Document:

exhibit10-1.htm

    EXHIBIT 10.1

    HI/FN,
INC.

     

    SEVERANCE
AND CHANGE OF CONTROL AGREEMENT

     

    This
Severance and Change of Control Agreement (the “Agreement”) is made and
entered into by and between [Executive Name] (“Executive”) and hi/fn, Inc. a
Delaware corporation (the “Company”) effective as of May
14, 2008 (the “Effective
Date”).

     

    RECITALS

     

    1.      It
is possible that the Company could terminate Executive’s employment with the
Company. The Board of Directors of the Company (the “Board”) recognizes that
such consideration can be a distraction to Executive and can cause Executive to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of Executive,
notwithstanding the possibility, threat or occurrence of such a
termination.

     

    2.      The
Board believes that it is in the best interests of the Company and its
stockholders to provide Executive with an incentive to continue his or her
employment and to motivate Executive to maximize the value of the Company for
the benefit of its stockholders.

     

    3.      The
Board believes that it is imperative to provide Executive with certain severance
benefits upon certain terminations of Executive’s employment with the
Company.  These benefits will provide Executive with enhanced
financial security and incentive and encouragement to remain with the
Company.

     

    4.      Certain
capitalized terms used in the Agreement are defined in Section 6
below.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

     

    1.      Term of
Agreement.  This Agreement will have an initial term of three
(3) years commencing on the Effective Date. Notwithstanding the previous
sentence, in the event of a Change of Control within three years of the
Effective Date, the term of the Agreement will extend through the one-year
anniversary of such Change of Control.

     

    2.      At-Will
Employment.  The Company and Executive acknowledge that
Executive’s employment is and will continue to be at-will, as defined under
applicable law, except as may otherwise be specifically provided under the terms
of any written formal employment agreement or offer letter between the Company
and Executive (an “Employment
Agreement”). If Executive’s employment terminates for any reason,
Executive will not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, including any payments or
benefits Executive would have otherwise been entitled to under his or her
Employment Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.      Severance
Benefits.

     

    (a)        Involuntary Termination
other than for Cause, Death or Disability Prior to a Change of Control or after
Twelve Months Following a Change of Control.  If the Company
(or any parent or subsidiary of the Company employing Executive) terminates
Executive’s employment with the Company (or any parent or subsidiary of the
Company) for a reason other than Cause, Executive becoming Disabled or
Executive’s death, any of which occur prior to a Change of Control or after
twelve (12) months following a Change of Control, then, subject to Section 4,
Executive will receive the following severance from the Company:

     

    (i)  Accrued
Compensation.  Executive will be entitled to receive all
accrued vacation, expense reimbursements and any other benefits due to Executive
through the date of termination of employment in accordance with the Company’s
then existing employee benefit plans, policies and arrangements.

     

    (ii)  Severance
Payment.  Executive will be paid continuing payments of
severance pay at a rate equal to Executive’s base salary rate, as then in
effect, for six (6) months from the date of such termination, to be paid
periodically in accordance with the Company’s normal payroll
policies.

     

    (iii)  Continued Executive
Benefits.  Executive will receive Company-paid coverage during
the six (6) month period following such termination for Executive and
Executive’s eligible dependents under the Company’s Benefit Plans.

     

    (iv)  Payments or Benefits
Required by Law.  Executive will receive such other
compensation or benefits from the Company as may be required by law (for
example, “COBRA” coverage under Section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”)).

     

    (b)        Involuntary Termination
other than for Cause, Death or Disability within Twelve Months of a Change of
Control.  If within twelve (12) months following a Change of
Control (A) Executive terminates his or her employment with the Company (or any
parent or subsidiary of the Company) for Good Reason or (B) the Company (or any
parent or subsidiary of the Company) terminates Executive’s employment for other
than cause, Executive becoming Disabled or Executive’s death, then, subject to
Section 4, Executive will receive the following severance from the
Company:

     

    (i)  Accrued
Compensation.  Executive will be entitled to receive all
accrued vacation, expense reimbursements and any other benefits due to Executive
through the date of termination of employment in accordance with the Company’s
then existing employee benefit plans, policies and arrangements.

     

    (ii)  Severance
Payment.  Executive will be paid continuing payments of
severance pay at a rate equal to Executive’s base salary rate, as then in
effect, for twelve (12) months from the date of such termination, to be paid
periodically in accordance with the Company’s normal payroll
policies.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii)  Options and Restricted
Stock.  50% of the unvested shares subject to all of
Executive’s outstanding rights to purchase or receive shares of the Company’s
common stock (including, without limitation, through awards of stock options,
stock appreciation rights, restricted stock units or similar awards) whether
acquired by Executive on, before or after the date of this Agreement and 50% of
any of Executive’s shares of Company common stock subject to a Company right of
repurchase or forfeiture upon Executive’s termination of employment for any
reason whether acquired by Executive on, before or after the date of this
Agreement, will immediately vest upon such termination.  In all other
respects, such awards will continue to be subject to the terms and conditions of
the plans, if any, under which they were granted and any applicable agreements
between the Company and Executive.

     

    (iv)  Continued Executive
Benefits.  Executive will receive Company-paid coverage during
the twelve (12) month period following such termination for Executive and
Executive’s eligible dependents under the Company’s Benefit Plans.

     

    (v)  Payments or Benefits
Required by Law.  Executive will receive such other
compensation or benefits from the Company as may be required by law (for
example, “COBRA” coverage under Section 4980B of the Code).

     

    (c)        Termination due to Death or
Disability.  If Executive’s employment with the Company (or any
parent or subsidiary of the Company) is terminated due to Executive’s death or
Executive’s becoming Disabled, then Executive or Executive’s estate (as the case
may be) will (i) receive the earned but unpaid base salary through the date of
termination of employment, (ii) receive all accrued vacation, expense
reimbursements and any other benefits due to Executive through the date of
termination of employment in accordance with Company-provided or paid plans,
policies and arrangements, and (iii) not be entitled to any other compensation
or benefits from the Company except to the extent required by law (for example,
“COBRA” coverage under Section 4980B of the Code).

     

    (d)        Other
Terminations.  If Executive voluntarily terminates Executive’s
employment with the Company or any parent or subsidiary of the Company (other
than for Good Reason within twelve (12) months of a Change of Control) or if the
Company (or any parent or subsidiary of the Company employing Executive)
terminates Executive employment with the Company (or any parent or subsidiary of
the Company) for Cause, the Executive will (i) receive his or her earned by
unpaid base salary through the date of termination of employment, (ii) receive
all accrued vacation, expense reimbursement and any other benefits due to
Executive through the date of termination of employment in accordance with
established Company plans, policies and arrangements, and (iii) not be entitled
to any other compensation or benefits (including without limitation, accelerated
vesting of any equity awards) from the Company except to the extent provided
under agreements(s) relating to any equity awards or as may be required by law
(for example, “COBRA” coverage under Section 4980B of the Code).

     

    (e)        Exclusive
Remedy.  In the event of a termination of Executive’s
termination of employment with the Company (or any parent or subsidiary of the
Company), the provisions of this Section 3 are intended to be and are exclusive
and in lieu of any other rights or remedies to which Executive or the Company
may otherwise be entitled (including any contrary provisions in the Employment
Agreement), whether at law, tort or contract, in equity, or under this
Agreement.  

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Executive
will be entitled to no benefits, compensation or other payments or rights upon
termination of employment other than those benefits expressly set forth in this
Section 3.

     

    4.      Conditions to Receipt of
Severance.

     

    (a)        Separation Agreement and
Release of Claims.  The receipt of any severance pursuant to
Section 3 will be subject to Executive signing and not revoking a separation
agreement and release of claims in a form reasonably acceptable to the
Company.  No severance pursuant to Section 3 will be paid or provided
until the separation agreement and release agreement becomes
effective.

     

    (b)        Nonsolicitation.  The
receipt of any severance benefits pursuant to Section 3 will be subject to
Executive not violating the provisions of Section 7.  In the event
Executive breaches the provisions of Section 7, all continuing payments and
benefits to which Executive may otherwise be entitled pursuant to Section 3 will
immediately cease.

     

    (c)        Section
409A.  Any cash severance to be paid pursuant to Sections
3(a)(ii) and 3(b)(ii) will not be paid during the six-month period following
Executive’s termination of employment, unless the Company reasonably determines
that paying such amounts immediately following Executive’s termination of
employment would not result the imposition of additional tax under Section 409A
of the Code (“Section 409A”), in which case such amounts shall be paid in
accordance with normal payroll practices.  If no cash severance is
paid to Executive as a result of the previous sentence, on the first day
following such six-month period, the Company will pay Executive a lump-sum
amount equal to the cumulative amounts that would have otherwise been paid to
Executive pursuant to Sections 3(a)(ii) and 3(b)(ii).  Thereafter,
Executive will receive his cash severance payments pursuant to Sections 3(a)(ii)
and 3(b)(ii) in accordance with the Company’s normal payroll
practices.

     

    5.      Limitation of
Payments.  In the event that the severance and other benefits
provided for in this agreement or otherwise payable to Executive (i) constitute
“parachute payments” within the meaning of Section 280G of the Code and (ii) but
for this Section 5, would be subject to the excise tax imposed by Section 4999
of the Code, then Executive’s severance benefits under Section 3 will be
either:

     

    (a)        delivered
in full, or

     

    (b)        delivered
as to such lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the
Code,

     

    whichever
of the foregoing amounts, taking into account the applicable federal, state and
local income taxes and the excise tax imposed by Section 4999, results in the
receipt by Executive on an after-tax basis, of the greatest amount of severance
benefits, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code. Unless the Company and Executive
otherwise agree in writing, any determination required under this Section 5 will
be made in writing by the Company’s independent public accountants immediately
prior to Change of Control (the “Accountants”), whose
determination will be conclusive and binding upon Executive and the Company for
all purposes.  For purposes of making the calculations required by
this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    taxes and
may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code.   The Company and Executive
will furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
Section.  The Company will bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section 5.

     

    6.      Definition of
Terms.  The following terms referred to in this Agreement will
have the following meanings:

     

    (a)        Benefit
Plans.  “Benefit Plans” means plans,
policies or arrangements that the Company sponsors (or participates in) and that
immediately prior to Executive’s termination of employment provide Executive
and/or Executive’s eligible dependents with medical, dental, and/or vision
benefits.  Benefit Plans do not include any other type of benefit
(including, but not by way of limitation, disability, life insurance or
retirement benefits).  A requirement that the Company provide
Executive and Executive’s eligible dependents with coverage under the Benefit
Plans will not be satisfied unless the coverage is no less favorable than that
provided to Executive and Executive’s eligible dependents immediately prior to
Executive’s termination of employment.  Notwithstanding any contrary
provision of this Section 6(a), but subject to the immediately preceding
sentence, the Company may, at its option, satisfy any requirement that the
Company provide coverage under any Benefit Plan by (i) reimbursing Executive’s
premiums under COBRA after Executive has properly elected continuation coverage
under COBRA (in which case Executive will be solely responsible for electing
such coverage for Executive and Executive’s eligible dependents), or (ii)
instead providing coverage under a separate plan or plans providing coverage
that is no less favorable or by paying Executive a lump sum payment sufficient
to provide Executive and Executive’s eligible dependents with equivalent
coverage under a third party plan that is reasonably available to Executive and
Executive’s eligible dependents.

     

    (b)        Cause.  “Cause” means (i) a failure by
Executive to substantially perform Executive’s duties as an employee, other than
a failure resulting from the Executive’s complete or partial incapacity due to
physical or mental illness or impairment, (ii) a willful act by Executive that
constitutes misconduct, (iii) circumstances where Executive intentionally or
negligently imparts material confidential information relating to the Company or
its business to competitors or to other third parties other than in the course
of carrying out Executive’s duties, (iv) a material violation by Executive of a
federal or state law or regulation applicable to the business of the Company,
(v) a willful violation of a material Company employment policy or the Company’s
insider trading policy, (vi) any act or omission by Executive constituting
dishonesty (other than a good faith expense account dispute) or fraud, with
respect to the Company or any of its affiliates, or any other misconduct which
is injurious to the financial condition of the Company or any of its affiliates
or is injurious to the business reputation of the Company or any of its
affiliates, (vii) Executive’s failure to cooperate with the Company in
connection with any actions, suits, claims, disputes or grievances against the
Company or any of its officers, directors, employees, shareholders, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns,
whether or not such cooperation would be adverse to Executive’s own interest, or
(viii) Executive’s conviction or plea of guilty or no contest to a
felony.

     

    (c)        Change of
Control.  “Change of Control” means the
occurrence of any of the following:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

        (i)        the
sale, lease, conveyance or other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, as amended), entity or group of persons acting
in concert;

     

        (ii)       
any person or group of persons becoming the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s
then outstanding voting securities;

     

        (iii)        a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its controlling entity) at least 50% of the total voting
power represented by the voting securities of the Company or such surviving
entity (or its controlling entity) outstanding immediately after such merger or
consolidation; or

                    

                        (iv)        a
contest for the election or removal of members of the Board that results in the
removal from the Board of at least 50% of the incumbent members of the
Board.

     

    (d)        Disability.  “Disability” will mean that
Executive has been unable to perform the principal functions of Executive’s
duties due to a physical or mental impairment, but only if such inability has
lasted or is reasonably expected to last for at least six (6)
months.  Whether Executive has a Disability will be determined by the
Board based on evidence provided by one or more physicians selected by the
Board.

     

    (e)        Good
Reason.  “Good
Reason” means (without Executive’s consent) (i) a material reduction in
Executive’s title, authority, status, or responsibilities, unless Executive is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) the
reduction of Executive’s aggregate base salary and target bonus opportunity as
in effect immediately prior to such reduction (other than a reduction applicable
to executives generally), or (iii) a relocation of Executive’s principal place
of employment by more than fifty (50) miles.

     

    7.      Non-Solicitation.  For
a period beginning on the Effective Date and ending twelve (12) months after
Executive ceases to be employed by the Company, Executive, directly or
indirectly, whether as employee, owner, sole proprietor, partner, director,
member, consultant, agent, founder, co-venturer or otherwise, will
not:  (i) solicit, induce or influence any person to leave employment
with the Company; or (ii) directly or indirectly solicit business from any of
the Company’s customers and users on behalf of any business that directly
competes with the principal business of the Company.

     

    8.      Litigation.  Executive
agrees to cooperate with the Company beginning on the Effective Date and
thereafter (including following Executive’s termination of employment for any
reason), by making himself or herself reasonably available to testify on behalf
of the Company or any of its affiliates in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and to assist the
Company, or any affiliate, in any such action, suit, or proceeding, by providing
information and meeting and consulting with the Board or it representatives or
counsel, or 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    representatives
or counsel to the Company, or any affiliate as reasonably
requested.  The Company agrees to reimburse Executive for all expenses
actually incurred in connection with his or her provision of testimony or
assistance.

     

    9.      Successors.

     

    (a)        The Company’s
Successors.  Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
will assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession.  For all purposes under the Agreement, the term “Company” will include any
successor to the Company’s business and/or assets which executes and delivers
the assumption agreement described in this Section 9(a) or which becomes bound
by the terms of this Agreement by operation of law.

     

    (b)        The Executive’s
Successors.  The terms of this Agreement and all rights of
Executive hereunder will inure to the benefit of, and be enforceable by,
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

     

    10.      Notice.

     

    (a)         General.  Notices
and all other communications contemplated by this Agreement will be in writing
and will be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid.  In the case of Executive, mailed notices will be
addressed to him or her at the home address which he or she most recently
communicated to the Company in writing.  In the case of the Company,
mailed notices will be addressed to its corporate headquarters, and all notices
will be directed to the attention of its President.

     

    (b)        Notice of
Termination.  Any termination by the Company for Cause or by
Executive for Good Reason or as a result of a voluntary resignation will be
communicated by a notice of termination to the other party hereto given in
accordance with Section 10(a) of this Agreement.  Such notice will
indicate the specific termination provision in this Agreement relied upon, will
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and will specify the
termination date (which will not be more than thirty (30) days after the giving
of such notice).

     

    11.      Miscellaneous
Provisions.

     

    (a)        Not Duty to
Mitigate.  Executive will not be required to mitigate the
amount of any payment contemplated by this Agreement, nor will any such payment
be reduced by any earnings that Executive may receive from any other
source.

     

    (b)        Waiver.  No
provision of this Agreement will be modified, waived or discharged unless the
modification, waiver or discharge is agreed to in writing and signed by
Executive and by an authorized officer of the  Company (other than
Executive).  No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    other
party will be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

     

    (c)        Headings.  All
captions and section headings used in this Agreement are for convenient
reference only and do not form a part of this Agreement.

     

    (d)        Entire
Agreement.  This Agreement constitutes the entire agreement of
the parties hereto and supersedes in their entirety all prior representations,
understandings, undertakings or agreements (whether oral or written and whether
expressed or implied) of the parties with respect to the subject matter hereof,
including (without limitation) to the Employment Agreement). No future
agreements between the Company and Executive may supersede this Agreement,
unless they are in writing and specifically mention this Section
11(d).

     

    (e)        Choice of
Law.  The laws of the State of California (without reference to
its choice of laws provisions) will govern the validity, interpretation,
construction and performance of this Agreement.

     

    (f)        Severability.  The
invalidity or unenforceability of any provision or provisions of this Agreement
will not affect the validity or enforceability of any other provision hereof,
which will remain in full force and effect.

     

    (g)        Withholding.  All
payments made pursuant to this Agreement will be subject to withholding of
applicable income and employment taxes.

     

    (h)        Counterparts.  This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.

     

    (Remainder
of Page Intentionally Left Blank)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by a duly authorized officer, as of the day and year set forth
below.

     

    
    

     

    
      	COMPANY:  	HI/FN,
  INC.
	 	 	 	 
	 	By:   	 	 
	 	 	 	 
	 	Title:     	 	 
	 	 	 	 
	 	 	 	 
	EMPLOYEE      	[Executive
      Name]	 
	 	 	 	 
	 	By:    	 	 
	 	 	 	 
	 	Title:Exhibit 10.1

 

Execution Version

 

TERM
LOAN AGREEMENT

 

dated as of May 15, 2008

 

among

 

AVALONBAY COMMUNITIES, INC.,

as Borrower,

 

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,

 

SUMITOMO
MITSUI BANKING CORPORATION,

WELLS
FARGO BANK, N.A., and

DEUTSCHE
BANK TRUST COMPANY AMERICAS, 

each as a Documentation Agent,

 

THE OTHER BANKS SIGNATORY HERETO,

each as a Bank,

 

J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead
Arranger,

 

and

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I            DEFINITIONS; ETC

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
  Accounting Terms

  	
  15

  
	
  Section 1.03

  	
  Computation of Time Periods

  	
  16

  
	
  Section 1.04

  	
  Rules of Construction

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II          THE LOANS

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Loans; Purpose

  	
  16

  
	
  Section 2.02

  	
  [Intentionally deleted]

  	
  17

  
	
  Section 2.03

  	
  Procedures for Advances

  	
  17

  
	
  Section 2.04

  	
  Interest Periods; Renewals

  	
  17

  
	
  Section 2.05

  	
  Interest

  	
  18

  
	
  Section 2.06

  	
  Fees

  	
  18

  
	
  Section 2.07

  	
  Notes

  	
  18

  
	
  Section 2.08

  	
  Repayments; Prepayments

  	
  18

  
	
  Section 2.09

  	
  [Intentionally Deleted]

  	
  19

  
	
  Section 2.10

  	
  Method of Payment

  	
  19

  
	
  Section 2.11

  	
  Elections, Conversions or Continuation of Loans

  	
  19

  
	
  Section 2.12

  	
  Minimum Amounts

  	
  19

  
	
  Section 2.13

  	
  Certain Notices Regarding Elections, Conversions and
  Continuations of Loans

  	
  20

  
	
  Section 2.14

  	
  Late Payment Premium

  	
  20

  
	
  Section 2.15

  	
  Incremental
  Term Loans

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III         YIELD PROTECTION;
  ILLEGALITY, ETC

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Additional Costs

  	
  22

  
	
  Section 3.02

  	
  Limitation on Types of Loans

  	
  23

  
	
  Section 3.03

  	
  Illegality

  	
  23

  
	
  Section 3.04

  	
  Treatment of Affected Loans

  	
  23

  
	
  Section 3.05

  	
  Certain Compensation

  	
  24

  
	
  Section 3.06

  	
  Capital Adequacy

  	
  24

  
	
  Section 3.07

  	
  Substitution of Banks

  	
  25

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 3.08

  	
  Applicability

  	
  26

  
	
  Section 3.09

  	
  Time for Notices

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV         CONDITIONS PRECEDENT

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Conditions Precedent to the Initial Advance

  	
  26

  
	
  Section 4.02

  	
  Conditions Precedent to Each Advance

  	
  28

  
	
  Section 4.03

  	
  Deemed Representations

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE V          REPRESENTATIONS AND WARRANTIES

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Due Organization

  	
  28

  
	
  Section 5.02

  	
  Power and Authority; No Conflicts; Compliance With
  Laws

  	
  28

  
	
  Section 5.03

  	
  Legally Enforceable Agreements

  	
  29

  
	
  Section 5.04

  	
  Litigation

  	
  29

  
	
  Section 5.05

  	
  Good Title to Properties

  	
  29

  
	
  Section 5.06

  	
  Taxes

  	
  29

  
	
  Section 5.07

  	
  ERISA

  	
  29

  
	
  Section 5.08

  	
  No Default on Outstanding Judgments or Orders, Etc

  	
  30

  
	
  Section 5.09

  	
  No Defaults on Other Agreements

  	
  30

  
	
  Section 5.10

  	
  Government Regulation

  	
  30

  
	
  Section 5.11

  	
  Environmental Protection

  	
  30

  
	
  Section 5.12

  	
  Solvency

  	
  31

  
	
  Section 5.13

  	
  Financial Statements

  	
  31

  
	
  Section 5.14

  	
  Valid Existence of Affiliates

  	
  31

  
	
  Section 5.15

  	
  Insurance

  	
  31

  
	
  Section 5.16

  	
  Accuracy of Information; Full Disclosure

  	
  31

  
	
  Section 5.17

  	
  OFAC

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI         AFFIRMATIVE COVENANTS

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Maintenance of Existence

  	
  32

  
	
  Section 6.02

  	
  Maintenance of Records

  	
  32

  
	
  Section 6.03

  	
  Maintenance of Insurance

  	
  32

  
	
  Section 6.04

  	
  Compliance with Laws; Payment of Taxes

  	
  32

  
	
  Section 6.05

  	
  Right of Inspection

  	
  32

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 6.06

  	
  Compliance With Environmental Laws

  	
  33

  
	
  Section 6.07

  	
  Maintenance of Properties

  	
  33

  
	
  Section 6.08

  	
  Payment of Costs

  	
  33

  
	
  Section 6.09

  	
  Reporting and Miscellaneous Document Requirements

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
  NEGATIVE
  COVENANTS

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Mergers Etc

  	
  36

  
	
  Section 7.02

  	
  Investments

  	
  36

  
	
  Section 7.03

  	
  Sale of Assets

  	
  36

  
	
  Section 7.04

  	
  Distributions

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  FINANCIAL
  COVENANTS

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Relationship of Total Outstanding Indebtedness to
  Capitalization Value

  	
  37

  
	
  Section 8.02

  	
  Relationship of Combined EBITDA to Combined Debt
  Service

  	
  37

  
	
  Section 8.03

  	
  Ratio of Unsecured Indebtedness to Unencumbered
  Asset Value

  	
  37

  
	
  Section 8.04

  	
  Relationship of Secured Indebtedness to
  Capitalization Value

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX         EVENTS OF DEFAULT

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Events of Default

  	
  37

  
	
  Section 9.02

  	
  Remedies

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE X          ADMINISTRATIVE AGENT; RELATIONS
  AMONG BANKS

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Appointment, Powers and Immunities of Administrative
  Agent

  	
  41

  
	
  Section 10.02

  	
  Reliance by Administrative Agent

  	
  41

  
	
  Section 10.03

  	
  Defaults

  	
  42

  
	
  Section 10.04

  	
  Rights of Administrative Agent as a Bank

  	
  42

  
	
  Section 10.05

  	
  Indemnification of Administrative Agent

  	
  42

  
	
  Section 10.06

  	
  Non-Reliance on Administrative Agent and Other Banks

  	
  42

  
	
  Section 10.07

  	
  Failure of Administrative Agent to Act

  	
  43

  
	
  Section 10.08

  	
  Resignation or Removal of Administrative Agent

  	
  43

  
	
  Section 10.09

  	
  Amendments Concerning Agency Function

  	
  44

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 10.10

  	
  Liability of Administrative Agent

  	
  44

  
	
  Section 10.11

  	
  Transfer of Agency Function

  	
  44

  
	
  Section 10.12

  	
  Non-Receipt of Funds by Administrative Agent

  	
  44

  
	
  Section 10.13

  	
  Withholding Taxes

  	
  45

  
	
  Section 10.14

  	
  [Reserved]

  	
  45

  
	
  Section 10.15

  	
  Pro Rata Treatment

  	
  45

  
	
  Section 10.16

  	
  Sharing of Payments Among Banks

  	
  45

  
	
  Section 10.17

  	
  Possession of Documents

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI         NATURE OF OBLIGATIONS

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Absolute and Unconditional Obligations

  	
  46

  
	
  Section 11.02

  	
  Non-Recourse to Borrower’s Principals

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII       MISCELLANEOUS

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Binding Effect of Request for Advance

  	
  47

  
	
  Section 12.02

  	
  Amendments and Waivers

  	
  47

  
	
  Section 12.03

  	
  Usury

  	
  48

  
	
  Section 12.04

  	
  Expenses; Indemnification

  	
  48

  
	
  Section 12.05

  	
  Assignment; Participation

  	
  49

  
	
  Section 12.06

  	
  Documentation Satisfactory

  	
  51

  
	
  Section 12.07

  	
  Notices

  	
  51

  
	
  Section 12.08

  	
  Setoff

  	
  53

  
	
  Section 12.09

  	
  Table of Contents; Headings

  	
  53

  
	
  Section 12.10

  	
  Severability

  	
  53

  
	
  Section 12.11

  	
  Counterparts

  	
  53

  
	
  Section 12.12

  	
  Integration

  	
  53

  
	
  Section 12.13

  	
  Governing Law

  	
  53

  
	
  Section 12.14

  	
  Waivers

  	
  53

  
	
  Section 12.15

  	
  Jurisdiction; Immunities

  	
  54

  
	
  Section 12.16

  	
  USA Patriot Act

  	
  55

  

 

iv

 

EXHIBITS

 

	
  EXHIBIT A

  	
  -

  	
  Authorization Letter

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  -

  	
  Note

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  -

  	
  Information Regarding Material
  Affiliates

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D

  	
  -

  	
  Solvency Certificate

  
	
   

  	
   

  	
   

  
	
  EXHIBIT E

  	
  -

  	
  Assignment and Acceptance

  
	
   

  	
   

  	
   

  
	
  EXHIBIT F

  	
  -

  	
  Form of Guaranty

  

 

SCHEDULES

 

	
  SCHEDULE 1

  	
  -

  	
  Loan Commitments

  
	
  SCHEDULE 1A

  	
  Applicable Lending Offices and
  Notice Addresses

  

 

 

This TERM
LOAN AGREEMENT is entered into as of May 15, 2008 (this “Agreement”) among AVALONBAY
COMMUNITIES, INC., a corporation organized and existing under the laws of the
State of Maryland (“Borrower”); the lenders
signatory hereto and such other lenders who from time to time become Banks
pursuant to Section 2.15, 3.07 or 12.05 (each a “Bank”
and collectively, the “Banks”) and
BANK OF AMERICA, N.A., as administrative agent for the Banks (in such capacity,
together with its successors in such capacity, “Administrative
Agent”).

