46204
                                       Attention:  Jacqueline E. McNeelan
                                       Telephone: (317) 237-2568
                                       Facsimile: (317) 237-2505

                  With a copy to:      Barnes & Thornburg
                                       11 South Meridian Street
                                       Indianapolis, Indiana  46204
                                       Attention:  Richard L. Johnson
                                       Telephone: (317) 231-7787
                                       Facsimile: (317) 231-7433

                  If to the Borrower:  Windrose Medical Properties, L.P.
                                       3502 Woodview Trace, Suite 210
                                       Indianapolis, Indiana  46268
                                       Attention:  Frederick L. Farrar
                                       Telephone: (317) 860-8213
                                       Facsimile: (317) 860-9190

                  With a copy to:      Daniel R. Loftus
                                       Secretary and General Counsel
                                       7101 Executive Center Drive

                                       44
<PAGE>

                                       Suite 250
                                       Brentwood, Tennessee 37027
                                       615-371-8607
                                       615-371-0246

or in accordance with the latest unrevoked written direction from either party
to the other party hereto. Failure of the Agent to furnish the Borrower's
attorney with a copy of any notice provided to the Borrower hereunder shall not
be deemed a failure of the Agent to provide the Borrower with such notice and
shall not affect, or in any way prevent or estop the Lenders from exercising,
any right or remedy of the Lenders hereunder or under any of the other Loan
Documents.

      9.06. Reimbursement for Certain Expenses. All reasonable costs incidental
to the Loan and all Advances thereof, including, but not limited to, title
insurance premiums, survey charges, appraisal fees, insurance premiums,
inspecting engineers' and/or architects' fees, attorneys' costs of the Agent and
fees and any and all other incidental expenses of the Agent, shall be paid by
the Borrower, together with any other fees agreed upon by Borrower, Agent and
Lenders. All such fees and expenses shall be paid upon the receipt of a
statement therefor.

      9.07. No Third Party Rights. Nothing in this Agreement, whether express or
implied, shall be construed to give to any Person other than the parties hereto
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any other Loan Document, which is intended for the sole and
exclusive benefit of the parties hereto and thereto.

      9.08. Interest Limitation. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, the obligations of the
Borrower to the Lenders under this Agreement and any other Loan Documents are
subject to the limitation that payments of interest to the Lenders shall not be
required to the extent that receipt by the Lenders of any such payment by the
Borrower would be contrary to provisions of governmental requirements applicable
to the Lenders which limit the maximum rate of interest which may be charged or
collected by the Lenders.

      9.09. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

      9.10. Governing Law. THE BORROWER AGREES WITH THE LENDERS THAT, EXCEPT AS
EXPRESSLY SET FORTH IN THE MORTGAGES AND THE ASSIGNMENTS OF RENTS AND ANY OTHER
LOAN DOCUMENTS, THE LAW OF THE STATE OF INDIANA SHALL GOVERN ALL MATTERS
RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ALL OF THE
INDEBTEDNESS OR OBLIGATIONS OF THE BORROWER ARISING HEREUNDER OR THEREUNDER. THE
BORROWER (a) SHALL BE SUBJECT TO PERSONAL JURISDICTION IN THE STATE OF INDIANA
AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA

                                       45
<PAGE>

LOCATED IN STATE OF INDIANA (AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM)
FOR THE ENFORCEMENT OF THE BORROWER'S OBLIGATIONS HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS AND (b) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY
OTHER STATE TO OBJECT TO JURISDICTION WITHIN INDIANA FOR THE PURPOSES OF SUCH
ACTION, SUIT, PROCEEDING OR LITIGATION TO ENFORCE SUCH OBLIGATIONS OF THE
BORROWER. THE BORROWER WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS (x)THAT IT IS NOT SUBJECT TO SUCH JURISDICTION OR THAT SUCH
ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THOSE
COURTS OR THAT THIS AGREEMENT AND SUCH OTHER LOAN DOCUMENTS MAY NOT BE ENFORCED
IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (y) THAT
THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, OR (z) THAT
THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER. NOTHING IN THIS SECTION
9.10 SHALL BE DEEMED TO PRECLUDE THE LENDERS FROM FILING ANY ACTION, SUIT OR
PROCEEDING IN RESPECT OF THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENTS IN THE
STATE IN WHICH THE BORROWER HAS ITS CHIEF EXECUTIVE OFFICE OR THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE IN WHICH THE BORROWER HAS
ITS CHIEF EXECUTIVE OFFICE, OR THE STATE IN WHICH A MORTGAGED PROPERTY IS
LOCATED OR THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE
STATE IN WHICH A MORTGAGED PROPERTY IS LOCATED.

      9.11. Certain Fees. No broker's or finder's fee or commission will be
payable with respect to the Loan, this Agreement, or the other Loan Documents,
or any of the transactions contemplated hereby, and the Borrower hereby
indemnifies the Lenders against, and agrees that it will hold the Lenders
harmless from, any claim, demand, or liability for any such broker's or finder's
fee or commission alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses, and
disbursements of counsel) arising in connection with any such claim, demand, or
liability.

      9.12. Survival. All representations, warranties, covenants, agreements and
obligations of the Borrower contained in this Agreement, as amended or
supplemented from time to time, shall survive the making of Advances and shall
continue in full force and effect so long as the Loan is outstanding and until
payment and performance in full of all of the Borrower's obligation thereunder
and under the Loan Documents.

      9.13. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed and delivered by the parties, shall constitute an
original but all such counterparts together constituting but one and the same
instrument.

      9.14. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Lenders, the Borrower and their respective
successors and assigns, except that

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<PAGE>

the Borrower may not assign or transfer its rights and obligations hereunder or
any interest herein without the prior written consent of the Lenders.

      9.15. Time of Essence. Time is of the essence under the Loan Documents.

      9.16. No Joint Venture. Notwithstanding anything to the contrary herein
contained or implied, the Lenders, by this Agreement, or by any action pursuant
hereto, shall not be deemed to be a partner of, or a joint venturer with, the
Borrower, and the Borrower hereby indemnifies and agrees to defend and hold the
Lenders harmless, including the payment of reasonable attorneys' fees, from any
loss resulting from any judicial construction of the parties' relationship as
such.