 

WHEREAS,
Borrower desires that the Banks provide a term loan facility in an aggregate
amount of up to $330 million in three (3) tranches with the option to
increase the aggregate amount to $400 million; and

 

WHEREAS, the
Banks have agreed to make the requested term loan facility available to
Borrower on the terms and conditions hereinafter set forth.

 

NOW THEREFORE, in
consideration of the premises and the mutual agreements, covenants and
conditions hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, Borrower, Administrative Agent and each of the Banks agree
as follows:

 

ARTICLE I

DEFINITIONS; ETC.

 

Section 1.01         Definitions.  As used in this Agreement the following terms
have the following meanings:

 

“Accordion Amount” means, at any
time, $70,000,000.

 

“Acquisition” means the acquisition
by Borrower, directly or indirectly, of an interest in multi-family real
estate.

 

“Acquisition Asset” means any
improved real property asset that has been owned by the Borrower, its
Consolidated Businesses or any UJV for fewer than twelve (12) months, unless
the Borrower has made a one-time election (by written notice to the
Administrative Agent) to no longer treat such asset as an Acquisition Asset for
purposes of this Agreement.

 

“Additional Costs” has the meaning
specified in Section 3.01.

 

“Administrative Agent” has the
meaning specified in the preamble.

 

“Administrative Agent’s  Office” means Administrative Agent’s address located at 777 Main Street,
Hartford, Connecticut 06115, or such other address in the United States as
Administrative Agent may designate by written notice to Borrower and the Banks.

 

“Affiliate” means, with respect to
any Person (the “first Person”), any other Person (1) which directly or
indirectly controls, or is controlled by, or is under common control with the
first Person; or (2) 10% or more of the beneficial interest in which is
directly or indirectly owned or held by the first Person.  The term “control” means the possession,
directly or indirectly, of the power, alone, to direct or cause the direction
of the management and policies of a Person, whether through the

 

 

ownership
of voting securities, by contract, or otherwise.  Notwithstanding the forgoing, in no event
shall the Administrative Agent or any Bank be deemed to be an Affiliate of the
Borrower.

 

“Agreement” has the meaning specified
in the preamble.

 

“Applicable Lending Office” means,
for each Bank and for its LIBOR Loan or Base Rate Loan, as applicable, the
lending office of such Bank (or of an Affiliate of such Bank) designated as
such on Schedule 1A hereto or in the applicable Assignment and
Acceptance, or such other office of such Bank (or of an Affiliate of such Bank)
as such Bank may from time to time specify to Administrative Agent and Borrower
as the office by which its LIBOR Loan or Base Rate Loan, as applicable, is to
be made and maintained.

 

“Applicable Margin” means, with
respect to Base Rate Loans and LIBOR Loans, the respective rates per annum
determined at any time, based on the range into which Borrower’s Credit Rating then falls, in
accordance with the following table (any change in Borrower’s Credit Rating causing it to move to
a different range on the table shall effect an immediate change in the
Applicable Margin):

 

	
  Range of Borrower’s Credit

  Rating (S&P/Moody’s or other

  agency equivalent)

  	
   

  	
  Applicable Margin for

  Base Rate Loans

  (% per annum)

  	
   

  	
  Applicable Margin

  for LIBOR Loans

  (% per annum)

  	
   

  
	
  Below BBB- or unrated/Below Baa3 or
  unrated

  	
   

  	
  0.975

  	
   

  	
  1.975

  	
   

  
	
  BBB-/Baa3

  	
   

  	
  0.60

  	
   

  	
  1.60

  	
   

  
	
  BBB/Baa2

  	
   

  	
  0.375

  	
   

  	
  1.375

  	
   

  
	
  BBB+/Baa1

  	
   

  	
  0.25

  	
   

  	
  1.25

  	
   

  
	
  A-/A3

  	
   

  	
  0.175

  	
   

  	
  1.175

  	
   

  
	
  A or higher/A2 or higher

  	
   

  	
  0.15

  	
   

  	
  1.15

  	
   

  

 

“Assignee” has the meaning specified
in Section 12.05.

 

“Assignment and Acceptance” means an
Assignment and Acceptance, substantially in the form of EXHIBIT E,
pursuant to which a Bank assigns and an Assignee assumes rights and obligations
in accordance with Section 12.05.

 

“Authorization Letter” means a letter
agreement executed by Borrower in the form of EXHIBIT A.

 

“Bank”  and  “Banks”
have the respective meanings specified in the preamble.

 

“Bank Parties” means Administrative
Agent and the Banks.

 

“Banking Day” means (1) any day
on which commercial banks are not authorized or required to close in New York
City and (2) whenever such day relates to a LIBOR Loan, an Interest Period
with respect to a LIBOR Loan, or notice with respect to a LIBOR Loan, a day on
which dealings in 

 

2

 

Dollar
deposits are also carried out in the London interbank market and banks are open
for business in London.

 

“Base Rate” means, for any day, the
higher of (1) the Federal Funds Rate for such day plus .50%, or (2) the
Prime Rate for such day.

 

“Base Rate Loan” means all or any
portion (as the context requires) of a Bank’s Loan which shall accrue interest at a rate determined in
relation to the Base Rate.

 

“Borrower” has the meaning specified
in the preamble.

 

“Borrower’s Accountants” means Ernst &
Young, or such other accounting firm(s) of nationally-recognized standing
selected by Borrower and reasonably acceptable to the Administrative Agent.

 

“Borrower’s Credit Rating” means the
rating assigned from time to time to Borrower’s unsecured and unsubordinated long-term indebtedness by,
respectively, S&P, Moody’s
and/or one or more other nationally-recognized rating agencies reasonably
approved by Administrative Agent.  If
such a rating is assigned by only one (1) such rating agency, it must be
either S&P or Moody’s.  If such a rating is assigned by two (2) such
rating agencies, at least one (1) must be S&P or Moody’s, and “Borrower’s Credit Rating” shall be the higher
of said ratings, except if the aforesaid ratings are greater than one (1) rating
level apart, in which case “Borrower’s
Credit Rating” shall be the average of said ratings.  If such a rating is obtained from more than two
(2) such rating agencies, “Borrower’s
Credit Rating” shall be the higher of the lowest two (2) ratings, if at
least one (1) of such two (2) is either S&P or Moody’s; if neither of the two (2) lowest
ratings is from S&P or Moody’s,
then “Borrower’s Credit Rating”
shall be the lower of the ratings from S&P and Moody’s.  Unless such
indebtedness of Borrower is rated by either S&P or Moody’s, “Borrower’s Credit Rating” shall be considered unrated for purposes of this
Agreement.

 

“Borrower’s Principals” means the
officers and directors of Borrower at any applicable time.

 

“Borrower’s Share of UJV Combined Outstanding
Indebtedness” means the sum of the indebtedness of each of the
UJVs contributing to UJV Combined Outstanding Indebtedness multiplied by
Borrower’s respective beneficial fractional interests in each such UJV.

 

“Capitalization Value” means, as of
the end of any calendar quarter, the sum, without double-counting, of (1) Combined
EBITDA attributable to Wholly-Owned Assets (other than Acquisition Assets and
Construction-in-Process) (less all leasing commissions and management and
development fees, net of any expenses applicable thereto, contributing to such
Combined EBITDA) for such quarter annualized (i.e., multiplied by four (4)),
capitalized at a rate of 6.75% per annum (i.e., divided by 6.75%), (2) Combined
EBITDA attributable to Borrower’s beneficial interest in the UJV’s (other than
with respect to Acquisition Assets or Construction-in-Process) (less all
leasing commissions and management and development fees, net of any expenses
applicable thereto, contributing to such Combined EBITDA) for such quarter
annualized (i.e., multiplied by four (4)), capitalized at a rate of 6.75% per
annum (i.e., divided by 6.75%), (3) such leasing commissions and management
and development fees for such quarter as were subtracted from Combined EBITDA
pursuant to clauses (1) and (2) above, annualized, (i.e., multiplied
by four (4)), capitalized at a rate of 20% per annum (i.e., divided by 20%), (4) Cash
and Cash Equivalents of Borrower and its Consolidated Businesses, as of the end
of such quarter, as reflected in Borrower’s 

 

3

 

Consolidated
Financial Statements, (5) the aggregate book value (on a cost basis) of
land held for future development and Construction-in-Process of Borrower and
its Consolidated Businesses plus Borrower’s beneficial interest in the book value (on a cost basis) of land
held for future development and Construction-in-Process of the UJVs, (6) the
aggregate book value (on a cost basis) of Acquisition Assets of Borrower and
its Consolidated Businesses plus Borrower’s beneficial interest in the book
value (on a cost basis) of Acquisition Assets of the UJVs, (7) the value
(at the lower of cost or market in accordance with GAAP) of Performing Notes
held by Borrower and its Consolidated Businesses, and (8) Eligible Cash
1031 Proceeds; provided that the sum of
items (2), (5) and (7) above shall not exceed 30% of Capitalization
Value.

 

“Capital Lease” means any lease which
has been or should be capitalized on the books of the lessee in accordance with
GAAP.

 

“Cash and Cash Equivalents” means (1) cash,
(2) direct obligations of the United States Government, including, without
limitation, treasury bills, notes and bonds, (3) interest-bearing or
discounted obligations of federal agencies and government-sponsored entities or
pools of such instruments offered by Approved Banks and dealers, including,
without limitation, Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified pass through
certificates, Federal National Mortgage Association bonds and notes, and
Federal Farm Credit System securities, (4) time deposits, domestic and
eurodollar certificates of deposit, bankers’ acceptances, commercial paper rated at least A-1 by S&P and
P-1 by Moody’s and/or guaranteed
by an Aa rating by Moody’s, an
AA rating by S&P or better rated credit, floating rate notes, other money
market instruments and letters of credit each issued by Approved Banks, (5) obligations
of domestic corporations, including, without limitation, commercial paper,
bonds, debentures and loan participations, each of which is rated at least AA
by S&P and/or Aa2 by Moody’s
and/or guaranteed by an Aa rating by Moody’s, an AA rating by S&P or better rated credit, (6) obligations
issued by states and local governments or their agencies, rated at least MIG-1
by Moody’s and /or SP-1 by
S&P and /or guaranteed by an irrevocable letter of credit of an Approved
Bank, (7) repurchase agreements with major banks and primary government
security dealers fully secured by the United States Government or agency
collateral equal to or exceeding the principal amount on a daily basis and held
in safekeeping and (8) real estate loan pool participations, guaranteed by
an AA rating given by S&P or an Aa2 rating given by Moody’s or better rated credit. For
purposes of this definition, “Approved Bank” means a financial institution
which has (x) (A) a minimum net worth of $500,000,000 and/or (B) total
assets of at least $10,000,000,000 and (y) a minimum long-term debt rating
of A+ by S&P or A1 by Moody’s.

 

“Closing Date” means the date this
Agreement has been executed by all parties.

 

“Code” means the Internal Revenue
Code of 1986, including the rules and regulations promulgated thereunder.

 

“Combined Debt Service” means, for
any period of time, (1) Borrower’s
share of total debt service (including principal) paid or payable by Borrower
and its Consolidated Businesses during such period (other than debt service on
construction loans until completion of the relevant construction and other
capitalized interest) plus a deemed annual capital expense charge of $150 per
apartment unit owned by Borrower or its Consolidated Businesses plus (2) Borrower’s beneficial interest in the sum of (a) total
debt service (including principal) paid or payable by the UJVs during such 

 

4

 

period
(other than debt service on construction loans until completion of the relevant
construction and other capitalized interest) plus (b) a deemed annual
capital expense charge of $150 per apartment unit owned by the UJVs plus (3) preferred
dividends and distributions paid or payable by Borrower and its Consolidated Businesses
during such period.

 

“Combined EBITDA” means, for any
period of time, the sum, without duplication, of (1) Borrower’s share of revenues less operating
expenses, general and administrative expenses and property taxes before
Interest Expense, income taxes, gains or losses on the sale of real estate
and/or marketable securities, depreciation and amortization and extraordinary
items for Borrower and its Consolidated Businesses, and adjusted, if material,
for non-cash revenue attributable to straight lining of rents and (2) Borrower’s beneficial interest in revenues
less operating expenses, general and administrative expenses and property taxes
before Interest Expense, income taxes, gains or losses on the sale of real
estate and/or marketable securities, depreciation and amortization and
extraordinary items (after eliminating appropriate intercompany amounts)
applicable to each of the UJVs, and adjusted, if material, for non-cash revenue
attributable to straight lining of rents, in all cases as reflected in Borrower’s Consolidated Financial Statements.

 

“Consolidated Business” means,
individually, each Affiliate of Borrower who is or should be included in
Borrower’s Consolidated
Financial Statements in accordance with GAAP.

 

“Consolidated Financial Statements”
means, with respect to any Person, the consolidated balance sheet and related
consolidated statement of operations, accumulated deficiency in assets and cash
flows, and footnotes thereto, of such Person, prepared in accordance with GAAP.

 

“Consolidated Outstanding Indebtedness”
means, as of any time, Borrower’s
share of all indebtedness and liability for borrowed money, secured or
unsecured, of Borrower and its Consolidated Businesses, including mortgage and
other notes payable but excluding any indebtedness which is margin indebtedness
on cash and cash equivalent securities, all as reflected in Borrower’s Consolidated Financial Statements.

 

“Consolidated Tangible Net Worth”
means, at any date, Borrower’s
share of the consolidated stockholders’
equity of Borrower and its Consolidated Businesses less their consolidated
Intangible Assets, all determined as of such date.  For purposes of this definition, “Intangible Assets” means with
respect to any such intangible assets, the amount (to the extent reflected in
determining such consolidated stockholders’ equity) of (1) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve (12) months after the acquisition of such
business) subsequent to September 30, 1994 in the book value of any asset
(other than real property assets) owned by Borrower or a Consolidated Business
and (2) all debt discount and expense, deferred charges, goodwill,
patents, trademarks, service marks, trade names, anticipated future benefit of
tax loss carry-forwards, copyrights, organization or developmental expenses and
other intangible assets (in each case, not adjusted for depreciation).

 

“Construction-in-Process”
means a property on which construction of improvements (excluding non-revenue
generating capital expenditures and excluding costs incurred prior to
construction, all as set forth in related quarterly financial statements or
supplemental financial information attached thereto) has commenced and is
proceeding to completion in the ordinary course but has not yet been completed
(as such completion shall be evidenced by a temporary or permanent certificate
of 

 

5

 

occupancy permitting use of
such property by the general public). 
Any such property shall be treated as Construction-in-Process until 12
months from the date of completion (as evidenced by a certificate of occupancy
or its equivalent permitting use of such property by the general public),
unless the Borrower has made a one-time election (by written notice to the
Administrative Agent) to no longer treat such property as
Construction-in-Process for purposes of this Agreement.

 

“Contingent Obligations” means,
without duplication, Borrower’s share
of (1) any contingent obligations of Borrower or its Consolidated
Businesses required to be shown on the balance sheet of Borrower and its
Consolidated Businesses in accordance with GAAP and (2) any obligation
required to be disclosed in the footnotes to Borrower’s Consolidated Financial Statements, guaranteeing partially or in
whole any non-Recourse Debt, lease, dividend or other obligation, exclusive of
contractual indemnities (including, without limitation, any indemnity or
price-adjustment provision relating to the purchase or sale of securities or
other assets) and guarantees of non-monetary obligations (other than guarantees
of completion) which have not yet been called on or quantified, of Borrower or
any of its Consolidated Businesses or of any other Person.  The amount of any Contingent Obligation
described in clause (2) shall be deemed to be (a) with respect to a
guaranty of interest or interest and principal, or operating income guaranty,
the net present value (using the Base Rate as a discount rate) of the sum of
all payments required to be made thereunder (which in the case of an operating
income guaranty shall be deemed to be equal to the debt service for the note
secured thereby), through (i) in the case of an interest or interest and
principal guaranty, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder) or (ii) in
the case of an operating income guaranty, the date through which such guaranty
will remain in effect and (b) with respect to all guarantees not covered
by the preceding clause (a), an amount equal to the stated or determinable
amount of the primary obligation in respect of which such guaranty is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming Borrower and/or one or more of its Consolidated
Businesses is required to perform thereunder) as recorded on the balance sheet
and on the footnotes to the most recent Borrower’s Consolidated Financial Statements required to be delivered
pursuant to this Agreement. 
Notwithstanding anything contained herein to the contrary, guarantees of
completion, of environmental indemnities and of fraud, misappropriation and
other “bad act” indemnities shall not be deemed to be Contingent Obligations
unless and until a claim for payment or performance has been made thereunder,
at which time any such guaranty shall be deemed to be a Contingent Obligation
in an amount equal to any such claim. 
Subject to the preceding sentence, (1) in the case of a joint and
several guaranty given by Borrower or one of its Consolidated Businesses and
another Person (but only to the extent such guaranty is recourse, directly or
indirectly to Borrower), the amount of the guaranty shall be deemed to be 100%
thereof unless and only to the extent that such other Person has delivered Cash
and Cash Equivalents to secure all or any part of such Person’s guaranteed obligations and (2) in
the case of joint and several guarantees given by a Person in which Borrower
owns an interest (which guarantees are non-recourse to Borrower), to the extent
the guarantees, in the aggregate, exceed 10% of Capitalization Value, the
amount in excess of 10% shall be deemed to be a Contingent Obligation of
Borrower.  Notwithstanding anything
contained herein to the contrary, “Contingent Obligations”
shall be deemed not to include guarantees of unadvanced funds under any
indebtedness of Borrower or its Consolidated Businesses or of construction
loans to the extent the same have not been drawn.  All matters constituting “Contingent
Obligations” shall be calculated without duplication.

 

6

 

“Continue”,  “Continuation”  and  “Continued”
refer to the continuation pursuant to Section 2.11 of a LIBOR Loan as a
LIBOR Loan from one Interest Period to the next Interest Period.

 

“Convert”,  “Conversion”  and  “Converted”
refer to a conversion pursuant to Section 2.11 of a Base Rate Loan into a
LIBOR Loan or a LIBOR Loan into a Base Rate Loan, each of which may be
accompanied by the transfer by a Bank (at its sole discretion) of all or a
portion of its Loan from one Applicable Lending Office to another.

 

“Debt” means (1) indebtedness or
liability for borrowed money, or for the deferred purchase price of property or
services (including trade obligations); (2) obligations as lessee under
Capital Leases; (3) current liabilities in respect of unfunded vested benefits
under any Plan; (4) obligations in respect of letters of credit issued for
the account of any Person; (5) all obligations arising under bankers’ or trade acceptance facilities; (6) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase any of the
items included in this definition, to provide funds for payment, to supply
funds to invest in any Person, or otherwise to assure a creditor against loss; (7) all
obligations secured by any Lien on property owned by the Person whose Debt is
being measured, whether or not the obligations have been assumed; and (8) all
obligations under any agreement providing for contingent participation or other
hedging mechanisms with respect to interest payable on any of the items
described above in this definition.

 

“Default” means any event which with
the giving of notice or lapse of time, or both, would become an Event of
Default.

 

“Default Rate” means a rate per annum
equal to: (1) with respect to Base Rate Loans a variable rate 2% above the
rate of interest then in effect thereon (including the Applicable Margin); and (2) with
respect to LIBOR Loans a fixed rate 2% above the rate(s) of interest in
effect thereon (including the Applicable Margin) at the time of Default until
the end of the then current Interest Period therefor and, thereafter, a
variable rate 2% above the rate of interest for a Base Rate Loan.

 

“Disposition” means a sale (whether
by assignment, transfer or Capital Lease) of an asset.

 

“Documentation Agent” means,
individually and collectively, Sumitomo
Mitsui Banking Corporation, Wells Fargo Bank, N.A., and Deutsche Bank Trust
Company Americas.

 

“Dollars” and the sign “$” mean
lawful money of the United States of America.

 

“Effective Date” means the first date
after the Closing Date on which the conditions specified in Sections 4.01 and
4.02 are satisfied (or waived in accordance with Section 12.02) and the
initial Loans are made to Borrower.

 

“Elect” and “Election”
refer to the election, if any, by Borrower pursuant to Section 2.11 to
have all or a portion of an advance of the Loans be outstanding as LIBOR Loans.

 

“Eligible Cash 1031 Proceeds” means the cash
proceeds held by a “qualified intermediary” from the sale of real property of
Borrower and its Consolidated Businesses, which proceeds are intended to be
used by such qualified intermediary to acquire one or more “replacement
properties” that are of “like-kind” to such real property in an exchange that
qualifies as a tax-free exchange under 

 

7

 

Section 1031 of the
Code, and no portion of which proceeds Borrower or any Affiliate has the right
to receive, pledge, borrow or otherwise obtain the benefits of until such time
as provided under the applicable “exchange agreement” (as such terms in
quotations are defined in Treasury Regulations Section 1.1031(k)-1(g)(4) (the
“Regulations”))
or until such exchange is terminated. 
Upon the cash proceeds no longer being held by such qualified
intermediary pursuant to the Regulations or otherwise no longer qualifying
under the Regulations for like-kind exchange treatment, such proceeds shall
cease being Eligible Cash 1031 Proceeds.

 

“Environmental Discharge” means any
discharge or release of any Hazardous Materials in violation of any applicable
Environmental Law.