      9.17. Lenders Not in Control. None of the covenants or other provisions
contained in the Loan Documents shall, or shall be deemed to, give the Lenders
the rights or power to exercise control over the affairs and/or management of
the Borrower, the power of the Lenders being limited to the right to exercise
the rights and remedies provided to it in the Loan Documents.

      9.18. Waiver of Jury Trial. The Borrower and the Lenders, after consulting
or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waives any right they may have to a trial by jury in any
litigation based upon or arising out of the Loan, this Agreement or any other
Loan Document or any of the transactions contemplated hereby or by any other
Loan Document or any course of conduct, dealing, statements, whether oral or
written, or actions of the Borrower or the Lenders. Neither the Borrower nor the
Lenders shall seek to consolidate, by counterclaim or otherwise, any action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by the Lenders or the Borrower
except by written instrument executed by both the Borrower and the Lenders.

                                   ARTICLE X
                          ASSIGNMENT AND PARTICIPATIONS

      10.01. Several Liability. Anything contained in this Agreement to the
contrary notwithstanding, the obligations of the Lenders to Borrower under this
Agreement are several and not joint and several; each Lender shall only be
obligated to fund its Percentage of each disbursement to be made hereunder up to
the amount of its Commitment.

      10.02. Assignments and Participations.

            a. Each Lender shall have the right to assign, transfer, sell,
      negotiate, pledge or otherwise hypothecate this Agreement and any of its
      rights and security hereunder and under the other Loan Documents to any
      other lending institution (an "Assignee") with the prior written consent
      of the Agent and with the prior written consent of Borrower, which
      consents by the Agent and the Borrower shall not be unreasonably withheld,
      conditioned or delayed (provided that no consent of Borrower shall be
      required if the Assignee is also a Lender or if an Event of Default then
      exists) and no consent of the Agent shall be required if the Assignee is
      also a Lender; provided, however, that (i) the parties to each

                                       47
<PAGE>

      such assignment shall execute and deliver to Agent, for its approval and
      acceptance, an Assignment and Acceptance, (ii) each such assignment shall
      be of a constant, and not a varying, percentage of the assigning Lender's
      rights and obligations under this Agreement, (iii) unless the Agent and,
      so long as no Event of Default exists, Borrower otherwise consent, the
      aggregate amount of the Commitment of the assigning Lender being assigned
      pursuant to each such assignment shall in no event be less than Five
      Million Dollars ($5,000,000), and (iv) if the assignment is less than the
      assigning Lender's entire interest in the Loan, the assigning Lender must
      retain at least a Five Million Dollar ($5,000,000) interest in the Loan.
      The Agent may designate any Assignee accepting an assignment of a
      specified portion of the Loan to be a Co-Agent, an "Arranger" or similar
      title, but such designation shall not confer on such Assignee the rights
      or duties of the Agent. Upon such execution, delivery, approval and
      acceptance, and upon the effective date specified in the applicable
      Assignment and Acceptance, (a) the Assignee thereunder shall be a party
      hereto and, to the extent that rights and obligations hereunder have been
      assigned to it pursuant to such Assignment and Acceptance, have the rights
      and obligations of a Lender hereunder and under the other Loan Documents,
      and Borrower hereby agrees that all of the rights and remedies of the
      Lenders in connection with the interest so assigned shall be enforceable
      against Borrower by an Assignee with the same force and effect and to the
      same extent as the same would have been enforceable but for such
      assignment, and (b) the assigning Lender thereunder shall, to the extent
      that rights and obligations hereunder and under the other Loan Documents
      have been assigned by it pursuant to such Assignment and Acceptance,
      relinquish its rights and be released from its obligations hereunder and
      thereunder. Notwithstanding the foregoing, if, as a result of such
      assignment by a Lender (or by entities of which a Lender or Lenders are
      subsidiaries), a Lender or two or more Lenders that are, directly or
      indirectly, subsidiaries of a common parent (collectively, "Merged
      Lenders") hold a Commitment or Commitments in an aggregate amount
      exceeding the amount of the Commitment held by the Agent, the Agent may,
      at its election, but without any obligation to do so, acquire from such
      Lender or Merged Lenders a portion of its or their Commitments and rights
      and obligations hereunder in an amount necessary to reduce the aggregate
      amount of the Commitments of the Merged Lenders, and to increase the
      Commitment of the Agent, to equal amounts. Such election shall be
      exercisable by notice from the Agent to the Merged Lenders and shall be
      effected, on a date designated in such notice.

            b. By executing and delivering an Assignment and Acceptance, the
      assigning Lender thereunder and the Assignee thereunder confirm to and
      agree with each other and the other parties hereto as follows: (i) except
      as provided in such Assignment and Acceptance, such assigning Lender makes
      no representation or warranty and assumes no responsibility with respect
      to any statements, warranties or representations made in or in connection
      with this Agreement or any other Loan Document or the execution, legality,
      validity, enforceability, genuineness, sufficiency or value of this
      Agreement or any other Loan Document or any other instrument or document
      furnished in connection therewith; (ii) such assigning Lender makes no
      representation or warranty and assumes no responsibility with respect to
      the financial condition of the Borrower, Guarantor or

                                       48
<PAGE>

      any Special Purpose Entity or the performance or observance by the
      Borrower, Guarantor or any Special Purpose Entity of any of its
      obligations under any Loan Document or any other instrument or document
      furnished in connection therewith; (iii) such Assignee confirms that it
      has received a copy of this Agreement together with such financial
      statements, Loan Documents and other documents and information as it has
      deemed appropriate to make its own credit analysis and decision to enter
      into the Assignment and Acceptance and to become a Lender hereunder; (iv)
      such Assignee will, independently and without reliance upon Agent, the
      assigning Lender 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 this Agreement;
      (v) such Assignee appoints and authorizes the Agent to take such action as
      the Agent on its behalf and to exercise such powers under this Agreement
      and the other Loan Documents as are delegated to Agent by the terms hereof
      and thereof, together with such powers as are reasonably incidental
      thereto; and (vi) such Assignee agrees that it will perform in accordance
      with their terms all of the obligations which by the terms of this
      Agreement are required to be performed by it as a Lender.