 

“Environmental Law” means any
applicable Law relating to pollution or the environment, including Laws
relating to noise or to emissions, discharges, releases or threatened releases
of Hazardous Materials into the work place, the community or the environment,
or otherwise relating to the generation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials.

 

“Environmental Notice” means any
written complaint, order, citation or notice from any Person (1) affecting
or relating to Borrower’s
compliance with any Environmental Law in connection with any activity or
operations at any time conducted by Borrower, (2) relating to (a) the
existence of any Hazardous Materials contamination or Environmental Discharges
or threatened Hazardous Materials contamination or Environmental Discharges at
any of Borrower’s locations or facilities or (b) remediation
of any Environmental Discharge or Hazardous Materials at any such location or
facility or any part thereof; or (3) relating to any violation or alleged
violation by Borrower of any relevant Environmental Law.

 

“ERISA” means the Employee Retirement
Income Security Act of 1974, including the rules and regulations
promulgated thereunder.

 

“ERISA Affiliate” means any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as Borrower, or
any trade or business which is under common control (within the meaning of Section 414(c) of
the Code) with Borrower, or any organization which is required to be treated as
a single employer with Borrower under Section 414(m) or 414(o) of
the Code.

 

“Event of Default” has the meaning
specified in Section 9.01.

 

“Federal Funds Rate” means, for any
day, the rate per annum (expressed on a 360-day basis of calculation) equal to
the weighted average of the rates on overnight federal funds transactions as
published by the Federal Reserve Bank of New York for such day provided that (1) if
such day is not a Banking Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the immediately preceding Banking Day as so
published on the next succeeding Banking Day; and (2) if no such rate is
so published on such next succeeding Banking Day, the Federal Funds Rate for
such day shall be the average of the rates quoted by three (3) Federal
Funds brokers to Administrative Agent on such day on such transactions.

 

“Fee Letter” means the letter
agreement, dated as of March 14, 2008, between Borrower, the Syndication
Agent and J.P. Morgan Securities, Inc.

 

8

 

“Fiscal Year” means each period from January 1
to December 31.

 

“GAAP” means generally accepted
accounting principles in the United States of America as in effect from time to
time, applied on a basis consistent with those used in the preparation of the
financial statements referred to in Section 5.13 (except for changes concurred
in by Borrower’s Accountants).

 

“Good Faith Contest” means the
contest of an item if: (1) the item is diligently contested in good faith,
and, if appropriate, by proceedings timely instituted; (2) reserves that
are adequate based on reasonably foreseeable likely outcomes are established
with respect to the contested item; (3) during the period of such contest,
the enforcement of any contested item is effectively stayed, delayed or
postponed; and (4) the failure to pay or comply with the contested item during
the period of the contest is not likely to result in a Material Adverse Change.

 

“Governmental Authority” means any
nation or government, any state or other political subdivision thereof, and any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

“Hazardous Materials” means any
pollutant, effluents, emissions, contaminants, toxic or hazardous wastes or
substances, as any of those terms are defined from time to time in or for the
purposes of any relevant Environmental Law, including asbestos fibers and
friable asbestos, polychlorinated biphenyls, and any petroleum or
hydrocarbon-based products or derivatives.

 

“Increased Amount Date” has the
meaning specified in Section 2.15.

 

“Incremental Limit” has the meaning
specified in Section 2.15.

 

“Interest Expense” means, for any
period of time, Borrower’s share
of the consolidated interest expense (without deduction of consolidated
interest income, and excluding (x) interest expense on construction loans
and (y) other capitalized interest expense in respect of either
construction activity or construction loans, in any such case under clauses (x) or
(y), only until completion of the relevant construction) of Borrower and its
Consolidated Businesses, including, without limitation or duplication (or, to
the extent not so included, with the addition of), (1) the portion of any
rental obligation in respect of any Capital Lease obligation allocable to
interest expense in accordance with GAAP; (2) the amortization of Debt
discounts; (3) any expense, payments or fees (other than up-front fees)
with respect to interest rate swap or similar agreements; and (4) the
interest expense and items listed in clauses (1) through (3) above
applicable to each of the UJVs multiplied by Borrower’s respective beneficial interests in the UJVs, in all cases as
reflected in Borrower’s
Consolidated Financial Statements.

 

“Interest Period” means, with respect
to any LIBOR Loan, the period commencing on the date the same is advanced,
Converted from a Base Rate Loan or Continued, as the case may be, and ending,
as Borrower may select pursuant to Section 2.04, on the numerically
corresponding day in the first, second or third calendar month thereafter, or,
with the consent of all Banks, 7 days or 14 days thereafter, provided that each
such Interest Period which commences on the last Banking Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.

 

9

 

“Law” means any federal, state or
local statute, law, rule, regulation, ordinance, order, code, or rule of
common law, now or hereafter in effect, and in each case as amended, and any
judicial or administrative order, consent decree or judgment.

 

“LIBOR Base Rate” means, for any
Interest Period:

 

(a)           the rate per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or
other commercially available source providing quotations of BBA LIBOR as
designated by Administrative Agent from time to time) at approximately 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period; or

 

(b)           if such rate is not available at such
time for any reason, then the “LIBOR Base Rate” for such Interest Period shall be the
rate per annum determined by Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
immediately available funds in the approximate amount of the Loans being made,
Continued or Converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

 

“LIBOR Interest Rate” means, for any
LIBOR Loan, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by Administrative Agent to be equal to the quotient of (1) the
LIBOR Base Rate for such LIBOR Loan for the Interest Period therefor divided by
(2) one minus the LIBOR Reserve Requirement for such LIBOR Loan for such
Interest Period.

 

“LIBOR Loan” means all or any portion
(as the context requires) of any Bank’s
Loan which shall accrue interest at rate(s) determined in relation to
LIBOR Interest Rate(s).

 

“LIBOR Reserve Requirement” means,
for any LIBOR Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during the Interest Period for such LIBOR Loan under Regulation D by member
banks of the Federal Reserve System in New York City with deposits exceeding
$1,000,000,000 against “Eurocurrency liabilities” (as such term is used in Regulation
D).  Without limiting the effect of the
foregoing, the LIBOR Reserve Requirement shall also reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (1) any category of liabilities which includes deposits by
reference to which the LIBOR Base Rate is to be determined as provided in the
definition of “LIBOR Base Rate” in this Section 1.01 or (2) any
category of extensions of credit or other assets which include loans the
interest rate on which is determined on the basis of rates referred to in said
definition of “LIBOR Base Rate”.

 

“Lien” means any mortgage, deed of
trust, pledge, negative pledge, security interest, hypothecation, assignment
for collateral purposes, deposit arrangement, lien (statutory or other), or
other security agreement or charge of any kind or nature whatsoever of any
third party (excluding any right of setoff but including, without limitation,
any conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or 

 

10

 

comparable
Law of any jurisdiction to evidence any of the foregoing and carriers,
warehousemen, mechanics and other similar inchoate liens that have not been
insured against in a manner reasonably satisfactory to Administrative Agent).

 

“Loan” means a Tranche A Loan, a
Tranche B Loan or a Tranche C Loan made by a Bank pursuant to Section 2.01
or Section 2.15, as applicable.

 

“Loan Commitment” means, with respect
to each Bank, its Tranche A Commitment, Tranche B Commitment or Tranche C
Commitment, as applicable.

 

“Loan Documents” means this
Agreement, the Notes, the Authorization Letter, the Solvency Certificate and
any guaranty executed and delivered pursuant to clause (y) of the
definition of “Unencumbered Assets” in Section 1.01.

 

“Material Adverse Change” means an
effect resulting from any circumstance or event or series of circumstances or
events, of whatever nature, which does or could reasonably be expected to, on
more than an interim basis, either (1) materially and adversely impair the
ability of Borrower and its Consolidated Businesses, taken as a whole, to
fulfill its material obligations or (2) cause a Default or an Event of
Default.

 

“Material Affiliates” means the
Affiliates of Borrower described on EXHIBIT C,
together with (or excluding) any Affiliates of Borrower which are hereafter
from time to time reasonably determined by Administrative Agent to be material
(or no longer material), upon written notice to Borrower, based on the most
recent Borrower’s Consolidated
Financial Statements.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a Plan
defined as such in Section 3(37) of ERISA to which contributions have been
made by Borrower or any ERISA Affiliate and which is covered by Title IV of
ERISA.

 

“New Bank”  and  “New
Note” have the respective meanings specified in Section 2.15.

 

“Note”  and  “Notes”
have the respective meanings specified in Section 2.07.

 

“Obligations” means each and every
obligation, covenant and agreement of Borrower, now or hereafter existing,
contained in this Agreement, and any of the other Loan Documents, whether for
principal, reimbursement obligations, interest, fees, expenses, indemnities or
otherwise, and any amendments or supplements thereto, extensions or renewals
thereof or replacements therefor, including but not limited to all
indebtedness, obligations and liabilities of Borrower to Administrative Agent
and any Bank now existing or hereafter incurred under or arising out of or in
connection with the Notes, this Agreement, the other Loan Documents, and any
documents or instruments executed in connection therewith; in each case whether
direct or indirect, joint or several, absolute or contingent, liquidated or
unliquidated, now or hereafter existing, renewed or restructured, whether or
not from time to time decreased or extinguished and later increased, created or
incurred, and including all indebtedness of Borrower, under any instrument now
or hereafter evidencing or securing any of the foregoing.

 

11

 

“Parent” means, with respect to any
Bank, any Person controlling such Bank.

 

“Participant”  and  “Participation”
have the respective meanings specified in Section 12.05.

 

“PBGC” means the Pension Benefit
Guaranty Corporation and any entity succeeding to any or all of its functions
under ERISA.

 

“Performing Notes” means mortgage notes and
notes receivable which are not more than 30 days past due or otherwise in
default; provided, that, in the case of mortgage notes and notes receivable
that generate cash and non-cash payments, such mortgage notes and notes receivable
shall be treated as Performing Notes whose value is determined solely by
reference to the cash payments and references to the income generated by the
Performing Notes shall include only the cash payments which have current
payments payable in cash.

 

“Person” means an individual,
partnership, corporation, limited liability company, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

 

“Plan” means any employee benefit or
other plan established or maintained, or to which contributions have been made,
by Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA or
to which Section 412 of the Code applies.

 

“presence”, when used
in connection with any Environmental Discharge or Hazardous Materials, means
and includes presence, generation, manufacture, installation, treatment, use,
storage, handling, repair, encapsulation, disposal, transportation, spill,
discharge and release.

 

“Prime Rate” means the variable per
annum rate of interest designated from time to time by Administrative Agent at
its principal office as its “prime rate” (it being understood that the “prime
rate” is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer).

 

“Pro Rata Share” means, for purposes
of this Agreement and with respect to each Bank, a fraction, the numerator of
which is the amount of such Bank’s
applicable Loan Commitment and the denominator of which is the total applicable
Loan Commitment of all Banks.

 

“Prohibited Transaction” means any
transaction proscribed by Section 406 of ERISA or Section 4975 of the
Code and to which no statutory or administrative exemption applies.

 

“Recourse Debt” means Debt, recourse
for the satisfaction of which is not limited to specified collateral.

 

“Regulation D” means Regulation D of
the Board of Governors of the Federal Reserve System.

 

“Regulation U” means Regulation U of
the Board of Governors of the Federal Reserve System.

 

“Regulatory Change” means, with
respect to any Bank, any change after the date of this Agreement in United
States federal, state, municipal or foreign laws or regulations (including
Regulation D) or the adoption or making after such date of any interpretations,
directives or 

 

12

 

requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.

 

“Reportable Event” means any of the
events set forth in Section 4043(c) of ERISA, other than those events
as to which the thirty (30) day notice period is waived under subsections .13,
..14, .16, .18, .19 or .20 of PBGC Reg. §2615.

 

“Required Banks” means (1) at
any time prior to the Effective Date, the Banks holding at least 51% of the
aggregate amount of unused Loan Commitments and (2) at any time after the
Effective Date, the Banks holding at least 51% of the then aggregate unpaid
principal amount of the Loans.

 

“Requested Increase” has the meaning
specified in Section 2.15.

 

“Secured Indebtedness” means that
portion of Total Outstanding Indebtedness that is secured by a Lien.

 

“Solvency Certificate” means a
certificate in the form of EXHIBIT D, to
be delivered by Borrower pursuant to the terms of this Agreement.

 

“Solvent” means, when used with
respect to any Person, that the fair value of the property of such Person, on a
going concern basis, is greater than the total amount of liabilities
(including, without limitation, contingent liabilities) of such Person.

 

“S&P” means Standard and Poor’s Ratings Services, a division of
McGraw-Hill Companies.

 

“Supplemental Fee Letter” means the
letter agreement, dated as of May 12, 2008 between Borrower and the
Administrative Agent.

 

“Syndication Agent” means JPMorgan
Chase Bank, N.A.

 

“Total Outstanding Indebtedness”
means, at any time, the sum, without duplication, of (1) Consolidated
Outstanding Indebtedness; (2) Borrower’s Share of UJV Combined Outstanding Indebtedness; and (3) Contingent
Obligations.

 

“Tranche A Commitment” means, with
respect to any Bank, the obligation of such Bank to make Tranche A Loans in the
principal amount set forth opposite its name in Schedule 1 attached hereto and
made a part hereof, and “Tranche A Commitments”
means the aggregate principal amount of the Tranche A Commitments of all the
Banks, the initial maximum amount of which shall be $105,600,000.

 

“Tranche A Loan” means any Loan made
by the Lenders pursuant to Section 2.01(b) and shall include any
incremental Tranche A Loan made pursuant to Section 2.15, and “Tranche A Loans” means the aggregate
principal amount of the Tranche A Loans of all the Banks.

 

“Tranche A Maturity Date” means May 1,
2009.

 

13

 

“Tranche B Commitment” means, with
respect to any Bank, the obligation of such Bank to make Tranche B Loans in the
principal amount set forth opposite its name in Schedule 1 attached hereto and
made a part hereof, and “Tranche B Commitments”
means the aggregate principal amount of the Tranche B Commitments of all the
Banks, the initial maximum amount of which shall be $112,200,000.

 

“Tranche B Loan” means any Loan made
by the Lenders pursuant to Section 2.01(c), and shall include any
incremental Tranche B Loan made pursuant to Section 2.15 and “Tranche B Loans” means the aggregate
principal amount of the Tranche B Loans of all the Banks.

 

“Tranche B Maturity Date” means January 4,
2010.

 

“Tranche C Commitment” means, with
respect to any Bank, the obligation of such Bank to make Tranche C Loans in the
principal amount set forth opposite its name in Schedule 1 attached hereto and
made a part hereof, and “Tranche C Commitments”
means the aggregate principal amount of the Tranche C Commitments of all the
Banks, the initial maximum amount of which shall be $112,200,000.

 

“Tranche C Loan” means any Loan made
by the Lenders pursuant to Section 2.01(d), and shall include any
incremental Tranche C Loan made pursuant to Section 2.15 and “Tranche C Loans” means the aggregate
principal amount of the Tranche C Loans of all the Banks.

 

“Tranche C Maturity Date” means January 3,
2011.

 

“UJV Combined Outstanding Indebtedness”
means, as of any time, all indebtedness and liability for borrowed money,
secured or unsecured, of the UJV’s,
on a combined basis, including mortgage and other notes payable but excluding
any indebtedness which is margin indebtedness on cash and cash equivalent
securities, all as reflected in the balance sheets of each of the UJVs,
prepared in accordance with GAAP.

 

“UJVs” means the unconsolidated joint
ventures (including general and limited partnerships) in which Borrower owns a beneficial
interest and which are accounted for under the equity method in Borrower’s Consolidated Financial Statements.

 

“Unencumbered” means, with respect to
any asset, that such asset is not, and the direct or indirect interests of
Borrower therein are not, subject to any Lien to secure all or any portion of
Secured Indebtedness.

 

“Unencumbered Asset Value” means, as
of the end of any calendar quarter, without duplication, (1) Unencumbered
Wholly-Owned Combined EBITDA for such quarter, annualized (i.e., multiplied by
four (4)), capitalized at a rate of 6.75% per annum (i.e., divided by 6.75%),
plus (2) Unencumbered Non-Wholly-Owned Combined EBITDA for such quarter,
annualized (i.e., multiplied by four (4)), capitalized at a rate of 6.75% per
annum (i.e., divided by 6.75%), plus (3) the aggregate book value (on a
cost basis) of Unencumbered Land and Construction-in-Process, plus (4) the
aggregate book value (on a cost basis) of Unencumbered Assets of Borrower and
its Consolidated Business which are Acquisition Assets plus Borrower’s
beneficial interest in the book value (on a cost basis) of Unencumbered Assets
of the UJVs that are Acquisition Assets (and for which Borrower substantially
controls the financing and sale), plus (5) unrestricted Cash and Cash 

 

14

 

Equivalents
of Borrower and its Consolidated Businesses, as of the end of such quarter, as
reflected in Borrower’s Consolidated Financial Statements, to the extent the
same are Unencumbered, plus (6) the value of all Eligible Cash 1031
Proceeds resulting from the sale of Unencumbered Assets, to the extent the same
are Unencumbered, plus (7) the value (at the lower of cost or market in
accordance with GAAP) of Performing Notes held by Borrower and its Consolidated
Businesses, to the extent the same are Unencumbered;

 

provided that the sum of clauses (2), (3) and (7) above shall
not exceed 30% of Unencumbered Asset Value.

 

“Unencumbered Assets” are
income-producing assets, reflected on Borrower’s Consolidated Financing
Statements, owned (in whole or in part), directly or indirectly by Borrower
which (1) are Unencumbered and (2) have been improved by buildings or
other improvements that have been issued a certificate of occupancy (or its
equivalent) and are fully operational. 
Notwithstanding the foregoing, if an asset that would otherwise qualify
as an Unencumbered Asset is owned by a Consolidated Business that has any
Recourse Debt, such asset shall not constitute, and may not be treated as, an
Unencumbered Asset unless and until the earlier to occur of (x) such
Recourse Debt has been repaid in full in cash and all loan documents evidencing
such Recourse Debt have been terminated and (y) such Consolidated Business
executes and delivers to the Administrative Agent, for the benefit of the
Administrative Agent and the Banks, a guaranty of the Obligations in
substantially the form of Exhibit F attached hereto.

 

“Unencumbered Land and Construction-in-Process”
means all land held for future development and Construction-in-Process
reflected on Borrower’s Consolidated Financial Statements, which are
wholly-owned, directly or indirectly,  by Borrower
and are Unencumbered.

 

“Unencumbered Non-Wholly-Owned Combined EBITDA”
means that portion of Combined EBITDA attributable to Unencumbered Assets that
are not Unencumbered Wholly-Owned Assets but for which the Borrower
substantially controls the sale or financing of such Unencumbered Asset
(assuming general and administrative expense is allocated proportionately to
Unencumbered Assets).

 

“Unencumbered Wholly-Owned Assets”
means Unencumbered Assets which are Wholly-Owned Assets.

 

“Unencumbered Wholly-Owned Combined EBITDA”
means that portion of Combined EBITDA attributable to Unencumbered Wholly-Owned
Assets (assuming general and administrative expense is allocated
proportionately to Unencumbered Wholly-Owned Assets).

 

“Unsecured Indebtedness” means that
portion of Total Outstanding Indebtedness that is not secured by a Lien.

 

“Wholly-Owned Assets” means
income-producing assets, which are reflected on Borrower’s Consolidated
Financial Statements, and are wholly-owned, directly or indirectly, by
Borrower.

 

Section 1.02         Accounting Terms.  All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, and all financial data
required to be delivered hereunder shall be prepared in accordance with GAAP.

 

15

 

Section 1.03         Computation of Time Periods.  Except as otherwise provided herein, in this
Agreement, in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and words “to”
and “until” each means “to but excluding”.

 

Section 1.04         Rules of Construction.  Except as provided otherwise, when used in
this Agreement (1) “or” is not exclusive; (2) a reference to a Law
includes any amendment, modification or supplement to, or replacement of, such
Law; (3) a reference to a Person includes its permitted successors and
permitted assigns; (4) all terms used in the singular shall have a
correlative meaning when used in the plural and vice versa; (5) a
reference to an agreement, instrument or document shall include such agreement,
instrument or document as the same may be amended, modified or supplemented
from time to time in accordance with its terms and as permitted by the Loan
Documents; (6) all references to Articles, Sections or Exhibits shall be
to Articles, Sections and Exhibits of this Agreement unless otherwise
indicated; (7) “hereunder”, “herein”, “hereof” and the like refer to this
Agreement as a whole; and (8) all Exhibits to this Agreement shall be
incorporated into this Agreement.

 

ARTICLE II

THE LOANS

 

Section 2.01         Loans; Purpose.

 

(a)           Subject to the terms and conditions
of this Agreement, the Banks agree to make loans to Borrower as provided in
this Article II.

 

(b)           Tranche A Loans.  Each of the Banks with a Tranche A Commitment
hereby severally and not jointly agrees to make a term loan in a single draw in
Dollars to Borrower on the Effective Date (each such loan by a Bank, a “Tranche A Loan”) in an amount up to
its Tranche A Commitment.  The Tranche A
Commitments shall expire at 5:00 p.m. (New York time) on the earlier of
the Effective Date or May 30, 2008. 
Notwithstanding the foregoing, any incremental Tranche A Loans shall be
made in accordance with Section 2.15.

 

(c)           Tranche B Loans.  Each of the Banks with a Tranche B Commitment
hereby severally and not jointly agrees to make a term loan in a single draw in
Dollars to Borrower on the Effective Date (each such loan by a Bank, a “Tranche B Loan”) in an amount up to
its Tranche B Commitment.  The Tranche B
Commitments shall expire at 5:00 p.m. (New York time) on the earlier of
the Effective Date or May 30, 2008. 
Notwithstanding the foregoing, any incremental Tranche B Loans shall be
made in accordance with Section 2.15.

 

(d)           Tranche C Loans.  Each of the Banks with a Tranche C Commitment
hereby severally and not jointly agrees to make a term loan in a single draw in
Dollars to Borrower on the Effective Date (each such loan by a Bank, a “Tranche C Loan”) in an amount up to
its Tranche C Commitment.  The Tranche C
Commitments shall expire at 5:00 p.m. (New York time) on the earlier of
the Effective Date or May 30, 2008. 
Notwithstanding the 

 

16

 

foregoing, any incremental Tranche C Loans shall be made in
accordance with Section 2.15.

 

(e)           The obligations of the Banks under
this Agreement are several, and no Bank shall be responsible for the failure of
any other Bank to make any advance of a Loan to be made by such other
Bank.  However, the failure of any Bank
to make any advance of the Loan to be made by it hereunder on the date
specified therefor shall not relieve any other Bank of its obligation to make
any advance of its Loan specified hereby to be made on such date.

 

(f)            Borrower shall use the proceeds of
the Loans for general capital and working capital requirements of Borrower and
its Consolidated Businesses and UJVs (which shall include, but not be limited
to, Acquisitions and/or costs incurred in connection with the development,
construction or reconstruction of multi-family real estate properties).  In no event shall proceeds of the Loans be
used in a manner that would violate Regulation U or in connection with a
hostile acquisition.

 

Section 2.02         [Intentionally deleted].

 

Section 2.03         Procedures for Advances.  In the case of an advance of the Loans
hereunder on the Effective Date or any Increased Amount Date, Borrower shall
submit to Administrative Agent an irrevocable request for such advance, stating
the amount requested and certifying the purpose, in general terms, for which
such advance is to be used, no later than 11:00 a.m. (New York time) on
the date, in the case of an advance of Base Rate Loans, which is one (1) Banking
Day, and, in the case of an advance of LIBOR Loans, which is three (3) Banking
Days, prior to the date such advance is to be made.  Administrative Agent, on the Banking Day of
its receipt and approval of the request for advance, will so notify the Banks
either by telephone or by facsimile.  Not
later than 11:00 a.m. (New York time) on the date of such advance, each
Bank shall, through its Applicable Lending Office and subject to the conditions
of this Agreement, make the amount to be advanced by it on such day available
to Administrative Agent, at Administrative Agent’s Office and in immediately available funds for the account of
Borrower.  The amount so received by
Administrative Agent shall, subject to the conditions of this Agreement, be
made available to Borrower, in immediately available funds, by Administrative
Agent’s crediting an account of
Borrower designated by Borrower and maintained with Administrative Agent at
Administrative Agent’s Office.