            c. Agent shall maintain a copy of each Assignment and Acceptance
      delivered to and accepted by it and shall record in its records the names
      and address of each Lender and the Commitment of, and Percentage of the
      Loan owing to, such Lender from time to time. Borrower, the Agent and
      Lenders may treat each entity whose name is so recorded as a Lender
      hereunder for all purposes of this Agreement.

            d. Upon receipt of an Assignment and Acceptance executed by an
      assigning Lender and an Assignee, Agent shall, if such Assignment and
      Acceptance has been properly completed and consented to if required
      herein, accept such Assignment and Acceptance, and record the information
      contained therein in its records, and the Agent shall use its best efforts
      to give prompt notice thereof to Borrower (provided that neither the Agent
      nor the Lenders shall be liable for any failure to give such notice).

            e. Borrower shall use reasonable efforts to cooperate with Agent and
      each Lender in connection with the assignment of interests under this
      Agreement or the sale of participations herein.

            f. Anything in this Agreement to the contrary notwithstanding, and
      without the need to comply with any of the formal or procedural
      requirements of this Agreement, including this Section, any Lender may at
      any time and from time to time pledge and assign all or any portion of its
      rights under all or any of the Loan Documents to a Federal Reserve Bank;
      provided that no such pledge or assignment shall release such Lender from
      its obligations hereunder. To facilitate any such pledge or assignment,
      the Agent shall, at the request of such Lender, enter into a letter
      agreement with the Federal Reserve Bank in, or substantially in, the form
      of the exhibit to Appendix C to the Federal Reserve Bank of New York
      Operating Circular No. 12.

            g. Anything in this Agreement to the contrary notwithstanding, any
      Lender may assign all or any portion of its rights and obligations under
      this Agreement to another branch or affiliate of such Lender without first
      obtaining the approval of any

                                       49
<PAGE>

      Agent or the Borrower, provided that (i) such Lender remains liable
      hereunder unless the Borrower and Agent shall otherwise agree, (ii) at the
      time of such assignment such Lender is not a Defaulting Lender, (iii) such
      Lender gives the Agent and Borrower at least fifteen (15) days prior
      written notice of any such assignment, and (iv) the parties to each such
      assignment execute and deliver to Agent an Assignment and Acceptance.

            h. Each Lender shall have the right, without the consent of the
      Borrower, to sell participations to one or more other Lenders (a
      "Participant") in or to all or a portion of its rights and obligations
      under the Loan and the Loan Documents; provided, however, that (i) such
      Lender's obligations under this Agreement (including without limitation
      its Commitment to Borrower hereunder) shall remain unchanged, (ii) such
      Lender shall remain solely responsible to the other parties hereto for the
      performance of such obligations (iii) the Borrower, the Agent and the
      other Lenders shall continue to deal solely and directly with such Lender
      in connection with such Lender's rights and obligations under this
      Agreement and with regard to any and all payments to be made under this
      Agreement and (iv) the holder of any such participation shall not be
      entitled to voting rights under this Agreement or the other Loan Documents
      (but such holder may contract with the Lender selling such Participant its
      interest in such Lender's share of the Loan as to voting of such Lender's
      interest under Section 11.06(b) [but not under any other section of this
      Agreement], provided that any such agreement by a Lender shall bind only
      such Lender alone and not Borrower, the other Lenders or the Agent).

            i. No Assignee of any rights and obligations under this Agreement
      shall be permitted to subassign such rights and obligations. No
      participant in any rights and obligations under this Agreement shall be
      permitted to sell subparticipations of such rights and obligations.

            j. Borrower acknowledges and agrees that Lenders may provide to any
      Assignee or Participant originals or copies of this Agreement, any other
      Loan Document and any other documents, instruments, certificates,
      opinions, insurance policies, letters of credit, reports, requisitions and
      other materials and information of every nature or description, and may
      communicate all oral information, at any time submitted by or on behalf of
      Borrower or received by any Lender in connection with the Loan or with
      respect to Borrower, provided that prior to any such delivery or
      communication, such Assignees or Participants shall agree to preserve the
      confidentiality of any of the foregoing to the same extent that such
      Lender agreed to preserve such confidentiality. In order to facilitate
      assignments to Assignees and sales to Participants, Borrower shall execute
      such further documents, instruments or agreements as Lenders may
      reasonably require; provided, that Borrower shall not be required (i) to
      execute any document or agreement which would materially decrease its
      rights, or materially increase its obligations, relative to those set
      forth in this Agreement or any of the other Loan Documents unless the Loan
      Documents are amended concurrently therewith (including financial
      obligations, personal recourse, representations and warranties and
      reporting requirements), or (ii) to expend more than incidental sums of
      money or incidental administrative time for which it does not receive
      reasonable reimbursement in order to comply with any requests or
      requirements of any Lender in connection with such

                                       50
<PAGE>

      assignment or sale arrangement. In addition, Borrower agrees to cooperate
      fully with Lenders in the exercise of the Lenders' rights pursuant to this
      Section, including providing such information and documentation regarding
      Borrower as any Lender or any potential Assignee or Participant may
      reasonably request and to meet with potential Assignees and Participants.

                                   ARTICLE XI
                                      AGENT

      11.01. Appointment. The Huntington National Bank is hereby appointed as
Agent hereunder and under each other Loan Document, and, subject to the terms
hereof, each Lender hereby irrevocably authorizes the Agent to act as agent for
the Lenders and to take such actions as the Lenders are obligated or entitled to
take under the provisions of this Agreement and the other Loan Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. Agent agrees to act as such
upon the express conditions contained in this Article in substantially the same
manner that it would act in dealing with a loan held for its own account. Agent
shall not have a fiduciary relationship with respect to any Lender by reason of
this Agreement.

      The provisions of this Article are solely for the benefit of the Agent and
the Lenders, and Borrower shall not have any rights to rely on or enforce any of
the provisions hereof except as provided in Section 11.02 below. In performing
its functions and duties under this Agreement, the Agent shall act solely as
agent for the Lenders and does not assume, and shall not be deemed to have
assumed, any obligations toward or relationship of agency or trust with or for
the Borrower.