 

Section 2.04         Interest Periods; Renewals.  In the case of the LIBOR Loans, Borrower
shall select an Interest Period of any duration in accordance with the
definition of Interest Period in Section 1.01, subject to the following
limitations: (1) no Interest Period may extend beyond the Tranche A
Maturity Date, Tranche B Maturity Date or Tranche C Maturity Date, as the case
may be; and (2) if an Interest Period would end on a day which is not a
Banking Day, such Interest Period shall be extended to the next Banking Day,
unless such Banking Day would fall in the next calendar month, in which event
such Interest Period shall end on the immediately preceding Banking Day.  Only an aggregate of six (6) discrete
segments of a Bank’s Loans
bearing interest at a LIBOR Interest Rate, for a designated Interest Period,
pursuant to a particular Election, Conversion or Continuation, may be
outstanding at any one time (each such segment of each Bank’s Loans corresponding to a
proportionate segment of each of the other Banks’ Loans).  Upon 

 

17

 

notice to
Administrative Agent as provided in Section 2.13, Borrower may Continue
any LIBOR Loan on the last day of the Interest Period of the same or different
duration in accordance with the limitations provided above.  If Borrower shall fail to give notice to
Administrative Agent of such a Continuation, such LIBOR Loan shall
automatically become a LIBOR Loan with an Interest Period of one (1) month
on the last day of the current Interest Period. 
Administrative Agent shall notify each of the Banks, either by telephone
or by facsimile, at least two (2) Banking Days prior to the termination of
the Interest Period in question in the event of such failure by Borrower to
give such notice of Continuation.

 

Section 2.05         Interest.  Borrower shall pay interest to Administrative
Agent for the account of the applicable Bank on the outstanding and unpaid
principal amount of the Loans, at a rate per annum as follows: (1) for
Base Rate Loans at a rate equal to the Base Rate plus the Applicable Margin and
(2) for LIBOR Loans at a rate equal to the applicable LIBOR Interest Rate
plus the Applicable Margin.  Any
principal amount not paid when due (when scheduled, at acceleration or
otherwise) shall bear interest thereafter, payable on demand, at the Default
Rate.

 

The interest rate on Base Rate Loans shall
change when the Base Rate changes. 
Interest on Base Rate Loans and LIBOR Loans shall not exceed the maximum
amount permitted under applicable Law. 
Interest shall be calculated for the actual number of days elapsed on
the basis of three hundred sixty (360) days.

 

Accrued interest shall be due and payable
in arrears upon and with respect to any payment or prepayment of principal and
on the first Banking Day of each calendar month; provided, however, that
interest accruing at the Default Rate shall be due and payable on demand.

 

Section 2.06         Fees.  Borrower agrees to pay to and for the
accounts of the parties specified therein, the fees provided for in the Fee
Letter and the Supplemental Fee Letter.

 

Section 2.07         Notes.  Each Tranche A Loan, Tranche B Loan and
Tranche C Loan made by each Bank under this Agreement shall be evidenced by,
and repaid with interest in accordance with, a separate promissory note of
Borrower in the form of EXHIBIT B duly
completed and executed by Borrower (each a “Note”).  Each Bank is hereby authorized by Borrower to
endorse on the schedule attached to each Note held by it, the amount of each
advance and each payment of principal received by such Bank for the account of
its Applicable Lending Office(s) on account of such Loan, which
endorsement shall, in the absence of manifest error, be conclusive as to the
outstanding balance of such Loan made by such Bank.  In case of any loss, theft, destruction or
mutilation of any Bank’s Note,
Borrower shall, upon its receipt of an affidavit of an officer of such Bank as
to such loss, theft, destruction or mutilation and an appropriate
indemnification, execute and deliver a replacement Note to such Bank in the same
principal amount and otherwise of like tenor as the lost, stolen, destroyed or
mutilated Note.

 

Section 2.08         Repayments; Prepayments.

 

(a)           The Borrower promises to pay on the Tranche A Maturity
Date, and there shall become absolutely due and payable on the Tranche A
Maturity Date, all of the Tranche A Loans outstanding on such date, together
with any and all accrued and unpaid interest thereon.  The Borrower promises to pay on the Tranche B
Maturity Date, and there 

 

18

 

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

 

(b)           Without prepayment premium or penalty
but subject to Section 3.05, Borrower may, upon at least one (1) Banking
Day’s notice to Administrative
Agent in the case of the Base Rate Loans, and at least three (3) Banking
Days’ notice to Administrative
Agent (who shall provide such notice, promptly upon receipt, to each of the
Banks) in the case of LIBOR Loans, prepay the Loans, provided that (1) any
partial prepayment under this Section shall be in integral multiples of
$500,000; (2) a LIBOR Loan may be prepaid at any time, subject, however,
to the provisions of Section 3.05; (3) each prepayment under this Section shall
include all interest accrued on the amount of principal prepaid through the
date of prepayment and (4) each prepayment under this Section shall
be applied (A) so long as no Event of Default has occurred and is
continuing, to the Tranche A Loans, the Tranche B Loans and the Tranche C Loans
as elected by the Borrower and (B) if an Event of Default has occurred and
is continuing, to the Loans pro-rata across the Tranche A Loans, the Tranche B Loans
and the Tranche C Loans.

 

(c)           Any Loans that are repaid or prepaid
may not be reborrowed.

 

Section 2.09         [Intentionally Deleted].

 

Section 2.10         Method of Payment.  Borrower shall make each payment under this
Agreement and under the Notes not later than 11:00 a.m. (New York time) on
the date when due in Dollars to Administrative Agent at Administrative Agent’s Office in immediately available
funds.  Administrative Agent will
thereafter, on the day of its receipt of each such payment, cause to be distributed
to each Bank (1) such Bank’s
appropriate share determined pursuant to Section 10.15 of the payments of
principal and interest in like funds for the account of such Bank’s Applicable Lending Office; and (2) fees
payable to such Bank in accordance with the terms of this Agreement.  In the event Administrative Agent fails to
pay funds received from Borrower to the Banks on the date on which Borrower is
credited with payment, Administrative Agent shall pay interest on such amounts
at the Federal Funds Rate until such payment to the Banks is made.  Borrower hereby authorizes Administrative
Agent and the Banks, if and to the extent payment by Borrower is not made when
due under this Agreement or under the Notes, to charge from time to time
against any account Borrower maintains with Administrative Agent or any Bank
any amount so due to Administrative Agent and/or the Banks.  Except to the extent provided in this
Agreement, whenever any payment to be made under this Agreement or under the
Notes is due on any day other than a Banking Day, such payment shall be made on
the next succeeding Banking Day, and such extension of time shall in such case
be included in the computation of the payment of interest and other fees, as
the case may be.

 

Section 2.11         Elections, Conversions or
Continuation of Loans. 
Subject to the provisions of Article III and Sections 2.04 and
2.12, Borrower shall have the right to Elect to have all or a portion of any
advance of the Loans be LIBOR Loans, to Convert Base Rate Loans into 

 

19

 

LIBOR Loans, to
Convert LIBOR Loans into Base Rate Loans, or to Continue LIBOR Loans as LIBOR
Loans, at any time or from time to time, provided that (1) Borrower shall
give Administrative Agent notice of each such Election, Conversion or
Continuation as provided in Section 2.13; and (2) a LIBOR Loan may be
Converted or Continued only on the last day of the applicable Interest Period
for such LIBOR Loan.  Except as otherwise
provided in this Agreement, each Election, Continuation and Conversion shall be
applicable to each Bank’s Loan
in accordance with its applicable Pro Rata Share.

 

Section 2.12         Minimum Amounts.  With respect to the Loans (or any portion
thereof), each Election and each Conversion shall be in an amount at least
equal to $1,000,000 and in integral multiples of $500,000.

 

Section 2.13         Certain Notices Regarding Elections,
Conversions and Continuations of Loans.  Notices by Borrower to Administrative Agent
of Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable
and shall be effective only if received by Administrative Agent not later than
10:30 a.m. (New York time) on the number of Banking Days prior to the date
of the relevant Election, Conversion or Continuation specified below:

 

	
   

  	
   

  	
  Number of Banking Days Prior Notice

  
	
   

  	
   

  	
   

  
	
  Conversions into Base Rate Loans

  	
   

  	
  two (2)

  
	
   

  	
   

  	
   

  
	
  Elections of, Conversions into or
  Continuations as, LIBOR Loans 

  	
   

  	
  three (3)

  

 

Promptly
following its receipt of any such notice, and no later than the close of business
on the Banking Day of such receipt, Administrative Agent shall so advise the
Banks either by telephone or by facsimile. 
Each such notice of Election shall specify the portion of the amount of
the advance that is to be LIBOR Loans (subject to Section 2.12) and the
duration of the Interest Period applicable thereto (subject to Section 2.04);
each such notice of Conversion shall specify the LIBOR Loans or Base Rate Loans
to be Converted; and each such notice of Conversion or Continuation shall
specify the date of Conversion or Continuation (which shall be a Banking Day),
the amount thereof (subject to Section 2.12) and the duration of the
Interest Period applicable thereto (subject to Section 2.04).  In the event that Borrower fails to Elect to
have any portion of an advance of the Loans be LIBOR Loans, the entire amount
of such advance shall constitute Base Rate Loans.  In the event that Borrower fails to Continue
LIBOR Loans within the time period and as otherwise provided in this Section,
such LIBOR Loans will automatically become LIBOR Loans with an Interest Period
of one (1) month on the last day of the then current applicable Interest
Period for such LIBOR Loans. 
Administrative Agent shall notify each of the Banks, either by telephone
or by facsimile, at least two (2) Banking Days prior to the termination of
the Interest Period in question in the event of such failure by Borrower.

 

Section 2.14         Late Payment Premium.  Borrower shall, at Administrative Agent’s option and upon notice to Borrower,
pay to Administrative Agent for the account of the Banks a late payment premium
in the amount of 4% of any payments of interest under the Loans made more than
ten (10) days after the due date thereof, which shall be due with any such
late payment.

 

20

 

Section 2.15         Incremental Term Loans

 

(a)           The
Borrower may, by written notice to the Syndication Agent on two occasions
during the period from the Closing Date to the six-month anniversary of the
Closing Date, request incremental Loan Commitments in an amount not to exceed
the aggregate amount of $70,000,000 (the “Incremental Limit”) (such that
the aggregate amount of all initial Loans and incremental Loans made hereunder
shall not exceed $400,000,000) from one or more additional Banks (which may
include any existing Bank) willing to provide such incremental Loans in their
own discretion; provided, that each incremental Bank shall be subject to the
approval of the Administrative Agent (which approval shall not be unreasonably
withheld) unless such incremental Bank is a Bank or an Affiliate of a
Bank.  Such notice shall set forth (i) the
amount of the incremental Loan Commitments being requested, which must be at
least $20,000,000, and (ii) the date on which such incremental Loan
Commitments are requested to become effective (the “Increased Amount Date”).  Any incremental Loan Commitments shall be
allocated pro-rata across the Tranche A Loans, the Tranche B Loans and the
Tranche C Loans.

 

(b)           The
Borrower and each incremental Bank shall execute and deliver to the
Administrative Agent such documentation as the Administrative Agent shall
reasonably specify to evidence the incremental Loan Commitment of such
incremental Bank.  Each of the parties
hereto hereby agrees that, upon the effectiveness of any such documentation,
this Agreement shall be amended to the extent (but only to the extent)
necessary to reflect the existence and terms of the incremental Loan
Commitments and incremental Loans evidenced thereby, and new Note(s) shall
be issued and the Borrower shall make such borrowings without the consent of
the Banks other than those Banks with incremental Loan Commitments.  The fees payable by the Borrower upon any
such incremental Loan Commitments shall be agreed upon by the Administrative
Agent, the Banks with incremental Loan Commitments and the Borrower at the time
of such increase.

 

Notwithstanding the foregoing, nothing in
this Section 2.15 shall constitute or be deemed to constitute an agreement
by any Bank to increase its Loan Commitments or make incremental Loans
hereunder.

 

(c)           Notwithstanding
the foregoing, no incremental Loan Commitment shall become effective under this
Section 2.15 and no incremental Loans shall be made unless (i) on the
date of such effectiveness, the conditions set forth in Section 4.02 shall
be satisfied and the Administrative Agent shall have received a certificate to
that effect dated such date and executed by a financial officer of the
Borrower, (ii) the Administrative Agent shall have received new Note(s),
customary legal opinions, board resolutions and other customary closing
certificates and documentation as required by the relevant amendment or other
documentation and, to the extent required by the Administrative Agent,
consistent with those delivered on the Effective Date under Section 4.01
and such additional customary documents and filings as the Administrative Agent
may reasonably require, and (iii) the Borrower shall be in pro forma
compliance with the covenants set forth in Article VIII after giving
effect to such incremental Loan Commitments, the Loans to be made thereunder
and the application of the proceeds therefrom as if made and applied on such
date.

 

21

 

ARTICLE III

YIELD PROTECTION; ILLEGALITY, ETC.

 

Section 3.01         Additional Costs.  Borrower shall pay directly to each Bank from
time to time on demand such amounts as such Bank may determine to be necessary
to compensate it for any increased costs which such Bank determines are
attributable to its making or maintaining a LIBOR Loan, or its obligation to
make or maintain a LIBOR Loan, or its obligation to Convert a Base Rate Loan to
a LIBOR Loan hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of its LIBOR Loan or such obligations (such increases in
costs and reductions in amounts receivable being herein called “Additional Costs”), in each case
resulting from any Regulatory Change which:

 

(1)           changes the basis of taxation of any
amounts payable to such Bank under this Agreement or the Notes in respect of
any such LIBOR Loan (other than changes in the rate of general corporate,
franchise, branch profit, net income or other income tax imposed on such Bank
or its Applicable Lending Office by the jurisdiction in which such Bank has its
principal office or such Applicable Lending Office); or

 

(2)           (other than to the extent the LIBOR
Reserve Requirement is taken into account in determining the LIBOR Rate at the
commencement of the applicable Interest Period) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any LIBOR Loan or any deposits referred to in the definition of “LIBOR
Interest Rate” in Section 1.01), or any commitment of such Bank (including
such Bank’s Loan Commitment
hereunder); or

 

(3)           imposes any other condition affecting
this Agreement or the Notes (or any of such extensions of credit or
liabilities).

 

Without limiting the effect of the
provisions of the first paragraph of this Section, in the event that, by reason
of any Regulatory Change, any Bank either (1) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits of other liabilities of such Bank which includes deposits
by reference to which the LIBOR Interest Rate is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Bank
which includes loans based on the LIBOR Interest Rate or (2) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if such Bank so elects by notice to Borrower
(with a copy to Administrative Agent), the obligation of such Bank to permit
Elections of, to Continue, or to Convert Base Rate Loans into, LIBOR Loans
shall be suspended (in which case the provisions of Section 3.04 shall be
applicable) until such Regulatory Change ceases to be in effect.

 

Determinations and allocations by a Bank
for purposes of this Section of the effect of any Regulatory Change
pursuant to the first or second paragraph of this Section, on its costs or rate
of return of making or maintaining its Loan or portions thereof or on amounts
receivable by it in 

 

22

 

respect
of its Loan or portions thereof, and the amounts required to compensate such
Bank under this Section, shall be included in a calculation of such amounts
given to Borrower and shall be conclusive absent manifest error.

 

Section 3.02         Limitation on Types of Loans.  Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBOR Interest
Rate for any Interest Period:

 

(1)           Administrative Agent reasonably
determines (which determination shall be conclusive), and provides Borrower, in
writing, with reasonable detail supporting such determination, that quotations
of interest rates for the relevant deposits referred to in the definition of “LIBOR
Interest Rate” in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining rates of
interest for the LIBOR Loans as provided in this Agreement; or

 

(2)           a Bank reasonably determines (which
determination shall be conclusive), and provides Borrower, in writing, with
reasonable detail supporting such determination, and promptly notifies
Administrative Agent that the relevant rates of interest referred to in the
definition of “LIBOR Interest Rate” in Section 1.01 upon the basis of
which the rate of interest for LIBOR Loans for such Interest Period is to be
determined do not adequately cover the cost to such Bank of making or
maintaining such LIBOR Loan for such Interest Period;

 

then
Administrative Agent shall give Borrower prompt notice thereof, and so long as
such condition remains in effect, the Banks (or, in the case of the
circumstances described in clause (2) above, the affected Bank) shall be
under no obligation to permit Elections of LIBOR Loans, to Convert Base Rate
Loans into LIBOR Loans or to Continue LIBOR Loans and Borrower shall, on the
last day(s) of the then current Interest Period(s) for the affected
outstanding LIBOR Loans, either (x) prepay the affected LIBOR Loans or (y) Convert
the affected LIBOR Loans into Base Rate Loans in accordance with Section 2.11.

 

Section 3.03         Illegality.  Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain a LIBOR Loan
hereunder, to allow Elections or Continuations of a LIBOR Loan or to Convert a
Base Rate Loan into a LIBOR Loan, then such Bank shall promptly notify
Administrative Agent and Borrower thereof and such Bank’s obligation to make or maintain a LIBOR Loan, or to permit
Elections of, to Continue, or to Convert its Base Rate Loan into, a LIBOR Loan
shall be suspended (in which case the provisions of Section 3.04 shall be
applicable) until such time as such Bank may again make and maintain a LIBOR
Loan.

 

Section 3.04         Treatment of Affected Loans.  If the obligations of any Bank to make or
maintain a LIBOR Loan, or to permit an Election of a LIBOR Loan, to Continue
its LIBOR Loan, or to Convert its Base Rate Loan into a LIBOR Loan, are
suspended pursuant to Sections 3.01 or 3.03 (each LIBOR Loan so affected being
herein called an “Affected Loan”), such Bank’s Affected Loan shall be
automatically Converted into a Base Rate Loan on the last day of the then current

 

23

 

Interest Period
for the Affected Loan (or, in the case of a Conversion (or conversion) required
by Sections 3.01 or 3.03, on such earlier date as such Bank may specify to
Borrower).

 

To the extent that such Bank’s Affected Loan has been so Converted
(or the interest rate thereon so converted), all payments and prepayments of
principal which would otherwise be applied to such Bank’s Affected Loan shall be applied instead to its Base Rate Loan
and such Bank shall have no obligation to Convert its Base Rate Loan into a
LIBOR Loan.

 

Section 3.05         Certain Compensation.  Other than in connection with a Conversion of
an Affected Loan, Borrower shall pay to Administrative Agent for the account of
the applicable Bank, upon the request of such Bank through Administrative Agent
which request includes a calculation of the amount(s) due, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Bank) to
compensate it for any non-administrative, actual loss, cost or expense which
such Bank reasonably determines is attributable to:

 

(1)           any payment or prepayment of a LIBOR
Loan made by such Bank, or any Conversion or Continuation of a LIBOR Loan made
by such Bank, in any such case on a date other than the last day of an
applicable Interest Period, whether by reason of acceleration or otherwise; or

 

(2)           any failure by Borrower for any
reason to Convert a Base Rate Loan or a LIBOR Loan or Continue a LIBOR Loan to
be Converted or Continued by such Bank on the date specified therefor in the
relevant notice under Section 2.13; or

 

(3)           any failure by Borrower to borrow (or
to qualify for a borrowing of) a LIBOR Loan which would otherwise be made
hereunder on the date specified in the relevant Election notice under Section 2.13.

 

Without limiting the foregoing, such
compensation shall include any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after the date of such payment, prepayment, Conversion or Continuation
(or failure to Convert, Continue or borrow). 
A determination of any Bank as to the amounts payable pursuant to this Section shall
be conclusive absent manifest error.  No
Bank shall make any request pursuant to this Section 3.05 unless such
amounts due to, and costs incurred by, such Bank are equal to or greater than
$100.

 

Section 3.06         Capital Adequacy.  If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or regulation
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 any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank’s obligations hereunder to a level
below that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by such
Bank (with a copy to Administrative 

 

24

 

Agent), Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank (or its Parent) for such reduction. 
A certificate of any Bank claiming compensation under this Section,
setting forth in reasonable detail the basis therefor, shall be conclusive
absent manifest error.

 

Section 3.07         Substitution of Banks.  If any Bank (an “Affected
Bank”) (1) makes demand upon Borrower for (or if Borrower
is otherwise required to pay) Additional Costs pursuant to Section 3.01 or
(2) is unable to make or maintain a LIBOR Loan as a result of a condition
described in Section 3.03 or clause (2) of Section 3.02,
Borrower may, within ninety (90) days of receipt of such demand or notice (or
the occurrence of such other event causing Borrower to be required to pay
Additional Costs or causing said Section 3.03 or clause (2) of Section 3.02
to be applicable), as the case may be, give written notice (a “Replacement Notice”) to
Administrative Agent and to each Bank of Borrower’s intention either (x) to prepay in full the Affected Bank’s Note(s) and to terminate the
Affected Bank’s entire Loan
Commitment or (y) to replace the Affected Bank with another financial
institution (the “Replacement Bank”) designated
in such Replacement Notice.  In the event
Borrower opts to give the notice provided for in clause (x) above, and if
the Affected Bank shall not agree within thirty (30) days of its receipt
thereof to waive the payment of the Additional Costs in question or the effect
of the circumstances described in Section 3.03 or clause (2) of Section 3.02,
then, so long as no Default or Event of Default shall exist, Borrower may
(notwithstanding the provisions of clause (2) of Section 2.09(a))
terminate the Affected Bank’s
entire Loan Commitment, provided that in connection therewith it pays to the
Affected Bank all outstanding principal and accrued and unpaid interest under
the Affected Bank’s Note(s),
together with all other amounts, if any, due from Borrower to the Affected
Bank, including all amounts properly demanded and unreimbursed under Sections
3.01 and 3.05.

 

In the event Borrower opts to give the
notice provided for in clause (y) above, and if (i) Administrative
Agent shall, within thirty (30) days of its receipt of the Replacement Notice,
notify Borrower and each Bank in writing that the Replacement Bank is
reasonably satisfactory to Administrative Agent and (ii) the Affected Bank
shall not, prior to the end of such thirty (30)-day period, agree to waive the
payment of the Additional Costs in question or the effect of the circumstances
described in Section 3.03 or clause (2) of Section 3.02, then
the Affected Bank shall, so long as no Default or Event of Default shall exist,
assign its Note(s) and all of its rights and obligations under this
Agreement to the Replacement Bank, and the Replacement Bank shall assume all of
the Affected Bank’s rights and
obligations, pursuant to an agreement, substantially in the form of an
Assignment and Acceptance, executed by the Affected Bank and the Replacement
Bank in accordance with Section 12.05. 
In connection with such assignment and assumption, the Replacement Bank
shall pay to the Affected Bank an amount equal to the outstanding principal
amount under the Affected Bank’s
Note(s) plus all interest accrued thereon, plus all other amounts, if any
(other than the Additional Costs in question), then due and payable to the
Affected Bank; provided, however, that prior to or simultaneously with any such
assignment and assumption, Borrower shall have paid to such Affected Bank all
amounts properly demanded and unreimbursed under Sections 3.01 and 3.05.  Upon the effective date of such assignment
and assumption, the Replacement Bank shall become a Bank party to this
Agreement and shall have all the rights and obligations of a Bank as set forth
in such Assignment and Acceptance, and the Affected Bank shall be released from
its obligations hereunder, and no further consent or action by any party shall
be required.  Upon the consummation of
any assignment pursuant to this Section, substitute Note(s) shall be
issued to the Replacement Bank by Borrower, in exchange for the return of the
Affected 

 

25

 

Bank’s Note(s).  The obligations evidenced by such substitute
note shall constitute “Obligations” for all purposes of this Agreement and the other
Loan Documents.  In connection with
Borrower’s execution of
substitute notes as aforesaid, Borrower shall deliver to Administrative Agent
evidence, satisfactory to Administrative Agent, of all requisite corporate
action to authorize Borrower’s
execution and delivery of the substitute notes and any related documents.  If the Replacement Bank is not incorporated
under the Laws of the United States of America or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 10.13. 
Each Replacement Bank shall be deemed to have made the representations
contained in, and shall be bound by the provisions of, Section 10.13.

 

Borrower, Administrative Agent and the
Banks shall execute such modifications to the Loan Documents as shall be
reasonably required in connection with and to effectuate the foregoing.

 

Section 3.08         Applicability.  The provisions of this Article III shall
be applied to Borrower so as not to discriminate against Borrower vis-a-vis
similarly situated customers of the Banks.