      11.02. Reliance on Agent. All acts of and communications by the Agent, as
agent for the Lenders, shall be deemed legally conclusive and binding; and
Borrower or any third party (including any court) shall rely on any and all
communications or acts of the Agent with respect to the exercise of any rights
or the granting of any consent, waiver or approval on behalf of a Lender in all
circumstances where an action by such Lender is required or permitted pursuant
to this Agreement or the provisions of any other Loan Document or by applicable
law without the right or necessity of making any inquiry of any individual
Lender as to the authority of Agent with respect to such matter. In no event
shall any of the foregoing limit the rights or obligations of any Lender with
respect to any other Lender pursuant to this Article XI.

      11.03. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto, and may
exercise all other powers of Lender as are not made subject to the consent of
the Required Lenders pursuant to Section 11.06(a) or any other provision of this
Agreement or to the consent of all Lenders pursuant to Section 11.06(b) or any
other provision of this Agreement. The Agent shall not be considered, or be
deemed, a separate agent of any Lender hereunder, but is, and shall be deemed,
acting in its contractual capacity as Agent, exercising such rights and powers
under the Loan Documents as are specifically delegated to the Agent or Agent is
otherwise entitled to take hereunder. Agent shall

                                       51
<PAGE>

have no implied duties to any Lender, or any obligation to any Lender to take
any action except any action specifically provided by the Loan Documents to be
taken by the Agent.

      11.04. Disbursements.

            a. At least one (1) Business Day (by 11:00 a.m. Columbus, Ohio time)
      prior to each date a disbursement of the Loan is to be made hereunder
      pursuant to this Agreement (or at least three (3) LIBOR Business Days [by
      11:00 a.m. Columbus, Ohio time] for any disbursements to be made at the
      Adjusted LIBOR Rate), the Agent shall notify each Lender of the proposed
      disbursement. Each Lender shall make available to Agent (or the funding
      Lender or entity designated by the Agent), the amount of such Lender's
      Percentage of such disbursement (with respect to such Lender, such amount
      being referred to herein as an "Advance") in immediately available funds
      not later than 11:00 a.m. (Columbus, Ohio time) on the date such
      disbursement is to be made (such date being referred to herein as a
      "Funding Date"). Unless the Agent shall have been notified by any Lender
      prior to such time for funding in respect of any Advance that such Lender
      does not intend to make available to the Agent such Lender's Advance, the
      Agent may assume that such Lender has made such amount available to the
      Agent and the Agent, in its sole discretion, may, but shall not be
      obligated to, make available to Borrower a corresponding amount. If such
      corresponding amount is not in fact made available to the Agent by such
      Lender on or prior to the respective Funding Date, such Lender agrees to
      pay and Borrower agrees to repay to Agent forthwith on demand such
      corresponding amount together with interest thereon, for each day from the
      date such amount is made available to Borrower until the date such amount
      is paid or repaid to Agent, at (A) in the case of such Lender, the Federal
      Funds Effective Rate, and (B) in the case of Borrower, the interest rate
      applicable at the time to a disbursement made on such Funding Date. If
      such Lender shall pay to Agent such corresponding amount, such amount so
      paid shall constitute such Lender's Advance, and if both such Lender and
      Borrower shall have paid and repaid, respectively, such corresponding
      amount, Agent shall promptly return to Borrower such corresponding amount
      in same day funds.

            b. Requests by the Agent for funding by the Lenders of disbursements
      of the Loan will be made by facsimile. Each Lender shall make its Advance
      available to the Agent in dollars and in immediately available funds to
      such Lender and account as the Agent may designate, not later than 11:00
      a.m. (Columbus, Ohio time) on the Funding Date. Nothing in this Section
      11.04 shall be deemed to relieve any Lender of its obligation hereunder to
      make any Advance on any Funding Date, nor shall any Lender be responsible
      for the failure of any other Lender to perform its obligations to make any
      Advance hereunder, and the Commitment of any Lender shall not be increased
      or decreased as a result of the failure by any other Lender to perform its
      obligation to make any Advances hereunder.

            c. As soon as practical Agent will promptly forward to each Lender
      copies of the Disbursement Request documents described in Paragraph 5.01
      of the Loan Agreement. Delivery of the Disbursement Request documents
      shall not be a condition to funding any Advance.

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<PAGE>

      11.05. Distribution and Apportionment of Payments.

            a. Subject to Section 11.05(b), payments actually received by Agent
      for the account of the Lenders shall be paid to them promptly after
      receipt thereof by Agent, but in any event within one (1) Business Day,
      provided that, if any such payments are not distributed to the Lenders
      within one Business Day after Agent's receipt thereof, Agent shall pay to
      such Lenders interest thereon, at the lesser of (i) the Federal Funds
      Effective Rate and (ii) if the applicable payment represents repayment of
      a portion of the principal of the Loan, the rate of interest applicable to
      such portion of the Loan, from the date of receipt of such funds by Agent
      until such funds are paid in immediately available funds to such Lenders
      provided such funds are received by Agent not later than 11:00 A.M.
      (Columbus, Ohio time) on the date of receipt. All payments of principal
      and interest in respect of the Loan, all payments of the fees described in
      this Agreement (but not in any separate fee letter except to the extent
      expressly set forth therein), and all payments in respect of any other
      obligations of Borrower under the Loan Documents shall be allocated among
      such of Lenders as are entitled thereto, in proportion of their respective
      Percentages or otherwise as provided herein in the other Loan Documents,
      as the case may be. The Agent shall distribute to each Lender at its
      primary address set forth herein or in its Assignment and Acceptance, or
      at such other address as a Lender may request in writing, such funds as it
      may be entitled to receive, provided that the Agent shall in any event not
      be bound to inquire into or determine the validity, scope or priority of
      any interest or entitlement of any Lender and may suspend all payments and
      seek appropriate relief (including without limitation instructions from
      the Required Lenders, or all Lenders, as applicable, or an action in the
      nature of interpleader) in the event of any doubt or dispute as to any
      apportionment or distribution contemplated hereby. The order of priority
      herein is set forth solely to determine the rights and priorities of the
      Lenders as among themselves and may at any time or from time to time be
      changed by the Lenders as they may elect, in writing, without necessity of
      notice to or consent of or approval by Borrower. b. If a Lender (a
      "Defaulting Lender") defaults in making any Advance or paying any other
      sum payable by it hereunder, such sum together with interest thereon at
      the Default Rate from the date such amount was due until repaid (such sum
      and interest thereon as aforesaid referred to, collectively, as the
      "Lender Default Obligation") shall be payable by the Defaulting Lender (i)
      to any Lender(s) which elect, at their sole option (and with no obligation
      to do so), to fund the amount which the Defaulting Lender failed to fund
      or (ii) to Agent or any other Lender which under the terms of this
      Agreement is entitled to reimbursement from the Defaulting Lender for the
      amounts advanced or expended. Notwithstanding any provision hereof to the
      contrary, until such time as a Defaulting Lender has repaid the Lender
      Default Obligation in full, all amounts which would otherwise be
      distributed to the Defaulting Lender shall instead be applied first to
      repay the Lender Default Obligation (to be applied first to interest at
      the Default Rate and then to principal) until the Lender Default
      Obligation has been repaid in full (whether by such application or by cure
      by the Defaulting Lender), whereupon such Lender shall no longer be a
      Defaulting Lender. Any interest collected from Borrower on account of
      principal advanced by any Lender(s) on behalf of a Defaulting Lender shall
      be paid to the Lender (s) who made such advance and shall be credited
      against the Defaulting Lender's obligation to pay interest on the amount
      advanced at the Default Rate. If no other Lender