 

Section 3.09         Time for Notices.  No Bank shall be entitled to compensation
under Section 3.01 or Section 3.06 for any costs incurred or
reduction suffered with respect to any date unless such Bank shall have
notified the Borrower that it will demand compensation for such costs or
reduction (such notice to provide a computation of such costs or reductions)
not more than one hundred and twenty (120) days after such Bank has obtained
actual knowledge of an event entitling it to such compensation, except that if
such event giving rise to compensation is retroactive, then the 120-day period
referred to above shall be extended to include the period of retroactive
effect.

 

ARTICLE IV

CONDITIONS PRECEDENT

 

Section 4.01         Conditions Precedent to the Initial
Advance. 
The obligations of the Banks hereunder and the obligation of each Bank
to make the Loans are subject to the condition precedent that Administrative
Agent shall have received and approved each of the following documents and each
of the following requirements shall have been fulfilled:

 

(1)           Fees and Expenses.  The payment of (a) all fees and expenses
incurred by Syndication Agent and Administrative Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) and (b) those
fees specified in the Fee Letter and the Supplemental Fee Letter to be paid by
Borrower on or before the Closing Date, including the closing fees payable to
the Banks;

 

(2)           Loan Agreement and Notes.  This Agreement and the Notes for each of the
Banks signatory hereto, each duly executed by Borrower;

 

(3)           Financial Statements.  Audited Borrower’s Consolidated Financial Statements as of and for the year ended December 31,
2007;

 

26

 

(4)           Evidence of Formation of Borrower.  Certified (as of the Closing Date) copies of Borrower’s certificate of incorporation and
by-laws, with all amendments thereto, and a certificate of the Secretary of
State of the jurisdiction of formation as to its good standing therein;

 

(5)           Evidence of All Corporate Action.  Certified (as of the Closing Date) copies of
all documents evidencing the corporate action taken by Borrower authorizing the
execution, delivery and performance of the Loan Documents and each other
document to be delivered by or on behalf of Borrower pursuant to this
Agreement;

 

(6)           Incumbency and Signature
Certificate of Borrower.  A
certificate (dated as of the Closing Date) of the secretary of Borrower
certifying the names and true signatures of each person authorized to sign on
behalf of Borrower;

 

(7)           Solvency Certificate.  A duly executed Solvency Certificate;

 

(8)           Opinion of Counsel for Borrower.  A favorable opinion, dated the Closing Date,
of Goodwin Procter LLP, counsel for Borrower, as to such matters as
Administrative Agent may reasonably request;

 

(9)           Authorization Letter.  The Authorization Letter, duly executed by
Borrower;

 

(10)         Request for Advance.  A request for an advance in accordance with Section 2.03;

 

(11)         Certificate.  The following statements shall be true and
Administrative Agent shall have received a certificate dated the Closing Date
signed by a duly authorized signatory of Borrower stating, to the best of the
certifying party’s knowledge,
the following:

 

(a)           All representations and warranties
contained in this Agreement and in each of the other Loan Documents are true
and correct on and as of the Closing Date as though made on and as of such
date, and

 

(b)           No Default or Event of Default has
occurred and is continuing, or could result from the transactions contemplated
by this Agreement and the other Loan Documents; and

 

(c)           No Material Adverse Change exists on
and as of the Closing Date;

 

(12)         Fee Letters.  The Fee Letter and Supplemental Fee Letter,
duly executed by Borrower;

 

27

 

(13)         Covenant Compliance.  A covenant compliance certificate of the sort
required by paragraph (3) of Section 6.09 for the most recent
calendar quarter for which Borrower is required to report financial results;
and

 

(14)         Additional Materials.  Such other approvals, documents, instruments
or opinions as Administrative Agent may reasonably request.

 

Section 4.02         Conditions Precedent to Each Advance.  The obligation of each Bank to make each
advance of the Loans shall be subject to satisfaction of the following
conditions precedent:

 

(1)           All conditions of Section 4.01
shall have been and remain satisfied as of the date of such advance;

 

(2)           No Default or Event of Default shall
have occurred and be continuing as of the date of the advance or would result
from the making of such advance;

 

(3)           Each of the representations and
warranties contained in this Agreement and in each of the other Loan Documents
shall be true and correct in all material respects as of the date of the
advance; and

 

(4)           Administrative Agent shall have
received a request for an advance in accordance with Section 2.03.

 

Section 4.03         Deemed Representations.  Each request by Borrower for, and acceptance
by Borrower of, an advance of proceeds of the Loans shall constitute a
representation and warranty by Borrower that, as of both the date of such
request and the date of such advance (1) no Default or Event of Default
has occurred and is continuing or would result from the making of such advance
and (2) each representation or warranty contained in this Agreement or the
other Loan Documents is true and correct in all material respects.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to
Administrative Agent and each Bank as follows:

 

Section 5.01         Due Organization.  Borrower is duly organized, validly existing
and in good standing under the Laws of the jurisdiction of its organization,
has the power and authority to own its assets and to transact the business in
which it is now engaged, and, if applicable, is duly qualified for the conduct
of business and in good standing under the Laws of each other jurisdiction in
which such qualification is required and where the failure to be so qualified
would cause a Material Adverse Change.

 

Section 5.02         Power and Authority; No Conflicts;
Compliance With Laws. 
The execution, delivery and performance of the obligations required to
be performed by Borrower of the Loan Documents are within the Borrower’s
corporate powers, have been authorized by all necessary corporate action, and
do not and will not (a) require the consent or approval of its 

 

28

 

shareholders or
such consent or approval has been obtained, (b) contravene either its
certificate of incorporation or by-laws, (c) to the best of Borrower’s knowledge, violate any provision
of, or require any filing, registration, consent or approval under, any Law
(including, without limitation, Regulation U), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it, (d) result in a breach of or constitute a default
under or require any consent under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which it may be a party or by which
it or its properties may be bound or affected except for consents which have
been obtained, (e) result in, or require, the creation or imposition of
any Lien, upon or with respect to any of its properties now owned or hereafter
acquired or (f) to the best of Borrower’s knowledge, cause it to be in default under any such Law, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument; to the best of its knowledge,
Borrower is in material compliance with all Laws applicable to it and its
properties.

 

Section 5.03         Legally Enforceable Agreements.  Each Loan Document has been duly executed and
delivered by the Borrower and is a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar Laws affecting creditors’ rights generally.

 

Section 5.04         Litigation.  There are no actions, suits or proceedings
pending or, to its knowledge, threatened against Borrower or any of its
Affiliates before any court or arbitrator or any Governmental Authority which
are reasonably likely to result in a Material Adverse Change or challenge the
validity or enforceability of any of the Loan Documents.

 

Section 5.05         Good Title to Properties.  Borrower and each of its Material Affiliates
have good, marketable and legal title to all of the properties and assets each
of them purports to own (including, without limitation, those reflected in the
Consolidated Financial Statements referred to in Section 5.13), only with
exceptions which do not materially detract from the value of such property or
assets or the use thereof in Borrower’s
and such Material Affiliate’s
business, and except to the extent that any such properties and assets have
been encumbered or disposed of since the date of such financial statements
without violating any of the covenants contained in Article VII or
elsewhere in this Agreement.  Borrower
and its Material Affiliates enjoy peaceful and undisturbed possession of all
leased property necessary in any material respect in the conduct of their
respective businesses.  All such leases
are valid and subsisting and are in full force and effect.

 

Section 5.06         Taxes.  Borrower has filed all tax returns (federal,
state and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies due and payable without the imposition of a
penalty, including interest and penalties, except to the extent they are the
subject of a Good Faith Contest. Borrower qualifies as a real estate investment
trust under the Code.

 

Section 5.07         ERISA.  Borrower is in compliance in all material
respects with all applicable provisions of ERISA.  Neither a Reportable Event nor a Prohibited
Transaction has occurred with respect to any Plan which could result in
liability of Borrower; no notice of intent to terminate a Plan has been filed
nor has any Plan been terminated within the past five (5) years; no
circumstance exists which constitutes grounds under Section 4042 of ERISA
entitling the PBGC to 

 

29

 

institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; Borrower and the ERISA Affiliates have
not completely or partially withdrawn under Sections 4201 or 4204 of ERISA from
a Multiemployer Plan; Borrower and the ERISA Affiliates have met the minimum
funding requirements of Section 412 of the Code and Section 302 of
ERISA of each with respect to the Plans of each and there is no material “Unfunded
Current Liability” (as such quoted term is defined in ERISA) with respect to
any Plan established or maintained by each; and Borrower and the ERISA
Affiliates have not incurred any liability to the PBGC under ERISA (other than
for the payment of premiums under Section 4007 of ERISA).  No part of the funds to be used by Borrower
in satisfaction of its obligations under this Agreement constitute “plan assets”
of any “employee benefit plan” within the meaning of ERISA or of any “plan”
within the meaning of Section 4975(e)(1) of the Code, as interpreted
by the Internal Revenue Service and the U.S. Department of Labor in rules,
regulations, releases, bulletins or as interpreted under applicable case law.

 

Section 5.08         No Default on Outstanding Judgments
or Orders, Etc. 
Borrower and each of its Material Affiliates have satisfied all
judgments which are not being appealed or which are not fully covered by
insurance, and are not in default with respect to any judgment, order, writ,
injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other Governmental Authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.

 

Section 5.09         No Defaults on Other Agreements.  Except as disclosed to Administrative Agent
in writing (who shall provide such information, promptly upon receipt, to each
of the Banks), Borrower is not a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
partnership, trust or other restriction which is likely to result in a Material
Adverse Change.  Borrower is not in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument which is likely to result in a Material Adverse Change. Borrower and
each of its Material Affiliates are in compliance in all material respects with
all Laws applicable to it, except where no Material Adverse Change could
reasonably be expected to occur as a result of such non-compliance.

 

Section 5.10         Government Regulation.  Borrower is not subject to regulation under
the Investment Company Act of 1940 or any statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.

 

Section 5.11         Environmental Protection.  To the best of Borrower’s knowledge, none of Borrower’s or its Material Affiliates’ properties contains any Hazardous
Materials that, under any Environmental Law currently in effect, (1) would
impose liability on Borrower that is likely to result in a Material Adverse
Change or (2) is likely to result in the imposition of a Lien on any
assets of Borrower or its Material Affiliates, in each case if not properly handled
in accordance with applicable Law or not covered by insurance or a bond, in
either case reasonably satisfactory to Administrative Agent.  To the best of Borrower’s knowledge, neither it nor any of
its Material Affiliates is in material violation of, or subject to any
existing, pending or threatened material investigation or proceeding by any
Governmental Authority under any Environmental Law.

 

30

 

Section 5.12         Solvency.  Borrower is, and upon consummation of the
transactions contemplated by this Agreement, the other Loan Documents and any
other documents, instruments or agreements relating thereto, will be, Solvent.

 

Section 5.13         Financial Statements.  The Borrower’s Consolidated Financial Statements most recently delivered to
the Banks pursuant to the terms of this Agreement are in all material respects
complete and correct and fairly present the financial condition of the subject
thereof as of the dates of and for the periods covered by such statements, all
in accordance with GAAP.  There has been
no Material Adverse Change since the date of such most recently delivered
Borrower’s Consolidated
Financial Statements.

 

Section 5.14         Valid Existence of Affiliates.  At the Closing Date, the only Material
Affiliates of Borrower are listed on EXHIBIT C.  Each Material Affiliate is a corporation,
partnership or limited liability company duly organized and existing in good
standing under the Laws of the jurisdiction of its formation.  As to each Material Affiliate, its correct
name, the jurisdiction of its formation, Borrower’s percentage of beneficial interest therein, and the type of
business in which it is primarily engaged, are set forth on said EXHIBIT C.  Borrower
and each of its Material Affiliates have the power to own their respective
properties and to carry on their respective businesses now being
conducted.  Each Material Affiliate is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the respective businesses
conducted by it or its respective properties, owned or held under lease, make
such qualification necessary and where the failure to be so qualified would
cause a Material Adverse Change.

 

Section 5.15         Insurance.  Borrower and each of its Material Affiliates
have in force paid insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are
usually carried by companies engaged in the same type of business and similarly
situated.

 

Section 5.16         Accuracy of Information; Full
Disclosure. 
Neither this Agreement nor any documents, financial statements, reports,
notices, schedules, certificates, statements or other writings furnished by or
on behalf of Borrower to Administrative Agent or any Bank in connection with
the negotiation of this Agreement or the consummation of the transactions
contemplated hereby, or required herein to be furnished by or on behalf of
Borrower (other than projections which are made by Borrower in good faith),
contains any untrue or misleading statement of a material fact or omits a
material fact necessary to make the statements herein or therein not
misleading.  To the best of Borrower’s knowledge, there is no fact which
Borrower has not disclosed to Administrative Agent and the Banks in writing
which materially affects adversely nor, so far as Borrower can now foresee,
will materially affect adversely the business affairs or financial condition of
Borrower or the ability of Borrower to perform this Agreement and the other
Loan Documents.

 

Section 5.17         OFAC.  None of the Borrower, any of its Consolidated
Businesses, or any Affiliate of the Borrower : (i) is a person named on
the list of Specially Designated Nationals or Blocked Persons maintained by the
U.S. Department of the Treasury’s Office of Foreign Assets Control available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time; (ii) is (A) an agency of the government
of a country, (B) an 

 

31

 

organization controlled by a country, or (C) a
person resident in a country that is subject to a sanctions program identified
on the list maintained by OFAC and available
at http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html,
or as otherwise published from time to time, as such program may be applicable
to such agency, organization or person; or (iii) derives more than 15% of
its assets or operating income from investments in or transactions with any
such country, agency, organization or person. 
None of the proceeds from the Loans will be used to finance any
operations, investments or activities in, or make any payments to, any such
country, agency, organization, or person.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

So
long as any of the Notes or Loans shall remain unpaid or the Loan Commitments
remain in effect, or any other amount is owing by Borrower to any Bank Party
hereunder or under any other Loan Document, Borrower shall, and, in the case of
Sections 6.01 through 6.07, inclusive, shall cause each of its Material
Affiliates to:

 

Section 6.01         Maintenance of Existence.  Preserve and maintain its legal existence and
good standing in the jurisdiction of its organization, and qualify and remain
qualified as a foreign entity in each other jurisdiction in which such
qualification is required except to the extent that failure to be so qualified
in such other jurisdictions is not likely to result in a Material Adverse
Change.

 

Section 6.02         Maintenance of Records.  Keep adequate records and books of account,
in which complete entries will be made reflecting all of its financial
transactions, in accordance with GAAP.

 

Section 6.03         Maintenance of Insurance.  At all times, maintain and keep in force
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in the same type of business and similarly situated, which
insurance shall be acceptable to Administrative Agent and may provide for
reasonable deductibility from coverage thereof. 
In connection with the foregoing, it is understood that Borrower’s earthquake insurance coverage in
place as of the Closing Date is acceptable to Administrative Agent.

 

Section 6.04         Compliance with Laws; Payment of
Taxes. 
Comply in all material respects with all Laws applicable to it or to any
of its properties or any part thereof, such compliance to include, without
limitation, paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property, except to the extent
they are the subject of a Good Faith Contest.

 

Section 6.05         Right of Inspection.  At any reasonable time and from time to time
upon reasonable notice, permit Administrative Agent or any Bank or any agent or
representative thereof to examine and make copies and abstracts from its
records and books of account and visit its properties and to discuss its affairs,
finances and accounts with the independent accountants of Borrower.

 

32

 

Section 6.06         Compliance With Environmental Laws.  Comply in all material respects with all
applicable Environmental Laws and timely pay or cause to be paid all costs and
expenses incurred in connection with such compliance, except to the extent
there is a Good Faith Contest.

 

Section 6.07         Maintenance of Properties.  Do all things reasonably necessary to
maintain, preserve, protect and keep its properties in good repair, working
order and condition except where the cost thereof is not in Borrower’s best interests and the failure to
do so would not result in a Material Adverse Change.

 

Section 6.08         Payment of Costs.  Pay all costs and expenses required for the
satisfaction of the conditions of this Agreement.

 

Section 6.09         Reporting and Miscellaneous Document
Requirements. 
Furnish directly to Administrative Agent (who shall provide, promptly
upon receipt, to each of the Banks):

 

(1)           Annual Financial Statements.  As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, Borrower’s Consolidated Financial Statements
as of the end of and for such Fiscal Year, in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period
in the prior Fiscal Year and audited by Borrower’s Accountants (without a “going
concern” or other extraordinary qualification or exception);

 

(2)           Quarterly Financial Statements.  As soon as available and in any event within
forty-five (45) days after the end of each calendar quarter (other than the
last quarter of the Fiscal Year), the unaudited Borrower’s Consolidated Financial Statements as of the end of and for such
calendar quarter, in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior Fiscal
Year;

 

(3)           Certificate of No Default and
Financial Compliance.  Within ninety
(90) days after the end of each Fiscal Year and within forty-five (45) days
after the end of each calendar quarter, a certificate of Borrower’s chief financial officer or
treasurer (a) stating that, to the best of his or her knowledge, no
Default or Event of Default has occurred and is continuing, or if a Default or
Event of Default has occurred and is continuing, specifying the nature thereof
and the action which is proposed to be taken with respect thereto; (b) stating
that the covenants contained in Sections 7.02, 7.03 and 7.04 and in Article VIII
have been complied with (or specifying those that have not been complied with)
and including computations demonstrating such compliance (or non-compliance);
and (c) setting forth the details of all items comprising Capitalization
Value, Unencumbered Asset Value, Total Outstanding Indebtedness, Secured
Indebtedness, Interest Expense and Unsecured Indebtedness (including amount,
maturity, interest rate and amortization requirements with respect to all
Indebtedness);

 

(4)           Certificate of Borrower’s
Accountants.  Simultaneously with the
delivery of the annual financial statements required by paragraph (1) of
this Section, (a) a statement of Borrower’s Accountants who audited such financial statements 

 

33

 

comparing the computations set
forth in the financial compliance certificate required by paragraph (3) of
this Section to the audited financial statements required by paragraph (1) of
this Section and (b) when the audited financial statements required
by paragraph (1) of this Section have a qualified auditor’s opinion, a statement of Borrower’s Accountants who audited such
financial statements of whether any Default or Event of Default has occurred
and is continuing;

 

(5)           Notice of Litigation.  Promptly after the commencement and knowledge
thereof, notice of all actions, suits, and proceedings before any court or
arbitrator, affecting Borrower which, if determined adversely to Borrower is
likely to result in a Material Adverse Change;

 

(6)           Notices of Defaults and Events of
Default.  As soon as possible and in
any event within ten (10) days after Borrower becomes aware of the
occurrence of a material Default or any Event of Default, a written notice
(which notice shall state that it is a “Notice of Default”) setting forth the
details of such Default or Event of Default and the action which is proposed to
be taken with respect thereto;

 

(7)           Material Adverse Change.  As soon as is practicable and in any event
within five (5) days after knowledge of the occurrence of any event or
circumstance which is likely to result in or has resulted in a Material Adverse
Change, written notice thereof;

 

(8)           Offices.  Thirty (30) days’ prior written notice of any
change in the chief executive office or principal place of business of Borrower;

 

(9)           Environmental and Other Notices.  As soon as possible and in any event within
ten (10) days after receipt, copies of all Environmental Notices received
by Borrower which are not received in the ordinary course of business and which
relate to a situation which is likely to result in a Material Adverse Change;

 

(10)         Insurance Coverage.  Promptly, such information concerning
Borrower’s insurance coverage as Administrative
Agent may reasonably request;

 

(11)         Proxy Statements, Etc.  Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which Borrower
or its Material Affiliates sends to its shareholders, and copies of all
regular, periodic and special reports, and all registration statements which Borrower
or its Material Affiliates files with the Securities and Exchange Commission or
any Governmental Authority which may be substituted therefor, or with any
national securities exchange;

 

(12)         Operating Statements.  As soon as available and in any event within
forty-five (45) days after the end of each calendar quarter, an operating
statement for each property directly or indirectly owned in whole or in part by
Borrower; and

 

34

 

(13)         General Information.  Promptly, such other information respecting
the condition or operations, financial or otherwise, of Borrower or any
properties of Borrower as Administrative Agent may from time to time reasonably
request.

 

Documents
required to be delivered pursuant to Sections 6.09(1), (2) or (11) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the website address listed in Section 12.07; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Bank and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall
deliver paper copies of such documents to the Administrative Agent or any Bank
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Bank and (ii) the Borrower shall notify the Administrative Agent and each
Bank (by telecopier or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. 
The Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Bank shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

 

The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Syndication Agent will make available to the Banks materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”)
by posting the Borrower Materials on IntraLinks or another similar electronic
system (the “Platform”)
and (b) certain of the Banks may be “public-side” Banks (i.e., Banks that do not wish to
receive material non-public information with respect to the Borrower or its
securities) (each, a “Public
Lender”).  The Borrower
hereby agrees that (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking Borrower Materials “PUBLIC,”
the Borrower shall be deemed to have authorized the Administrative Agent, the
Syndication Agent, and the Banks to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
or any confidentiality agreement entered into by any Bank; (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Investor;” and (z) the
Administrative Agent and the Syndication Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

 

35

 

ARTICLE VII

NEGATIVE COVENANTS

 

So long as any of the Notes or Loans shall
remain unpaid, or the Loan Commitments remain in effect, or any other amount is
owing by Borrower to any Bank Party hereunder or under any other Loan Document,
Borrower shall not do any or all of the following:

 

Section 7.01         Mergers Etc.  Merge or consolidate with (except where
Borrower is the surviving entity), or sell, assign, lease or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired).

 

Section 7.02         Investments.  Directly or indirectly, make any loan or
advance to any Person or purchase or otherwise acquire any capital stock,
assets, obligations or other securities of, make any capital contribution to,
or otherwise invest in, or acquire any interest in, any Person (any such
transaction, an “Investment”) if such
Investment constitutes the acquisition of a minority interest in a Person (a “Minority Interest”) and the amount
of such Investment, together with the value of all other Minority Interests,
would exceed 20% of Capitalization Value, determined as of the end of the most
recent calendar quarter for which Borrower is required to have reported
financial results pursuant to Section 6.09.  A 50% beneficial interest in a Person, in
connection with which the holder thereof exercises joint control over such
Person with the holder(s) of the other 50% beneficial interest, shall not
constitute a “Minority Interest” for purposes of this Section.

 

Section 7.03         Sale of Assets.  Effect (i) a Disposition of any of its
now owned or hereafter acquired assets (including equity interests therein),
including assets in which Borrower owns a beneficial interest through its
ownership of interests in joint ventures, (a) in one or more transactions
after the Closing Date aggregating more than 25% of Capitalization Value or (b) if
after giving effect to such Disposition, a Default or Event of Default would
exist, or (ii) the granting of a Lien on any Unencumbered Wholly-Owned
Assets or Unencumbered Land and Construction-In-Process, if after granting such
Lien, a Default or Event of Default would exist.

 

Section 7.04         Distributions.  During the existence of any Event of Default,
make, declare or pay, directly or indirectly, any dividend or distribution to
any of its equity holders in an amount greater than the minimum dividend or
distribution required under the Code to maintain the real estate investment
trust status of Borrower under the Code, as evidenced by a detailed certificate
of Borrower’s chief financial
officer or treasurer reasonably satisfactory in form and substance to
Administrative Agent; provided, however, that following acceleration of the
maturity of the Notes, Borrower shall not, directly or indirectly, make,
declare or pay any dividend or distribution to any of its equity holders.

 

36

 

ARTICLE VIII

FINANCIAL COVENANTS

 

So
long as any of the Notes or Loans shall remain unpaid, or the Loan Commitments
remain in effect, or any other amount is owing by Borrower to any Bank Party
under this Agreement or under any other Loan Document, Borrower shall not
permit or suffer any or all of the following:

 

Section 8.01         Relationship of Total Outstanding
Indebtedness to Capitalization Value.  At any time, the ratio of Total Outstanding
Indebtedness to Capitalization Value to exceed 60%; provided that such ratio
may exceed 60% from time to time following an acquisition by Borrower and its
Affiliates of real property assets so long as (a) such ratio does not
exceed 65%, (b) such ratio ceases to exceed 60% within 180 days after each
date such ratio first exceeded 60%, and (c) the Borrower provides a
certificate of its chief financial officer or treasurer to the Administrative
Agent when such ratio first exceeds 60% and when such ratio ceases to exceed 60%.

 

Section 8.02         Relationship of Combined EBITDA to
Combined Debt Service. 
For any calendar quarter, the ratio of (1) Combined EBITDA to (2) Combined
Debt Service (each for the twelve (12)-month period ending with such quarter),
to be less than 1.50 to 1.00.