                                       53
<PAGE>

      makes an advance a Defaulting Lender failed to fund, a portion of the
      indebtedness of Borrower to the Defaulting Lender equal to the Lender
      Default Obligation shall be subordinated to the indebtedness of Borrower
      to all other Lenders and shall be paid only after the indebtedness of
      Borrower to all other Lenders is paid. The provisions of this Section
      shall apply and be effective regardless of whether an Event of Default
      occurs and is then continuing, and notwithstanding (i) any other provision
      of this Agreement to the contrary or (ii) any instruction of Borrower as
      to its desired application of payments. No Defaulting Lender shall have
      the right to vote on matters which are subject to the consent or approval
      of Required Lenders or all Lenders and while any Lender is a Defaulting
      Lender the requisite percentage of Lenders which constitutes the Required
      Lenders shall be calculated exclusive of the Percentage of the Defaulting
      Lender. The Agent shall be entitled to (i) withhold or set off, and to
      apply to the payment of the Lender Default Obligation any amounts to be
      paid to such Defaulting Lender under this Agreement, and (ii) bring an
      action or suit against such Defaulting Lender in a court of competent
      jurisdiction to recover the Lender Default Obligation and, to the extent
      such recovery would not fully compensate the Lenders for the Defaulting
      Lender's breach of this Agreement, to collect damages. In addition, the
      Defaulting Lender shall indemnify, defend and hold Agent and each of the
      other Lenders harmless from and against any and all claims, actions,
      liabilities, damages, costs and expenses (including attorneys' fees and
      expenses), plus interest thereon at the Default Rate, for funds advanced
      by Agent or any other Lender on account of the Defaulting Lender or any
      other damages such persons may sustain or incur by reason of or as a
      direct consequence of the Defaulting Lender's failure or refusal to abide
      by its obligations under this Agreement.

            c. At least five Business Days prior to the first date on which
      interest or fees are payable hereunder for the account of any Lender, each
      Lender that is not incorporated under the laws of the United States of
      America, or a state thereof, agrees that it will deliver to the Agent two
      duly completed copies of United States Internal Revenue Service Form 1001
      or 4224, certifying in either case that such Lender is entitled to receive
      payments under this Agreement and the Note without deduction or
      withholding of any United States federal income taxes. Each Lender which
      so delivers a Form 1001 or 4224 further undertakes to deliver the Agent
      two additional copies of such form (or a successor form) on or before the
      date that such form expires or becomes obsolete or after the occurrence of
      any event requiring a change in the most recent forms so delivered by it,
      and such amendments thereto or extensions or renewals thereof as may be
      reasonably requested by the Agent, in each case certifying that such
      Lender is entitled to receive payments under this Agreement and the Note
      without deduction or withholding of any United States federal income
      taxes, unless an event (including without limitation any change in treaty,
      law or regulation) has occurred prior to the date on which any such
      delivery would otherwise be required which renders all such forms
      inapplicable or which would prevent such Lender from duly completing and
      delivering any such form with respect to it and such Lender advises the
      Agent that it is not capable of receiving payments without any deduction
      or withholding of United States federal income tax.

      11.06. Consents and Approvals.

                                       54
<PAGE>

            a. Each of the following shall require the approval or consent of
      the Required Lenders:

                  i. Declaring the Notes to be immediately due and payable
            following an Event of Default or any rescission of any such
            acceleration;

                  ii. Approval of the exercise of rights and remedies under the
            Loan Documents following an Event of Default;

                  iii. Appointment of a successor Agent or removal of Agent;

                  iv. Approval of Post-Default Plan (defined in Section
            11.07(d));

                  v. Approval of a new Mortgaged Property which is not a
            Restricted Asset; and

                  vi. Except as referred to in subsection (b) below, approval of
            any amendment or modification of this Agreement or any of the other
            Loan Documents, or issuance of any waiver of any material provision
            of this Agreement (including any Conditional Default or Event of
            Default) or any of the other Loan Documents;

            b. Each of the following shall require the approval or consent of
      all the Lenders:

                  i. Extension of the Maturity Date (beyond any extension
            permitted herein) or forgiveness of all or any portion of the
            principal amount of the Loan or any accrued interest thereon, or any
            other amendment of this Agreement or the other Loan Documents which
            would reduce the interest rate options or the rate at which fees are
            calculated or forgive any loan fee, or extend the time of payment of
            any principal, interest or fees;

                  ii. Reduction of the percentage specified in the definition of
            Required Lenders;

                  iii. Increasing of the amount of the Loan or any Lender's
            Commitment;

                  iv. Release of Borrower, Guarantor or any lien on any material
            collateral (including the Mortgaged Properties) (except as Borrower
            is entitled to under the Loan Documents);

                  v. Approval of a Restricted Asset as a Mortgaged Property; and

                                       55
<PAGE>

                  vi. Amendment of the provisions of this Article XI.

            c. In addition to the required consents or approvals referred to in
      subsections (a) and (b) above, the Agent may at any time request
      instructions from the Required Lenders with respect to any actions or
      approvals which, by the terms of this Agreement or of any of the Loan
      Documents, the Agent is permitted or required to take or to grant without
      instructions from any Lenders, and if such instructions are promptly
      requested, the Agent shall be absolutely entitled to refrain from taking
      any action or to withhold any approval and shall not be under any
      liability whatsoever for refraining from taking any action or withholding
      any approval under any of the Loan Documents until it shall have received
      such instructions from the Required Lenders. Without limiting the
      foregoing, no Lender shall have any right of action whatsoever against any
      Agent as a result of such Agent acting or refraining from acting under
      this Agreement or any of the other Loan Documents in accordance with the
      instructions of the Required Lenders or, where applicable, all Lenders.
      The Agent shall promptly notify each Lender at any time that the Required
      Lenders have instructed the Agent to act or refrain from acting pursuant
      hereto. Each Lender hereby agrees to approve or disapprove a request by
      Borrower to add new Mortgaged Properties within ten (10) Business Days
      after receipt of the information set forth in Exhibit K hereto.

            d. Each Lender authorizes and directs the Agent to enter into the
      Loan Documents other than this Agreement for the benefit of the Lenders.
      Each Lender agrees that any action taken by the Agent at the direction or
      with the consent of the Required Lenders in accordance with the provisions
      of this Agreement or any other Loan Document, and the exercise by the
      Agent at the direction or with the consent of the Required Lenders of the
      powers set forth herein or therein, together with such other powers as are
      reasonably incidental thereto, shall be authorized and binding upon all
      Lenders, except for actions specifically requiring the approval of all
      Lenders. All communications from the Agent to the Lenders requesting
      Lender's determination, consent, approval or disapproval (i) shall be
      given in the form of a written notice to each Lender, (ii) shall be
      accompanied by a description of the matter or item as to which such
      determination, approval, consent or disapproval is requested, or shall
      advise each Lender where such matter or item may be inspected, or shall
      otherwise describe the matter or issue to be resolved, (iii) shall
      include, if reasonably requested by a Lender and to the extent not
      previously provided to such Lender, written materials and a summary of all
      oral information provided to the Agent by Borrower in respect of the
      matter or issue to be resolved, and (iv) shall include the Agent's
      recommended course of action or determination in respect thereof. Each
      Lender shall reply promptly, but in any event within ten (10) Business
      Days after receipt of the request therefor from the Agent (the " Lender
      Reply Period"). Unless a Lender shall give written notice to the Agent
      that it objects to the recommendation or determination of the Agent
      (together with a written explanation of the reasons behind such objection)
      within the Lender Reply Period, such Lender shall be deemed to have
      approved of or consented to such recommendation or determination. With
      respect to decisions requiring the approval of the Required Lenders or all
      Lenders, the Agent shall upon receiving the required approval or consent
      follow the

                                       56
<PAGE>

      course of action or determination recommended to the Lenders by the Agent
      or such other course of action recommended by the Required Lenders.

      11.07. Consents and Approvals. a. The Agent is hereby authorized on behalf
      of all Lenders, without the necessity of any notice to or further consent
      from any Lender, at any time and from time to time, to take any action
      with respect to any collateral for the Loan or any Loan Document which may
      be necessary to preserve and maintain such collateral or to perfect and
      maintain perfected the liens upon such collateral granted pursuant to this
      Agreement and the other Loan Documents.

            b. Except as provided in this Agreement, the Agent shall have no
      obligation whatsoever to any Lender or to any other person or entity to
      assure that any collateral exists or is owned by Borrower or is cared for,
      protected or insured or has been encumbered or that the liens granted
      herein or in any of the other Loan Documents or pursuant hereto or thereto
      have been properly or sufficiently or lawfully created, perfected,
      protected or enforced or are entitled to any particular priority.

            c. Should the Agent commence any proceeding or in any way seek to
      enforce the Agent's or the Lenders' rights or remedies under the Loan
      Documents, irrespective of whether as a result thereof the Agent shall
      acquire title to any collateral, each Lender, upon demand therefor from
      time to time, shall contribute its share (based on its Percentage) of the
      reasonable costs and/or expenses of any such enforcement or acquisition,
      including, but not limited to, fees of receivers or trustees, court costs,
      title company charges, filing and recording fees, appraisers' fees and
      fees and expenses of attorneys to the extent not otherwise reimbursed by
      Borrower. Without limiting the generality of the foregoing, each Lender
      shall contribute its share (based on its Percentage) of all reasonable
      costs and expenses incurred by the Agent (including reasonable attorneys'
      fees and expenses) if the Agent employ counsel for advice or other
      representation (whether or not any suit has been or shall be filed) with
      respect to any collateral for the Loan or any part thereof, or any of the
      Loan Documents, or the attempt to enforce any security interest or lien on
      any collateral, or to enforce any rights of the Agent or the Lenders or
      any of Borrower's or any other party's obligations under any of the Loan
      Documents, but not with respect to any dispute between any Agent and any
      other Lender(s). It is understood and agreed that in the event the Agent
      determines it is necessary to engage counsel for Lender from and after the
      occurrence of a Default or Event of Default, said counsel shall be
      selected by the Agent and written notice of such selection, together with
      a copy of such counsel's engagement letter and fee estimate, shall be
      delivered to the Lenders.

            d. In the event that all or any portion of the collateral for the
      Loan is acquired by the Agent as the result of the exercise of any
      remedies hereunder or under any other Loan Document, or is retained in
      satisfaction of all or any part of Borrower's obligations under the Loan
      Documents, title to any such collateral or any portion thereof shall be
      held in the name of the Agent or a nominee or subsidiary of Agent, as
      agent, for the ratable benefit of the Agent and the Lenders. The Agent
      shall prepare a recommended course of action for such collateral (the
      "Post-Default Plan"), which shall be subject to the approval

                                       57
<PAGE>

      of the Required Lenders. The Agent shall administer the collateral in
      accordance with the Post-Default Plan, and upon demand therefor from time
      to time, each Lender will contribute its share (based on its Percentage)
      of all reasonable costs and expenses incurred by the Agent pursuant to the
      Post-Default Plan, including without limitation, any operating losses and
      all necessary operating reserves. To the extent there is net operating
      income from such collateral, the Agent shall, in accordance with the
      Post-Default Plan, determine the amount and timing of distributions to the
      Lenders. All such distributions shall be made to the Lenders in accordance
      with their respective Percentages. In no event shall the provisions of
      this subsection or the Post-Default Plan require the Agent or any Lender
      to take an action which would cause such Lender to be in violation of any
      applicable regulatory requirements.