 

Section 8.03         Ratio of Unsecured Indebtedness to
Unencumbered Asset Value.  At any time, the ratio of (1) Unsecured
Indebtedness to (2) Unencumbered Asset Value to exceed 65%.

 

Section 8.04         Relationship of Secured Indebtedness
to Capitalization Value.  At any time, Secured Indebtedness to exceed
40% of Capitalization Value.

 

ARTICLE IX

EVENTS OF DEFAULT

 

Section 9.01         Events of Default.  Any of the following events shall be an “Event
of Default”:

 

(1)           If Borrower shall fail to pay the
principal of any Notes or Loans as and when due, and such failure to pay shall
continue unremedied for five (5) days after the due date of such amount;
or fail to pay interest accruing on any Notes or Loans as and when due, and
such failure to pay shall continue unremedied for five (5) days after
written notice by Administrative Agent of such failure to pay; or fail to pay
any fee or any other amount due under this Agreement, any other Loan Document
or the Fee Letter or the Supplemental Fee Letter as and when due and such failure
to pay shall continue unremedied for two (2) Banking Days after written
notice by Administrative Agent of such failure to pay; or

 

(2)           If any representation or warranty
made by Borrower in this Agreement or in any other Loan Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with a Loan Document shall prove
to have been incorrect in any material respect on or as of the date made; or

 

37

 

(3)           If Borrower shall fail (a) to
perform or observe any term, covenant or agreement contained in Article VII
or Article VIII; or (b) to perform or observe any term, covenant or
agreement contained in this Agreement (other than obligations specifically
referred to elsewhere in this Section 9.01) or any Loan Document, or any
other document executed by Borrower and delivered to Administrative Agent or
the Banks in connection with the transactions contemplated hereby and such
failure under this clause (b) shall remain unremedied for thirty (30)
consecutive calendar days after notice thereof (or such shorter cure period as
may be expressly prescribed in the applicable document); provided, however,
that if any such default under clause (b) above cannot by its nature be
cured within such thirty (30) day, or shorter, as the case may be, grace period
and so long as Borrower shall have commenced cure within such thirty (30) day,
or shorter, as the case may be, grace period and shall, at all times
thereafter, diligently prosecute the same to completion, Borrower shall have an
additional period, not to exceed sixty (60) days,  to cure such default; in no event, however,
is the foregoing intended to effect an extension of the Tranche A Maturity Date,
Tranche B Maturity Date or Tranche C Maturity Date, as the case may be; or

 

(4)           If Borrower or any Consolidated
Business shall fail (a) to pay any Recourse Debt of the Borrower or such
Consolidated Business (other than the payment obligations described in
paragraph (1) of this Section) in an amount equal to or greater than
$50,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) after the expiration of any applicable
grace period, or (b) to perform or observe any material term, covenant, or
condition under any agreement or instrument relating to any such Debt, when
required to be performed or observed, if the effect of such failure to perform
or observe is to accelerate, or to permit the acceleration of, after the giving
of notice or the lapse of time, or both (other than in cases where, in the
judgment of the Required Banks, meaningful discussions likely to result in (i) a
waiver or cure of the failure to perform or observe, or (ii) otherwise
averting such acceleration are in progress between Borrower and the obligee of
such Debt), the maturity of such Debt, or any such Debt shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
or otherwise required prepayment), prior to the stated maturity thereof; or

 

(5)           If Borrower, or any Affiliate of
Borrower to which $50,000,000 or more of Capitalization Value is attributable,
shall (a) generally not, or be unable to, or shall admit in writing its
inability to, pay its debts as such debts become due; or (b) make an
assignment for the benefit of creditors, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial
part of its assets; or (c) commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
Law of any jurisdiction, whether now or hereafter in effect; or (d) have
had any such petition or application filed or any such proceeding shall have
been commenced, against it, in which an adjudication or appointment is made or
order for relief is entered, or which petition, application or proceeding
remains undismissed or unstayed for a period of sixty (60) days or more; or (e) be
the subject of any proceeding under which all or a 

 

38

 

substantial part of its assets may
be subject to seizure, forfeiture or divestiture; or (f) by any act or
omission indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the appointment of a
custodian, receiver or trustee for all or any substantial part of its property;
or (g) suffer any such custodianship, receivership or trusteeship for all
or any substantial part of its property, to continue undischarged for a period
of sixty (60) days or more; or

 

(6)           If one or more judgments, decrees or
orders for the payment of money in an amount in excess of 5% of Consolidated
Tangible Net Worth (excluding any such judgments, decrees or orders which are
fully covered by insurance) in the aggregate shall be rendered against Borrower
or any of its Material Affiliates, and any such judgments, decrees or orders
shall continue unsatisfied and in effect for a period of thirty (30)
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal; or

 

(7)           If any of the following events shall
occur or exist with respect to Borrower or any ERISA Affiliate: (a) any
Prohibited Transaction involving any Plan; (b) any Reportable Event with
respect to any Plan; (c) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of any Plan; (d) any
event or circumstance which would constitute grounds for the termination of, or
for the appointment of a trustee to administer, any Plan under Section 4042
of ERISA, or the institution by the PBGC of proceedings for any such
termination or appointment under Section 4042 of ERISA; or (e) complete
or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of any
Multiemployer Plan; and in each case above, if such event or conditions, if
any, could in the reasonable opinion of any Bank subject Borrower to any tax,
penalty, or other liability to a Plan, Multiemployer Plan, the PBGC or
otherwise (or any combination thereof) which in the aggregate exceeds or is
likely to exceed $50,000; or

 

(8)           If at any time Borrower is not a
qualified real estate investment trust under Sections 856 through 860 of the
Code or is not a publicly traded company listed on the New York Stock Exchange;
or

 

(9)           If at any time any portion of
Borrower’s assets constitute
plan assets for ERISA purposes (within the meaning of C.F.R. §2510.3-101); or

 

(10)         If, in the reasonable judgment of all
of the Banks (and the basis for such determination is provided to Borrower in
writing in reasonable detail), there shall occur a Material Adverse Change; or

 

(11)         If, during any period of up to twelve
(12) consecutive months commencing on or after the Closing Date, individuals
who were directors of Borrower at the beginning of such period (the “Continuing Directors”), plus any new
directors whose election or appointment was approved by a majority of the 

 

39

 

Continuing Directors then in
office, shall cease for any reason to constitute a majority of the Board of
Directors of Borrower; or

 

(12)         If, through any transaction or series
of related transactions, any Person (including Affiliates of such Person) shall
acquire beneficial ownership, directly or indirectly, of securities of Borrower
(or of securities convertible into securities of Borrower) representing 25% or
more of the combined voting power of all securities of Borrower entitled to
vote in the election of directors.

 

Section 9.02         Remedies.  If an Event of Default has occurred and is continuing
(other than an Event of Default with respect to the Borrower described in Section 9.01(5)),
the Administrative Agent, at the request of the Required Banks, shall by notice
to the Borrower take any or all of the following actions, at the same or
different times:  (i) terminate the Loan Commitments, and
thereupon the Loan Commitments shall terminate immediately, (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower and (iii) exercise
any remedies provided in any of the Loan Documents or by law; and in case of
any Event of Default with respect to the Borrower described in Section 9.01(5),
the Loan Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.  Notwithstanding the foregoing, if an Event of
Default under Section 9.01(10) shall occur and be continuing,
Administrative Agent shall not be entitled to exercise the foregoing remedies
until (1) it has received a written notice from all of the Banks (the “Unanimous Bank Notices”) (i) requesting
Administrative Agent exercise such remedies and (ii) indicating each Bank’s conclusion in its reasonable
judgment that a Material Adverse Change has occurred and (2) Administrative
Agent has provided notice to Borrower, together with copies of all of the
Unanimous Bank Notices.

 

40

 

ARTICLE X

ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS

 

Section 10.01                     Appointment, Powers
and Immunities of Administrative Agent.  Each Bank hereby
irrevocably appoints and authorizes Administrative Agent to act as its agent
hereunder and under any other Loan Document with such powers as are
specifically delegated to Administrative Agent by the terms of this Agreement
and any other Loan Document, together with such other powers as are reasonably
incidental thereto.  Administrative Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and any other Loan Document or required by Law, and shall not by
reason of this Agreement be a fiduciary or trustee for any Bank except to the
extent that Administrative Agent acts as an agent with respect to the receipt
or payment of funds (nor shall Administrative Agent have any fiduciary duty to
Borrower nor shall any Bank have any fiduciary duty to Borrower or to any other
Bank).  No implied covenants,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against Administrative Agent.  Neither Administrative Agent nor any of its
directors, officers, employees, attorneys-in-fact or affiliates shall be
responsible to the Banks for any recitals, statements, representations or
warranties made by Borrower or any officer, partner or official of Borrower or
any other Person contained in this Agreement or any other Loan Document, or in
any certificate or other document or instrument referred to or provided for in,
or received by any of them under, this Agreement or any other Loan Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or any other document
or instrument referred to or provided for herein or therein, for the perfection
or priority of any Lien securing the Obligations or for any failure by Borrower
to perform any of its obligations hereunder or thereunder.  Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.  Neither Administrative
Agent nor any of its directors, officers, employees, attorneys-in-fact, agents
or affiliates shall be liable or responsible 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.  Borrower shall pay any fee
agreed to by Borrower and Administrative Agent with respect to Administrative
Agent’s services hereunder.

 

Section 10.02                     Reliance by Administrative
Agent.  Administrative Agent shall be entitled to
rely upon any certification, notice or other communication (including any
thereof by telephone, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Administrative Agent.  Administrative Agent may deem and treat each
Bank as the holder of the Loan made by it for all purposes hereof and shall not
be required to deal with any Person who has acquired a Participation in any
Loan or Participation from a Bank.  As to
any matters not expressly provided for by this Agreement or any other Loan
Document, Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with instructions signed
by the Required Banks or all Banks, as required by this Agreement, and such
instructions of the Required Banks or all Banks, as the case may be, and any
action taken or failure to act pursuant thereto, shall be binding on all of the
Banks and any other holder of all or any portion of any Loan or Participation.

 

41

 

Section 10.03                     Defaults. 
Administrative Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default unless Administrative Agent has
received notice from a Bank or Borrower specifying such Default or Event of
Default and stating that such notice is a “Notice of Default.”  In the event that Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default,
Administrative Agent shall give prompt notice thereof to the Banks.  Administrative Agent, following consultation
with the Banks, shall (subject to Section 10.07 and Section 12.02)
take such action with respect to such Default or Event of Default which is
continuing as shall be directed by the Required Banks; provided that, unless
and until Administrative Agent shall have received such directions,
Administrative Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Banks; and provided further that Administrative Agent
shall not send a notice of default or acceleration to Borrower without the
approval of the Required Banks.  In no
event shall Administrative Agent be required to take any such action which it
determines to be contrary to Law or to the Loan Documents.  Each of the Banks acknowledges and agrees
that no individual Bank may separately enforce or exercise any of the
provisions of any of the Loan Documents, including, without limitation, the
Notes, other than through Administrative Agent.

 

Section 10.04                     Rights of
Administrative Agent as a Bank.  With respect to its Loan
Commitment and the Loan provided by it, Administrative Agent in its capacity as
a Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may exercise the same as though it were not acting as Administrative
Agent, and the term “Bank” or “Banks” shall, unless the context otherwise
indicates, include Administrative Agent in its capacity as a Bank.  Administrative Agent and its Affiliates may
(without having to account therefor to any Bank) accept deposits from, lend
money to (on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with Borrower (and any Affiliates of Borrower)
as if it were not acting as Administrative Agent.

 

Section 10.05                     Indemnification of
Administrative Agent.  Each Bank agrees to indemnify Administrative
Agent (to the extent not reimbursed under Section 12.04 or under the
applicable provisions of any other Loan Document, but without limiting the
obligations of Borrower under Section 12.04 or such provisions), for its
Pro Rata Share (calculated on the basis of all Loan Commitments) of any and all
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 Administrative Agent in any
way relating to or arising out of this Agreement, any other Loan Document or
any other documents contemplated by or referred to herein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which Borrower is obligated to pay under Section 12.04) or under
the applicable provisions of any other Loan Document or the enforcement of any
of the terms hereof or thereof or of any such other documents or instruments;
provided that no Bank shall be liable for (1) any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the party
to be indemnified, (2) any loss of principal or interest with respect to
Administrative Agent’s Loan or (3) any
loss suffered by Administrative Agent in connection with a swap or other
interest rate hedging arrangement entered into with Borrower.

 

Section 10.06                     Non-Reliance on
Administrative Agent and Other Banks.  Each Bank agrees that it
has, independently and without reliance on Administrative Agent or any other
Bank, 

 

42

 

and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and the decision to enter
into this Agreement and that it will, independently and without reliance upon
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Loan Document.  Administrative
Agent shall not be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any other Loan Document or any
other document referred to or provided for herein or therein or to inspect the
properties or books of Borrower.  Except
for notices, reports and other documents and information expressly required to
be furnished to the Banks by Administrative Agent hereunder, Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of Borrower (or any Affiliate of Borrower) which may come into the
possession of Administrative Agent or any of its Affiliates.  Administrative Agent shall not be required to
file this Agreement, any other Loan Document or any document or instrument
referred to herein or therein, for record or give notice of this Agreement, any
other Loan Document or any document or instrument referred to herein or
therein, to anyone.

 

Section 10.07                     Failure of
Administrative Agent to Act.  Except for action
expressly required of Administrative Agent hereunder, Administrative Agent
shall in all cases be fully justified in failing or refusing to act hereunder
unless it shall have received further assurances (which may include cash
collateral) of the indemnification obligations of the Banks under Section 10.05
in respect of any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.  If any indemnity furnished by the Banks to
Administrative Agent for any purpose shall, in the reasonable opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the action
indemnified against until such additional indemnity is furnished.

 

Section 10.08                     Resignation or
Removal of Administrative Agent.  Administrative Agent
hereby agrees not to unilaterally resign except in the event it becomes an
Affected Bank and is removed or replaced as a Bank pursuant to Section 3.07,
in which event it shall have the right to resign.  Bank of America agrees that it may be
replaced as Administrative Agent by the Required Banks if the aggregate
outstanding principal amount of its Loans is reduced through assignments to
Assignees to (a) $15,000,000 or less from the Effective Date until the
Tranche A Maturity Date, (b) $10,000,000 or less from the Tranche A
Maturity Date until the Tranche B Maturity Date, or (c) $5,000,000 or less
from and after the Tranche B Maturity Date. 
In addition, Administrative Agent may be removed at any time with cause
by the Required Banks.  In the case of
any removal of Administrative Agent, Borrower and the Banks shall be promptly
notified thereof.  Upon any such
resignation or removal of Administrative Agent, the Required Banks shall have
the right to appoint a successor Administrative Agent, which successor
Administrative Agent, so long as it is reasonably acceptable to the Required
Banks, shall be that Bank then having the greatest Loan Commitment; if two (2) or
more Banks have an equal greatest Loan Commitment, the Required Banks shall
select between or among them, in each case, with the prior written consent of
the Borrower (not to be unreasonably withheld or delayed) so long as no Event
of Default has occurred and is continuing. 
If no successor Administrative Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within thirty (30) days
after the Required Banks’
removal of the retiring Administrative Agent, then the retiring Administrative 

 

43

 

Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be one of the Banks.  The Required Banks or the retiring
Administrative Agent, as the case may be, shall upon the appointment of a
successor Administrative Agent promptly so notify Borrower and the other
Banks.  Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s removal hereunder as Administrative
Agent, the provisions of this Article X 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 Administrative Agent.

 

Section 10.09                     Amendments Concerning
Agency Function.  Notwithstanding anything to the contrary
contained herein, Administrative Agent shall not be bound by any waiver,
amendment, supplement or modification hereof or of any other Loan Document
which affects its duties, rights, and/or function hereunder or thereunder
unless it shall have given its prior written consent thereto.

 

Section 10.10                     Liability of
Administrative Agent.  Administrative Agent shall not have any
liabilities or responsibilities to Borrower on account of the failure of any
Bank to perform its obligations hereunder or to any Bank on account of the
failure of Borrower to perform its obligations hereunder or under any other
Loan Document.

 

Section 10.11                     Transfer of Agency
Function.  Without the consent of Borrower or any Bank,
Administrative Agent may at any time or from time to time transfer its
functions as Administrative Agent hereunder to any of its offices wherever
located in the United States, provided that Administrative Agent shall promptly
notify Borrower and the Banks thereof.

 

Section 10.12                     Non-Receipt of Funds
by Administrative Agent.  (a) Unless
Administrative Agent shall have received notice from a Bank or Borrower (either
one as appropriate being the “Payor”) prior to the date on which such Bank is
to make payment hereunder to Administrative Agent of the proceeds of a Loan or
Borrower is to make payment to Administrative Agent, as the case may be (either
such payment being a “Required Payment”),
which notice shall be effective upon receipt, that the Payor will not make the
Required Payment in full to Administrative Agent, Administrative Agent may
assume that the Required Payment has been made in full to Administrative Agent
on such date, and Administrative Agent in its sole discretion may, but shall
not be obligated to, in reliance upon such assumption, make the amount thereof
available to the intended recipient on such date.  If and to the extent the Payor shall not have
in fact so made the Required Payment in full to Administrative Agent, the
recipient of such payment shall repay to Administrative Agent forthwith on
demand such amount made available to it together with interest thereon, for
each day from the date such amount was so made available by Administrative
Agent until the date Administrative Agent recovers such amount, at the
customary rate set by Administrative Agent for the correction of errors among
Banks for three (3) Banking Days and thereafter at the Base Rate.

 

(b)                                 If, after Administrative Agent has
paid each Bank’s share of any
payment received or applied by Administrative Agent in respect of the Loan,
that payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency Law,
sharing of payments clause 

 

44

 

of any loan agreement or otherwise,
such Bank shall, at Administrative Agent’s
request, promptly return its share of such payment or application to
Administrative Agent, together with such Bank’s proportionate share of any interest or other amount required to
be paid by Administrative Agent with respect to such payment or
application.  In addition, if a court of
competent jurisdiction shall adjudge that any amount received and distributed
by Administrative Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to Administrative Agent
its share of the amount so adjudged to be repaid or shall pay over to the same
in such manner and to such Persons as shall be determined by such court.

 

Section 10.13                     Withholding Taxes. 
Each Bank represents that it is entitled to receive any payments to be
made to it hereunder without the withholding of any tax and will furnish to
Administrative Agent such forms, certifications, statements and other documents
as Administrative Agent may request from time to time to evidence such Bank’s exemption from the withholding of
any tax imposed by any jurisdiction or to enable Administrative Agent or
Borrower to comply with any applicable Laws or regulations relating
thereto.  Without limiting the effect of
the foregoing, if any Bank is not created or organized under the Laws of the
United States of America or any state thereof, such Bank will furnish to
Administrative Agent a United States Internal Revenue Service Form W-8ECI
in respect of all payments to be made to such Bank by Borrower or
Administrative Agent under this Agreement or any other Loan Document or a
United States Internal Revenue Service Form W-8BEN establishing such Bank’s complete exemption from United
States withholding tax in respect of payments to be made to such Bank by
Borrower or Administrative Agent under this Agreement or any other Loan
Document, or such other forms, certifications, statements or documents, duly
executed and completed by such Bank as evidence of such Bank’s exemption from the withholding of
U.S. tax with respect thereto. 
Administrative Agent shall not be obligated to make any payments
hereunder to such Bank in respect of any Loan or Participation or such Bank’s Loan Commitment or obligation to
purchase Participations until such Bank shall have furnished to Administrative
Agent the requested form, certification, statement or document.

 

Section 10.14                     [Reserved].

 

Section 10.15                     Pro Rata Treatment. 
Except to the extent otherwise provided, each advance of proceeds of the
Loans shall be made by the Banks ratably according to the amounts of their
respective applicable Loan Commitments. 
Except as otherwise expressly provided in this Agreement, each payment
in respect of principal or interest with respect to the Loans shall be applied
to such obligations owing to the Banks pro rata according to the respective
amounts then due and owing to the Banks with respect to such Loans.

 

Section 10.16                     Sharing of Payments
Among Banks.  If a Bank shall obtain payment of any
principal of or interest on any Loan made by it through the exercise of any
right of setoff, banker’s lien,
counterclaim, or by any other means (including direct payment), and such
payment results in such Bank receiving a greater payment than it would have
been entitled to had such payment been paid directly to Administrative Agent
for disbursement to the Banks, then such Bank shall promptly purchase for cash
from the other Banks Participations in the Loans made by the other Banks in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Banks shall share ratably the benefit of such
payment.  To such end 

 

45

 

the Banks shall make appropriate adjustments among themselves (by
the resale of Participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.  Borrower
agrees that any Bank so purchasing a Participation in the Loans made by other
Banks may exercise all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such
Participation.  Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right
with respect to any other indebtedness of Borrower.

 

Section 10.17                     Possession of
Documents.  Each Bank shall keep possession of its own
Notes.  Administrative Agent shall hold
all the other Loan Documents and related documents in its possession and
maintain separate records and accounts with respect thereto, and shall permit
the Banks and their representatives access at all reasonable times to inspect
such Loan Documents, related documents, records and accounts.

 

ARTICLE XI

NATURE OF OBLIGATIONS

 

Section 11.01                     Absolute and
Unconditional Obligations.  Borrower acknowledges and
agrees that its obligations and liabilities under this Agreement and under the
other Loan Documents shall be absolute and unconditional irrespective of (1) any
lack of validity or enforceability of any of the Obligations, any Loan
Documents, or any agreement or instrument relating thereto; (2) any change
in the time, manner or place of payment of, or in any other term in respect of,
all or any of the Obligations, or any other amendment or waiver of or consent
to any departure from any Loan Documents or any other documents or instruments
executed in connection with or related to the Obligations; (3) any
exchange or release of any collateral, if any, or of any other Person from all
or any of the Obligations; or (4) any other circumstances which might
otherwise constitute a defense available to, or a discharge of, Borrower or any
other Person in respect of the Obligations.

 

The obligations and
liabilities of Borrower under this Agreement and other Loan Documents shall not
be conditioned or contingent upon the pursuit by any Bank or any other Person
at any time of any right or remedy against Borrower or any other Person which
may be or become liable in respect of all or any part of the Obligations or
against any collateral or security or guarantee therefor or right of setoff
with respect thereto.

 

Section 11.02                     Non-Recourse to
Borrower’s Principals.  Notwithstanding anything to the contrary
contained herein, in any of the other Loan Documents, or in any other
instruments, certificates, documents or agreements executed in connection with
the Loans (all of the foregoing, for purposes of this Section, hereinafter
referred to, individually and collectively, as the “Relevant
Documents”), no recourse under or upon any Obligation,
representation, warranty, promise or other matter whatsoever shall be had
against any of Borrower’s
Principals and each Bank expressly waives and releases, on behalf of itself and
its successors and assigns, all right to assert any liability whatsoever under
or with respect to the Relevant Documents against, or to satisfy any claim or
obligation arising thereunder against, any of Borrower’s Principals or out of any assets of Borrower’s Principals, provided, however, that
nothing in this Section shall be deemed to (1) release Borrower from
any personal liability pursuant to, or from any of its respective obligations
under, the Relevant Documents, or from personal liability for its fraudulent
actions or fraudulent 

 

46

 

omissions; (2) release any of Borrower’s Principals from personal liability for its or his own
fraudulent actions or fraudulent omissions; (3) constitute a waiver of any
obligation evidenced or secured by, or contained in, the Relevant Documents or
affect in any way the validity or enforceability of the Relevant Documents; or (4) limit
the right of Administrative Agent and/or the Banks to proceed against or
realize upon any collateral hereafter given for the Loans or any and all of the
assets of Borrower (notwithstanding the fact that any or all of Borrower’s Principals have an ownership
interest in Borrower and, thereby, an interest in the assets of Borrower) or to
name Borrower (or, to the extent that the same are required by applicable Law
or are determined by a court to be necessary parties in connection with an
action or suit against Borrower or any collateral hereafter given for the
Loans, any of Borrower’s
Principals) as a party defendant in, and to enforce against any collateral
hereafter given for the Loans and/or assets of Borrower any judgment obtained
by Administrative Agent and/or the Banks with respect to, any action or suit
under the Relevant Documents so long as no judgment shall be taken (except to
the extent taking a judgment is required by applicable Law or determined by a
court to be necessary to preserve Administrative Agent’s and/or Banks’
rights against any collateral hereafter given for the Loans or Borrower, but
not otherwise) or shall be enforced against Borrower’s Principals or their assets.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.01                     Binding Effect of
Request for Advance.  Borrower agrees that, by its acceptance of
any advance of proceeds of the Loans under this Agreement, it shall be bound in
all respects by the request for advance submitted on its behalf in connection
therewith with the same force and effect as if Borrower had itself executed and
submitted the request for advance and whether or not the request for advance is
executed and/or submitted by an authorized person.