      11.08. Lender Actions Against Borrower or the Collateral. Each Lender
agrees that it will not take any action, nor institute any actions or
proceedings, against Borrower or any other Person hereunder or under any other
Loan Documents with respect to exercising claims against the Borrower or rights
in any Collateral without the consent of the Required Lenders. With respect to
any action by the Agent to enforce the rights and remedies of the Agent and the
Lenders with respect to the Borrower and any collateral in accordance with the
terms of this Agreement, each Bank hereby consents to the jurisdiction of the
court in which such action is maintained.

      11.09. Assignment and Participation. No Lender shall be permitted to
assign or sell all or any portion of its rights and obligations under this
Agreement to Borrower or any Affiliate of Borrower.

      11.10. Ratable Sharing. Subject to Sections 11.04 and 11.05, Lenders agree
among themselves that (i) with respect to all amounts received by them which are
applicable to the payment of the Loan, equitable adjustment will be made so
that, in effect, all such amounts will be shared among them ratably in
accordance with their Percentages, whether received by voluntary payment, by the
exercise of the right of set-off or bankers' lien, by counterclaim or cross
action or by the enforcement of any or all of the Loan Documents or any
collateral and (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, bankers' lien or otherwise, receive
payment of a proportion of the aggregate amount of the Loan held by it which is
greater than its Percentage of the payments on account of the Loan, the one
receiving such excess payment shall purchase, without recourse or warranty, an
undivided interest and participation (which it shall be deemed to have done
simultaneously upon the receipt of such payment) in such obligations owed to the
others so that all such recoveries with respect to such obligations shall be
applied ratably in accordance with their Percentages; provided, that if all or
part of such excess payment received by the purchasing party is thereafter
recovered from it, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest except to the extent
the purchasing party is required to pay interest in connection with such
recovery. Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.

                                       58
<PAGE>

      11.11. General Immunity. Neither Agent nor any of its directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or them hereunder or under any other Loan Document or
in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.

      11.12. No Responsibility for Loan, Recitals, etc. Neither Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any use of the Loan;
(ii) the performance or observance of any of the covenants or agreements of any
party to any Loan Document; (iii) the satisfaction of any condition specified in
this Agreement, except receipt of items purporting to be the items required to
be delivered to any Agent; or (iv) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith, provided that the foregoing shall not release Agent from liability
for its gross negligence or willful misconduct.

      11.13. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by all the
Lenders (or the Required Lenders, if such action may be directed hereunder by
the Required Lenders), and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of Lenders. Each Lender, severally
to the extent of its Percentage, hereby agrees to indemnify Agent against and
hold it harmless from any and all liability, cost and expense that it may incur
by reason of taking or continuing to take any such action, provided that the
foregoing shall not require any Lender to indemnify Agent from liability for its
gross negligence or willful misconduct.

      11.14. Employment of Agents and Counsel. The Agent may undertake any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be liable to Lenders,
except as to money or securities received by them or their authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.

      11.15. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
an employee of Agent, provided that the foregoing shall not release the Agent
from liability for its gross negligence or willful misconduct. Any such counsel
shall be deemed to be acting on behalf of Lender in assisting the Agent with
respect to the Loan, but shall not be precluded from also representing Agent in
any matter in which the interests of Agent and the other Lenders may differ.

      11.16. Agent's Reimbursement and Indemnification. Lenders agree to
reimburse and indemnify Agent ratably (i) for any amounts (excluding principal
and interest on the Loan and loan fees) not reimbursed by Borrower for which
Agent is entitled to reimbursement under the

                                       59
<PAGE>

Loan Documents, (ii) for any other expenses incurred by Agent on behalf of
Lender, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents, if not paid by Borrower, (iii) for any
expenses incurred by Agent on behalf of Lender which may be necessary or
desirable to preserve and maintain collateral or to perfect and maintain
perfected the liens upon the collateral granted pursuant to this Agreement and
the other Loan Documents, if not paid by Borrower, (iv) for any amounts and
other expenses incurred by Agent on behalf of Lender in connection with any
default by any Lender hereunder or under the other Loan Documents, if not paid
by such Lender, and (v) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of the Loan Documents or any
other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, 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 Agent.

      11.17. Rights as a Lender. With respect to its Commitment, if any, Agent
shall have the same rights, powers and obligations hereunder and under any other
Loan Document as any Lender and may exercise such rights and powers as though it
were not an Agent, and the term "Lender" or " Lenders" shall, unless the context
otherwise indicates, include Agent in its individual capacities. The Borrower
and each Lender acknowledges and agrees that Agent and/or its Affiliates may
accept deposits from, lend money to, hold other investments in, and generally
engage in any kind of trust, debt, equity or other transaction or have other
relationships, in addition to those contemplated by this Agreement or any other
Loan Document, with Borrower or any of its Affiliates in which Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.

      11.18. Lender's Credit Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements and other information prepared by Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.

      11.19. Notice of Events of Default. Should Agent receive any written
notice of the occurrence of a default or Event of Default, or should the Agent
send Borrower a notice of Default or Event of Default, the Agent shall promptly
furnish a copy thereof to each Lender.

      11.20. Successor Agent.

            a. Agent may resign from the performance of all its functions and
      duties hereunder at any time by giving at least thirty (30) days prior
      written notice to Lenders and Borrower. Such resignation shall take effect
      on the date set forth in such notice or as otherwise provided below. Such
      resignation by Agent as agent shall not affect its obligations hereunder,
      if any, as a Lender.

                                       60
<PAGE>

            b. Upon resignation by, or removal of, the Agent, or any successor
      Agent, the Required Lenders shall appoint a successor Agent with the
      consent of Borrower, which shall not be unreasonably withheld, conditioned
      or delayed (provided that no consent of Borrower shall be required if the
      successor Agent is also a Lender or if an Event of Default then exists).
      If no successor Agent shall have been so appointed by the Required
      Lenders, and shall have accepted such appointment within thirty (30) days
      after the retiring Agent's giving notice of resignation, then the retiring
      Agent may appoint a successor Agent with the consent of Borrower, which
      shall not be unreasonably withheld, conditioned or delayed (provided that
      no consent of Borrower shall be required if the successor Agent is also a
      Lender or if an Event of Default then exists). Upon the acceptance of any
      appointment as an 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 Agent and the Agent, and the retiring
      Agent shall be discharged from its duties and obligations hereunder and
      under the other Loan Documents other than its liability, if any, for
      duties and obligations accrued prior to its retirement. After any retiring
      Agent's resignation hereunder as an Agent, the provisions of this Article
      25 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 an Agent
      hereunder and under the other Loan Documents.