 

Section 12.02                     Amendments and
Waivers.  No amendment or waiver of any provision of
this Agreement or any other Loan Document nor consent to any departure by Borrower
(or, in the case of any guaranty executed and delivered pursuant to clause (y) of
the definition of “Unencumbered Assets” in Section 1.01, the guarantor
referred to therein) therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Banks and, solely for purposes
of its acknowledgment thereof, Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall (1) increase the Loan Commitment of any Bank or extend the
expiration date of the Loan Commitment of any Bank without the written consent
of such Bank; (2)  reduce the principal of, or interest on, the Notes or
Loans or any fees due hereunder or any other amount due hereunder or under any
Loan Document, without the written consent of each Bank affected thereby; (3) extend
the Tranche A Maturity Date, the Tranche B Maturity Date or the Tranche C
Maturity Date or otherwise postpone any date fixed for any payment of principal
of, or interest on, the Notes or Loans or any fees due hereunder or under any
Loan Document, in each case without the written consent of each Bank affected
thereby; (4) change the definition of “Required Banks” without the consent of
each Bank; (5) amend Section 10.15, Section 10.16, this Section or
any other provision requiring the consent of all the Banks, without the written
consent of each Bank; (6) waive any default under paragraph (1) (with
respect to payment of principal only) or paragraph (5) of Section 9.01
without the consent of each Bank or (7) release all or substantially all of the
guaranties executed and delivered pursuant to clause (y) of 

 

47

 

the definition of “Unencumbered Assets” in Section 1.01
without the consent of each Bank; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent. 
Any advance of proceeds of the Loans made prior to or without the
fulfillment by Borrower of all of the conditions precedent thereto, whether or
not known to Administrative Agent and the Banks, shall not constitute a waiver
of any Default or Event of Default or a waiver of the requirement that all
conditions, including the non-performed conditions, shall be required with
respect to all future advances.  Neither
any failure or delay on the part of Administrative Agent or any Bank to
exercise any right hereunder nor any single or partial exercise of any right or
power hereunder or any abandonment or discontinuance of steps to enforce such
right or power shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.  All communications from Administrative Agent
to the Banks requesting the Banks’
determination, consent, approval or disapproval (i) shall be given in the
form of a written notice to each Bank, (ii) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent or disapproval is requested and (iii) shall include Administrative
Agent’s recommended course of
action or determination in respect thereof. 
Each Bank shall reply promptly, but in any event within ten (10) Banking
Days (or five (5) Banking Days with respect to any decision to accelerate
or stop acceleration of the Loan) after receipt of the request therefor by
Administrative Agent (the “Bank Reply Period”).  Unless a Bank shall give written notice to
Administrative Agent that it objects to the recommendation or determination of
Administrative Agent (together with a written explanation of the reasons behind
such objection) within the Bank Reply Period, such Bank shall be deemed to have
approved or consented to such recommendation or determination.

 

Section 12.03                     Usury. 
Anything herein to the contrary notwithstanding, the obligations of
Borrower under this Agreement and the Notes shall be subject to the limitation
that payments of interest shall not be required to the extent that receipt
thereof would be contrary to provisions of Law applicable to a Bank limiting
rates of interest which may be charged or collected by such Bank.

 

Section 12.04                     Expenses;
Indemnification.  Borrower agrees (i) to reimburse
Administrative Agent and Syndication Agent on demand for all costs, expenses,
and charges (including, without limitation, all reasonable fees and charges of
engineers, appraisers and legal counsel) incurred by it in connection with the
Loans and the preparation, execution, delivery and administration of the Loan
Documents and any amendment or waiver with respect thereto, and (ii) to
reimburse each of the Banks for reasonable legal costs, expenses and charges
incurred by each of the Banks in connection with the performance or enforcement
of this Agreement, the Notes, or any other Loan Documents; provided, however,
that Borrower is not responsible for costs, expenses and charges incurred by
the Bank Parties in connection with the administration or syndication of the
Loans (other than the fees required by the Fee Letter and the Supplemental Fee
Letter).  Borrower agrees to indemnify
Administrative Agent and each Bank and their respective directors, officers,
employees, affiliates, advisors and agents (each such Person, an “Indemnitee”) from, and hold each of
them harmless against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them arising out of or by reason of (x) any
claims by brokers due to acts or omissions by Borrower, (y) the execution,
delivery and performance of this Agreement, the other Loan Documents, any
amendment or waiver to this Agreement or the other Loan Documents, or 

 

48

 

the transactions contemplated hereby (including the use of the
proceeds of the Loans) or (z) any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to any actual or proposed use by Borrower of the proceeds
of the Loans, including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of such Indemnitee). 
To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any transaction, agreement or instrument contemplated
hereby, any Loan or the use of the proceeds thereof.

 

The obligations of
Borrower under this Section and under Article III shall survive the
repayment of all amounts due under or in connection with any of the Loan
Documents and the termination of the Loans, provided, however, that in the case
of Article III, such obligations shall survive only for a period of ninety
(90) days after such repayment and termination.

 

Section 12.05                     Assignment;
Participation.  This Agreement shall be binding upon, and
shall inure to the benefit of, Borrower, Administrative Agent, the Banks and
their respective successors and permitted assigns.  Borrower may not assign or transfer its rights
or obligations hereunder without the prior written consent of each Bank (and
any attempted assignment or transfer without such consent shall be null and
void).

 

Any Bank may, without the
consent of, or notice to, the Borrower or the Administrative Agent, at any time
grant to one or more banks or other institutions (each a “Participant”)
participating interests in its Loan (each a “Participation”).  In the event of any such grant by a Bank of a
Participation to a Participant, whether or not Borrower or Administrative Agent
was given notice, such Bank shall remain responsible for the performance of its
obligations hereunder, and Borrower and Administrative Agent shall continue to
deal solely and directly with such Bank in connection with such Bank’s rights and obligations
hereunder.  Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of Borrower hereunder and under any other Loan Document including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in the first
proviso to Section 12.02 without the consent of the Participant.  Any Participant hereunder shall have the same
benefits as any Bank with respect to the yield protection and increased cost
provisions of Article III, but a Participant shall not be entitled to
receive any greater payment than the Lender granting such Participation would
have been entitled to receive.

 

Subject to the conditions set forth below, any Bank may assign to one
or more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Loan Commitment and the Loans at
the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:

 

49

 

(i)                                     the
Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Bank, an Affiliate of a Bank, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee; and

 

(ii)                                  the
Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Loan Commitment or Loan to an
assignee that is (A) a Bank holding Loans immediately prior to giving
effect to such assignment, (B) an Affiliate of such Bank, or (C) an
Approved Fund with respect to such Bank.

 

Such assignments shall be
subject to the following additional conditions:

 

(1)                                  except
in the case of an assignment to a Bank or an Affiliate of a Bank or any
Approved Fund or an assignment of the entire remaining amount of the assigning
Bank’s Loan Commitment or Loans, the amount of the Loan Commitment or Loans of
the assigning Bank subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that
no such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing;

 

(2)                                  each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Bank’s rights and obligations under this Agreement, except
that this clause (2) shall not prohibit any Bank from assigning all or a
portion of its rights and obligations among separate tranches on a non-pro rata basis;

 

(3)                                  the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee of $3,500; and

 

(4)                                  the
assignee, if it shall not be a Bank, shall deliver to the Administrative Agent
an Administrative Questionnaire in which the assignee designates one or more
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower and its related parties or its
securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws,
including Federal and state securities laws.

 

For the purposes of this Section 12.05,
the term “Approved Fund” has the following meaning:

 

“Approved
Fund” means any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit
in the ordinary course and that is administered or managed by 

 

50

 

(a) a
Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of
an entity that administers or manages a Bank.

 

Upon (i) execution
and delivery of such Assignment and Acceptance, (ii) payment by such
Assignee to the Bank of an amount equal to the purchase price agreed between
the Bank and such Assignee and (iii) payment of the fee described in
paragraph (3) above, such Assignee shall be a Bank Party to this Agreement and
shall have all the rights and obligations of a Bank as set forth in such
Assignment and Acceptance, and the assigning Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. 
Upon the consummation of any assignment pursuant to this paragraph,
substitute Note(s) shall be issued to the assigning Bank and Assignee by
Borrower, in exchange for the return of the original Note(s).  The obligations evidenced by such substitute
notes shall constitute “Obligations” for all purposes of this Agreement and the
other Loan Documents. In connection with Borrower’s execution of substitute notes as aforesaid, Borrower shall
deliver to Administrative Agent evidence, satisfactory to Administrative Agent,
of all requisite corporate action to authorize Borrower’s execution and delivery of the substitute notes and any related
documents.  If the Assignee is not
incorporated under the Laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 10.13.  Each Assignee shall be deemed to have made
the representations contained in, and shall be bound by the provisions of, Section 10.13.

 

Any Bank may at any time pledge or assign or grant a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Bank, including without limitation any pledge or assignment or grant to
secure obligations to a Federal Reserve Bank, and this Section 12.05 shall
not apply to any such pledge or assignment or grant of a security interest; provided
that no such pledge or assignment or grant of a security interest shall release
a Bank from any of its obligations hereunder or substitute any such pledgee or
assignee or grantee for such Bank as a party hereto.

 

Borrower recognizes that
in connection with a Bank’s
selling of Participations or making of assignments, any or all documentation,
financial statements, appraisals and other data, or copies thereof, relevant to
Borrower or the Loans may be exhibited to and retained by any such Participant
or assignee or prospective Participant or assignee.  In connection with a Bank’s delivery of any financial
statements and appraisals to any such Participant or assignee or prospective
Participant or assignee, such Bank shall also indicate that the same are
delivered on a confidential basis. 
Borrower agrees to provide all assistance reasonably requested by a Bank
to enable such Bank to sell Participations or make assignments of its Loan as
permitted by this Section.  Each Bank
agrees to provide Borrower with notice of all Participations sold by such Bank
to other than its Affiliates.  Any Bank
or Participant may pledge its Loans or Participations as collateral in
accordance with applicable law.

 

Section 12.06                     Documentation
Satisfactory.  All documentation required from or to be
submitted on behalf of Borrower in connection with this Agreement and the
documents relating hereto shall be subject to the prior approval of, and be
satisfactory in form and substance to, Administrative Agent, its counsel and,
where specifically provided herein, the Banks. 
In addition, the persons or parties responsible for the execution and
delivery of, and signatories to, all of such 

 

51

 

documentation, shall be acceptable to, and subject to the approval
of, Administrative Agent and its counsel and the Banks.

 

Section 12.07                     Notices.

 

(a)                                  Unless the party to be notified
otherwise notifies the other party in writing as provided in this Section, and
except as otherwise provided in this Agreement, notices shall be given to
Administrative Agent by telephone, confirmed by writing, and to the Banks and
to Borrower by ordinary mail or overnight courier, receipt confirmed, addressed
to such party at its address on the signature page of this Agreement (in
the case of the Borrower) or on Schedule 1A hereto (in the case of the
Banks).  Notices shall be effective (1) if
by telephone, at the time of such telephone conversation, (2) if given by
mail, three (3) days after mailing; and (3) if given by overnight
courier, upon receipt.  Notices
delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection
(b).

 

(b)                                 Electronic
Communications.  Notices and other
communications to the Banks hereunder may be delivered or furnished by
electronic communication (including e-mail and internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Bank pursuant to Section 2
if such Bank, has notified the Administrative Agent that it is incapable of
receiving notices under such section by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.

 

Unless the Administrative Agent
otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

 

(c)                                  The
Platform.  THE PLATFORM (AS
DEFINED IN SECTION 6.09) IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS (AS DEFINED IN SECTION 6.09)
OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
OR OMISSIONS FROM THE BORROWER MATERIALS. 
NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR 

 

52

 

OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent,
the Syndication Agent or any of its Related Parties (collectively, the “Agent Parties”) have
any liability to Borrower, any Bank or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of Borrower’s or the Administrative Agent’s or the
Syndication Agent’s transmission of Borrower Materials through the internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and
non-appealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no
event shall any Agent Party have any liability to Borrower, any Bank or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

 

Section 12.08                     Setoff. 
Borrower agrees that, in addition to (and without limitation of) any
right of setoff, bankers’ lien
or counterclaim a Bank may otherwise have, each Bank shall be entitled, at its
option, to offset balances (general or special, time or demand, provisional or
final) held by it for the account of Borrower at any of such Bank’s offices, in Dollars or in any other
currency, against any amount payable by Borrower to such Bank under this
Agreement or such Bank’s
Note(s), or any other Loan Document which is not paid when due (regardless of
whether such balances are then due to Borrower), in which case it shall
promptly notify Borrower and Administrative Agent thereof; provided that such
Bank’s failure to give such
notice shall not affect the validity thereof.

 

Payments by Borrower
hereunder or under the other Loan Documents shall be made without setoff or
counterclaim.

 

Section 12.09                     Table of Contents;
Headings.  Any table of contents and the headings and
captions hereunder are for convenience only and shall not affect the
interpretation or construction of this Agreement.

 

Section 12.10                     Severability. 
The provisions of this Agreement are intended to be severable.  If for any reason 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.

 

Section 12.11                     Counterparts. 
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing any such counterpart.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

Section 12.12                     Integration. 
The Loan Documents, the Fee Letter and Supplemental Fee Letter set forth
the entire agreement among the parties hereto relating to the transactions 

 

53

 

contemplated thereby and supersede any prior oral or written
statements or agreements with respect to such transactions.

 

Section 12.13                     Governing Law. 
This Agreement shall be governed by, and construed and enforced in
accordance with, the Laws of the State of New York (without giving effect to
New York’s principles of
conflicts of Laws).

 

Section 12.14                     Waivers. 
In connection with the obligations and liabilities as aforesaid,
Borrower hereby waives (1) promptness and diligence; (2) notice of any
actions taken by any Bank Party under this Agreement, any other Loan Document
or any other agreement or instrument relating thereto except to the extent
otherwise provided herein; (3) all other notices, demands and protests, and
all other formalities of every kind in connection with the enforcement of the
Obligations, the omission of or delay in which, but for the provisions of this
Section, might constitute grounds for relieving Borrower of its obligations
hereunder; (4) any requirement that any Bank Party protect, secure,
perfect or insure any Lien on any collateral or exhaust any right or take any
action against Borrower or any other Person or any collateral; (5) any
right or claim of right to cause a marshalling of the assets of Borrower; and (6) all
rights of subrogation or contribution, whether arising by contract or operation
of law (including, without limitation, any such right arising under the Federal
Bankruptcy Code) or otherwise by reason of payment by Borrower, either jointly
or severally, pursuant to this Agreement or other Loan Documents.

 

Section 12.15                     Jurisdiction;
Immunities.  Borrower, Administrative Agent and each Bank
hereby irrevocably submit to the jurisdiction of any New York State or United
States Federal court sitting in New York City over any action or proceeding
arising out of or relating to this Agreement, the Notes or any other Loan
Document.  Borrower, Administrative
Agent, and each Bank irrevocably agree that all claims in respect of such
action or proceeding may be heard and determined in such New York State or
United States Federal court.  Borrower,
Administrative Agent, and each Bank irrevocably consent to the service of any
and all process in any such action or proceeding by the mailing of copies of
such process to Borrower, Administrative Agent or each Bank, as the case may
be, at the addresses specified herein. 
Borrower, Administrative Agent and each Bank agree that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
Law.  Borrower, Administrative Agent and
each Bank further waive any objection to venue in the State of New York and any
objection to an action or proceeding in the State of New York on the basis of
forum non conveniens.  Borrower,
Administrative Agent and each Bank agree that any action or proceeding brought
against Borrower, Administrative Agent or any Bank, as the case may be, shall
be brought only in a New York State court sitting in New York City or a United
States Federal court sitting in New York City, to the extent permitted or not
expressly prohibited by applicable Law.

 

Nothing in this Section shall
affect the right of Borrower, Administrative Agent or any Bank to serve legal
process in any other manner permitted by Law.

 

To the extent that
Borrower, Administrative Agent or any Bank have or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property,
Borrower, Administrative Agent and each Bank 

 

54

 

hereby irrevocably waive such immunity in
respect of its obligations under this Agreement, the Notes and any other Loan
Document.

 

BORROWER, ADMINISTRATIVE
AGENT AND EACH BANK WAIVE ANY RIGHT EACH SUCH PARTY MAY HAVE TO JURY TRIAL IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT WITH RESPECT TO THIS
AGREEMENT, THE NOTES OR THE LOANS.  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

Section 12.16                     USA Patriot Act. 
Each Bank hereby notifies Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub.L.107-56 (signed into law October 26,
2001)) (the “Act”), it is required to
obtain, verify and record information that identifies Borrower, which
information includes the name and address of Borrower and other information
that will allow such Bank to identify Borrower in accordance with the Act.

 

55

 

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

 

	
   

  	
  AVALONBAY COMMUNITIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
     Name:

  
	
   

  	
     Title:

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  100 Bridgeport Ave.,
  Suite 258

  
	
   

  	
  Shelton, CT 06484

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
   

  
	
   

  	
  Telephone:

  	
  (203) 926-2326

  
	
   

  	
  Telecopy:

  	
  (203) 926-2304

  
	
   

  	
   

  
	
   

  	
  Address of principal
  place of business, if

  
	
   

  	
  different than above:

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification
  Number:

  
				

 

[Signature page to Term
Loan Agreement]

 

 

EXHIBIT A

 

AUTHORIZATION LETTER

 

May    , 2008

 

Bank of America, N.A.

777 Main Street

Hartford, CT  06115

Attention:                    

 

Re:          Term Loan Agreement dated as of May 15, 2008 (the “Loan Agreement”; capitalized terms
not otherwise defined herein shall have the meanings ascribed to such terms in
the Loan Agreement) among us, as Borrower, the Banks named therein, and you, as
Administrative Agent for said Banks

 

Ladies/Gentlemen:

 

In connection with the captioned Loan
Agreement, we hereby designate any of the following persons to give to you
instructions, including notices required pursuant to the Loan Agreement,
orally, by telephone or teleprocess, or in writing:

 

[NAMES]

 

Instructions may be honored on the oral,
telephonic, teleprocess or written instructions of anyone purporting to be any
one of the above designated persons even if the instructions are for the
benefit of the person delivering them. 
We will furnish you with written confirmation of each such instruction
signed by any person designated above (including any telecopy which appears to
bear the signature of any person designated above) on the same day that the
instruction is provided to you, but your responsibility with respect to any
instruction shall not be affected by your failure to receive such confirmation
or by its contents.

 

Without limiting the foregoing, we hereby
unconditionally authorize any one of the above-designated persons to execute
and submit requests for the advance of proceeds of the Loans and notices of
Elections, Conversions and Continuations to you under the Loan Agreement with
the identical force and effect in all respects as if executed and submitted by
us.

 

You and the Banks shall be fully protected
in, and shall incur no liability to us for, acting upon any instructions which
you in good faith believe to have been given by any person designated above,
and in no event shall you or the Banks be liable for special, consequential or
punitive damages.  In addition, we agree
to hold you and the Banks and your and their respective agents harmless from
any and all liability, loss and expense arising directly or indirectly out of
instructions that we provide to you in connection with the Loan Agreement
except for liability, loss or expense occasioned by your gross negligence or
willful misconduct.

 

Upon notice to us, you may, at your option,
refuse to execute any instruction, or part thereof, without incurring any
responsibility for any loss, liability or expense arising out of such refusal
if you in good faith believe that the person delivering the instruction is not
one of the

 

 

persons designated above or if the instruction is not accompanied by an
authentication method that we have agreed to in writing.

 

We will promptly notify you in writing of any
change in the persons designated above and, until you have actually received
such written notice and have had a reasonable opportunity to act upon it, you
are authorized to act upon instructions, even though the person delivering them
may no longer be authorized.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  AVALONBAY COMMUNITIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
				

 

A-2

 

EXHIBIT B

 

[TRANCHE A] [TRANCHE B] [TRANCHE C] NOTE

 

	
   

  	
  $                          

  	
  New York, New York

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  May 15, 2008

  

 

For value received, AvalonBay Communities, Inc.,
a Maryland corporation (“Borrower”),
hereby promises to pay to the order of
                      
or its successors or assigns (collectively, the “Bank”),
at the principal office of Bank of America, N.A. (“Administrative
Agent”) located at 777 Main Street, Hartford, CT  06115 for the account of the Applicable
Lending Office of the Bank, the principal sum of
                
Dollars
($                        ),
or if less, the amount loaned by the Bank under its [Tranche A] [Tranche B]
[Tranche C] Loan to Borrower pursuant to the Loan Agreement (as defined below)
and actually outstanding, in lawful money of the United States and in
immediately available funds, in accordance with the terms set forth in the Loan
Agreement.  Borrower also promises to pay
interest on the unpaid principal balance hereof, for the period such balance is
outstanding, in like money, at said office for the account of said Applicable
Lending Office, at the time and at a rate per annum as provided in the Loan
Agreement.  Any amount of principal
hereof which is not paid when due, whether at stated maturity, by acceleration,
or otherwise, shall bear interest from the date when due until said principal
amount is paid in full, payable on demand, at the rate set forth in the Loan
Agreement.

 

The date and amount of the advance of the
Loan made by the Bank to Borrower under the Loan Agreement referred to below,
and each payment of said Loan, shall be recorded by the Bank on its books and,
prior to any transfer of this Note (or, at the discretion of the Bank, at any
other time), may be endorsed by the Bank on the schedule attached hereto and
any continuation thereof.

 

This Note is one of the  [Tranche A] [Tranche B] [Tranche C] Notes
referred to in the Term Loan Agreement, dated as of May 15, 2008 (as the
same may be amended from time to time, the “Loan
Agreement”) among Borrower, the Banks named therein (including
the Bank) and Administrative Agent, as administrative agent for the Banks.  All of the terms, conditions and provisions
of the Loan Agreement are hereby incorporated by reference.  All capitalized terms used herein and not
defined herein shall have the meanings given to them in the Loan Agreement.

 

The Loan Agreement contains, among other
things, provisions for the prepayment of and acceleration of this Note upon the
happening of certain stated events.

 

No recourse shall be had under this Note
against Borrower’s Principals
except as and to the extent set forth in Section 11.02 of the Loan
Agreement.

 

All parties to this Note, whether principal,
surety, guarantor or endorser, hereby waive presentment for payment, demand,
protest, notice of protest and notice of dishonor.  This Note shall be governed by, and construed
and enforced in accordance with, the Laws of the State of New York, provided
that, as to the maximum lawful rate of interest which may be charged or
collected, 

 

B-1

 

if the Laws applicable to the Bank permit it to charge or collect a
higher rate than the Laws of the State of New York, then such Law applicable to
the Bank shall apply to the Bank under this Note.

 

	
   

  	
  AVALONBAY COMMUNITIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
				

 

B-2

 

	
  Date

  	
   

  	
  Amount
  of

  Loan

  	
   

  	
  Amount
  of

  Principal Paid or

  Prepaid

  	
   

  	
  Balance
  of

  Principal

  Unpaid

  	
   

  	
  Notation
  Made

  By:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-3

 

EXHIBIT C

 

INFORMATION REGARDING MATERIAL
AFFILIATES

 

B-1

 

EXHIBIT D

 

SOLVENCY CERTIFICATE

 

The person
executing this Solvency Certificate (this “Certificate”)
is the
                                    
of AvalonBay Communities, Inc., a Maryland corporation (“Borrower”), and is
familiar with its properties, assets and businesses, and is duly authorized to
execute this certificate on behalf of Borrower pursuant to Section 4.01(7) of
the Term Loan Agreement dated the date hereof (the “Loan Agreement”)
among Borrower, the banks party thereto (each a “Bank” and collectively, the “Banks”) and Bank of
America, N.A., as administrative agent for the Banks (in such capacity,
together with its successors in such capacity, “Administrative Agent”).  In executing this Certificate, such person is
acting solely in his or her capacity as the
                                  
of Borrower, and not in his or her individual capacity.  Unless otherwise defined herein, terms
defined in the Loan Agreement are used herein as therein defined.

 

The
undersigned further certifies that he or she has carefully reviewed the Loan
Agreement and the other Loan Documents and the contents of this Certificate
and, in connection herewith, has made such investigation and inquiries as he or
she deems reasonably necessary and prudent therefor.  The undersigned further certifies that the
financial information and assumptions which underlie and form the basis for the
representations made in this Certificate were reasonable when made and were
made in good faith and continue to be reasonable as of the date hereof.

 

The
undersigned understands that Administrative Agent and the Banks are relying on
the truth and accuracy of this Certificate in connection with the transactions
contemplated by the Loan Agreement.

 

The
undersigned certifies that Borrower is Solvent.

 

IN WITNESS
WHEREOF, the undersigned has executed this Certificate on May [    ],
2008.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

D-1

 

EXHIBIT E

 

ASSIGNMENT AND ACCEPTANCE

 

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

 

For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Loan Agreement, as of the Effective Date inserted by the Administrative
Agent as contemplated below, (a) all of the Assignor’s rights and
obligations in its capacity as a Bank under the Loan Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to
the amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (b) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of the Assignor (in its capacity as a
Bank) against any Person, whether known or unknown, arising under or in
connection with the Loan Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (a) above (the rights and obligations sold and
assigned pursuant to clauses (a) and (b) above being referred to
herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Acceptance, without representation or warranty by the Assignor.

 

	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [and is an Affiliate of
                              (1)]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower:

  	
   

  	
  AvalonBay Communities, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:

  	
   

  	
  Bank of America, N.A.,

  
	
   

  	
   

  	
   

  	
   

  	
  as the Administrative Agent under the Loan
  Agreement

  

 

(1) Select Bank as applicable.

 

E-1

 

	
  5.

  	
   

  	
  Loan Agreement:

  	
   

  	
  The Term Loan Agreement dated as of
  May 15, 2008, among AvalonBay Communities, Inc., as borrower, the
  Banks parties thereto, and Bank of America N.A. or any successor thereto,
  individually and as Administrative Agent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned
  Interest:

  	
   

  	
   

  

 

	
  Facility Assigned

  	
   

  	
  Aggregate
  Amount of

  Loan

  Commitment/Loans

  for all Lenders*

  	
   

  	
  Amount
  of Loan

  Commitment/Loans

  Assigned*

  	
   

  	
  Percentage
  Assigned

  of Loan

  Commitment/Loans(2)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche A
  Commitment

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  
	
  Tranche B
  Commitment

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  
	
  Tranche C
  Commitment

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  
	
  Tranche A
  Loans

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  
	
  Tranche B
  Loans

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  
	
  Tranche C
  Loans

  	
   

  	
  $

  	
   

  	
  $

  	
   

  	
   

  	
  %

  

 

[7.            Trade Date:                                     ](3)

 

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

 

[Remainder of Page Intentionally Left
Blank]

 

*    Amount
to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.

 

(2)  Set
forth, to at least 9 decimals, as a percentage of the Loan Commitment/Loans of
all Lenders thereunder.

 

(3)  To
be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

E-2

 

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

 

 

	
   

  	
  ASSIGNOR

  	
   

  
	
   

  	
  [NAME OF
  ASSIGNOR]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  	
   

  
	
   

  	
  [NAME OF
  ASSIGNEE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

	
  [Consented
  to and](4) Accepted:

  
	
   

  
	
  BANK OF
  AMERICA, N.A.,

  
	
  acting in
  its capacity as Administrative

  Agent

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  [Consented
  to:

  
	
   

  
	
  AVALONBAY
  COMMUNITIES, Inc.,

  
	
  a Maryland
  corporation

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:](5)

  

 

(4)
Administrative Agent consent is not required for assignments to another
Bank.  See Section 12.05 of Loan
Agreement.

 

(5) Borrower consent is required unless (a) assignment is to
a Bank, or Affiliate of a Bank or an Approved Fund, or (b) an Event of
Default has occurred and is continuing. 
See Section 12.05 of the Loan Agreement.

 

E-3

 

ANNEX 1

 

Re:  Term Loan Agreement dated as of May 15,
2008, among AvalonBay Communities, Inc., as borrower, the Banks parties
thereto, Bank of America, N.A. and any successors thereto, individually and as
Administrative Agent (the “Loan Agreement”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Assignment and Acceptance to which
this annex is attached and if not defined therein, shall have the meanings
given to them in the Loan Agreement.

 

STANDARD TERMS
AND CONDITIONS FOR

ASSIGNMENT AND
ACCEPTANCE

 

1.         Representations and Warranties.

 

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

 

1.2.      Assignee.  The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby and to become a Bank under the
Loan Agreement, (ii) it meets all requirements of an Assignee under the
Loan Agreement (subject to receipt of such consents as may be required under
the Loan Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Loan Agreement as a Bank thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Bank
thereunder, and (iv) it has received a copy of the Loan Agreement,
together with copies of the most recent financial statements delivered pursuant
to §4.01(3) and §6.09 thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other
Bank, and (v) if it is a non-U.S. Bank, attached to the Assignment and
Acceptance is any documentation required to be delivered by it pursuant to the
terms of the Loan Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Bank, and based on such documents and
information as it shall

 

E-4

 

deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank.

 

2.     Payments.  From and after
the Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee whether such amounts have accrued prior to, on
or after the Effective Date.  The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with
respect to the making of this assignment directly between themselves.

 

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

 

E-5

 

EXHIBIT F

 

FORM OF SUBSIDIARY GUARANTY

 

Subsidiary
Guaranty, dated as of
              ,
200     by and among the undersigned (the “Subsidiary Guarantor”),
in favor of each of the Banks (as defined herein) and Bank of America, N.A., as
administrative agent (in such capacity, the “Administrative
Agent”) for itself and for the other financial institutions
(collectively, the “Banks”) which are or may
become parties to the Term Loan Agreement dated as of May 15, 2008, among
AvalonBay Communities, Inc. (the “Borrower”),
the Administrative Agent, and the Banks (as amended, supplemented or otherwise
modified from time to time, the “Loan Agreement”).  Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Loan Agreement.

 

WHEREAS, the
Borrower, the Administrative Agent, the Banks and the other parties thereto
have entered into the Loan Agreement;

 

WHEREAS, the
Borrower and the Subsidiary Guarantor are members of a group of related
entities, the success of each of which is dependent in part on the success of
the other members of such group;

 

WHEREAS, the Subsidiary
Guarantor expects to receive substantial direct and indirect benefits from the
Loans and other extensions of credit made by each Bank to the Borrower pursuant
to the Loan Agreement (which benefits are hereby acknowledged);

 

WHEREAS, the
Borrower has covenanted and agreed with the Banks, that pursuant to the
definition of Unencumbered Assets set forth in Section 1.01 of the Loan
Agreement, the undersigned Subsidiary Guarantor shall execute and deliver this
Subsidiary Guaranty; and

 

WHEREAS, the Subsidiary
Guarantor wishes to guaranty the Borrower’s obligations to the Banks and the
Administrative Agent under and in respect of the Loan Agreement as herein
provided;

 

NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:

 

1.             Guaranty of Payment and
Performance of Obligations.  In
consideration of the Banks’ extending credit, or otherwise, in their
discretion, giving time, financial or banking facilities or accommodations to
the Borrower, the Subsidiary Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to the Administrative Agent and each Bank that the
Borrower will duly and punctually pay or perform, at the place specified
therefor, or if no place is specified, at the Administrative Agent’s head
office, (i) all indebtedness, obligations and liabilities of the Borrower
to any of the Banks and the Administrative Agent, individually or collectively,
under the Loan Agreement or any of the other Loan Documents or in respect of
any of the Loans or the Notes, or other instruments at any time evidencing any
obligations thereunder, whether existing on the date of the Loan Agreement or
arising or incurred thereafter, direct or indirect, secured or unsecured, 

 

F-1

 

joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, arising by
contract, operation of law or otherwise, including all such which would become
due but for the operation of the automatic stay pursuant to §362(a) of the
Federal Bankruptcy Code and the operation of §§502(b) and 506(b) of
the Federal Bankruptcy Code; and (ii) without limitation of the foregoing,
all reasonable fees, costs and expenses incurred by the Administrative Agent or
the Banks in attempting to collect or enforce any of the foregoing, accrued in
each case to the date of payment thereof (collectively the “Obligations” and individually an “Obligation”).  This Subsidiary Guaranty is an absolute,
unconditional, irrevocable and continuing guaranty of the full and punctual
payment and performance by the Borrower of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that any
Bank or the Administrative Agent first attempt to collect any of the
Obligations from the Borrower or resort to any security or other means of
obtaining payment of any of the Obligations which any Bank or the
Administrative Agent now has or may acquire after the date hereof or upon any
other contingency whatsoever.  Upon any
Event of Default which is continuing by the Borrower in the full and punctual
payment and performance of the Obligations, the liabilities and obligations of
the Subsidiary Guarantor hereunder shall, at the option of the Administrative
Agent, become forthwith due and payable to the Administrative Agent and to the
Bank or Banks owed the same without demand or notice of any nature, all of
which are expressly waived by the Subsidiary Guarantor, except for notices
required to be given to the Borrower under the Loan Documents.  Payments by the Subsidiary Guarantor
hereunder may be required by any Bank or the Administrative Agent on any number
of occasions.

 

2.             Subsidiary Guarantor’s Further
Agreements to Pay.  The Subsidiary
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to each Bank and the Administrative Agent forthwith upon demand, in
funds immediately available to such Bank or the Administrative Agent, all costs
and expenses (including court costs and legal fees and expenses) incurred or
expended by the Administrative Agent or such Bank in connection with this
Subsidiary Guaranty and the enforcement hereof, together with interest on
amounts recoverable under this Subsidiary Guaranty from the time after such
amounts become due at the default rate of interest set forth in the Loan
Agreement; provided that if such interest exceeds
the maximum amount permitted to be paid under applicable law, then such
interest shall be reduced to such maximum permitted amount.

 

3.             Payments.  The Subsidiary Guarantor covenants and agrees
that the Obligations will be paid strictly in accordance with their respective
terms regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any Bank with respect thereto.  Without limiting the generality of the
foregoing, the Subsidiary Guarantor’s obligations hereunder with respect to any
Obligation shall not be discharged by a payment in a currency other than the
currency in which such Obligation is denominated (the “Obligation
Currency”) or at a place other than the place specified for the
payment of such Obligation, whether pursuant to a judgment or otherwise, to the
extent that the amount so paid on conversion to the Obligation Currency and
transferred to New York, New York, U.S.A., under normal banking procedures does
not yield the amount of Obligation Currency due thereunder.

 

4.             Taxes.  All payments hereunder shall be made without
any counterclaim or set-off, free and clear of, and without reduction for any
Indemnified Taxes or Other Taxes, which are now 

 

F-2

 

or may hereafter be imposed,
levied or assessed by any Governmental Authority on payments hereunder, all of
which will be for the account of and paid by the Subsidiary Guarantor.  If for any reason, any such reduction is made
or any Taxes are paid by the Administrative Agent or any Bank (except for taxes
on income or profits of the Administrative Agent or such Bank), the Subsidiary
Guarantor agrees to pay to the Administrative Agent or such Bank such
additional amounts as may be necessary to ensure that the Administrative Agent
or such Bank receives the same net amount which it would have received had no
such reduction been made or Taxes paid.

 

5.             Consent to Jurisdiction.  The Subsidiary Guarantor agrees that any suit
for the enforcement of this Subsidiary Guaranty or any of the other Loan
Documents may be brought in the courts of the State of New York sitting in New
York, New York or any federal court sitting in New York, New York and consents
to the non-exclusive jurisdiction of such courts and the service of process in
any such suit being made upon the Subsidiary Guarantor by mail at the address
specified herein.  Except to the extent
such waiver is expressly prohibited by law, the Subsidiary Guarantor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit is brought in an inconvenient court.

 

6.             Liability of the Subsidiary
Guarantor.  The Administrative Agent
and the Bank have and shall have the absolute right to enforce the liability of
the Subsidiary Guarantor hereunder without resort to any other right or remedy
including any right or remedy under any other guaranty or against any other
guarantor of any of the Obligations, and the release or discharge of any other
guarantor of any Obligations shall not affect the continuing liability of the
Subsidiary Guarantor hereunder that has not been released or discharged.

 

7.             Representations and Warranties;
Covenants.  (a) The Subsidiary
Guarantor hereby makes and confirms the representations and warranties made on
its behalf by the Borrower pursuant to Article V of the Loan Agreement, as
if such representations and warranties were set forth herein.  The Subsidiary Guarantor hereby agrees to
perform the covenants set forth in Articles VI and VII of the Loan Agreement
(to the extent such covenants expressly apply to the Subsidiary Guarantor) as
if such covenants were set forth herein. 
The Subsidiary Guarantor acknowledges that it is, on a collective basis
with the Borrower and all other Subsidiary Guarantors, bound by the financial
covenants and other covenants set forth in Article VIII of the Loan
Agreement.  The Subsidiary Guarantor
hereby confirms that it shall be bound by all acts or omissions of the Borrower
pursuant to the Loan Agreement.

 

(b)           The
Subsidiary Guarantor represents and warrants that it is a limited liability
company, limited partnership, corporation, or other legal entity, as
applicable, duly formed or organized, validly existing and in good standing
under the laws of the state of its formation or organization; the Subsidiary
Guarantor has all requisite limited liability company, limited partnership,
corporate or other legal entity power, as applicable, to own its respective
properties and conduct its respective business as now conducted and as
presently contemplated; and the Subsidiary Guarantor is in good standing as a
foreign entity and is duly authorized to do business in the jurisdictions where
the properties and Unencumbered Assets owned by it are located and in each other
jurisdiction where such qualification is necessary except where a failure to be
so qualified in such other jurisdiction would not cause a Material Adverse
Change.  The execution, delivery and
performance of this Subsidiary Guaranty and the transactions contemplated
hereby (i) are within the authority of the Subsidiary Guarantor, (ii) have
been duly authorized by all necessary 

 

F-3

 

proceedings on the part of the
Subsidiary Guarantor and any member, manager, or other controlling Person
thereof, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which the Subsidiary Guarantor is subject or any judgment, order, writ,
injunction, license or permit applicable to the Subsidiary Guarantor, (iv) do
not conflict with any provision of the Certificate of Organization or
Formation, the limited liability company agreement, articles of incorporation,
bylaws, or other authority documents of the Subsidiary Guarantor or the
authority documents of any controlling Person thereof, and (v) do not
contravene any provisions of, or constitute a Default or Event of Default or a
default under or a failure to comply with any term, condition or provision of,
any other agreement, instrument, judgment, order, decree, permit, license or
undertaking binding upon or applicable to the Subsidiary Guarantor or any of
the Subsidiary Guarantor’s properties (except for any such failure to comply
under any such other agreement, instrument, judgment, order, decree, permit,
license, or undertaking as would not cause a Material Adverse Change) or result
in the creation of any mortgage, pledge, security interest, lien, encumbrance
or charge upon any of the properties or assets of the Subsidiary Guarantor.

 

(c)           This
Subsidiary Guaranty has been duly executed and delivered by and constitutes the
legal, valid and binding and enforceable obligations of the Subsidiary
Guarantor, subject only to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors’ rights and to the fact that the
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.

 

(d)           The
execution, delivery and performance by the Subsidiary Guarantor of this
Subsidiary Guaranty and the transactions contemplated hereby do not require (i) the
approval or consent of any governmental agency or authority other than those
already obtained, or (ii) filing with any governmental agency or
authority, other than filings which will be made with the SEC when and as
required by law.

 

8.             Effectiveness.  The obligations of the Subsidiary Guarantor
under this Subsidiary Guaranty shall continue in full force and effect and
shall remain in operation until all of the Obligations shall have been
indefeasibly paid in full or otherwise fully satisfied, and shall continue to
be effective or be reinstated, as the case may be, if at any time payment or
other satisfaction of any of the Obligations is rescinded or must otherwise be
restored or returned upon the bankruptcy, insolvency, or reorganization of the
Borrower, or otherwise, as though such payment had not been made or other
satisfaction occurred.  No invalidity,
irregularity or unenforceability of the Obligations by reason of applicable
bankruptcy laws or any other similar law, or by reason of any law or order of
any government or agency thereof purporting to reduce, amend or otherwise
affect the Obligations, shall impair, affect, be a defense to or claim against
the obligations of the Subsidiary Guarantor under this Subsidiary Guaranty.

 

9.             Freedom of Bank to Deal with
Borrower and Other Parties.  The
Administrative Agent and each Bank shall be at liberty, without giving notice
to or obtaining the assent of the Subsidiary Guarantor and without relieving
the Subsidiary Guarantor of any liability hereunder, to deal with the Borrower
and with each other party who now is or after the date hereof becomes liable in
any manner for any of the Obligations, in such manner as the Administrative
Agent or such Bank in its sole discretion deems fit, and to this end the
Subsidiary Guarantor gives to the 

 

F-4

 

Administrative Agent and each
Bank full authority in its sole discretion to do any or all of the following
things: (a) extend credit, make loans and afford other financial
accommodations to the Borrower at such times, in such amounts and on such terms
as the Administrative Agent or such Bank may approve, (b) vary the terms
and grant extensions of any of the Obligations, any of the Loan Documents or
any other present or future indebtedness or obligation of the Borrower or of
any other party to the Administrative Agent or such Bank, (c) grant time,
waivers and other indulgences in respect thereof, (d) vary, exchange,
release or discharge, wholly or partially, or delay in or abstain from
perfecting and enforcing, or impair, any security or guaranty or other means of
obtaining payment of any of the Obligations which the Administrative Agent or
any Bank now has or may acquire after the date hereof, (e) accept partial
payments from the Borrower or any such other party, (f) release or
discharge, wholly or partially, any endorser or guarantor, and (g) compromise
or make any settlement or other arrangement with the Borrower or any such other
party.

 

10.           Unenforceability of Obligations
Against Borrower; Invalidity of Security or Other Guaranties.  If for any reason the Borrower has no legal
existence or is under no legal obligation to discharge any of the Obligations
undertaken or purported to be undertaken by it or on its behalf, or if any of
the moneys included in the Obligations have become irrecoverable from the
Borrower by operation of law or for any other reason, this Subsidiary Guaranty
shall nevertheless be binding on the Subsidiary Guarantor to the same extent as
if the Subsidiary Guarantor at all times had been the principal debtor on all
such Obligations.  This Subsidiary
Guaranty shall be in addition to any other guaranty or other security for the
Obligations, and it shall not be prejudiced or rendered unenforceable by the invalidity
of any such other guaranty or security.

 

11.           Waivers by Subsidiary Guarantor.  The Subsidiary Guarantor waives notice of
acceptance hereof, notice of any action taken or omitted by the Administrative
Agent or any Bank in reliance hereon, and any requirement that the
Administrative Agent or any Bank be diligent or prompt in making demands
hereunder, giving notice of any default by the Borrower or asserting any other
rights of the Administrative Agent or any Bank hereunder.  The Subsidiary Guarantor also irrevocably
waives, to the fullest extent permitted by law, all defenses in the nature of
suretyship that at any time may be available in respect of the Subsidiary
Guarantor’s obligations hereunder by virtue of any statute of limitations,
valuation, stay, moratorium law or other similar law now or hereafter in
effect.

 

12.           Restriction on Subrogation and
Contribution Rights.  Notwithstanding
any other provision to the contrary contained herein or provided by applicable
law, unless and until all of the Obligations have been indefeasibly paid in
full in cash and satisfied in full, the Subsidiary Guarantor hereby irrevocably
defers and agrees not to enforce any and all rights it may have at any time
(whether arising directly or indirectly, by operation of law or by contract) to
assert any claim against the Borrower on account of payments made under this
Subsidiary Guaranty, including, without limitation, any and all rights of or
claim for subrogation, contribution, reimbursement, exoneration and indemnity,
and further waives any benefit of and any right to participate in any
collateral which may be held by the Administrative Agent or any Bank or any
affiliate of the Administrative Agent or any Bank.  In addition, the Subsidiary Guarantor will
not claim any set-off or counterclaim against the Borrower in respect of any
liability it may have to the Borrower unless and until all of the Obligations
have been indefeasibly paid in full in cash and satisfied in full.

 

F-5

 

Subject
to the foregoing and the indefeasible performance and payment in full of the
Obligations, the Subsidiary Guarantor acknowledges that all other guarantors of
any of the Obligations shall have contribution rights against the Subsidiary
Guarantor in accordance with applicable law and in accordance with each such
Person’s benefits received under the Loan Agreement and in respect of the Loans
and the Letters of Credit.

 

13.           Demands.  Any demand on or notice made or required to
be given pursuant to this Subsidiary Guaranty shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, return receipt requested, sent by overnight courier, or
sent by telegraph, telecopy, telefax or telex and confirmed by delivery via courier
or postal service, addressed as follows:

 

(a)           if
to the Subsidiary Guarantor, at

 

AvalonBay Communities, Inc.

100 Bridgeport Avenue, Suite 258

Shelton, CT 06484

 

or at such other address for notice as
the Subsidiary Guarantor shall last have furnished in writing to the
Administrative Agent;

 

(b)           if
to the Administrative Agent, at

 

Bank of America, N.A.

777 Main Street

Hartford, CT  06115

Attn:                                                

 

or at such other address
for notice as the Administrative Agent shall last have furnished in writing to
the Subsidiary Guarantor; and

 

(c)           if
to any Bank, at such Bank’s address as set forth in its Administrative
Questionnaire.

 

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

 

14.           Amendments, Waivers, Etc.  No provision of this Subsidiary Guaranty can
be changed, waived, discharged or terminated except by an instrument in writing
signed by the Administrative Agent (acting with the requisite consent of the
Banks as provided in the Loan Agreement) and the Subsidiary Guarantor expressly
referring to the provision of this Subsidiary Guaranty to which such instrument
relates; and no such waiver shall extend to, affect or impair any right with
respect to any Obligation which is not expressly dealt with therein.  No course of dealing 

 

F-6

 

or delay or omission on the
part of the Administrative Agent or the Banks or any of them in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto.

 

15.           Further Assurances.  The Subsidiary Guarantor at its sole cost and
expense agrees to do all such things and execute, acknowledge and deliver all
such documents and instruments as the Administrative Agent from time to time
may reasonably request in order to give full effect to this Subsidiary Guaranty
and to perfect and preserve the rights and powers of the Administrative Agent
and the Banks hereunder.

 

16.           Miscellaneous Provisions.  This Subsidiary Guaranty shall be governed by
and construed in accordance with the laws of the State of New York and shall
inure to the benefit of the Administrative Agent, each Bank and their
respective successors in title and assigns permitted under the Loan Agreement,
and shall be binding on the Subsidiary Guarantor and the Subsidiary Guarantor’s
successors in title, assigns and legal representatives, provided that the
Subsidiary Guarantor may not assign, transfer or delegate any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and all of the Banks (and any attempted such assignment without such
consent shall be null and void).  The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement.  The invalidity or unenforceability of any one
or more sections of this Subsidiary Guaranty shall not affect the validity or
enforceability of its remaining provisions. 
Captions are for ease of reference only and shall not affect the meaning
of the relevant provisions.  The meanings
of all defined terms used in this Subsidiary Guaranty shall be equally
applicable to the singular and plural forms of the terms defined.

 

17.           WAIVER OF JURY TRIAL.  EXCEPT TO THE EXTENT SUCH WAIVER IS EXPRESSLY
PROHIBITED BY LAW, THE SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY JURISDICTION AND IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH,
OR ARISING OUT OF THIS SUBSIDIARY GUARANTY, THE OBLIGATIONS, OR ANY INSTRUMENT
OR DOCUMENT DELIVERED PURSUANT HERETO OR THERETO OR ANY OTHER CLAIM OR DISPUTE
HOWSOEVER ARISING, AMONG THE SUBSIDIARY GUARANTOR, THE BORROWER, THE
ADMINISTRATIVE AGENT AND/OR THE BANKS. 
THIS WAIVER OF JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY DOCUMENT
EXECUTED BY THE SUBSIDIARY GUARANTOR, THE ADMINISTRATIVE AGENT OR THE BANKS AND
DELIVERED TO THE ADMINISTRATIVE AGENT OR THE BANKS, AS THE CASE MAY BE,
WHETHER OR NOT SUCH DOCUMENTS SHALL CONTAIN SUCH A WAIVER OF JURY TRIAL.  THE SUBSIDIARY GUARANTOR CONFIRMS THAT THE
FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

 

[Remainder of Page Intentionally Left Blank]

 

F-7

 

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

 

	
   

  	
   

  	
  [SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  Name:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  

 

F-8

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