      11.21. Additional Duties of Agent.

            a. The Agent shall keep proper accounts and records reflecting the
      interests of each Lender in the Loan and the Loan Documents; such accounts
      and records shall be maintained in accordance with the Standard of Care
      (as hereinafter defined), and shall be available for inspection by any
      lender during regular business hours upon reasonable prior notice fro such
      Lender. As used herein, the term "Standard of Care" shall mean the same
      standard of diligence, care and judgment as Agent uses with loans
      comparable to the Loan which Agent makes, holds and administers for its
      own account.

            b. Agent shall furnish to each Lender, promptly after Agent's
      receipt thereof, true and complete copies of all financial reports,
      statements and accounts submitted by Borrower or by other on Borrower's
      behalf in accordance with the Loan Documents or otherwise with respect to
      the Loan.

            c. Agent shall provide each Lender with (i) true and complete copies
      of all notices and other written communications which Agent shall receive
      from Borrower or Guarantor with respect to the Loan promptly after Agent's
      receipt of the same; and (ii) true and correct copies of any and all
      notices which Agent may furnish to Borrower or Guarantor with respect to
      the Loan, promptly after sending the same to Borrower or Guarantor.

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

                                       61
<PAGE>

         SIGNATURE PAGE OF WINDROSE MEDICAL PROPERTIES, L.P. TO AMENDED
                 AND RESTATED SECURED REVOLVING CREDIT AGREEMENT

                                   "BORROWER"

                                   WINDROSE MEDICAL PROPERTIES, L.P., a
                                   Virginia limited partnership

                                   By: Windrose Medical Properties Trust, a
                                       Maryland real estate investment trust,
                                       its general partner

                                       By: /s/ Frederick L. Farrar
                                           ---------------------------------
                                           Frederick L. Farrar, President

<PAGE>

          SIGNATURE PAGE OF THE HUNTINGTON NATIONAL BANK TO AMENDED AND
                   RESTATED SECURED REVOLVING CREDIT AGREEMENT

                               "LENDER"

                               THE HUNTINGTON NATIONAL BANK, a national banking
                               association, for itself and as agent for the
                               Lenders

                               By: /s/ Jacqucline E. McNcclan
                                   --------------------------------------
                                   Jacqucline E. McNcclan, Vice President

Commitment:            $20,000,000

Percentage Interest:    28.5714285%

<PAGE>

         SIGNATURE PAGE OF BANK ONE, NA TO AMENDED AND RESTATED SECURED
                           REVOLVING CREDIT AGREEMENT

                           "LENDER"

                           BANK ONE, NA, a national banking association

                           By: /s/ Anne Quenette Kruer
                               ----------------------------------
                           Printed: Anne Quenette Kruer

                           Title: Assistant Vice President

Commitment:           $15,000,000

Percentage Interest:  21.428571%

<PAGE>

               SIGNATURE PAGE OF RAYMOND JAMES, FSB TO AMENDED AND
                   RESTATED SECURED REVOLVING CREDIT AGREEMENT

                           "LENDER"

                           RAYMOND JAMES, FSB, a national banking association

                           By: /s/ Sean C. Dunne
                               -------------------------
                           Printed: Sean C. Dunne
                           Title: Assistant Vice President

Commitment:           $10,000,000

Percentage Interest:  14.2857142%

<PAGE>

          SIGNATURE PAGE OF FIRST NATIONAL BANK & TRUST TO AMENDED AND
                   RESTATED SECURED REVOLVING CREDIT AGREEMENT

                                 "LENDER"

                                 FIRST NATIONAL BANK & TRUST, a national banking
                                 association

                                 By: /s/ Robert B. Scott
                                     ------------------------------
                                     Robert B. Scott, Vice President

Commitment:           $10,000,000

Percentage Interest:  14.2857142%

<PAGE>

              SIGNATURE PAGE OF FLEET NATIONAL BANK TO AMENDED AND
                  RESTATED SECURED REVOLVING CREDIT AGREEMENT

                             "LENDER"

                             FLEET NATIONAL BANK, a national banking association

                             By: /s/ Bill Lamb
                                 ----------------------------
                             Printed: Bill Lamb

                             Title: VP

Commitment:           $15,000,000

Percentage Interest:  21.428571%
<PAGE>

                                   SCHEDULE 1

1.    A certain Replacement Credit Note in the original principal amount of
      $20,000,000 executed by Windrose Medical Properties, L.P. payable to the
      order of The Huntington National Bank, dated December 30, 2003, which
      Replacement Credit Note has a maturity of September 30, 2005.

2.    A certain Replacement Credit Note in the original principal amount of
      $15,000,000 executed by Windrose Medical Properties, L.P. payable to the
      order of Bank One, NA, dated December 30, 2003, which Replacement Credit
      Note has a maturity of September 30, 2005.

3.    A certain Replacement Credit Note in the original principal amount of
      $10,000,000 executed by Windrose Medical Properties, L.P. payable to the
      order of Raymond James, FSB, dated December 30, 2003, which Replacement
      Credit Note has a maturity of September 30, 2005.

4.    A certain Replacement Credit Note in the original principal amount of
      $10,000,000 executed by Windrose Medical Properties, L.P. payable to the
      order of First National Bank & Trust, dated December 30, 2003, which
      Replacement Credit Note has a maturity of September 30, 2005.

5.    A certain Replacement Credit Note in the original principal amount of
      $15,000,000 executed by Windrose Medical Properties, L.P. payable to the
      order of Fleet National Bank, dated December 30, 2003, which Replacement
      Credit Note has a maturity of September 30, 2005.

<PAGE>

                                   SCHEDULE 2

                          The Huntington National Bank

                                  Bank One, NA

                               Fleet National Bank

                             Raymond James Bank, FSB

                           First National Bank & Trust

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